Rather than delaying the much-needed restructuring, we should use recovery programs to reset the economy on a sustainable footing, urges Jochen Markard.
All over the world, governments are putting together economic aid programmes worth billions to safeguard businesses and jobs. Switzerland is supporting Swiss Air Lines; Germany is planning an economic package for the car industry; Canada and the USA want to save their oil and gas sectors. But who’s protecting the climate in all this?
At first glance, the impulse to bail out key industries is understandable. Covid-19 calls for countries to respond quickly - help must be provided swiftly, with a minimum of red tape. But another global challenge confronts us: climate change. A medium and long-term restructuring of production and consumption is needed to address it.
Climate change may seem less urgent, but the problem is escalating - and the longer we wait, the more serious the consequences. We have neither the time nor resources to fight these two crises independently of each other.
So, as we recently argued in our editorial in Science , it’s crucial to exploit synergies.1 Experience with the financial crisis indicates that unconditional recovery funds often cement existing structures. This isn’t the way to achieve change. Instead of investing scarce taxpayers’ money in sectors that are damaging to our climate, we should invest in sustainable industries and business models. Through the Coronavirus crisis, we can use leverage in two ways to pave the way to a carbon-free future.
Lockdowns have severely destabilised the economy. As devastating as this shock is, its disruptive potential can also help to unlock existing structures, particularly in the fossil fuels sector. So the first approach is to deliberately not rescue carbon-intensive business models.
One example is coal-fired power stations. Countries such as the UK, Italy and Canada are already well on the way to phasing out these particularly CO2-intensive plants. Corona can help to accelerate the transition of the coal industry. Here financial aid must go not to power plant or mine operators, but to mining regions and workers. They must be given the best possible support in the form of early retirement, retraining and above all the development of new industries.
Another example is the car industry, which has been under pressure for some years to keep pace with digitisation and climate change. But instead of focusing on alternative drive systems, manufacturers have pushed lucrative SUVs onto the market. A further round of government scrappage premiums, as Germany is discussing, is certainly the wrong way to go about things. I believe that investment in factories, batteries or charging stations for e-mobility is the way forward - while at the same time pressing on with means of transport other than the car.
Strengthening low-carbon innovation
The second approach centres on services and technologies for a deep decarbonisation of our society. Where climate-friendly alternatives are already at hand, we need to accelerate their diffusion. Immediate steps can be taken to replace oil and gas heating systems, install solar systems on commercial and office buildings, and encourage public transport and e-mobility.
Elsewhere, we need longer-term strategies for developing low-carbon alternatives in the first place. I’m thinking particularly of CO2-intensive sectors that are difficult to decarbonise, such as the cement, steel and chemical industries, and the shipping, aviation and agriculture sectors. Here, wide-ranging innovation programmes must be launched to make climate-friendly substitutes - such as wood instead of concrete and green hydrogen instead of heavy oil - marketable. The countries and companies taking the lead here will be able to position themselves as frontrunners internationally.
Coronavirus relief programmes can prepare the ground for sustainable transformation and spur a green recovery. We should seize this opportunity.