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The Case for a Green Resilient Recovery

  1. JUNE 2020 Briefing on non-state actor response The Case for a Green, Resilient Recovery
  2. 1 Context • As the impact of COVID-19 continues to be felt, non state actors (NSA) including business leaders, investors, and local government leaders globally have (in alignment with the UNSG) been vocal in their support for a Green, Resilient Recovery (GRR) and the opportunity to “build back better” by accelerating the transition to a resilient, zero emissions future. • Many global academic and technical experts have published widely on core principles to underpin a successful recovery, and have outlined emerging evidence on the compelling economic case for GRR, alongside critical co-benefits in public health, decent jobs and enhanced resilience to climate change. Purpose of this document • This document seeks to bring together in a single place an analysis published by key members of the NSA community on GRR, with four key objectives: – Summarize and consolidate key insights, providing a centralised reference point for the broad base of published work to date – Lay out the definitive economic and social case for GRR, and its implications to climate crisis, as it exists so far – Highlight sector-specific asks for GRR in the areas of transport, power, buildings, heavy industry and nature – Provide a view on the policy action and NSA proof points (evolving daily) that demonstrate ongoing commitment from NSA actors to GRR Acknowledgements This paper draws directly upon the exceptional body of work and perspectives to date published by leading organizations, initiatives and partners of the Marrakech Partnership for Global Climate Action, including: • IMF • ETC, MPP, WEF • Smiths School of Economics • WMB • PRI • VividEconomics • ICP Hub Next steps • The situation is evolving at pace, and members of the NSA community are continuing to advance the GRR work and action agenda. In addition to supporting positive action on GRR by policymakers and NSA as part of our broader objectives, these members will: – Continue to represent and provide a platform for the best thinking of the NSA community in advocating positive response to GRR from policymakers – Investigate and publish a more detailed business case to reflect the benefits of GRR as an opportunity to accelerate climate action and the transition to a resilient, zero emissions future, to be published in September Executive Summary | Context and objectives
  3. 2 GRR offers a unique opportunity in both scale and urgency to align post-crisis growth with the Paris Accord and revive the economy, deliver decent jobs in future-facing industries • Current crisis presents a significant moment in time, where short term policy decisions will have long and far reaching impact on climate • The $8tn of COVID-19 stimulus is already 13x times as much as 2018 climate financing – after 2008 green stimulus reached 16% total stimulus spend Studies suggest that green stimulus projects have both superior short and long run economic multipliers, alongside major public health wins-wins like clean air • Estimates suggest clean energy infrastructure and efficiency creates 3x more jobs than stimulus in fossil fuels • Other policy types that can deliver high climate impact alongside effective, rapid stimulus including shovel-ready building retrofits, green R&D, natural infrastructure and worker retraining To maximize the benefit of GRR, stimulus should focus on long-term structural changes and be supported by overarching policy framework • In 2008, failure to adopt wider policy support dampened impact of green stimulus measures following the GFC • Short term response holds some climate benefits, but investment likely to be most effective in longer term recovery phase An unprecedented cross-section of non-state actors (NSAs) including businesses, investors and cities have reiterated commitment to climate ambition and citied their support for GRR • GRR has been supported by 155 companies with a market cap of $2.4tn, 109 investors with AuM of $11.9tn, 40 mayors and >200 UK NSAs • Large majorities (~2/3s) of people around the world hope governments will prioritise climate change in COVID-19 economic responses • Launch of “Race to Zero”-- an international campaign for a healthy, resilient zero carbon recovery. Led by the UNFCCC Champions for Climate Action, it brings together the largest ever net zero coalition, covering 992 businesses, 449 cities, 21 regions, 505 universities and 38 of the biggest investors. For 5 sectors, key policy asks from the NSA community have been identified and summarized for ongoing reference and enhancement • In power generation: eliminating fossil fuel subsidies and coal will compliment renewable capacity auctions, smart grid investment, and R&D in energy storage • In road transport: accelerating EV subsidies, bailouts conditional to EV commitments, investment in supporting urban infrastructure to support modal shift • In aviation: bailouts should be conditional on SAF commitments, encourage modal shift to rail, and R&D on next generation fuels and offsetting technology • In industry: research, development and demonstration (RD&D) of hydrogen, biomethane and CCUS leading to deployment in industrial clusters • In built environment: regulations, incentives & public procurement of retrofits, net zero carbon new builds, and resilient green infrastructure (digital connectivity, waste, flood mitigation etc.) • In nature: labour intensive forest planting, ecosystem restoration should accompany R&D and incentives for sustainable agriculture Executive Summary | Key messages
  4. 3 Key Messages
  5. 4 COVID-19 has presented a unique and urgent opportunity in the fight against climate change Progress on climate change will depend significantly on policy choices in the coming six months; the right choices could drive a long-term downward trend in GHG emissions —Hepburn, Stern and Stiglitz (2020) Source: Hepburn, Stern and Stiglitz (2020), 'Will COVID-19 fiscal recovery packages accelerate or retard progress on climate change?'
