The pressure on governments to make the post-pandemic economic stimulus a green recovery continues to intensify, with 155 multinational companies and more than 220 state and regional governments joining the call, and business analysts suggesting the right recovery package could make 2019 the year of peak carbon while delivering badly-needed job creation.
With key economic recovery decisions still taking shape last month in the United States and Europe, 155 multinationals affiliated with the We Mean Business Coalition “issued a statement reaffirming their own science-based commitments to achieve a zero-carbon economy and calling on governments around the world to match their ambition,” Ethical Corporation Magazine reports. “They call on policy-makers to use the trillions of dollars they are preparing to inject into their economies to support efforts to hold global temperature rise to within 1.5°C above pre-industrial levels, in line with reaching net-zero emissions well before 2050.”
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The group of companies, including Carlsberg Group, Adobe, Sky, H&M Group, IKEA, Mars, Nestlé, and Coca-Cola European Partners, represented US$2.4 trillion in net worth and employed more than five million people, in what Ethical Corp calls “the biggest statement yet from the corporate world linking the climate crisis and COVID-19 recovery”.
“Governments can be reassured that businesses are implementing science-based targets to get us on a 1.5°C trajectory,” said We Mean Business CEO María Mendiluce. “They are calling for recovery policies that will boost the economy and build resilience. A net-zero aligned recovery will enable companies to invest and innovate at the pace and scale necessary to build back better, creating decent jobs, protecting health, reducing emissions, and increasing resilience in the future.”
The state and regional governments were all members of the Under2 Coalition, a network coordinated by The Climate Group. Their statement “cited research from the Global Commission on the Economy and Climate that moving to a zero-emission future can deliver economic benefits of $26 trillion through to 2030, create 65 million new low-carbon jobs, and avoid 700,000 premature deaths from air pollution,” Ethical Corp says.
If those investments go the right way, they could make 2019 the year when global carbon emissions peaked before going into permanent decline, writes Martyn Link, chief strategy officer at Wood, an engineering consultancy that has diversified from oilfield services into cleaner energy sources. In a post for Greentech Media—a news outlet affiliated with analyst firm Wood Mackenzie, which is in turn associated with Wood—Link calls for a five-step plan that maintains energy security, accelerates clean technology investments, delivers incentives for decarbonization, builds sustainable urban environments, and supports flexible, integrated communities that reflect a potential “transformative shift” to remote work and home offices.
“These shifts will not happen overnight and will require smaller, incremental goals that also deliver near-term benefits,” Link states. But “as we plan for the future, there’s no better way to honour the lives that have been lost and the people who continue to put their lives at risk during these extraordinary times than by making 2020 a turning point and a catalyst from which we begin to build a more sustainable future for the next generation.”
In a separate post last month, one of the world’s leading sources of business analysis and insights agrees that the right post-pandemic stimulus will “help the climate” while creating up to three million jobs. The history of the recovery after the 2008 economic crash shows that a post-pandemic surge could drive up emissions, writes a team from McKinsey & Company. But “a low-carbon recovery could not only initiate the significant emissions reductions needed to halt climate change but also create more jobs and economic growth than a high-carbon recovery would,” the consultants say.
And once the dollars are spent, there might not be another opportunity to get emissions on track.
“Our analysis of stimulus options for a European country suggests that mobilizing €75 billion to €150 billion of capital could yield €180 to €350 billion of gross value added, generate up to three million new jobs, and enable a carbon emissions reduction of 15 to 30% by 2030,” McKinsey adds, and “such a package need not involve economic compromises. A recent survey of top economists shows that stimulus measures targeting good environmental outcomes can produce as much growth and create as many jobs as environmentally neutral or detrimental measures. But a high-carbon recovery could make it hard to meet the goals of the Paris Agreement, and heavy relief and stimulus spending might leave governments too debt-strapped to pay later for emissions cuts.”
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