The Green Renaissance: How to Rebuild the Global Economy

Episode 6: Are We Building Back Better?

Episode Summary

Just over a year ago, as COVID-19 was causing personal, social and economic devastation across the world, government leaders were quick to announce their plans to “build back better” as part of a green recovery. At the time, we all listened. But were we too quick to take these statements at face value? 12 months on, have governments really been matching these commitments with action on the ground? In Episode 6, we sat down for an open debate with Steven Stone (United Nations Environment Programme), Brian O’Callaghan (Oxford University), Jean-Paul Adam (United Nations Economic Commission for Africa) and Katja Funke (International Monetary Fund), to ask: are we building back better?

Episode Notes

Open Discussion

3:03 Q1: What is at stake when we talk about a green recovery? And what does a green recovery actually mean?

13:38 Q2: Are countries really building back better?

23:08 Q3: How do we bridge the gap between commitments and actions?

35:56 Q4: What is our green recovery action plan for the next 6-12 months? 

Episode Transcription

[Teaser]

Steven Stone: So you can understand why a country or politicians would need to say my first priority is to jumpstart the economy. But guess what? We’re jumpstarting a dirty economy. The economy is largely dirty, you know, it’s just colossally good at producing CO2 emissions.

Colm Hastings: Welcome to The Green Renaissance, a podcast series from the Partnership for Action on Green Economy that aims to unpack the green recovery debate. This month, join us for an open discussion with Steven Stone, Brian O’Callaghan, Jean-Paul Adam and Katja Funke as we ask – 18 months on, are we really building back better?

Steven Stone: But if we don’t spend it wisely, to actually position ourselves vis-a-vis the planetary crises that are in front of us, then we’re doing ourselves a double disservice, because we’re loading ourselves down with debt.

Brian O’Callaghan: The public investment profiles that are set forward now, are going to influence a country’s emissions profile for the next two, three decades ahead. Right, and they set industrial priorities as well, which could have even longer term implications.

Jean-Paul Adam: The African Union actually recently adopted a green stimulus program. It hasn’t perhaps generated much attention in the media, mostly because it’s unfunded. So it’s a great intention. But we have to be able to back it up in terms of real investments. And I think this is one of the huge challenges for all African countries.

Katja Funke: I think that’s a super important point that, we need to align the objective of the climate with the objective of the people. Because governments are not working either for the UN, they are not working for us, they are working for their people. And unless you have the people asking them to do something, it’s not going to happen.

Colm Hastings: Subscribe wherever you get your podcasts. I’m Colm Hastings, and this is The Green Renaissance.

[Intro]

Colm Hastings: For those of you that have been following the series so far, you’ll notice that today we’re changing up our format slightly and having an open discussion and debate with four experts on the state of play for a green recovery so far.

Colm Hastings: So now roughly 18 months have passed since the COVID-19 pandemic first entered the mainstream consciousness, and we’re all well aware of the personal, social and economic devastation it has caused across the world. It’s now also just over 12 months since the first national economic responses to the pandemic began to emerge, and it therefore seems like a good time to take a step back and assess how these efforts have been going so far.

Colm Hastings: Now at the time we were told – and many of us indeed told the world – that the pandemic represented a once-in-a-generation opportunity to reset our economic models and shift these onto a greener and more inclusive trajectory. Governments were quick to sign up to this message, and to declare that they would be building back better as part of a green recovery. At the time, we all listened. But were we too quick to take these commitments at face value? 12 months on, have countries really been building back better, and have their recoveries really been green?

Colm Hastings: With us to have this debate are four leading voices. Steven Stone, who is the Chief of the Resource and Markets Branch at the United Nations Environment Programme; Brian O’ Callahan, who is Lead Researcher and Project Manager of the Oxford University Economic Recovery Project; Jean-Paul Adam, who is the Director of Climate Change, Natural Resource Management and Technology at the United Nations Economic Commission for Africa; and last but not least, Katja Funke, who is the Public Financial Management Expert at the International Monetary Fund. Let’s hear what they had to say.

[Discussion]

Colm Hastings: So to start with I thought we could take a bit of a step back and begin by perhaps reminding ourselves first of all, you know, what is at stake when we talk about a green recovery? And then to follow up on that by discussing again, what a green recovery actually means. So Steven, perhaps we can come to you first. What would you say is the overall landscape, the overall picture, the context that is behind and informing the green recovery debate? And what shall we say are the core elements that we should be looking out for in green recovery responses?

Steven Stone: Thanks, Colm. Yeah, I was thinking about that before we joined this morning, I’m really looking forward to this conversation with my colleagues, because I think you have at least three of the brightest minds on the topic here. And one that’s waking up to it. You know, COVID wasn’t a coincidence, right? COVID happens because of all the pressure, on nature and on habitats. So zoonoses, in a way are symptomatic of the pressure that we’re exerting on our ecosystems. And that’s a harbinger of the future. We’re currently facing three planetary crisis, one is in nature loss, from where zoonoses come, but also climate instability, also rising levels of toxicity and pollution. So if you want, COVID-19 is a harbinger, it’s not a coincidence, it’s probably a sign of things to come if we don’t get our act together. So that’s first what’s at stake.

