How does coronavirus impact climate action? Does the response to the crisis show that big threats like climate change really can be beaten? Find out from our climate change expert
Our lives have changed with the coronavirus crisis. But have they changed forever? In Does This Change Everything? European Investment Bank experts examine the implications of the COVID-19 crisis for sectors from education and digitalisation to urban mobility and medicine—and for your everyday life.
To find out what coronavirus means for climate change and the fight against it, we spoke to Nancy Saich, chief climate change expert at the European Investment Bank, the EU Bank.
Read Does This Change Everything? from the European Investment Bank, the EU bank. Subscribe to the podcast on iTunes, Acast, PlayerFM and Spotify
Does the coronavirus crisis have an impact on the threat of climate change?
Yes, it does. I think it has potentially a very positive impact on that threat. There’s also a risk of it having a negative impact. It can have a positive impact, because it has shown that globally when we’re facing a threat we can be prepared to change dramatically the way we run our lives and businesses to deal with that threat. In this case, we’re dealing with the virus. Climate change is actually a much bigger threat. Maybe the serious action taken to deal with the virus makes the steps to deal with climate change seem less scary and less unachievable—because we’ve shown we can fundamentally and quickly adjust the way we do business and run our cities. From the negative side, there is a risk that the money that’s going to be needed to rebuild the economies and get people back to work goes to the wrong things. I do hope not, and there’s a lot of effort going on in the EU to make sure that the recovery is green. If we do that, it can be a leap forward in terms of our response to climate change.
Governments are introducing big economic stimulus plans to help businesses recover from the lockdown. Should the stimulus focus on green companies?
First it’s important to understand that there are many companies that produce good things and employ a lot of people that are not green—but they may not be harming climate in a particular way. Let’s take a topical example of a company that’s making ventilators. They may not be green, but they’re making something very important. So all the stimulus does not have to be on green companies, because there are many important parts of our economy that do not harm the climate but are not green. On the other hand, if we use the stimulus to support companies that are high emitting and are not making an effort to transition, then that would be a mistake. So my view is that stimuli should focus on trying to help all companies be more green. But simply focusing on green companies is not the way forward. We need to support all parts of the economy to be greener as part of the recovery.
Do you think governments and investors will turn their focus away from climate and environmental sustainability, because they’re so concerned about a recession after the coronavirus?
There is that risk. The focus right now is on the humanitarian issue, on the loss of jobs as people’s living is lost. So they’re right to focus now on the immediate needs. As long as we do that without slipping back on climate and environment, that’s okay. What’s really important is the next thing we do, when we start really trying to build back better and put things back in a stronger position to try to avoid the worst of a recession—we must then really focus on recovery and climate at the same time. There is a lot of pressure out there to make sure that governments and investors don’t turn away now from climate and environment. Younger (and older!) people have seen what the world might be like if we reduce emissions and how wonderful it would be to live in cities without so much air pollution and where you don’t have so much traffic. Perhaps it has given some hope to younger members of society that there is really a way to get to a much better way of living. They’re putting pressure on governments and investors to absolutely not turn away from climate and environment. So I don’t think governments will turn the focus away because I think there’s sufficient pressure not to do that.
In the lockdown we have used our cars much less. Oil prices collapsed. What does this mean for the future of climate change?
The most important thing is to focus on where we use the public money going forward. We probably have to be very careful not to prop up parts of the economy where perhaps the economic situation of the virus has sped up something we needed to do anyway—to move away from our dependence on fossil fuels. Oil prices collapsed because we’ve been using our cars less. President Macron of France talked last week about how the effort must now be towards electric car manufacturing in France. If we keep on that sort of path, this may be the moment where we accelerate away from our dependence on oil and fossil fuels.
Is it likely that citizens might be more open to climate solutions because they’ve seen that life goes on, even without air travel and constant mobility?
There are some very negative sides to this crisis, obviously. I am concerned about my elderly parents in the UK, my husband’s family in South Africa. Of course people will go back to flying and travelling. But it has shown us that we can do a lot more without travelling. People have become much more adept on Skype, on Zoom, and have found they can stay in touch with their families and do a lot of things in a low-carbon way. For example, I’m really old school, so I like to write on a paper document and the type it into a computer. I can’t do that at home. I can’t print documents. So I’ve really had to learn to review documents on the screen. Younger people were already working in this way—my daughter doesn’t print things. So perhaps the older generation has found that we can work in a different way. People have been very imaginative. My husband’s physiotherapist has been working by video. So my husband has found he doesn’t need to travel to the clinic. He can still do his injury rehabilitation—but at home on a video session. It has shown us that we can do a lot of things without travelling around all the time. Perhaps we’re now more aware of travelling only when we really need to, and not travelling all the time out of habit.
People used to say that the investment needed to fight climate change was so big it perhaps couldn’t be done. But the economic stimulus plans for coronavirus are even bigger—and they’re happening. Is this a sign that the necessary climate investment really can be achieved?
Absolutely. It always could be achieved, it’s just that there’s an inertia in the system so that it takes a long time to shift money to greener and transition activities. The seriousness of the coronavirus has made it necessary that big changes in investments are made in a very short time. Look how fast some of the manufacturing has changed from making totally different items to making ventilators or other necessary medical equipment. That’s been much faster than many of the investments that are needed to address climate change. We’ve surprised ourselves. When it became clear that manufacturing needed to change, it did change – and very fast. It has shown in clear relief that actually we can do this—we can address climate change. The investment potential is there, with for example the EU Sustainable Finance Action Plan and many things that are going on with the green recovery. We can divert money much more quickly than we thought. Perhaps this has made it less scary, because we’ve just done this with the virus, so let’s carry on and deal with other big threats that are facing us, including climate change, which is probably the biggest that we’re facing.
What can the EIB do to help in this new situation?
We have a very important role in the recovery in the EU. I believe there’s going to be a lot of new initiatives in the green recovery. The bank is not only supporting the health sector and social sector to recover and support SME job creation—but we can also really help with green efforts, using our knowledge, our financial innovation, partnering up with public money to really accelerate green financing. And in building back better, building resilience to all kinds of shocks. This time it has been a virus, but let’s suppose the next one is catastrophic drought across large parts of Europe, knocking our tourism, agriculture, wine. We need to be resilient to those things, and the EIB with its multisector approach, funding public and private sectors, can really help drive that agenda. And then of course we are a global multilateral development bank, we are the EU’s development bank, so we can also really take this forward in developing countries and help them not only with their health crisis, but also through our credit lines to employment in small businesses. Critically we can help countries build resilience to other big impacts on people living in urban and rural areas—addressing all types of risks, including climate change and environmental degradation. If we help our clients with this more holistic resilience across all different types of threats, then we’re helping them build stronger economies and work towards achieving the Sustainable Development Goals and really helping them recover in a green way. This will help them step forward into a cleaner, greener future for their citizens, as well as for our citizens in the EU.
Read Does This Change Everything? from the European Investment Bank, the EU bank. Subscribe to the podcast on iTunes, Acast, PlayerFM and Spotify