  6. 5 BC 08.Jun.20: Global business leaders Statement reaffirming commitment to 1.5'C path, including advocacy and support for 1.5'C aligned policy 155Companies have signed $2.4t Mkt cap5m Employees Mayors Statement pledging to build a better, more sustainable and fairer society out of the recovery from Covid-19 40cities have signed UK non-state actors Call to the UK government to deliver a Covid-19 recovery plan that builds a more inclusive, stronger and resilient economy >200 UK companies have signed Investors and financial institutions Call to policymakers for a sustainable recovery by incorporating climate conditions into financial support for companies $11.9t Assets under management or advice 109investors have signed Across the NSA community there is strong support for a Green Resilient Recovery, and a unified call for continued climate leadership in the current crisis Source: SBTi; Prince of Wales Corporate Leaders Group, PRI, C40
  7. 6 Large majorities of people around the world hope governments will prioritise climate change in COVID-19 economic responses 1. Full question was: Question: To What extent do you agree or disagree with the following: In the economic recovery after COVID-19, it is important that government actions prioritize climate change?; n = 500 to 1000 per country; total of 28,039 online adults respondents aged 16-74; fieldwork dates 17-19 April 2020, where results do not sum to 100%, this may be due to rounding effects, Multiple responses, or the exclusion of “don’t know” categories Source: IPSOS MORI, April 22, 2020 Is it important that government actions responding to C-19 prioritize climate change? Survey results, April 20201 65% Strongly agree/trend to agree 25% Trend to disagree/Strong disagree 65% 81% 80% 80% 66% 64% 63% 63% 62% 61% 60% 58% 57% 57% 57% 10% 6% 6% 4% 12% 14% 10% 11% 12% 9% 16% 11% 9% 10% 11% 25% 13% 14% 16% 22% 22% 27% 26% 26% 30% 24% 31% 34% 33% 32% Average Italy India Brazil Mexiko France China Japan Spain Russia Canada UK Australia Germany US
  8. 7 Stimulus provides a major opportunity for low carbon transition given the scale of economic investment $8.0 Tr Total Climate Finance 2017/18 $0.6 Tr Total COVID-19 stimulus to date x12.8 Stimulus is already ~13x 2018 climate finance In 2008 even low percentages of "green" stimulus (~16%) translated into significant volumes of money 79 64 34 19 15 13 13 11 9 6 60 80 0 40 20 Green stimulus as per cent of total stimulus by the end of 2009 (in%) . Source: Barron's, CPI, Green Stimulus Measures, ILO (2010) Note: EU direct=EU wide package. EU total=including individual EU countries additional stimulus packages KOR EU (Direct) CHN FRA GBR GER USA EU (Total) CAN JPN ~$60bn ~$25bn ~$22bn ~$10bn ~$10bn ~$20bn ~$110bn ~$60bn ~$5bn ~$40bn 16% global avg.