Steven Stone: And the second thing about what’s at stake, from my point of view is, we’re borrowing huge amounts of money from the future, we’re pulling spending forward, those were all those announcements, the $16 trillion that we’ve tracked with Brian and colleagues at Oxford Smith, that’s all money that’s being brought from the future today to jumpstart our economies. And that’s a huge investment. That’s a huge put, that’s a huge bet on our future. But if we don’t spend it wisely to actually position ourselves vis-a-vis the planetary crises that are in front of us, then we’re doing ourselves a double disservice. Because we’re loading ourselves down with debt, and we’re not in any better position to face the future. So that’s a very quick snapshot Colm of how I see it: a triple planetary crisis, a message from nature, and the chance to get our act together and use that huge spending from the future to position ourselves better for the future.

Colm Hastings: So how should we use those that spending? What is a green recovery? What are the kinds of areas, the policy areas, the investments that countries should be making?

Steven Stone: I would love to hear Brian’s view on this.

Brian O’Callaghan: Well, at the Oxford Recovery project, we spent a lot of time working with governments around the world to understand what may be best suited to their specific economic context. The whole idea here is that governments can use spending to simultaneously win on the economic side, you know, simultaneously create jobs, boost economic growth, and meet some of these environmental objectives – and as Steven says those environmental objectives are multifaceted. Because countries are different, and because countries’ economies are different, the priorities are different across them.

Brian O’Callaghan: But overall, some of the big themes and big areas for intervention that we see, include green energy, sustainable transport, green and efficient buildings. We talk quite a lot about natural capital solutions as well, which includes nature-based solutions. And then if you’re being even more forward looking, there are opportunities to kickstart clean research and development as well. And here the intricacies between what is good for one economy and another economy come forward quite strongly, too.

Colm Hastings: Is it a case that, as you said, these kind of different priorities, different challenges that countries are facing. So when we talk about a green recovery for example, in Europe, it’s perhaps not the same as talking about a green recovery in Africa or in other low, middle income countries? Jean-Paul, what’s been your experience working on the green recovery in Africa so far?

Jean-Paul Adam: Well, I think there’s some areas in common. Brian mentioned, I think the sort of big ticket items, which probably in all countries will have a positive impact. But then there are the nuances when you come to Africa, and in Africa, energy is number one. In terms of the priority for investment, because it’s a platform on which you build other interventions. And you know, there are almost 600 million people in Africa who still don’t have access to electricity. And being able to deal with that gap is key to then deal with other gaps. So, unless we can provide electricity for example, in rural areas, we’re not going to be able to invest in sustainable food security options for smallholder farmers. We need to be able to invest in in energy as a platform to address the issues of sustainable investment in agriculture, for sustainable investment in transport.

Jean-Paul Adam: Similarly, to deal with the social aspects. In the pandemic, a lot of schools in rural areas, couldn’t offer any solutions for education because they didn’t have access to electricity. In vaccine rollout now, some of the rural areas, again, you have health centers, but they don’t have access to electricity, therefore, you can’t store the vaccine. So electricity and energy investment and renewables, luckily, are now much more affordable. And they also do a lot to provide jobs, as well as providing more inclusion in terms of those jobs.

Jean-Paul Adam: Research done by the Renewable Energy Agency has shown that you get more jobs taken up by women in renewables than in fossil fuels, for example. And as Brian said, the case studies we’ve done in Africa, we look at the South Africa case study, for example, by investing in energy, sustainable transport solutions, nature-based solutions, you will get 250% more job creation than if you were investing in fossil fuel-related equivalents, and 420% more value addition across the economy. So there’s a real economic case to do so. But the big challenge in Africa and low, middle income countries is where do you get that investment in the first place? How do you invest in those areas? How do you get the funds to make that difference?

Colm Hastings: Katja, perhaps now we can also talk to you about some of your experiences at the IMF. I think Kristalina Georgieva, was one of the first to coin the phrase green recovery this time last year. Has the IMF’s kind of interpretation of the green recovery, has that shifted at all over the past 12 months? Are there any new developments that we should be taking into consideration, new priority areas, for instance?

Katja Funke: I’m not sure it has really shifted, I think it has been more defined over the last year. I guess at the beginning of the crisis, things were moving so quickly and we all got overrun by developments. And the first thing that came were the big announcements of packages were countries for announcing how much they were going to spend in order to address the crisis. And everybody was thinking these resources need to be used in a way, that is going forward and not just addressing the immediate crisis. And as Steven was saying, there was so much going on and so much in terms of resources also taken from the future, that we all thought this must be an investment in the future. I think what we saw during the last year is that of course a lot of these resources were spent on the immediate crisis response, whether it was on health or immediate support for livelihoods. And now it’s about refocusing on what’s happening in the recovery phase.

