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Key issues for a sustainable Covid-19 recovery

SEI Research Director Åsa Persson looks at some of the main questions we need to consider in planning a sustainable, just and resilient recovery and how SEI aims to contribute.

Business people walking through at city at dawn.

Photo: Ezra Bailey / Getty Images.

Åsa Persson / Published on 1 April 2020

We are living through a world-changing event. There will be a before and an after the Covid-19 pandemic. It is hard to predict what that changed world will look like. But to some degree, it is in our hands.

Even as we deal with the crisis and immediate relief measures, the debate has already started on what form the recovery should take. In particular, there are growing calls for a “green” recovery, one that accelerates progress towards decarbonization and broader social and environmental sustainability goals, rather than simply restoring the unsustainable patterns that will leave us more prone and less resilient to future crises.

Emergency relief must take priority. But the underlying logic is unassailable: we should not respond to one crisis by further aggravating climate change, pollution and deforestation, for example through unconditional bail-outs to fossil-based industries and airlines, or easing environmental enforcement. So, a key question is at what point can we start to include green conditionality clauses in recovery packages? When do we move from relief to recovery?

Stark reminder

Looking beyond environmental questions, the Covid-19 pandemic is a stark reminder that all three dimensions of sustainable development – economic, social and environmental – are inextricably linked. In the South, major shortfalls in water and sanitation, overcrowded and poorly housed communities, and a lack of social safety nets are causing grave concern over the eventual scale of the pandemic and its impacts.

Even in the North, we are quickly starting to see how inequalities within cities and between urban and rural areas are determining people’s chances of surviving the pandemic, both financially and health-wise.

The recovery needs to be socially just, and make our societies far more resilient to future crises. While the calls for a green recovery have acknowledged this, it is perhaps more useful and potentially less alienating to talk of a sustainable, just and resilient recovery.

Better health and well-being reduces vulnerability

Starting with resilience, improved health and well-being across societies will reduce vulnerability to similar pandemics – or at least reduce their capacity to multiply vulnerabilities. Equitable access to safe, functioning water and sanitation services is still a key barrier to human development in many places. There is vast untapped potential to make sanitation more circular and more ecologically sustainable, especially in the fast-growing cities of the South. Given the likely constraints on investment capital, small-scale “gridless” sanitation solutions that can be rolled out faster and cheaper than large centralized sewage systems could play a crucial role.

Cleaner air relieves health services

Improved urban air quality would also relieve the burden on health services and the incidence of respiratory disease, as well as the vulnerability of city dwellers to influenza and other diseases like Covid-19. Our research has highlighted that governments often find the impacts of air pollution on public health a more compelling reason to rein in coal-burning industries than the carbon emissions. Climate mitigation could be a side benefit of resilience-focused recovery strategies.

While the calls for a green recovery have acknowledged this, it is perhaps more useful – and potentially less alienating – to talk of a sustainable, just and resilient recovery.

Public participation makes for durable policy

When it comes to planning for more resilient societies – and more broadly the mid-term recovery – public participation is not just a question of democratic principle. The fact is local residents best understand their preferences, options, behaviours and needs. On top of that, SEI research has found that involving them early in the policy design process greatly improves the chances that new behaviours stick. Although we are getting used to more coercive strategies used to control the pandemic’s spread, we must move to more participatory, democratic processes in the mid-term recovery.

Equitable resilience, economic resilience

There are also issues of justice in the very pursuit of resilience, something we have picked up from work on disaster risk reduction: whose homes and livelihoods get protected? Which aspects of the status quo do we want to shore up, and which do we want to change? The goal, therefore, should be to design recovery for equitable resilience. Social unrest as a result of the pandemic and its management is emerging in places. The “leave no one behind” slogan of Agenda 2030 takes on a new and real meaning.

With the warnings of massive lay-offs and economic downturn, what the Covid-19 pandemic has shown us so far is that the economic resilience of our societies, corporations and small and medium enterprises is surprisingly low. Only weeks into disruptions, drastic economic relief actions have been taken.

This raises important questions for the quickly growing practice of sustainable finance. To make finance and lending not only green, but sustainable in all three dimensions, economic resilience seems a key issue going forward. As for the disruptions in global supply chains, they give us a foretaste of what can be expected with climate change – including indirect, second- and third-order effects on supplies arising from climate impacts in distant places, and the need for adaptation “without borders”.

The green in green recovery

Our governments and leaders know very well what is needed to meet the Paris climate targets: deep decarbonization at a rate of 7% per annum. The roadmaps for a transition away from fossil fuels and towards ever-cheaper renewables are already there. What is needed, in particular in making decisions at the sharp end of recovery design, are constructive and practical options for governments to get out of the fossil fuel economy, in particular those with high fossil-based revenue streams stemming from either coal, oil and gas reserves or large auto industries. This is why we are studying the political economy of carbon lock-in and go beyond high-level principles to look at concrete and tested options for cutting subsidies and developing phase-out plans.

Just recovery

As the analysis of economic impacts on different sectors starts to take place, any economic stimulus plan will favour some industries more than others. A green recovery inevitably means investing in cleaner, greener industrial activity at the expense of fossil fuel-dependent peers, and when this shift happens it must not leave people behind. Indeed, the economic logic of recovery can only strengthen the case against the huge subsidies that prop up the global fossil fuel industry, which dwarf the cost of a global clean energy transition. That also needs to be taken into account in a sustainable recovery. Work on planning for just transitions has already started and can be further accelerated.

Recovery beyond the rich world

To date, the biggest impacts of the Covid-19 pandemic have been in major economies: China, the US, and much of Europe. These are countries with large national budgets and relatively easy access to credit. How will poorer countries manage a sustainable recovery? Experts called on G20 leaders for trillions of dollars in aid last week to help poorer countries weather the crisis and rebuild. But our research shows that aid flows suffered a deep – if short-lived – dip in the wake of the last global financial crisis, especially marked in programmes with environmental protection as a principal objective. As wealthier countries struggle with their own recoveries, how can the mechanisms of international cooperation ensure a global recovery?

For now, governments may have limited bandwidth to discuss the detail of a sustainable recovery strategy. The responsibility that SEI will take as a global research institute in the collective problem-solving ahead is to move quickly from translating high-level principles – sustainable, just and resilient – into concrete, practical options.

Perspective contacts:

Åsa Persson
Åsa Persson

Research Director and Deputy Director

SEI Headquarters

Robert Watt
Robert Watt

Engagement Director

SEI Headquarters

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