  9. 8 Source: UN Secretary General Principles outlined by UN for Green & Resilient Recovery 6 We need to work together as an international community Fossil fuel subsidies must end, polluters pay and public funds go to sustainable sectors Money must drive a shift from grey to green and resilient C-19 money must deliver new jobs and businesses through a clean green transition Taxpayer rescue of companies must be tied to achieving green jobs and sustainable growth Climate risks must be incorporated into financial, infrastructure & policy decisions
  10. 9 …in addition to securing co-benefits Boosts to adjacent industries, by accelerating R&D in underfunded sectors Correcting for the undervaluing of natural resources by the market Securing the public health gains of lower environmental pollution Green investments can deliver high economic performance… 1. The Lancet Commission on Pollution and Health (2017) values global welfare losses from pollution impacts on health at 6.2% of GDP or $4.6tn Source: Michael Jacobs for the Grantham Instiute (2012), 'Green Growth: Economic Theory and Political Discourse'; Hepburn, Stern and Stiglitz (2020), 'Will COVID-19 fiscal recovery packages accelerate or retard progress on climate change?'; Brookings Institute (2012), 'Fiscal Policy in a Depressed Economy'; IMF Working Paper (2013), 'Growth Forecast Errors and Fiscal Multipliers' …which are boosted by the effects of stimulus in recessions…. High short run multiplier driven by greater labour intensity of green measures Persistent long-run effect from cost-efficiencies allowing greater business and consumer spending 1.5- 2.5 Estimates of economic multiplier from expansionary fiscal spending in a recession
  11. 10 Policymakers and economists have identified five core policy types that can delivery a high climate impact alongside effective, rapid stimulus High Negative impact High Positive impact Potential climate Impact HighLong-Run multiplerLow E B P F J A I C H G Q R W V KO D M X S High climate-impact, high economic impact policies2 Speed Fast Slow157 experts 34 experts Number of experts rating policy in Top 10 Clean physical infrastructure investments Building efficiency retrofits Investment in education and training to address unemployment1 Clean R&D Investment Natural capital investment for ecosystem resilience and regeneration 1. Both immediate unemployment from COVID-19 and structural unemployment from decarbonisation 2. Full table of policies surveyed is at back of document Source: Hepburn, O'Callaghan, Stiglitz and Stern (2020), ''Will COVID-19 fiscal recovery packages accelerate or retard progress on climate change?'. Note: A sixth policy lever of rural support spending is identified in Low and Middle Income Countries, which is of greater effectiveness than Clean R&D Investment. See additional slide in pre-read for policy definitions
  12. 11 Existing analysis suggests a positive business case for green stimulus (I/II) Investment in clean energy infrastructure and efficiency creates 3x more jobs than stimulus in fossil fuels 1. Based on averages of multiple technologies Note: Based on input-output modelling of economies with synthetic "new" clean industries to capture the full effects, rather than post-intevention empirical assessment Source: Heidi Garrett-Peltier (2016), Green Versus Brown: Comparing the employment impacts of energy efficiency, renewable energy, and fossil fuels using an input- output model Renewable technologies Energy Efficiency Fossil Fuels 4.50 4.06 4.26 4.67 4.55 4.59 4.55 3.98 3.66 6.16 0.94 0.70 1.18 2.99 3.46 2.98 2.73 2.98 3.13 3.22 3.43 3.10 2.77 1.71 1.49 1.92 Industrial EE Smart Grid1 Mass Transit and Freight Rail Average: Fossil Fuels1 7.4 1 Oil and Gas1 Coa l1 Geotherm al 2.6 5 7.2 4 Average: Energy Efficiency Average: Renewable Technologies 3.1 0 Win d1 Sola r1 Hydr o Home Weatherization and Commercial Retrofits1 7.7 2 7.5 3 7.4 9 2.20 7.5 2 7.4 0 7.7 7 6.7 6 8.9 3 Total FTE xx x Legen d Direct FTE Indirect FTE Jobs created per $1M of stimulus +5 extra jobs created in renewables/efficiency vs. fossil fuels
  13. 12 Existing analysis suggests a positive business case for green stimulus (II/II) Superior job impacts of green stimulus driven by greater labour intensity of renewables per GWh generated Source: UKERC (2014): Low Carbon Jobs “The Evidence for net job creation from policy support for energy efficiency and renewable energy Note: Number in brackets shows number of studies reviewed in report; Coal (5), Lig (1), CCS (1), Gas (4), Shale (1), Geothermal (3), Hydro (1), Biomass (5), LFG (1), Wind (15), OffSW (1), Solar PV (5), CSP (3), EE (3), EE-H (1) +1.0 0.4 Jobs per annual GWh generated Additional jobs generated per annual GWh switched from fossils to renewabels UK power generation employment Intensity 9 6 0 3 Gross job/annual GWh Lignite Coal CCS Gas Shale Geothermal Hydro Biomass LFG Wind Offshore Wind SolarPV Concentrate d SolarPower Energy Efficiency Household Energy Efficiency Direct Indirect InducedAverage
