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Opportunities and Risks for Green Economic Recovery

Robert Stavins's picture
Professor & Director, John F. Kennedy School of Government, Harvard University

Robert N. Stavins is the A.J. Meyer Professor of Energy & Economic Development, Director of Graduate Studies for the Doctoral Programs in Public Policy and in Political Economy and...

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  • Aug 21, 2020
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In our most recent (August 19th) webinar in the series of Conversations on Climate Change and Energy Policy, sponsored by the Harvard Project on Climate Agreements (HPCA), I had the pleasure of hosting Rachel Kyte, Dean of the Fletcher School of Law and Diplomacy at Tufts University.  This webinar series features leading authorities on climate change policy, whether from academia, the private sector, NGOs, or government.  In this case, my guest has had her feet planted firmly in more than one of those realms.  Previously Dean Kyte served as a Special Representative of the U.N. Secretary-General, and before that was Vice President and Special Envoy for Climate Change at the World Bank.  A video recording and transcript of the webinar are available here.

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Due to the global COVID pandemic, the webinar was executed remotely.  The consequent economic downturns have made many countries think about the design of their respective economic recovery packages, including the possibility of greening recovery policies and instruments.  This was the topic of Rachel Kyte’s presentation, “Using the Pandemic Recovery to Spur the Clean Transition – Opportunities and Potential Pitfalls.”

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Citing the fact that 180 nations are in severe recessions, with some possibly teetering on the brink of depression, Dean Kyte describes the current moment as an opportunity to “pivot to a trajectory that would get us closer to being on track for the kind of economic pathway forward that we would need to reach zero net emissions by mid-century … in order to combat the worst impacts of climate change.”  Leveraging that opportunity, however, will be complicated, Kyte explained, noting that the severe economic stress caused by the pandemic is “testing the boundaries of international solidarity.”

“We are about to see over the fall, I think, some of the cumulative impacts of the economic crisis on our financial systems. And we can see that the traditional mechanisms and multinational cooperation which we rely upon in order to attack issues of global public good are straining. They are straining with COVID and they are straining with the impacts of climate change,” she says.

It is imperative, she argues, for citizens, institutions, and governments to recognize the severity of the situation, and muster the political will to address the severe economic pains caused both by the pandemic and unmitigated climate change.

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“We will really be putting pressure on the systems that are normally in place to support that – the IMF, the multinational development banks, the role of central banks,” she points out. “In these economic crises, it is the least well off, the most vulnerable, and the most vulnerable to climate change, who are impacted the most. And what we’re looking at is wiping out the advances that have been made in poverty alleviation over the last few years. That has huge impacts for the way we think about vulnerability to climate change going forward.”

Over the short-term, however, Rachel Kyte acknowledges that economic contractions have reduced carbon dioxide (CO2) emissions, as global energy demand is expected to fall by about six percent in 2020, compared with 2019. But demand will pick back up when economies rebound, she notes, unless there are systematic efforts to change it. Those efforts, she remarks, can be strategically incorporated into economic relief packages that will continue to emerge.

“There are, I think, a number of think tank groups, [and other] regional bodies now suggesting that there are clear policy priorities in order to be able to hit that sweet spot of short-term recovery, but also a cleaner and faster pathway down the energy transition,” she remarks. She specifically cites the need for green “shovel-ready” projects aligned with rescue plans for distressed industries that adhere to a pathway of deep decarbonization and increased energy efficiency. Rachel also discusses the need for smart private finance and investment in green technologies, and sufficient international cooperation necessary to spare developing countries crushing debt loads that would cripple their climate change mitigation efforts.

Referring to the nature of such a green energy pivot, she remarks that, “We’re at a moment where we need both scaffolding and scholarship or new design. The scaffolding is that we have an international system that helps us respond to pandemics, that helps us respond to economic crises, and that should help us to respond to climate change. And that system is really underperforming, at risk, and under strain.  So, we have to in this immediate phase put scaffolding around it and help it limp forward and help us all limp forward together.”

During the webinar, after concluding her presentation, Dean Kyte fields questions from the audience, including the risks of economic rescue packages that worsen the effects of climate change, the potential for reductions in Overseas Development Assistance budgets to the developing world, the challenges of green aid in Africa, obstacles facing the United Nations Framework Convention on Climate Change (UNFCCC) in making substantive progress, Mexico’s mixed record on climate change policy, and potential incentives to encourage developing countries to adopt green recovery trajectories. 

All of this and more can be heard and seen at this website.  I hope you will check it out.

Previous webinar in this series – Conversations on Climate Change and Energy Policy – have featured Meghan O’Sullivan’s thoughts on Geopolitics and Upheaval in Oil Markets, and Jake Werksman’s assessment of the European Union’s Green New Deal

The next HPCA Conversation on Climate Change and Energy Policy is scheduled for September 8th with guest Joseph Stiglitz, University Professor at Columbia University.  Click here to register in advance for that webinar.

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The post Opportunities and Risks for Green Economic Recovery appeared first on An Economic View of the Environment.

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Matt Chester's picture
Matt Chester on Aug 21, 2020

 She specifically cites the need for green “shovel-ready” projects aligned with rescue plans for distressed industries that adhere to a pathway of deep decarbonization and increased energy efficiency. Rachel also discusses the need for smart private finance and investment in green technologies, and sufficient international cooperation necessary to spare developing countries crushing debt loads that would cripple their climate change mitigation efforts.

This can and should be easy wins for all politicians and government leaders involved-- projects that put local workers and economies in a good place, have long-term energy/environmental benefits, and provide an opportunity to spending that's agreeable. If the only issue is where those funds come from, I know of some fossil fuel subsidies that could be spared!

Robert Stavins's picture
Thank Robert for the Post!
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