Corporate Subsidies Must Be Investments, Not Handouts
Unfortunately, COVID-19 has changed our lives in ways that we never imagined. In just a few short months, the impact of this devastating virus has shut schools, offices, stores and factories. Airlines are grounded. Borders are closed. Many of us are quarantined at home.
We are grappling with a radical change to the way we live our lives. It’s a challenge that people and families are coming to grips with, as are businesses both big and small, health systems and governments.
This is a collective effort that calls on everyone to play their part – whether it’s individuals shopping for an elderly neighbor, companies enabling employees to work from home, businesses switching manufacturing capacity to producing hand sanitizer, or governments putting aside party differences to agree on massive assistance measures that will help combat the effects of this world-wide pandemic.
As all of us adapt to the urgency of the situation, two things are becoming clear. The first is that all of us – families, businesses and governments – have the power to act radically and decisively when the moment calls for it. In the face of overwhelming evidence that this virus can have deadly consequences on a huge scale, we do not hesitate to suspend “normal life” because we understand that it is necessary. It is necessary because it will ensure that – for most of us, at least – there is a life we can come back to.
Companies around the world have stepped up. They are showing how they can act to protect people and the most vulnerable when the moment calls for it, without getting tangled in red tape or bogged down in internal company politics.
Equally, governments are quickly designing some of the biggest economic stimulus packages ever seen in peacetime.
This is vital to ensure that the damage to economies, companies and people from coronavirus is minimized, while maximizing the chance of a strong recovery.
The immediate focus is on ensuring people can afford shelter, food and medical treatment, and that medical supply chains and service providers can surge in capacity. It’s an essential effort to support communities, workers and businesses hardest hit by the virus itself. Companies, especially SMEs, need immediate access to capital to survive the turbulence, keep people in work and ensure vital goods and services remain available.
The second message is a wake-up call for all of us. The emergence and effects of this virus show just how fragile our way of life is. If we did not truly understand it before, we understand it now. Life on earth is a delicate balance, and it only takes one black-swan event to put everything in jeopardy.
It also makes it clear that we have the will and the capacity to face down threats to our communities and way of life. The coronavirus has moved with a frightening speed and we have responded with the same speed. The climate crisis has the potential to be far more devastating for humanity, but is clearly visible on the horizon allowing us the chance to take decisive action.
With the coronavirus, we are taking the action that is necessary. When it comes to climate change, we are still moving too slowly, often too tangled in red tape and bogged down in internal company and country politics. We have not truly understood that the worldwide devastation from climate change will be much, much worse than what we are experiencing today.
As the immediate crisis response transitions to longer-term economic stimulus in the coming months, the focus will be on rebuilding the economy and setting a new course. It is our responsibility to use this moment of crisis and renewal to build greater resilience, and to finally tackle the biggest threat to our existence.
Governments must put climate action and resilience at the core of these longer-term economic stimulus packages. This will ensure that public spending helps address both the current economic crisis and the ongoing climate crisis. It will help to avoid the economic earthquakes that – in the face of overwhelming evidence – we already know are coming.
This is a moment where we can take a decisive turn on the road to a resilient, zero-carbon future. We must include everyone, and we must avoid automatically recommencing a way of life that threatens our planet, the health of our communities and our people.
Long-term stimulus investment should be used to build a better future. A zero-carbon future in which communities and the economy are resilient to the impacts of climate change. One where investments contribute to reducing emissions, ensuring clean air and providing good jobs as well as safeguarding economic growth. This means aligning government spending with the most ambitious goals of the Paris Agreement – limiting global warming to a maximum of 1.5ºC and reaching net-zero emissions by 2050 at the latest.
Stimulus spending decisions should be screened through the lens of climate and resilience to ensure new dollars are directed toward zero-carbon options, and the power of public investment and procurement is used to accelerate demand for climate solutions that deliver good jobs, helping to mitigate rising unemployment.
We have the solutions to build zero-carbon power and transport systems. We know how to put people to work building energy efficient, low-carbon buildings and infrastructure. Nature-based solutions are available now to rapidly reduce and sequester emissions. Many of the technologies needed to create zero-carbon industrial sectors already exist.
Governments should ensure their stimulus packages accelerate these solutions and the many benefits that come with them. As a report from the New Climate Economy shows, shifting to a low-carbon economy could create a $26 trillion growth opportunity and 65 million new jobs by 2030.
We must protect what is most important. We have a responsibility to protect our families from economic shocks we can already see coming. By providing long-term solutions that build in climate resilience we can help mitigate the future problems caused by climate change.
A clear signal from governments that they back the rapid transition to a resilient zero-carbon economy and support the raft of climate solutions that already exist will help the private sector invest confidently as it acts to rebuild and boost the economy.
We need to look forward with hope that in rebuilding from this devastating crisis we can ensure greater resilience and a clear pathway to the zero-carbon future.