We Must Shape the post-COVID recovery to Address Climate Change, Too | Opinion

There is much to applaud in the global response to COVID-19: the hundreds of billions of dollars to reinforce healthcare systems and fund research that developed in record time not one, but several vaccines; the synchronized action of central banks and governments to prevent a full-blown global financial crisis; and the debt relief extended to low-income countries. Those were the right measures taken at the right time—and they helped the world avoid a second Great Depression.

But as vaccination campaigns advance and economies move on the path to recovery, governments need to rethink the blanket support extended to individuals and businesses during the first phase of the pandemic. Millions of jobs have been destroyed by COVID-19. Many of these may be gone for good. Automation in manufacturing and logistics, and fast-moving digitalization across the board, could destroy even more jobs in the near future.

There is a chance now to direct the next round of fiscal stimulus to address our other looming crisis — our changing climate, that is also putting future growth and prosperity at risk. For many countries, it is a greater threat than COVID-19 and one that will not go away with a vaccine. Climate change threatens global stability by increasing the risk of conflict over scarce resources, especially water; or by driving migration when crops fail; or by allowing diseases to spread from tropical to temperate zones as global temperatures rise.

We have an opportunity now to channel this unprecedented fiscal effort into a new climate economy – one that promotes low-emissions activities and helps businesses and communities adapt and prepare for the accelerating impacts of climate change. Climate adaptation action offers an effective route to long-term, sustainable employment and an opportunity for the millions of workers who have lost their jobs during the pandemic.

IMF analysis shows that a coordinated green infrastructure push combined with the right price signal on carbon emissions could boost global GDP in the first 15 years of the recovery by 0.7 percent. It would create millions of jobs. Green investment is win-win-win: good for growth, climate, and jobs.

And when support is directed to climate adaptation, it also helps to address growing inequalities. Rising temperatures have vastly unequal effects within countries and across the world, with the brunt of adverse consequences borne by those who can least afford it and have contributed almost nothing to the problem. Small island nations and low-income countries are particularly vulnerable. In Central America and the Caribbean, recent hurricanes have flattened Honduras, Dominica, Grenada, Puerto Rico and the Bahamas, with losses often amounting to several multiples of their annual GDPs. Last year, floods left one-quarter of Bangladesh under water. COVID-19 made a bad situation worse. Climate-vulnerable nations need strategies and funding to cope with climate impacts that are happening now.

Investing in climate adaptation is not complicated. The solutions are often simple. It means working with nature rather than against it. Restoring mangrove forests to protect coastlines. Selecting drought-resistant crops. Reducing waste, particularly the wasteful use of water. Harnessing the power of digital technologies to help farmers make better decisions. Big-ticket items include flood barriers and investments to strengthen energy and transport networks against the destructive force of floods, fires and storms.

But funding for climate adaptation remains far short of what is needed. A report from the Global Center on Adaptation estimates finance would have to increase five- to ten-fold, from $30 billion to an estimated $140-$300 billion a year, just to meet adaptation needs in the developing world.

The IMF has committed over $100 billion in financing since the pandemic began. Looking forward, the Fund is ramping up its technical support for the policies, investment plans and skills low-income countries need to identify climate threats, access funding and strengthen their response to climate change.

Global financial institutions such as the IMF, the World Bank and multilateral development banks have an important role to play in bringing about a new climate economy that integrates resilience and adaptation. But they can only be as effective as the countries they serve. This means governments must pay more attention to climate risks and make climate action a priority. The unprecedented economic stimulus they are about to expand is a good place to start.

During the global financial crisis, governments took action to strengthen the resilience of the banking sector. During the COVID-19 crisis, we must go further and take action to strengthen the resilience of people and the planet. It is the opportunity of our lifetime—we must seize it.

Kristalina Georgieva is Managing Director of the International Monetary Fund. Ban Ki-moon is 8th Secretary-General of the United Nations and Chair of the Global Center on Adaptation.

The views expressed in this article are the authors' own.