As global confirmed cases of COVID-19 surge toward 15 million, temperatures recently struck 38 degrees Celsius in the Russian Arctic. And while government officials urge people to wear masks, wash their hands and physically distance from each other, we cannot distance ourselves from the climate emergency.
Turbocharged by rising ocean temperatures, the 2020 Atlantic hurricane season is predicted to be very active with at least four major hurricanes of category 3 or higher forming. Yet, as Latin America and the Caribbean confront COVID-19, on top of tackling the virus, The Bahamas continues to rebuild almost a year after Hurricane Dorian caused over $3 billion worth in damages. What’s worse, the cost of climate change impacts, including more intense hurricanes, floods and droughts, could reach $100 billion per year by 2050.
With the need to confront both these short-term and long-term emergencies simultaneously, the region cannot wait for the COVID-19 emergency to end before planning a sustainable recovery.
We cannot get “back to normal”
We cannot go “back to normal.” Especially since the pre-pandemic world was largely the problem in the first place—and likely caused the emergence of the virus and its rapid spread. It also had high levels of inequality and low levels of social inclusion. Our destructive relationship with nature made pandemics more likely, with zoonoses, diseases transmitted to humans from animals, becoming more frequent. Long-term exposure to air pollution is likely an important contributor to COVID-19 deaths. Major Latin American cities have suffered from poor air quality likely placing more stress on vulnerable citizens during the pandemic.
Latin America is now the world’s COVID-19 epicenter, with the regional death toll surpassing 150,000. The region’s economy could contract by over 9 percent in 2020 as a result of the lockdowns and lower oil and commodity prices, remittances, tourism, as well as capital outflows. Up to 17 million formal and 23 million informal jobs could be lost and 2.7 million small companies could close. This tragedy could exacerbate the volatile political situation. Millions of citizens were out on the streets in late 2019 demanding better public services, an end to inequality, and more protection against disasters.
It’s time for a sustainable recovery
The pandemic requires a recovery that protects lives, creates jobs, and strengthens the system against future pandemics and climate disasters.
Governments worked to provide an immediate response to protect lives and livelihoods by providing liquidity and improving access to credit to reduce layoffs and company closures. However, they need to continue to protect the vulnerable via cash transfer programs to avoid citizens slipping back into poverty. The precarious social situation in Latin America requires putting social and environmental resilience at the heart of a sustainable recovery.
Given severe fiscal constraints, the region cannot rely solely on fiscal stimulus like in previous crises. Local and federal governments, multilateral development banks and the private sector must come together to develop a shovel-ready pipeline of sustainable infrastructure projects that are labor-intensive and get people back to work quickly. These projects include expanding renewable energy, retrofitting buildings to make them energy efficient, and using nature-based solutions to restore habitats.
The evidence clearly shows that long-term climate friendly stimulus policies can lead to effective multipliers such as increased innovation and investment and co-benefits including greater social inclusion and less air and water pollution. The response will also determine our fate on this planet, with the time available to tackle the climate and ecological emergencies evaporating rapidly.
Decarbonization strategies can guide the way
Vital to our recovery are the long-term decarbonization strategies called for by the Paris Agreement. Multiple countries such as Costa Rica and the United Kingdom are using them to steer their economies toward net-zero emissions by 2050. Our work at the IDB with various Latin American countries shows how these strategies are essential to ensuring a just transition to net-zero emissions, and help countries avoid locking into carbon-intensive and polluting development paths, which would create financial risks later on.
These strategies can play an essential role in helping governments, banks and investors identify and plan the deployment of sustainable infrastructure and policy packages in energy, transport and agriculture. They can also help ensure that public funds avoid bailing out polluting industries. Conditions on bailouts should include commitments to reduce emissions, improve energy efficiency, greater emphasis on training, and disclosure of climate risk by companies. Built in consultation with social partners, the strategies can help governments anticipate and facilitate job creation and identify sectors, including fossil fuels and livestock, that could be negatively affected.
Costa Rica is already applying such a strategy, using its national decarbonization plan to select shovel-ready projects and create jobs including in electric public transport and nature-based solutions in agriculture. Our experience working with Costa Rica shows that development banks can play a key role in designing long-term strategies and implementation plans via policy design and stakeholder engagement, but also help leverage funding.
The benefits of a sustainable recovery and aiming for net-zero emissions are impressive especially for saving resources as debt piles up and fiscal space diminishes—especially now given the pandemic. The region could achieve annual savings of $621 billion by 2050 if its energy and transport sectors reach net-zero emissions. This would also create 7.7 million new permanent jobs. With solar and wind power now cheaper than fossil fuel in many countries, it’s time to ditch fossil fuels—which carry $90 billion worth of stranded assets risk in the region’s power sector alone. Latin America and the Caribbean’s immense natural capital also offers opportunities. Nature-based solutions, including mangrove restoration and reforestation projects, can create jobs and leverage private sector investment, all while protecting ecosystems and building resilience.
The cities of Lima, Bogotá, Medellín and Mexico City are also working to build a better future. They are expanding cycle lines and temporarily closing streets to enable social distancing and promote healthier urban spaces. In Medellín, Colombia, the city authorities are pushing for a sustainable recovery with plans to more than double the number of interconnected public transport lines over the next decade, while aiming to cut carbon emissions by 20 percent by 2030. The city is also working to provide 50,000 electric bikes for residents to rent at an affordable price. For small business owners, informal workers, and those working in tourism, these measures could prove important for recovering business opportunities.
But temporary street closures are not enough. We need to make these changes stick for the long term. With oil prices low, cautiously eliminating fossil fuel subsidies could free up scarce public funds and redirect them to poor households while also reducing air pollution. Greater private sector finance will be key. Green bonds are an important instrument to mobilize the private sector financing that supports sustainable infrastructure investments. Recent successes in Latin America and the Caribbean, where green bonds reached roughly $14 billion in 2019, need to continue.
The time is now. With strong global public support for a sustainable recovery and 39 different entities including the European Union, governments, and cities having proposed or adopted regional, national, and sub-national plans for a sustainable recovery, we need to take advantage of this momentum. Add to this the experience many countries have implementing long-term strategies, and a just transition toward net-zero emissions is even more feasible. Using these strategies to guide a sustainable recovery can ensure we don’t just secure a short-term recovery, but build a more inclusive and sustainable future to tackle the climate emergency as well.
This article was originally published by Global Americans.
Further reading:
Jobs in a Net-Zero Emissions Future in Latin America and the Caribbean
Getting to Net-Zero Emissions: Lessons from Latin America and the Caribbean
Peru advances towards carbon neutrality with an ambitious, participatory and robust plan
Photo: Flickr – Jonathan González
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Self interest groups in LA make it neccesary that Multilateral Banks like the IADB, donors etc decisevelly pressure LA government to make serious commitments toward that direction. Many LA countries economies have economic elites that benefit from the “status quo” and have big influence on lawmakers to make changes very difficult.