  14. 13 Truly transformative green policies can only be delivered as part of a recovery phase due to longer lead-ins to lock in structural change Short term focus on fast-acting liquidity support for households. However, need for climate alignment via: • Removal or no expansion of fossil fuel subsidies given low oil price • Encouraging positive changes via subsidies, e.g. solar panel and EV purchase incentives • Guaranteed or low cost loans for green improvements (e.g. insulation retrofits) Cash subsidies are low multiplier and risk locking in high-carbon trajectories. Conditional bailouts to maintain employment and market confidence conditional on: • Commitments to net zero by 2050 – with tangible 2030 commitments • Commitments to report in line with TCFD • Commitments to phase out relationships with thermal coal over the next 5 years • Sector specific commitments on measurable progress over the next 5 years Stimulus aligned to boosting demand and climate impact: • Green Infrastructure (EV charging, railways, dams, smart grids, digital infra. etc.) • Green R&D (materials, energy storage, heat exchangers, CCUS) • Retraining for greener occupations to ensure a just transition • Natural infrastructure (e.g. planting trees) • Retrofit stimulus (e.g. for insulation/heat pumps) • Connectivity infrastructure • Fund demonstrations and industrial hubs of green hydrogen, chemicals, and steel as well as CCUS Liquidity for consumers Bailouts with green "strings" Green infrastructure, RD&D1 and industry stimulus Response Recovery Overarching green policy Wider policy changes required to lock in structural societal change and ensure lasting impact of GRR • Carbon taxes and border adjustment carbon trade taxes • Protections for natural resources (e.g. forest protection) • Redesign electricity markets to reward RE, storage, demand side response and flexibility • Green public procurement • Worker training focused on cleaner industry skills • International collaboration (Mission innovation) • Supporting behavioral change, (e.g. low emissions zones) • Regulation (e.g. new build efficiency regs.)1. Research, development, and demonstration
  15. 14 Sector Policy reviews summarizing NSA responses
  16. 15 Transport
  17. 16 Green stimulus potential: GRR has the potential to reshape the industry delivering better jobs and a cleaner environment Increase subsidies for EVs Trade-in credits for old cars ("cash for clunkers") should used as much as possible for EVs alone Bailouts may not be required for majority of industry but where given should be conditional on: • agreed share of EVs in fleet sales by 2025 • protecting R&D into EVs Targeted as loans or grants to small innovative green transport companies (Arrivalm Rivian, NIO etc.) especially at risk • EV charging infrastructure • Improving public transport (e.g. cycle lanes, electric bus routes, intra&inter city trains) • Trials of hydrogen, BEV, and e- highways for heavy vehicles • R&D into batteries • Support and retrain ICE employees and support just transition Liquidity for consumers Bailouts with green "strings" Green infrastructure, RD&D and industry stimulus Response Recovery Overarching green policy Transform policy ecosystem to support green • Create low emission zones • Increase no car zones • Center design around cycling and walking • Allow EVs perks like carpool lanes, cheaper parking etc. • Limit ICE registrations • Publicly procure BEV • Promote electric micro mobility Not exhaustive Road
  18. 17 Green stimulus potential: GRR can reshape aviation away from its high emissions growth trajectory n/a Bailouts common and more will be needed due to massive reduction in air travel. Conditions should be attached • Commitments to a portion of SAF • Commitments to cut regional flights • Commitments to upgrade fleet and meet certain efficiency targets "Cash for clunkers" program to scrap old aircraft Green infrastructure investment • Improve public transport (e.g. high speed train lines) in order to reduce short distance aviation demand Green R&D funding • Zero emissions aviation R&D, including biofuels, synthetic fuels and electric planes (for short distance) - via multi- airline public private partnerships • CCUS and offsetting emissions technology • Research on non-CO" aviation climate impacts Transform policy ecosystem to support green • Maintain CORSIA base year of 2020 – which will entail more offsetting • Support regional rail • Introduce sufficient taxation on airline emissions – can be done by altering air passenger duty and varying it by distance • Cut public procurement of flights in favor of rail • Mandates to increase SAF production and use • Mandatory emissions disclosure by airlines • Efficiency standards for aircrafts • Offsetting requirements for domestic flights Source: Desktop research, BCG analysis, press search Liquidity for consumers Bailouts with green "strings" Response Recovery Overarching green policyGreen infrastructure, R&D and industry stimulus Aviation
