Mostafa Monira Firdouse, Green Finance Advisor of Friends of the Earth (HK)

Pre-COVID 19

Ten years ago, the question was whether emerging market economies should engage in climate change mitigation or wait for the high-income countries to take the lead. A common argument made at that time in these countries was “grow now and clean up later.” However, things are dramatically changed after COP21 in 2015 and continued. The climate protests that took place all over the world in 2019 were a result of heightened public awareness and growing frustration over the lack of urgency shown by governments and businesses. Shell’s defeat in Nigerian oil pollution is a huge success of that, and it shows that ESG is not a choice anymore. At the same time, Climate and sustainable financing has increased significantly over the last decade.

Post COVID 19

However, the pandemic has paved the way for a fundamental change in human behavior.

The Millennial and Generation Z groups, defined as those born between 1980 and 1995 and 1996 and 2010 respectively, together make up a significant proportion of the global population: in emerging markets alone, they account for around 46% of the population. The Deloitte Global Millennial Survey 2019 found that both Millennials and Gen Z identified climate change as the biggest challenge currently facing society.

Also, the extreme weather is a continuous reminder. The Australian wildfires of late 2019 highlighted the impact that this weather can have on habitats.

One of the few positives to come out of the COVID-19 pandemic has been the immediate impact on greenhouse gas (GHG) emissions. Nationwide lockdowns have led to a reduction in harmful emissions drop of nearly 8% in global CO2.

However, the question now is: will we revert to historic norms after the pandemic, or will it bring about some long-lasting changes? Do we know yet?

What’s Next

In light of the current COVID-19 pandemic there are now two schools of thought for the trajectory of climate action.

(i) Pandemic could lead to fundamental changes in human behaviour which may act as a tailwind for the climate change theme;

(ii) The shock to the global economy coupled with lower oil prices could result in policy measures being directed elsewhere resulting in the cost trajectories for renewables and electric vehicles becoming less favourable. 

Different analytics showed that; green recovery post Covid-19 will be sustained by three trends:

— The technological landscape has evolved rapidly in favour of clean alternatives, reducing the attractiveness of fossil fuels. Markets will continue to move towards clean technologies given their risk / return characteristics.

— Climate change negotiations have made progress in only a few years and pressure has been growing for more countries to act on climate change.

— Financial innovation to support green alternatives has been increasing rapidly and is leading to ever cheaper green technologies.

FLAGGING my urge

Wind of change is blowing; it is clear that economic empowerment and profitability does not mean everything and will not last long. Besides, technological advancement needs money, reach and continuous improvement to be beneficial. And all these economic and technology will be meaningful if there is social benefit. Vertical skills have been developed and refined, but now is the time to connect the dots and build horizontally to bring SOLIDARITY. This is the time economics, social, science, technology etc. all GURUs should work together forgetting their own personal/institutional/regional gain. Doesn’t mean that it’s not happening, but the end product in none.

Perhaps, this is the time to think about viability of ‘Shared Socioeconomic Pathways (SSP)’.

Take a closure look on climate change and green growth strategy.

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