Katja Funke: And apart from focusing on that part of the spending, that is going into the recovery of the economy, and hopefully into a transition of the economy. I think we also realize that it’s not only about the spending, but it’s also about other aspects, that it’s also about taxation when we talk about carbon pricing, for example, and about regulation, because some countries have changed their regulation, loosened up their regulation, in the area of environment, in order to help their economies to recover more quickly. And I guess that’s a big thing to look after as well, that we are not losing ground there or maybe even are able to gain some ground in that area. So I think it’s not shifted, it’s been more refined, and it has been broadened in terms of what we look for in a green recovery.

Brian O’Callaghan: And perhaps, if I may just jump in here Colm, a couple of additional points on what has changed. You know in the beginning we were talking about stopping dirty spending, and accelerating clean spending, very much in these two camps. And those are very important parts of the conversation, and probably the most important parts of the conversation. But at the same time, there are these big chunks of recovery-type spending, which maybe are traditionally seen as neutral for the climate, but are still very important parts of any government investment program, right. So for example, new healthcare investment, or building new schools. Those are positive, but you wouldn’t necessarily think they have a positive or a negative greenhouse gas or other environmental impact.

Brian O’Callaghan: What we’ve been talking about more and more now, and you’ve seen this in the recent Biden jobs plan proposal, is thought for how you can build green incentives into that type of spending, too, right? So if you’re going to build a new school, are there opportunities to bring solar energy into the mix, ensure that the school is powered by solar energy on its roofs? Or if you have to build a new hospital, can we ensure that all materials associated with that construction are green and sustainably sourced? So those parts of the conversation I think, have also been recent and very welcome.

Brian O’Callaghan: The additional piece here, which I think we’ve rightly focused on more over the last six months, is the justice and health and other components, right? Across environmental movements, there has been more focus on ensuring that we are building up social capital, reducing inequalities, and not as perhaps has been done in some instances in the past, exacerbating them. And this is important both within economies, so within the UK economy here for example, but also between economies. There’s an important component, which JP alluded to, of ensuring that high-income countries bring some of the justice considerations into how they think about international affairs and international relations, which means directly putting some funds towards support of lower- and middle-income countries that most need it.

Steven Stone: Yeah, and if I could come in their Colm, I just, you know, to put the numbers in magnitude, right. The $1.9 trillion package that Biden put forward in his first days, would essentially take care of the debt problem, or the debt servicing problem, at the very least for a large number of countries. The total debt outstanding debt service payments for the 72 most indebted countries is around $600 billion for the next four years. So just to put the numbers into perspective, there really is a justice question and I think that one is coming more and more to the fore. Particularly as the role of government comes more to the fore because, as we’ve seen with COVID, it really is the government that needs to step in and set things straight. It’s no longer a private sector solution only, or even mostly, which is a very interesting trend or change over the past 12 months.

Colm Hastings: I think you’ve actually touched on a few points that I hope we can explore in more detail a bit later on, particularly in terms of how we now address many of the challenges that are now still prevalent. But for now, perhaps we could just kind of move forward and have a quick reflection on the green recovery efforts so far. So Brian, I wanted to come to you first here, you are obviously the lead author of a recently published report by the University of Oxford and United Nations Environment Programme, which asked this very question, you know, are we building back better? So I wonder if you could just share quickly some of the main findings and insights from that report?

Brian O’Callaghan: So this report builds on a massive global and collaborative tracking effort between Oxford, the UN Environment Programme, UN Development Programme, the IMF, GIZ, and UN PAGE as well – so this big collaborative effort. What we’re trying to do is understand how governments are spending in relation to COVID. When we look through the environmental lens, we see that, there are really big opportunities, basically, in all countries around the world to spend green. And we’ve heard many instances of government leaders, putting out broad statements of how they are going to build back better, and the importance of building back better, or of greening their economy. Unfortunately, they haven’t quite met that rhetoric with action.

Brian O’Callaghan: To date, we’ve seen about 82% of recovery spending, not advancing those environmental objectives that they say that they’re doing. We go into detail in the report highlighting where green spending has gone, where dirty-type spending has moved. And importantly, we also highlight, again, these major disparities between different parts of the world. So even without considering what has been green, and what hasn’t, we find that so far, high income countries have spent about $12,000 per person in response to COVID. Emerging Markets are somewhere around $600 to $700 per person, and that’s mostly led by China. And then your least developed countries, they’re at $10 per person. $12,000 versus $10.

Brian O’Callaghan: So these huge disparities that we already had going into COVID, they’ve been broadened because of the direct economic consequences of COVID. And they’re going to be enlarged yet again, because of how countries can respond differently. And that’s, importantly true on climate as well, right? If you’re only spending $10 per person, because you don’t have more to spend, you can’t possibly be spending very much green. And so again, there’s a big impetus here, both to accelerate green investment around the world, but also to ensure that we’re supporting the global south more broadly in their efforts to do so.

Colm Hastings: Jean-Paul, how do we support the global south? How do we support low and middle income countries, to elevate their fiscal abilities?