  19. 18 NSA actors in the transport sector are reiterating their commitments to net zero "If governments in some way subsidise a return to the old world, it’ll be a waste of money. They should use the money to promote new technology, as they were planning to do before coronavirus" -Hakan Samuelsson, Volvo CEO "Science tells us we must curb global temperature rise to 1.5°C above pre-industrial levels to avoid the worst impacts of climate change… This means targeting net zero emissions, not just for our operations and facilities, but more fundamentally, ensuring the products and technologies we are proud to pioneer can be used in a way that generates net zero emissions." -Warren East, Rolls-Royce CEO "The strategy sets out how the West Midlands can rebuild its economy in a way that drives green and inclusive growth - … • accelerating the transition of the region’s automotive industry to electric vehicles • rolling out charging infrastructure for electric vehicles at scale • active transport initiatives, for example pop-up cycle lanes and widened pavements." -West Midlands Combined Authority
  20. 19 Power generation
  21. 20 Green stimulus potential: There is an opportunity for green recovery, increasing jobs and boosting GVA while tackling emissions • Fossil fuel subsidies especially in the developing world should be avoided (e.g. petrol subsidies) – low oil price is a chance to remove these • Subsidies for rooftop solar can accelerate deployment Bailouts conditional on commitments to: • Set science based emissions reduction targets & net zero by 2050 • Disclosure of climate-related risk in line with TCFD • Phase out thermal coal mining & power generation • Further renewable energy deployment for power generators • Very low levels (max 0.2%) of methane leakage for oil and gas companies • Launch/continue competitive renewable power auctions to derisk private investment • Utilise government-sponsored finance institutions to lend to renewable power projects • Enable investment in smart transmission/distribution systems and interconnectors • Invest in R&D in enabling green technologies (long-duration batteries, green hydrogen projects, smart grids) Source: Desktop research, BCG analysis, press search Short term liquidty Bailouts with green "strings" Response Recovery Overarching green policy • Affirm and extend policies promoting renewable energy solutions • Fast-track/streamline permitting for new projects • Enable corporate renewable energy procurement • Ensure grids give priority to RE and reward smartness, storage and flexibility • Revise education/labour policies to foster just transition through retraining and skills to help works transition to renewable energy jobs Green infrastructure, RD&D and industry stimulus
  22. 21 Leading players in the energy sector have reaffirmed commitments "Even at this time of immediate challenge we must also maintain the focus on the long term … which is why we aim to be a net zero emissions energy business by 2050 or sooner" - Ben van Beurden, Shell CEO "We are therefore writing to ask that the economic recovery plans you are developing align with the UK’s wider goals and deliver a clean, just recovery, that creates quality employment and builds a more sustainable, inclusive and resilient UK economy for the future. " -Climate Leadership Group letter (209 signatures) Source: Press search "There’ll be no healthy economy without a healthy population and a healthy planet. Investment to rebuild Britain after coronavirus should be aligned with industries and projects that support net zero. Prioritising investment in new low carbon infrastructure and energy projects will unlock high-quality jobs and investment in towns and regions that have been hardest hit by the crisis.”" - Colin Matthews, EDF Energy Chairman
  23. 22 Built environment
