fruganomics
Signposts to beyond Covid-19
As Covid-19 blows a huge hole in everyone’s budget – wait! I’ve been here before. We want to change but life seems to keep us in the same groove. So what’s happened to the UN Sustainability Goals?
Recessions aren’t exactly new. Yes, this is a bad one, but we’ve had world recessions in 1981, 1991, 2001, 2011 and now 2020. And that’s just recently. Depending on how you define it, we’ve had at least four global recessions since World War II, in 1975, 1982, 1991 and 2009 [source: https://en.wikipedia.org/wiki/Global_recession].
The UK had two until the 1800’s then four between 1800 and 1900. There were eight in the 20th century and this will be the second since then. According to Wikipedia there were 24 recessions in the USA in the 19th century. In the last century there were 20, including the Great Depression. Wikipedia describes some of these as “panics” (who wouldn’t?) with a few “depressions” thrown in (who wouldn’t be?). That’s a lot of ups and downs however you measure it.
One of the problems with boom-bust thinking is governments feeling pressurised to create jobs ‘at any cost’ in a recession.
The evidence suggests that ups and downs are a permanent fixture of the world we live in. Last time it was reckless bankers, this year it’s Covid-19. Right now the FTSE 100 is pointing up and down like a mad dictator. All this bouncing around is bad for stability and our chances of meeting the UN Sustainability Goals.
Recessions lead to compromise on global goals
But recessions threaten green recovery. One of the problems with boom-bust thinking is governments feeling pressurised to create jobs ‘at any cost’ in a recession. According to think tank Global Energy Monitor Beijing approved the equivalent of 7960 megawatts of coal-fired power plants in March 2020, more than the total for 2019.
And we’re never quite ready. We weren’t ready for the financial crisis of 2008, Covid-19 took the whole world by surprise – this despite dire warnings from no less a figure than Bill Gates (see Ted talk) years ago, as well as dire warnings from the World Health Organisation. Incidentally, Bill Gates has also spoken about climate change, see this article of mine.
But finally, there’s a chance wise heads will prevail.
As the risk of Covid-19 recedes there are promising signs of a more stable, “green” recovery. The focus is more on climate change than any of the other UN Sustainability Goals. But I’m ok with that, this is an urgent issue and at it’s a start.
And action on climate change will lead to action on the other ecological goals we all need to address. Actually it’s a better approach than I originally thought. Corporations may be a target for our anger but being profit-seeking they tend to be very good at taking action.
Signs coming from business
It’s encouraging to see high-powered campaigns coming from the business community. The Energy Networks Association is pushing the government to advance its plans for the world’s first zero carbon gas grid and hydrogen-powered energy. The Hydrogen Strategy Now campaign puts the case for a hydrogen energy grid, with more than forty big-name partners including EDF, Bosch and electronics giant Siemens.
Campaigning is all good stuff but I’m in two minds. While it’s necessary to lobby government, ultimately it’s what companies do day-to-day that counts.
Signatories to an open letter to Boris Johnson calling for a sustainable (aka low carbon) recovery include Iceland Foods, Barratt Developments, The Body Shop, Ben and Jerry’s, the Royal Society for the Protection of Birds (RSPB), the National Trust and Greenpeace UK.
UKSSD runs the Build Back Better (#buildbackbetter) campaign on behalf of several large companies, promoting the 17 UN Sustainability Goals. Well-known brands from the 84 signatories to their open letter to the UK Government in January 2020 include: BT, Coca-Cola, Co-op, Fujitsu, HSBC, Jaguar Land Rover, Sainsbury’s and Tesco.
The UN Global Compact Network went one better than UKSSD and came up with 150 signatures (but also as part of the Build Back Better campaign) .
Business For Nature Campaign
Business for Nature is a global coalition whose aim is to call on governments to reverse nature loss. On 15 June, 31 NGOs and business groups including Business for Nature published a letter calling on CEOs to push governments to include ambitious policies to reverse nature loss as part of green recovery plans.