Jean-Paul Adam: Well, I think one of the very interesting things of the work being done by Brian jointly with UNECA and with UNEP and with others, is to show where the investment has the most impact. So that there needs to be a focus on those areas, starting with energy, looking at sustainable transport solutions, and also preserving natural capital because of the cyclical nature – I think Steven mentioned at the start that COVID-19 has come about because of the, I would say the lack of attention given to natural protection.

Jean-Paul Adam: Now the main issue that’s faced by African countries and low- and middle-income countries, and what perhaps we could term as vulnerable countries is the access to affordable finance in the first instance, and there’s huge discrepancies. You know, we’ve talked about just the Biden plan being $1.9 trillion. African countries in 2020 had $56 billion committed. And I’m not talking of their own resources, but I’m talking of resources that were committed through the major international institutions, either through the debt suspension and service initiative or through other funds.

Jean-Paul Adam: There was $56 billion committed of which actually, only $35 billion was actually disbursed in 2020. Some of it is still being disbursed this year. So you can see that the amount of money that was available was very little, and that translates into very small amounts of spending per capita. And it has been going mostly into rescuing big employers because it has been trying to maintain people in employment and ensuring that the economies don’t sink. We need to dramatically increase the investment that’s available going forward to stimulate jobs, and if we want them to go into new areas like renewables, we need to recognize that means transferring people from, in some cases, the commodities, extractive sectors, and they need to be retrained to be able to go into the renewable sectors. And that means dramatic investment upfront.

Jean-Paul Adam: A lot of this can be done by the private sector, and there is demand from the private sector to invest particularly in energy. But in Africa, you also need to deal with the transmission and distribution networks for example, and these have to be done by governments. And the amount of funding that’s currently available just is not there to meet those requirements. And if they’re going to borrow on the markets, African countries, even the best performing African countries will pay five to six times more in interest rates than for example, countries in the OECD. So we need to address that issue of access to funding. And it needs to be upfront, because the investments that will be done now, will have the biggest impact as opposed to waiting for a few years down the line. We need to put that money into these countries immediately and not wait five years down the line.

Colm Hastings: Perhaps to you Katja, does the IMF have a role in kind of addressing these gaps and increasing the funding available to low- and middle-income countries?

Katja Funke: I think the way that the IMF is supporting also through its programs is to look into the aspect of the environment and the plans that the governments have, to support them to identify what environmental impacts that they can take into account when they’re making their plans. I think one very important aspect is the quality of public investment. And that’s especially what we see in low- and middle-income countries, that where you’re putting your money, and what you’re getting from it is detrimental to whether you are having a success in your transition or not. And that’s something that we are supporting as well with our capacity development, when it comes to public financial management support and investment management. That’s a huge effort I think that we have to make with countries that the money is going in the in the right direction and being used in an efficient way.

Colm Hastings: Steven, did you want to add something?

Steven Stone: I did yeah, I did want to come in here Colm because I think what Katja is alluding to is the quality of public expenditure. And with this massive influx of new money, the stimulus spending, and the kind of efforts that Oxford’s brought and others, they’re really looking at the quality of the spending, and I think that’s part of the future. Because the challenges are so huge, every penny, every dollar that’s spent needs to be spent wisely. And so the role of public finance, I think is going to be key. And Jean-Paul you alluded to this, how do you leverage the limited public finance that there is, to leverage the private capital that is seeking the high returns, but currently is pooled in advanced economies at very low interest, sometimes negative interest rates, with massive liquidity injections, central bank purchases, and the money is not reaching where it’s needed the most.

Steven Stone: So we have a classic market failure here, that we need to also bring into the picture. The other thing I wanted to say Colm on this point is, you know, and I think Jean-Paul you also alluded to this. The amount of inertia in our economies is huge. So you know, there is this opportunity to transition and to pivot. But the urgency is simply to jumpstart the economies. There are so many jobs that have been lost. I think it’s like 4% of GDP lost to labour income, just simply from jobs being lost. So you can understand why a country or politicians would need to say, my first priority is to jumpstart the economy.

Steven Stone: But guess what? We’re jumpstarting a dirty economy. The economy is largely dirty, you know, it’s just colossally good at producing CO2 emissions. I think it’s around 30 gigatons a year. So that’s really the challenge. We have a dirty economy. With lots of inertia, and then we have this golden opportunity to go green. And there’s a real tension there. But financing is key, and I think looking at how to unlock this financing, particularly for countries that don’t have it and have massive, not only needs, but opportunities is a real part of the question here.

Brian O’Callaghan: And Steven, unfortunately, it seems like it’s one of the last big opportunities that we have to make significant movements on climate. You know, the investment, or the public investment profiles that are set forward now, are going to influence a country’s emissions profile for the next two, three decades ahead. Right, and they set industrial priorities as well, which could have even longer term implications.

Brian O’Callaghan: And I say, perhaps one of the last because, as you’ve just explained, Steven, the amount of capital leaving government balance sheets now is massive and in some ways unprecedented. And there just is not going to be the political capital to spend very much more in the decade ahead. We’re going to see governments and political parties on both sides, focusing on balancing the budget and returning to surplus, and all of those types of ideals, which realistically mean that the purse strings get tied tight, and we don’t see more investment. So if governments were to ever spend big on climate, now would be the time.