  24. 23 Green stimulus potential: Greening the built environment can provide immediate jobs, relieve fuel poverty, increase resilience to climate change and improve health and wellbeing Support widespread retrofit: insulation, power & heat sources, efficiency controls • Supply green mortgages for energy efficient retrofit • 0% VAT for energy efficient retrofit • Subsidies for renewable and low carbon technologies, e.g. solar • Domestic energy efficiency salary sacrifice schemes • Financial incentives to retrofit commercial buildings whilst empty due to COVID Incentivise net zero new builds • Incentives for low carbon operational performance and construction methods, e.g. grants, subsidies and technical assistance Construction companies requiring bail out to sign science based commitments that align with 1.5 degrees target, publish plans, take immediate action and publicly report progress. Additionally, calculate and publicly report life cycle carbon emissions on all projects. Projects requiring support to conduct and report life cycle assessments, selecting lowest carbon options. Fund training programmes for retrofit and net zero buildings construction. Invest in retrofit: insulation, power & heat sources, efficiency controls • Nationwide retrofits of low income inefficient households • Retrofit public buildings whilst closed due to COVID • Infrastructure retrofit to mitigate inefficiencies, e.g. pipelines Invest in net zero new builds • R&D in net zero construction methods (incl. low carbon materials). Invest in infrastructure that enables low carbon services • Waste infrastructure to support collection, reuse and recycling • Retrofit pipelines, switch to low carbon power, EVs charging infrastructure, rail • Digital infra to support less travel Invest in green infrastructure for resilience and health & wellbeing • Flood defences, local green space and biodiversity • Greening public procurement: for all new building and infrastructure projects, national- and state-level gov’ts set ceilings for embodied and operational carbon intensity, which are to decrease over time • Ratchet up energy efficiency requirements for all buildings including end date for natural gas installations • Institute performance-based material efficiency standards to reduce waste and encourage material reuse and recycling to improve efficiency of capital investment by 30-50% • Legislate public reporting of life cycle emissions (construction and operation) of built assets to inform future policy and targets • Legislate life cycle assessments at the early design stages to obtain planning permission Source: Desktop research, BCG analysis, press search Liquidity for consumers Bailouts with green "strings" Response Recovery Overarching green policy Green infrastructure, RD&D and industry stimulus
  25. 24 Leading businesses have spoken out on the importance of zero- carbon homes and buildings "UK companies stand ready to help the government realise its 2050 zero carbon target. A key part of this requires the UK to deliver zero-carbon homes at scale ...we strongly support investing in better housing for all, especially in areas such as insulation and low carbon heating. This will help our climate change goals and support our economic recovery by creating new job opportunities nationwide." -Thierry Garnier, Kingfisher plc CEO Source: Press search "COVID-19 has shown both the fragility and the resilience of society and the ecosystem and as we enter the recovery period, we must take the opportunity to build back better by focussing on a green and just recovery – a realisation of our purpose to shape the future of real estate for a better world." -Chris Ireland. JLL UK CEO
  26. 25 Heavy Industry
  27. 26 Green stimulus potential: Building back better in heavy industry dependent on generating sufficient investment in decarbonization technology • Direct liquidity support for consumers unlikely, given scale of B2B operations • Extensive RD&D on syngas, biomethane generation, cement chemistries, new materials, high temperature iron ore electrolysis, & CCUS • Concessional funding of industrial-scale clean hydrogen projects and application in chemicals, 10-12 steel demonstrations, shipping ports, and plane designs • Incentivize "greening" of supply chains and sourcing clean power for operations • Align int’l market standards for structural timber • Greening public procurement: public sector projects have targets for carbon intensity of materials • Set minimum product standards, or carbon border tax adjustment for imported products • More rigorous carbon tax/pricing for heavy industry • Launch product standards limiting carbon intensity of operations • Conditional bailouts for manufacturers with commitments to reduce emissions intensity of operations • Ensure that access to any long term redevelopment funds includes provisions for investment in hydrogen, CCUS, and other applied RD&D collaboration Source: Desktop research, BCG analysis, press search Liquidity for consumers Bailouts with green "strings" Response Recovery Overarching green policy Green infrastructure, RD&D and industry stimulus
