Our economic recovery after the coronavirus pandemic ends must be anchored around sustainability, writes James MacGregor, environmental economist at Ramboll and Adam Pritchard, consultant at Ramboll.
Sustainability is increasingly imprinted in post-COVID pandemic solutions. A sustainable recovery is being proposed by business, governments and international agencies to recover societies, economies and international relations.
Whilst this elevated objectification of sustainability is indeed a positive step, we are faced with a significant challenge in its realisation. Indeed, the history of economic recovery from crises is brimming with examples of dirtier, unplanned, races to regain business-as-usual, rather than meaningful diversions to fresh symbols of societal preference.
The COVID-19 crisis is having an unprecedented impact on global economies, businesses, governments, society, as well as our natural environment. It is too early to fully comprehend the economic implications of the pandemic, but few question the scale of the challenge ahead.
Yet the calls for a sustainable pathway are loud. In the UK, the Committee on Climate Change’s (CCC) letter to the government, emphasised the criticality of avoiding a ‘quick and dirty’ recovery, which sacrifices environmental goals for a rapid return to business as usual. Mayors through the C40 are similarly pledging ‘no return to business as usual’; businesses are advocating for a ‘green recovery’ and millions of citizens are urging their politicians to ‘listen to the birdsong’, and strive to make more sustainable decisions over fiscal stimulus and public investment decisions.
Globally, the COVID-19 lockdown is proving to be a ‘watershed moment’ for the natural environment. Air quality has dramatically improved in all cities, without cars on roads and curtailment of industrial emissions. Freshwater and terrestrial habitats alike are improving, and wildlife appears to be flourishing in some countries as reduced human activity enables birds to nest on unexpectedly empty beaches, and cutbacks in road traffic are increasing habitat connectivity and wildlife roaming.
However, COVID-19 has exposed many flaws in our way of living. It has exposed limitations in our economics, health systems, food security, supply chains, and exposed inequalities of costs and opportunities across sectors, markets and societies. Some businesses have embraced the ‘new normal’, enacting social distancing and remote working. Many others, however, have been unable to adapt.
We are concerned that after relaxation of lockdown, organisations will seek a quick return to ‘business-as-usual’, trading environmental and social improvements in search of a strong economic rebound. Global Energy Monitor reports data on the approval of coal-fired power plants in the first three weeks of March 2020 already exceeding total approvals for 2019. Compounding this is the exacerbated differential among renewable and fossil-fuel costs owing to historically low oil prices.
Additionally, while the environment is currently flourishing in some respects, the pandemic has also brought threats, such as lower donations, closed attractions, and cancelled fundraising. A ‘sustainable recovery’ that ensures decisions being taken over the structure, timing and scale of the global transition from the COVID-19 pandemic is vital as we start to emerge from the worldwide lockdown, embedding long-term planning for an inclusive, sustainable and prosperous future.
Sustainability means different things to different people, however financial and economic health has long been intimately linked with social and environmental sustainability, and has long been beneficial to businesses, governments and society. The pandemic is generating fresh trends in sustainability – from more of a focus on local, to a delivery culture, and more time spent outdoors.
Leveraging these newfound appreciations and valuations into long-term behavioural changes will not be simple. Pre-pandemic, sustainability was notoriously difficult to retrofit, expensive to build, and crucially lacked mainstream will from businesses and governments. It requires leadership to overcome short-term political and investment cycles, and the long-term costs of inaction and the benefits of an early and more gradual transition.
Driving the achievement of ambitious environmental, social and economic goals sooner and with greater clarity will be key as we move forward: this pause in economic activity is a once-in-a-generation opportunity to engineer, strategise and plan towards truly sustainable objectives for the good of all.
Looking into three stages of the pandemic
We see three key stages, set in motion around the world:
At the time of writing, multiple governments are expressing their keenness to relax lockdown (Stage 1), and enter one of two potential Stage 2s, with the main triggers being a sustained fall in COVID-19 cases and deaths.
Some emerging information shows a Stage 2a, ‘business-as-usual’ pathway focusing on rapid but stable financial and economic growth, including US EPA suspending environmental law enforcement, bailouts announced for some fossil fuel-based industries, and reductions in renewable energy bought by national grids.
Alongside this, many instances of decisions are being made to progress to Stage 2b, a new set of businesses, products, services and innovations which both build on business-as-usual and disrupt it. Stage 2b has been conditionality baked into bailouts in several countries (notably France’s Air France bailout which included several environmental conditions, including the slashing of domestic flights to encourage rail travel) and the European Parliament and Commission proposing a recovery and reconstruction package that ’should have at its core the Green Deal and the digital transformation in order to kick start the economy’.
Both will inevitably result in Stage 3, stabilisation. What status we stabilise in, however, is highly uncertain.
Ensuring a sustainable recovery
Ensuring the health of global populations and their national economies will dominate the headlines for the foreseeable future. For human societies to emerge stronger, more efficient, equitable and liveable, we need a new way of thinking about the future, clearer long-term goals and pathways to achieving these. And we need decisions to be taken today, and over the coming weeks and months to integrate these goals.
This attitude is reflected in a recent letter from the CCC to the UK Government, stressing that ‘reducing greenhouse gas emissions and adapting to climate change should be integral to any recovery package’. Six ‘resilience principles’, all relating to the above Stage 2b ‘recalibrated recovery’ phase, are highlighted:
- Use climate investments to support the economic recovery and jobs
- Lead a shift towards positive long-term behaviours
- Tackle the wider ‘resilience deficit’ on climate change
- Embed fairness as a core principle
- Ensure the recovery does not ‘lock-in’ greenhouse gas emissions or increased climate risk
- Strengthen incentives to reduce emissions when considering fiscal changes.
These principles deliver an essential reminder that, despite the short-term uplift in environmental performance and recovery, there is a potent risk that the pandemic will overshadow environmental concerns in the longer term.
Key to enabling sustainable recovery will be ensuring that the business case imperative of embedding environmental resilience isn’t lost. We can embed this resilience while ensuring inclusivity and liveability through strategic collaboration between stakeholder groups. Governments have a key role however, in ensuring that quicker and cheaper profitability doesn’t trump sustainable profitability.
We have been presented with a valuable opportunity to engineer, strategise and plan towards objectives that are truly sustainable. The concern is that if we don’t, the recovery period will be longer, more polluting and less beneficial to our economies, society and natural environment.
Unless we ensure our recovery from COVID-19 is truly sustainable, we risk locking our future into unsustainable models which are less resilient and more exposed to future shocks, be these economic, epidemiologic or environmental.