Colm Hastings: You’ve all made very clear that there is indeed a huge gap between the commitments that governments are making to the public, on the face of things, and the actions that they’re actually taking. So I guess the million dollar question is, how do we bridge that gap? How do we now hold governments to account? How do we drive governments to make those right decisions? Katja, I think some of your work has touched on some of this, in terms of how we can ensure that there’s accountability for governments.

Katja Funke: One important point from my perspective is that we move on and don’t just look at what they’re doing in terms of the recovery coming from COVID. But that we’re looking at the whole package of policies, of the whole budget that governments are putting in place, because if we continue focusing on just the aspect of announced new policies, I think you also give governments the opportunity to basically dress their appearance by just making themselves look green, by putting forward all the green stuff and hiding everything that is not green or not perceived as green in the budget. So it’s taking a holistic view at what governments are doing.

Katja Funke: Another aspect, from my point of view is that there have been so many entities looking at this, with producing indices, producing trackers and everything. So it’s not very transparent in terms of how we are measuring and how we are following up on what governments are doing. It would be really useful from my point of view if we had an organized and unified effort, in terms of looking at what governments are doing, and in terms of communicating what we see what governments are doing, so that we produce something that can be picked up by the public and can be held against governments to show them this is what you promised, and this is what you’re doing. And not this is what you promised, and these are the 10 different measures that you can look at in order to see what you’re doing. So I think transparency, and that needs some unified efforts, would be something that can be very useful in pushing government.

Steven Stone: Colm if I can just take the contrary view, not to be contrary for the sake of being contrary Katja but just to say that, I’m really impressed with the amount of attention and sort of the blossoming of efforts to track. And I know it’s probably confusing, but I also feel that it shows the value of actually trying to quantify the benefits. And so over the year, we’ve seen a flourishing, but I think that’s exactly how we create transparency. Now eventually, it all needs to be published. And it all needs to be open source and public source. That’s the real thing, because we saw a lot of consultancies coming in and sort of doing I don’t know, blackbox calculations. But for example, with the Oxford work, it’s all in the public domain. And it’s all based on the Cameron Hepburn et al methodology. So I think that’s the way to go, sort of open source.

Brian O’Callaghan: And to add to it, if anyone is interested in checking out that data set, it’s just Google Global Recovery Project Oxford, and you can download the full set. There are almost 5,000 different policies in there, and no matter where you’re from in the world, you can get a little bit of a perspective on how your government has been doing.

Jean-Paul Adam: Perhaps just to come in as well, from the African perspective. I think that, firstly, we need to recognize the economic model that Africa has used so far. And of course this is a generalization because it’s a huge continent with many different countries, but the bulk of growth in Africa has been driven from commodity exports and extractives, over recent years. And these have led to real improvements in standards of living in a broad sense. I mean, in terms of the achievements for the Millennium Development Goals, there was a huge leap forward, overall for Africa.

Jean-Paul Adam: But this is measured, particularly through GDP per capita, which is not necessarily the best measure as well of real progress. And the progress that has been made has left people in very vulnerable situations. So you’ve seen a huge increase of people that have left absolute poverty, but you have a rising inequality, and there’s a risk of that divide growing going forward. The challenge as well around, for example, the extractives in many countries have actually been interlinked with the lack of transparency. I think investments in particularly renewable energy could be done in a very transparent way, there is if you use market based mechanisms, you can build in that transparency at the outset. There are a number of countries in Africa that have led the way in that regard.

Jean-Paul Adam: And by addressing that we can dramatically improve the impact of the investment. So illicit finance of financial flows cost Africa about 3% of GDP per annum. But we should also know that climate change is costing African countries around 5%, on average, per annum in terms of the costs to their economies. So investing dramatically in areas that boost climate resilience, which include moving towards cleaner energy, but also nature-based solutions, investing in protection of that natural capital, is one of the key ways to show citizens as well the impact that these investments can make.

Jean-Paul Adam: And I think the work that we’ve done, using the case studies done jointly with Oxford University have shown, that you get a much better impact in terms of job creation and value addition, by doing that, and that’s available in our green recovery report issued by the ECA, which includes case studies from Oxford University, and Vivid Economics.

Steven Stone: If I could come in Colm, I think there’s a really interesting confluence between, just to build on what Jean-Paul is saying, the literature is quite strong on the benefits of investing green, so the job multipliers and the growth multiplier. So I don’t feel like we need any more proof of concept, or proof rather, what we need is proof of concept that countries are actually putting this into play. And so you have the statements from leaders saying we want to go green, and for example, where I am in Europe, you know, huge amount of forward momentum, the EU Next Generation bid, the EU Green Deal. So there is a lot of leadership from some parts of governments.

