• Sun. Nov 29th, 2020

The Pandemic’s Economic Crisis Calls for a Green Recovery

— Rachel Kyte, the dean of the Fletcher School at Tufts University and a former special representative to the United Nations for Sustainable Energy for All


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Remember Greta Thunberg? News cycles were devoted to her passage across the Atlantic. World leaders praised or ridiculed her on Twitter, depending on their politics. She represented a movement that caught the world’s attention.

In fact, before the pandemic, climate change was one of the biggest drivers of political economy in much of the developed world, even as the United States abandoned its path to carbon neutrality under the Trump administration.

And the European Union, home to 446 million people and the richest collective of nations in the world, was starting the so-called Green Deal, the largest ever public investment in sustainable development, at $857 billion.

But as the pandemic hit, unleashing economic calamity and devastating job losses, climate change politics rapidly fell off the agenda.

Yet it’s in that very agenda, Rachel Kyte argues, that the opportunities for genuine, durable economic recovery and job creation lie.

Ms. Kyte, the dean of the Fletcher School at Tufts University and a former special representative to the United Nations for Sustainable Energy for All, has spent much of her career on the cutting edge of climate politics, science and the public policy debate around them.

“We need to invest in what is going to be competitive in a decarbonized world,” she argues, not “pour funding into zombie companies.”

But in many places ruled by populists, Ms. Kyte observes, people may be the driving force of change before governments catch up.

Updated

“Populists, whether they come from the left or the right, don’t do well with scientific advice,” Ms. Kyte said, drawing a correlation between many populists’ rejection of the science behind the climate crisis and their poor handling of the pandemic.

She talked with In Her Words about what a green recovery might look like and why the time for it is right now.

The conversation has been condensed and edited for clarity.

By the time the coronavirus pandemic spread, the idea of switching to a green economy was prominent in Europe — and indeed, a matter of debate around the world. How might it be integrated into whatever economic recovery lies ahead?

When we think about how to build back, we have to think about how to get businesses back, how to get people back in jobs, how to get food systems and energy systems moving again.

But there is a moment for learning, right?

Our energy demand has completely collapsed as we’ve all had to stay at home. Energy demand is down worldwide by 20 to 30 percentage points. That gives us an opportunity to really think about what is the energy system that we need as we come back.

Why is the energy system so important? Because the energy system accounts for the largest amounts of carbon emissions, which was driving the economy closer and closer to a precipice when it came to our ability to manage climate change. As a society, we’ve got to be able to respond to what we call the gray rhinos — these big risks that are sitting right in front of us — that we tend to try to ignore.

So, if we are already in a climate crisis, the way the economy comes back needs to be resilient to that crisis as well.

We already know that the oil and gas and fossil fuel part of the energy economy has been in real trouble. For geopolitical reasons, and then with the collapse of demand, oil prices came all the way down. Before the crisis, investors had been walking away from oil. Already the world was saying, “OK, we need to decarbonize,” therefore we need to invest in what is going to be competitive in a decarbonized world. And that is renewable energy — it’s a clean way to produce steel, it’s a low carbon way to produce cement, it’s the hydrogen economy for shipping and aviation. Stimulus should flow to these types of projects.

And the good news is that most of those green things, those clean things are actually job rich and job rich in local economies.

Some have argued that in a crisis like this, we just need to rev up the economic engines and worry about green transitions later. What do you say to that?

The worst thing in the world would be to double down on what’s not working, what was already unattractive and which was already not performing very well.

I think public attitudes around health and the environment are holding up and probably made even stronger as a result of this crisis. And so I don’t think that investing in things which are going to make the air really dangerous for us, again, is something that’s going to hold up for very long, especially with young people.

Certainly that’s where private investors are going. Why would public investors want to hold on to carbon assets? Then you’re just creating sort of bad assets on the public balance sheet while the private sector is going to be investing in clean. I don’t think that works for the poor and the vulnerable either.

Wouldn’t it be better to learn the lessons of reconstruction? Europe built a European Bank for Reconstruction and Development in order to manage the transition and the adjustment as the Iron Curtain collapsed, and that was about taking very big uncompetitive industries that were dirty and had huge payrolls, and turning them into things that could be competitive globally.

When you look across the world at political resistance to this kind of green rebuilding, what patterns do you see?

This crisis really has shown that populists, whether they come from the left or the right, whether we’re talking about Nicaragua or Mexico or Brazil or the United States, don’t do well with scientific advice.

There’s a correlation really between leaders who aren’t particularly keen on taking good scientific advice and their response to this crisis and the way in which they’re managing it competently. And therefore, you think about, “Well, what’s going to be their response to the next crisis?” — which is the climate crisis.

I think at the grass roots around the world, people see with their own eyes. They see crops disappearing. They see crop patterns changing. They see the air quality diminishing in their cities and towns. They see the sea level rising. They see the impact of storms. People know the climate is changing, and that what they want is government to work with them, to build resilience.

How do you take action or reach agreement on climate when there has been no common ground around the world for climate in the first place? It looks like it’s every person for themselves out there right now.

You can’t isolate yourself from a pandemic and you can’t isolate yourself from climate change. So we do have to find mechanisms.

In 2008, I worked in the international financial system, and in the standing up of the G-20 in response to the financial crisis, you had committed multilateralists sitting in key jobs in international organizations and in key jobs in government and in key governments. There’s no getting away from the fact that when you’ve got inward-looking politicians in key countries of the global economy, it makes it more difficult.

There is something we call reciprocal vulnerability, and I think women leaders are frankly, better at it. It’s basically standing up and saying, “You know what? I don’t know, we don’t know, but we are going to get through this together.”

There’s something extraordinarily powerful in that. Look at the countries that have done that versus the countries where it’s like, “We’re best at this,” or “We’re best at that,” whether or not that’s really true. In this crisis, imagine the international cooperation of walking into the room saying, “We don’t know, but we’re going to get through this together.” It’s not a bad place to start.

I can find green beans from Kenya in my local organic supermarket here in Brussels. It’s good that the growers have a global market for their goods, but how do you maintain those livelihoods and jobs at the scale — especially as different parts of the world are hit by the crisis-related downturn?

This crisis is going to force us to address some issues that we haven’t really wanted to address in the last few years, which is that you can grow your green beans in Naivasha and you can export them to the Netherlands, and I can buy them the next morning, but we still don’t have access to an affordable diet for millions and millions of Africans. We don’t have effective local and regional markets for fresh foods in Africa. We need extraordinary amounts of investment in cold storage and in supply chains within the region. And so, when a shock comes and suddenly there’s no flights to Amsterdam, everything collapses.

The same is true across Latin America. Most Latin American countries are exporting their food, and yet Latin Americans are suffering from type two diabetes, increasing amounts of noncommunicable diseases because of bad diets. And we have unparalleled rates of deforestation.