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Climate crisis: Covid-induced economic woes hindering low-carbon transition

Katie Kouchakji, IBA Environment CorrespondentMonday 10 May 2021

Despite global calls to ‘build back better’ following the Covid-19 pandemic, a recent United Nations report has revealed that just 18 per cent of recovery spending is going to measures that enhance sustainability.

The report, Are we building back better?, says that the largest window of opportunity for recovery spending is just opening now, and calls on governments to prioritise spending in energy, transport, building upgrades, energy efficiency, natural capital, and research and development.

‘A one-dimensional focus on short-term economic recovery risks further exacerbating long-term social and environmental crises,’ says the report.

‘The sense that we have is that we’ve won the rhetoric war – but we’re nowhere close to having a green economy,’ says Ronan Palmer, head of the clean economy programme at London-based think-tank E3G. ‘The longer the pandemic goes on, the more governments may have to support the fossil fuel industry as that’s where the jobs are at the moment.’

A one-dimensional focus on short-term economic recovery risks further exacerbating long-term social and environmental crises

UN report, Are we building back better?

He acknowledges this is a tough stance to take, but that the transition needs to be a managed process – while also cautioning that increased government debt leads to concerns about austerity measures. ‘This won’t help the transition either – they do need to invest in the transition,’ Palmer adds.

Even having a legislated net-zero emissions goal has not deterred the United Kingdom from controversially saying it will permit further oil and gas drilling in the North Sea and initially refusing to get involved in a decision regarding a new coal mine in Cumbria, saying it was a local issue, before changing tack in the face of global outcry and ordering a public inquiry.

‘It’s unbelievable that the country hosting COP26 is promoting a coal mine – and this hasn’t gone unnoticed,’ says Palmer, referring to the UN Climate Change Conferences of the Parties (COP26), currently planned to take place in Glasgow in November 2021.

‘The UK is leading the world in tackling climate change and we take our role hosting COP26 very seriously,’ said a UK government spokesperson. ‘The UK was the first major economy to legislate to eliminate our contribution to climate change by 2050 and last month the government committed to the world’s most ambitious climate target to reduce emissions in 2035 by at least 78% compared to 1990 levels – the highest reduction target by a major economy to date.’

They declined to comment further on the Cumbrian coal mine proposal ahead of the public inquiry, scheduled for September.

At the time of writing in May, it was still uncertain if COP26 would proceed as planned, with speculation that it could either take place virtually or be postponed again, having already been delayed from the original November 2020 dates.

Also of concern are ‘middle economic countries’, such as Brazil and Indonesia. As environmental regulations are starting to bite, governments may be tempted to roll them back, says Palmer.

The International Union for Conservation of Nature (IUCN) published a collection of papers in March which found that the pandemic has severely affected nature conservation, via reduced patrols, education and outreach, and environmental protection rollbacks, among other reasons. One of the papers analysed economic stimulus packages and found 64 instances in 22 countries where environmental protection regulations were removed. These include proposals in India to ease environmental clearance processes for infrastructure projects; permitting deforestation in protected areas in Russia and suspension of environmental impact assessments; and changes to the type of wood which can be used in Polish power plants.

The researchers concluded that, ‘on balance, post-COVID economic stimulus packages and policies to date have undermined more than supported environmental protections’ and warned that in the long-term this could lead to damage to infrastructure or impinge on Indigenous people’s rights.

Guillermo Tejeiro Gutiérrez, a director at Brigard & Urrutia in Bogota and Communications Officer of the IBA Environment, Health & Safety Law Committee, says that ‘rollbacks on environmental regulations are always worrying’.

He also notes that the notion of building back better wasn’t talked about as much in Latin America. ‘Covid brought a lot of stress to a lot of people, and people are focused on trying to get back to their lives and try to survive,’ says Tejeiro Gutiérrez, adding that, from an environmental law perspective, the principle of no regression means you cannot undo achievements and progress. ‘Rollbacks should be avoided by any means,’ he says.

However, in Brazil, President Jair Bolsonaro and his administration have hastened the repeal of environmental protection regulations during the pandemic, including revoking mangrove protections in September 2020. Environment Minister Ricardo Salles said that the protections ‘stifled economic development’; the decision however was swiftly paused by a federal judge, citing ‘the evident risk of irretrievable damage to the environment’. Earlier in 2020, Salles was caught on video telling Bolsonaro that they should take advantage of the media’s focus on Covid-19 to push through changes.

‘I’m not sure that [Brazil’s rollbacks] has to do with Covid-19, but the political agenda of the government there,’ says Tejeiro Gutiérrez.

Throughout 2020, the same could be said of the United States, under former President Donald Trump. Indeed, the IUCN paper found that the US, Brazil and India were ‘hotspots’ of environmental rollbacks during the pandemic. However, since his inauguration in January, President Joe Biden has set about undoing Trump’s damage to environmental protections, using executive orders where possible, including cancelling the Keystone XL pipeline. His American Jobs Plan puts action on climate change at the centre, with measures to increase energy efficiency, enhance the electricity grid, cap orphan oil and gas wells, and expand the railways.

‘It’s the kind of large-scale investment you need,’ says E3G’s Palmer.

In Australia too, it’s a different story. While Melbourne underwent one of the world’s longest lockdowns, the rest of the country has, for the most part, kept moving. Hospitality, tourism and the arts have been badly affected, ‘but most other service industries and building and construction didn’t miss a beat,’ says Ilona Millar, a partner at Baker McKenzie in Sydney.

‘If anything, what we’ve seen with Covid-19 is temporary measures [in the planning system] put in place to allow certain development approval processes to be fast tracked and extend the time before approved developments lapse,’ she adds. ‘It’s a lot more nuanced here – most of the Covid-19 response measures were temporary powers, not a complete reset of the system.’

Ultimately, says Tejeiro Gutiérrez, ‘we know the transition is going to happen – it’s just a question of when.’ With sustainability at the top of the global agenda, he continues, ‘now is the time to make something out of it, so the green recovery discourse is very helpful.’