Kempen's Commentary: Green recovery
As a result of the corona crisis, 2.6 billion tons of CO2 will not see the light of day. That’s an expected decrease of 8 percent this year: some kind of light in these dark times. This estimate by the International Energy Agency (IEA)1 is a daily identifiable number. Roads are empty, skies are blue, and the internet is full of videos of animals in places that have long been a no-go area for them. Is this the tipping point for the transition to a sustainable economy?
The fact is that it’s possible. With companies lining up for support, governments have an unprecedented power to shape the future. Public aid to banks in the financial crisis was accompanied by tightened regulations for the financial sector. And also now, in the corona crisis, support to companies can surely be conditional. Current discussions about airlines are a good example, and perhaps just the beginning. A recent poll by among others Joseph Stiglitz among more than 200 G20 officials and central bankers shows that a large majority of them believes that state aid should be green2. There is broad support by companies for the ‘green recovery alliance’ that has started in the European3. The ambitions of companies from the ‘old’ economy are also rising sharply: Shell is lowering the dividend and investing more money in the energy transition.
However, the fact that it’s possible doesn’t mean that it will really happen. After all, the economic consequences of this major crisis ask for rapid action. Every day of delay will cause more economic damage and a bigger risk for the climate to come second, or even third or fourth. The easiest way to get the economy back on track quickly and to create more jobs is to keep the old economy standing. Certainly in a world of little cooperation, it may be a risk to be in front when it comes to the energy transition. So, lots of tension between the climate and jobs, but also between the long and the short term.
But is this contradiction the right picture? Many countries can currently borrow money for free. Why would a country with confidence for the future no longer use this option? The low interest charges mean that many investments in the energy transition will pay for themselves, and much more than that. At the same time, for those who suffer from the adjustments, the pain can be eased. In this way we prepare our economy together for the next generations. A future with jobs, but also with a blue sky, even when the roads will fill up again.