Signs coming from government
The UK Prime Minister Boris Johnson has signalled his interest in a green recovery, as has his Business Minister Alok Sharma. The UK supports the Paris Agreement, but the targets agreed would only achieve a 3% reduction in greenhouse gases; many countries are having trouble achieving even this. Another international meeting, Cop26 (someone must know what this stands for) will address this but has been postponed due to the Coronavirus.
At times like this governments put out a lot of noble words. Sometimes they fall on arable land, sometimes on stony. But I’m hopeful when I look at some of the campaign groups that have been put together to try and make things happen.
Other governments and UN sustainability goals
South Korean President Moon Jae-in is promising to launch a “Green New Deal” that aims to provide economic stimulus while putting the country on track for net-zero emissions by 2050.
The European Commission has proposed a €750 billion ($1.15 trillion) stimulus package with 25% allocated to green projects. In addition a “green recovery alliance” was launched in the European Parliament on 14 April and includes 79 MEPs from across the political spectrum, civil society groups, 37 CEOs, 28 business associations, the European trade union confederation, seven NGOs and six think tanks. Big names from the private sector who signed the appeal include the CEO’s of Ikea, H&M, Unilever, Danone and E.ON.
The IMF has produced a paper entitled “Greening the Recovery” and the International Energy Agency (IEA) is lobbying governments to promote net-zero emissions targets.
All promising stuff. I’m not sure how much this translates into their policy on lending. They may not be empowered to make decisions based on a country’s green credentials, only its ability to repay the loan.
Several governments – including those of Italy, Germany, Spain and Britain – have announced plans to issue green bonds to help finance green infrastructure projects in 2020.
Will Beijing and Washington play?
Beijing is targeting what’s been termed “neo infrastructure,” which could help cut emissions but isn’t focused on green measures. It includes expanding 5G networks, industrial internet and data centres, as well as boosting rail service and electric vehicle charging stations.
While the US Federal government is, to put it mildly, not that interested, the States themselves are taking action. New York Governor Andrew Cuomo says he will speed up approval of low-carbon power projects, including a power transmission line from Quebec to New York City. California Governor Gavin Newsom has assembled a task force to advise on the state’s economic recovery that includes a strong climate lens.
Chile has strengthened its commitment to reduce emissions, pledging to stabilise its emissions by 2025, and achieve net-zero peak emissions by 2050.
Mayors from the C40 group of cities, across Europe, the US and Africa held talks in May to coordinate efforts to support a low-carbon, sustainable recovery. These largely centre around networks of cycle lanes, traffic-free areas and pedestrianised networks.
But one of the most interesting – and adventurous – initiatives is the adoption by the city of Amsterdam, Netherlands to adopt the ‘Doughnut Economics’ circular economy model proposed and made famous in the 2017 bestseller Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist (see also my article).
‘Doughnut’ economics outlines a concentric rings model whereby economies can work to achieve the UN’s sustainability goals. The model has been formally adopted by the municipality of Amsterdam as the starting point for public policy decisions, the first city in the world to make such a commitment.
Then there’s the Aldersgate Group, which is calling for low-carbon projects, with statements from member organisations including Anglian Water, BT, Cemex, Johnson Matthey, Legal and General Investment Management and Scottish Power, among others.
So, will things change?
It is beyond doubt there’s a much stronger call from both civil society and big business for a green recovery. History tells us governments tend to backtrack on progressive policies in a recession. Call me over-optimistic but I don’t think that’s going to happen this time.
Why do I believe things will change?
I don’t believe commerce will ultimately accept any position that doesn’t mean significant reduction in greenhouse gas emissions. I don’t believe they can, because they know what their customers want and they know what the stakes are. They will resist government’s attempts to paper over the cracks and will go their own way.
This growing awareness is the genie you can’t put back in the bottle. Knowing full well what the effects of ‘no change’ are, they are already making changes. And it’s not just them, by any means. All of those suppliers have customers. Err, where d’you think they get their money from?
This time I’m optimistic. It’s #earthtoo from here.
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