Steven Stone: And then you’re seeing also on the business side, a real push towards green as well. So it’s kind of interesting, I’m thinking of the whole push towards net-zero. The Principles for Responsible Banking, the Net-Zero Asset Owner Alliance, where you’re getting literally trillions of dollars that are feeling the pressure, the climate pressure. Last week, there was some really big moves on some of the major oil companies. Exxon Mobil had sort of a director insurrection, and there’s this little group called Engine Number One that engineered a board – not takeover, but they got a couple of people on the board.

Steven Stone: So the point is that there are these two sort of big trends, and one is pressure from the private sector, from the public to go greener. And then there are the statements that we want to go greener and actually some actions, from leaders. I think, you know, following Jean-Paul’s point, proof of concept needs to happen at very country levels, and we need to support those countries, at least from the UN perspective, that are making those commitments and following through.

Jean-Paul Adam: And I think linking to that, of course, there’s the issue of availability of financing because, there are actually a huge number of, there’s 39,000 megawatts of renewable energy projects in Africa which have been developed but are not yet funded, for example. So the funding gap is one of the key issues, and if we can get financing into these areas, I think it is part of proving that concept and showing new jobs are coming online linked to investments in these sectors. But the key is that it has to happen quickly.

Jean-Paul Adam: The African Union actually recently adopted a green stimulus program, this happened in January this year, it hasn’t perhaps generated much attention in the media, mostly because it’s unfunded. So it’s a great intention. But we have to be able to back it up in terms of real investments. And I think this is one of the huge challenges for all African countries. How do we actually make that jump from the intention to the implementation? And I think that’s one of the key things that gives us all sleepless nights right now.

Colm Hastings: Should we be giving governments, particularly in high-income countries a harder time? We now have this data available. As you’ve all just said, I think many of the solutions, the answers are here, perhaps they were even here 12, 13 years ago, after the last economic financial crisis. And looking at the results of the latest report that you authored Brian, a cynic might say that we shouldn’t really be surprised that countries haven’t matched their commitments with action, you can say that this is exactly what’s happened in the past, every time governments have been confronted with a choice between perhaps maintaining the status quo and real change.

Brian O’Callaghan: I would say that governments prior lack of action was unacceptable, and their current lack of action is unacceptable. So while we may have expected them to continue to act in an unacceptable way, that’s just not okay, right? And to the broader question that we’re addressing here which is, how can we actually push some of these changes? I think we need to understand that governments have competing priority sets, right now. They’re being lobbied by groups from every single side. And it’s important that those who are in favour of environmental protection, are making their voices heard. So that’s at that top lobby level, but that’s also coming from the people, right?

Brian O’Callaghan: It’s important that we say something. That our youth movements, do something. That the public takes a stand. That, you know, you look to some of the work that we’ve done in the Observatory, and call out the particularly poor performance of different countries. So my home in Australia, for example, one of the absolute worst performers so far, I think only 2% of recovery spending has been green. And it’s important for me as an Australian, my colleagues, those younger than me, too, and those older, everyone to stand up and say something, do something. And that can be at the local level, that can be within the business that you work for, that can be within your school. But there’s an opportunity for us all to actually just, do something.

Jean-Paul Adam: Perhaps the last thing on this point as well is that, I do think that there has to be greater advocacy for the countries that have the resources and that can access resources cheaply to make sure that these resources globally are being channelled into areas that make the most difference. Now for Africans, for example, the conversation around net-zero doesn’t necessarily resonate, because for the average African citizen, net-zero doesn’t improve their livelihoods.

Jean-Paul Adam: But, what the work that we’ve done has shown is that by investing in the right way, we can move towards zero hunger, zero poverty. And the net-zero pathway in terms of emissions is aligned, with zero hunger and with zero poverty. And so we have to make sure that people understand that. I think the economics is clear on that. But we have to make sure that the resources are there that actually allow us to go in those, in that direction.

Katja Funke: I think that’s a super important point that, we need to align the objective of the climate with the objective of the people. Because governments are not working either for the UN, they are not working for us, they are working for their people. And unless you have the people asking them to do something, it’s not going to happen. So, I think how we can feed into the whole situation is by providing the information, providing the background, doing communication so that people get the information that they need in order to ask for the right things to do from the government.

Katja Funke: And that’s from my point of view a little bit our role as well, because we are not here to dictate to governments what they can do. We can only help and encourage. And that’s also a little bit to answer to the question of whether we should be, more critical. I think sometimes if we can give a platform to shine to those governments who are doing the right things, that’s sometimes more helpful than blaming those who are doing the wrong things. Because that’s how we also make people feel that they can help their governments to be, a country to be proud of. And if we can achieve that, I think that’s a much more forceful message and more forceful motivation for countries to do the right things.

Steven Stone: I totally agree Katja with what you are saying, and some of the work that we’ve done at the UN, for example, the Partnership for Action on Green Economy, it’s all about lifting up and making visible that kind of political commitment and championing, when a window of opportunity opens and you see that kind of leadership, it is something that we need to celebrate and we’ve seen it in, in countries like in Africa, Jean-Paul, we were talking about South Africa earlier, you know, some real leadership from countries like South Africa, Indonesia, around the world.

