A McKinsey analysis published in April suggests that lockdowns could make up to 60 million jobs in Europe and up to 57 million jobs in the United States vulnerable: subject to reductions in hours or pay, temporary furloughs, or permanent discharge. That cost is visible in the rising unemployment figures that many countries continue to report. The coronavirus pandemic has not only had tragic effects on health and lives but also taken an immense toll on livelihoods. The recovery from the COVID-19 economic crisis coincides with a pivotal time in the fight against climate change Governments can use the framework described in this article to design and carry out a low-carbon recovery agenda that could meet the immediate economic needs and improve the long-term well-being of their people. But our analysis highlights the chance for policy makers to assemble a package that quickly creates jobs and economic demand, produces steady growth, and accelerates the uptake of zero-carbon technologies. It requires assessing stimulus measures with respect to complex factors, including socioeconomic impact, climate impact, and feasibility. But a high-carbon recovery could make it hard to meet the goals of the Paris Agreement, and heavy relief and stimulus spending might leave governments too debt-strapped to pay later for emissions cuts.įinding a low-carbon, high-growth recovery formula isn’t easy. 1 Cameron Hepburn et al, “Will COVID-19 fiscal recovery packages accelerate or retard progress on climate change?,” Oxford Review of Economic Policy working paper, number 20-02, 36(S1), May 4, 2020. A recent survey of top economists shows that stimulus measures targeting good environmental outcomes can produce as much growth and create as many jobs as environmentally neutral or detrimental measures. Such a package need not involve economic compromises. Our analysis of stimulus options for a European country suggests that mobilizing €75 billion to €150 billion of capital could yield €180 billion to €350 billion of gross value added, generate up to three million new jobs, and enable a carbon-emissions reduction of 15 to 30 percent by 2030. A low-carbon recovery could not only initiate the significant emissions reductions needed to halt climate change but also create more jobs and economic growth than a high-carbon recovery would. The period after the COVID-19 crisis could determine whether the world meets or misses the emissions goals of the 2015 Paris Agreement, which were set to limit global warming to 1.5☌ to 2☌.Īchieving those goals is a distinct possibility. The danger now is that the same pattern will repeat itself-and today the stakes are even higher. But by 2010, emissions had reached a record high, in part because governments implemented measures to stimulate economies, with limited regard for the environmental consequences. The ensuing economic slowdown sharply reduced global greenhouse-gas emissions in 2009. Important as it is to repair the economic damage, a swift return to business as usual could be environmentally harmful, as the world saw after the 2007–08 financial crisis. Severe job losses and revenue declines in some sectors, along with the high likelihood of an economic recession, have also compelled policy makers to mount an unprecedented financial response, which already exceeds $10 trillion, according to McKinsey estimates. Sustaining an effective public-health response remains a top concern for many policy makers and business executives. The tragedy of the COVID-19 crisis has taken much attention away from the threat of climate change, as institutions devoted themselves to protecting lives and livelihoods.
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