  28. 27 Industrial and end manufacturers have spoken out in support of GRR "European Aluminium represents the entire value chain of the aluminium industry in Europe … Building on the European aluminium industry's long commitment to sustainability, we endorse the European Green Deal to remain one of the pillars of Europe's recovery plan" - European Aluminium Position paper Source: Press search "I firmly believe that achieving a green economic recovery, supported by both policy and public investment, will lead to job creation across the UK and long-term economic success. Now is the time for us all to take the leap from this uncertainty and create a well-balanced, sustainable economy that will flourish." - Carl Ennis, Siemens UK CEO "Uncertain times often result in dynamic change for the betterment of society; and despite the evident challenges that 2020 and the unprecedented impact of Covid-19 will bring to the Global economy, we at Mitsubishi Electric believe that an increased focus on innovative technology is now more important than ever. We remain committed to not only producing products and services that work towards the Government’s target of net zero greenhouse gas emissions by 2050, but through the impact of the present crisis on the UK we predict an accelerated alignment between the ‘new normal’ and a shift to greener technology, the long term opportunities of which are limitless." -Deane Flint, Mitsubishi Electric Europe Branch President
  29. 28 Nature
  30. 29 Green stimulus potential: Specific policies for a green recovery in Nature focus on ensuring investment in natural infrastructure, tightening protections • Paying people to plant trees (as seen in Pakistan) • Aid around green farming practices • Industrial farming companies compelled to reduce carbon intensity of operations • Consumer companies receiving bailout packages forced to reduce carbon intensity of supply chains • Investing in natural infrastructure, peatlands, wood restoration • R&D into sustainable agriculture • Technical assistance for greening supply chains, rural upskilling (in developing countries) and use of fertilisers • Tighten environmental protections as part of • Expand subsidies to protect natural environment – including within agriculture Source: Desktop research, BCG analysis, press search Liquidity for consumers Bailouts with green "strings" Response Recovery Overarching green policy Green infrastructure, RD&D and industry stimulus
  31. 30 Major players have reaffirmed sustainability commitments and NZ ambition "We must move beyond business-as-usual and work together to deliver the greatest impact for people, prosperity and the planet … A systemic shift to a zero-carbon and resilient economy is within our reach - our only future depends on making this vision a reality." -Science Based Targets initiative letter, 155 signatories "Let’s work together to create a more sustainable and resilient world. We will play our part and are committed to net-zero greenhouse gas emissions by 2050." -Mark Schneider, Nestlé CEO Source: Press search "Historical Athens begins its recovery phase from the epidemic with an array of green initiatives aiming to fully take advantage of the lessons learnt from the health crisis; that includes - not exhaustively - increasing its recycling network, enhancing its urban nature and, on the whole, treating this challenge as nothing more - and nothing less - than a unique opportunity. An opportunity to help our cities and our citizens grow, prosper and enter a new era of environmental awareness and involvement. This should not be a time for us to simply react but to reflect and to blossom." -Kosta Bakoyannis, Mayor of Athens
  32. 31 List of policies assessed for climate and economic impact E B P F J A I C H G Q R N W U V Y T KO D M L X S Number of experts rating policy in Top 10 157 experts 34 experts Speed Fast Slow Alphabetic labels reference policy IDS High Long-Run multiplerLow High Negative impact High Positive impact Potentialclimate Impact A Temporary waiver of interest payments B Assisted bankruptey (Supper Chapter 11) C Liquidity support for large corporation D Liquidity support for households, start-ups and SME’s E Airline bailouts F Not for profits, education, research, health inst. bailouts G Reduction in VAT and other goods and services taxes H Income tax cuts I Business tax deferrals J Business tax relief for strategic and structural adj. K Direct provision of basic needs L Education investment M Healthcare investment N Worker retaining O Targeted direct cash transfers or temporary wage increase P Rural support policies Q Traditional transport infrastructure investment R Project-based local infrastructure grants S Connectivity infrastructure investment T Clean energy infrastructure investement U Buildings upgrades (energy efficiency) V Green spaces and natural infrastructure investment W Disaster preparedness, capacity building X General R&D spending Y Clean R&D spending 1. April 2020, Survey of 231 finance ministry/central bank officials/senior economists (representing 53 countries incl. all G20; perspective on COVID 19 fiscal recovery packages (Hepburn et al, 2020) by Smiths School Oxford