Steven Stone: But at the same time, huge pressure, right? We have to acknowledge there’s massive pressure because the fiscal pressure, the fiscal space is reduced, revenues are down, the economy is interrupted. And then essentially, you know, nature in the way is our safety blanket. You know, when things get tough, people go back to the land. That’s what happened in India with the lockdown. Pressure increases on the environment or pressure to extract more from the environment. And so I think we really need to focus our attention on what are the options for those countries.

Steven Stone: And Katja another thing that caught my attention during the spring meetings with the IMF and the World Bank was this idea of some kind of programmatic approach to resilience, lending or debt for climate swap. So this kind of idea that there are countries which are hugely vulnerable because of the climate situation, and they’re also fiscally vulnerable because of COVID, that to me is a very clear pathway potentially for, with a relatively modest contribution from advanced economies, you could actually have a huge impact on people’s lives, and increasing the resilience and capacity of countries to thrive in the next coming decades.

Colm Hastings: Throughout the series, I’ve been asking each of our guests whether they feel optimistic about the future. And overwhelmingly, the answer has been yes – everyone feels great about developments that are happening, the future prospects. But I think as the last 12 months have shown, sometimes this optimism can also be misplaced. So instead of asking you whether you feel optimistic, I want to ask you about the concrete steps that are needed to scale our actions moving forwards. What is our end goal in six or 12 months’ time, not five, 10 years down the line? What are the policies, investment pathways that we can look to prioritize? And then also, how do we, how do we gauge, how do we measure this process over the next few years, it’s perhaps too long to wait until the end of the 2030 Agenda.

Jean-Paul Adam: Perhaps, I could start Colm. I think one of the first things that I think, Katja mentioned this earlier on, is a global price on carbon. Aligning a global price on carbon with the goals of the Paris Agreement, first of all, it creates an acceleration mechanism in terms of people understanding the impact that carbon has on the global economy. And it also further incentivizes net-zero investments. And we already know that in terms of the economic impact, investing in green sectors and in the green recovery will accelerate jobs and will create more value addition. But by having a global price on carbon, you’re essentially giving a clearer indication of the impact that this has. Now just for African countries, for example, our Green Recovery Report has shown that just buying from three sectors, which would be renewable energy, investment in climate-smart agriculture and moving towards clean cooking, if you had a global carbon price at about fifty dollars per ton, you could raise 30 billion dollars per year for Africa. And so, it’s a way of incentivizing the positive.

Jean-Paul Adam: And this is something, I think, which has to be addressed in in urgency. There’s a number of other financial innovations that can be done, that can bring new financing quickly. As Stephen mentioned before debt swaps, which I think are very interesting. In Africa, you actually see that Africa pays four times more in terms of debt service than it does in terms of, in terms of what it gains from its revenue. So if you were able to in strategic ways, invest in buying back African debt, but then investing the gains into climate-positive solutions, including renewables, but also nature-based solutions, it would make a very big impact.

Jean-Paul Adam: And you also need to look at how you can de-risk the cost of private sector investment in Africa, and that means using credit guarantees in some cases. One of the things that the Economic Commission for Africa has proposed, is a mechanism for creating a repo market, a repurchasing market to increase the liquidity of African bonds, on the conditionality that they are invested in green sectors. And of course, the final point would be that you do have to mobilize 100 billion per year, which was a figure which was not chosen arbitrarily. It was the cost of investing in carbon neutrality. And that’s the goal that we have to achieve. And that sounds like a lot of money. But when you put it in the context of the amount of money that has been raised for various stimulus, stimuli across the world, it’s a very small amount and it’s doable.

Brian O’Callaghan: I think broadly, over the course of the pandemic countries have become very inward focused, you know, and that’s been natural. We’ve all been looking internally and spending on our domestic economy. It’s important now that we remember that we’re part of a global environment and a global economy. Economic pains in Africa and across the developing world have big, real long term consequences for the rest of us. Periods of economic woe, lead to instability, lead to constraints on the global economy that are bad for everyone, basically. And so I think it’s really important to focus on initiatives like debt swaps, for example, that involve countries as well as the various multilaterals, for example, the IMF and the World Bank and others.

Brian O’Callaghan: I think that the World Bank, the IMF have been making positive movements. Surely they can do more. But we also need to be thinking about what countries can do and how exactly they can intervene. And in that way, a green recovery isn’t just about green investment. It’s also about support of the global south in a real, tangible financial way.

Brian O’Callaghan: But broadly otherwise to your question Colm, you know, I am naturally an optimist. But even in this case, looking at where we are, I’m a little scared. We are a very long way off. We’re not in the right place, we’re nowhere close to it. And yeah, if we were to make any serious movement forward in the climate fight, we need to do a lot and we need to do it very urgently.

Brian O’Callaghan: I think that every government at this point needs a plan for how they’re going to target prosperity by decoupling growth from emissions. I’ll say that again, we need to be targeting prosperity by decoupling our economic growth from emissions. Every country in every context has opportunity to do that. They all need to be thinking about how, and then working proactively in the immediate term, to set up that long term transition.

Steven Stone: And if I could come in there Colm, I think in addition to that long-term plan for prosperity. Earlier this year, the Secretary-General of the UN launched a report called “Making Peace with Nature”. And it’s very significant because in it, climate is definitely part of nature, climate is part of our environment. But nature is also part of our environment. And we are drawing down the wealth that sustains us. This, again, is where COVID came from. It’s the shrinking habitat. It’s the pressure that we’re putting on nature. So as part of that prosperity plan, it’s also reinvesting in nature.

Steven Stone: And a lot of the things that were planned for 2020 got pushed back, like the Conference on Biodiversity, in Kunming in China this year. Like the Conference on Climate as well. So there’s these milestones, there’s these windows that opened for leaders to come forward and actually commit to these plans for prosperity going forward. I just wanted to mention two other things Colm, in terms of how I see the windows opening. One is very close at hand, here in Geneva the WTO is under new leadership. Dr. Ngozi from Nigeria is leading, and they’re actually making huge progress under her leadership. And they’re working towards an agreement on fish subsidies, something that’s been pending for years, if not a decade. And this is about our ocean resources, these are about common access resources that concern us all.

Steven Stone: The other that’s a big one for UNEP is UNEP Plus 50. UNEP was created 50 years ago at Stockholm in 1972. What do we need to do, what can we think about doing as we reach this milestone? What do the next 50 years look like? What do we need to be doing today? And I think one of the things that gives me the most excitement, that excites me the most, is the whole push towards circularity. The idea that we can create value while minimizing waste streams, we can make our economies more efficient. And in fact, this isn’t anything new. Right? This is something, economies were circular a long time ago. It’s just with our industrial development, we learned a way of producing that doesn’t create that kind of value without creating liabilities, the climate liabilities, the nature and the pollution liabilities.

Steven Stone: So I think there’s a lot that can be done and there’s a really interesting report that looks at 1.5 degree lifestyles. What kind of lifestyles are needed, to bring our collective footprint within a 1.5 degree world? So there’s a lot sort of moving in the next six to 12 months. I think the work that we’ve done here on greening recoveries is a big part of it and hopefully lights a fire, in terms of what can be done, what needs to be done. But there’s also a lot more coming.

Katja Funke: Since Brian was saying that he’s rather pessimistic, or at least not that optimistic. I think from all the challenges that we had over the last 18 months, we can also see that we are able to adapt, we are able to change, and I would take a big hope from this, and as Steven was saying we need to change our lifestyle and I think we have shown that we can if we are forced to, and maybe we just need to feel the force that it’s not only if we are forced by a pandemic, but also by climate change, which is maybe becoming more and more visible to all of us as well. So I would be very hopeful that people are able and also willing to adapt and to change. And I hope we see that in our institutions as well. I mean, as we all are going back to office and everything, I think we need to lead by example and show that we can do things differently as well and not just look for others to solve the problem. Even if it’s, our contribution’s small, but I think the small contribution everybody has to do in coming up with a big outcome.

Katja Funke: I think that’s a good important point on what we as well and even in our work can do to kind of set the right, the right signals to countries. We can’t force them to do things that we want them to do, but we can certainly push them in the right direction.

Steven Stone: I just had one last reflection Colm, and it’s been great Katja sharing this time with you and Brian, with you and also with Jean-Paul. Two reflections, one is the quality of the leadership we’re now seeing across the major institutions and the UN system is outstanding. And you know, Kristalina Georgieva at the head of the IMF, a PhD in environmental economics. There’s not, it’s not a coincidence that you know there’s green thinking there. Within the UN, Achim Steiner is leading UNDP. Inger Andersen, UNEP, the list goes on and on. So the leadership is very, very strong. And I think that gives us some hope for the future, and we’re also seeing very strong leadership within countries, as I mentioned, in very, very important parts of the world, in Europe, in the US, in other countries as well.

Steven Stone: The other thought that I wanted to leave us with that gives me hope and optimism, is science. Because we entered a, sort of a realm of fake news a couple of years ago. And the antidote to fake news, the vaccine for fake news is science, including strong social science. And I think that’s what we have been talking about today as well, the science that Oxford produced, on the social science, the research that Oxford produced on the recovery tracking. The science also Katja that the Fund is producing, on the job multipliers and the growth multipliers and all of the working papers. The blog space of the IMF has gone through the roof in the past year, and really has become a source of public information, of good scientific information.

Steven Stone: And that’s UNEP’s role as well, to bring strong science, including social science to bear, for policymakers and for the general public. So that gives me hope for the future. And we keep strengthening our science, strengthening our game and talking to people like you who help us get the message out.

[Outro]

Colm Hastings: That was The Green Renaissance. Don’t forget to subscribe on whichever platform you get your podcasts from to receive new episodes each month, and please do give us a rating if you’ve liked the series so far. If you want to find out more about some of the green recovery responses that we’ve discussed in this episode, visit Oxford University and UNEP’s Global Recovery Observatory, which lists almost 5,000 policies that have been adopted up to this point. Thanks so much as always for listening, and until next time.