Last yeararound this time, the entire world was shaken by apandemic that has forever changed our lives.This year,the world is stillcoping with the devastating impactsoftheCovid-19 crisis, however with a significantly changed outlook. While a year agomanyunanswered questionsmadeit hardly possible topredicthow the pandemicwouldunfold,we now have answerson howto get back to a post-pandemic life. Thecontinuous rollout of vaccines raises the expectationsfor a return to a pre-pandemic “normality”inthe next18 months–an effort that needs to consider the challenges to secure a sustainable and inclusive future following the pandemic.
Earth Day highlights the importance of immediate climate action
For the past 50 years,Earth Dayhas not only remindedus of the importance of immediate climate action,but it has also been a platform to create and increase momentumforthe climate change action agenda.
Within thenewpost-pandemicreality, the global community will be facingthree mainchallenges.
- First,the immediate social costs of the pandemic need to befurthermitigated andeffective policiesimplemented toreverse thenegative impact of the pandemic on social issues, such asthe rise of extremeglobal povertywithan additional150 million peopleexpected tolive in poverty by the end of 2021.
- Second,mid-,and long-termstrategies need to be craftedto ensure a swift and sustainable economic recovery.These strategiesneed to aim atenabling net-zeroemissionpathwaysby 2050 andimplementingeffective climate resilience toensure that agreen, inclusive,and resilienteconomic recovery is achieved.Boldpublic and privateaction will be necessary tomeet this challenge.
- Third,while both short- andlong-termactions are necessary, public financial resources are constrained.In 2020alone,public spending related to the COVID-19 crisisreached levels of20%-50%of GDPin high income countries. Low- andmiddle-incomecountriesreported significantly lower numbersdue to already existing financial constraints.Limited public spending resources will have to be used both efficiently and effectivelyin 2021 and beyond.
Earth Day 2021 provides us with the unique chance to revive and strengthenaclimate change action momentum for the post-pandemic era.OnApril 22-23,theLeadersSummit on Climatewill behosted byU.S.President Biden in Washington D.C.A main topic will behowclimate ambition can be combined withpandemic reliefand result in economic growth, increasedwealth,and improved climate change resilience.Moreover, a recentjoint statement by the U.S. and Chinacallsfor cooperation and increased climate ambition on the road to COP26 in Glasgow.Morethan ever,nowis the perfect moment toaccelerateajust transitiontoa green,inclusive,and resilientfuture.
How is climate actionprogressinginLatin America and the Caribbean(LAC)?
As themost affected region with an estimated economic contraction of7.4% in 2020,the pandemic hasimpactednot onlyhealthsystemsinthe region, butalso thejobmarkets,education,infrastructure and the economy as a whole.In theefforts toovercomethe economic and social challengesexposed bythe pandemic,Latin American and Caribbean countries have anopportunitytolink climate and biodiversity action to deliver a sustainable Covid-19 recovery.
At the Inter-American Development Bank (IDB), we developed a rapid approval mechanism to respond to governments’needs in the region. In 2020, the IDB increased approvals by 11% and disbursements by 55% for a total ofUS$ 12.6 billionapproved by the IDB sovereign window.
Green, just and sustainablerecoveryaction can ensure thatthenegativeeconomic impacts are not only reversed but new opportunities and innovationarecreated throughout the region.Experience from the LAC regionshows that the expansion of renewable energy generation, emission-free transport, reduction of deforestation, strengthening sustainable land management practices, sustainable transport and sustainable urban developmentresult indirect and indirect positive economic impact while creatingvariousco-benefits.
For instance,arecent study focusedon the costs and benefits ofdecarbonization investments in Costa Ricahas shown that decarbonizing the economy leads to significant net benefitsof estimatedUS$41billionbetween 2020 and 2050, with especially high growth potential in sectors like agriculture, fisheries and forestry.
Another exampleshowsthatinvesting in electric mobilityin Limacouldtriggeradditional investments in the transport ecosystem and thereby createmore employment.
In the LAC region, transitioning towards a carbon neutral economy also creates positive impact on the labor market and is estimated to create up to net 15 million jobs until 2030. Enabling sectors such as agriculture and tourism to transform to net-zero carbon sectors establishes new opportunities for job creation, economic growth and social improvements while increasing the protection of environment and biodiversity.
NDC INVEST is supporting countriestoincrease their climate ambition
Tobring theseinsights to lifeandachievetheclimate ambitionof the region,the IDB Group platformNDCINVESThasbeen supporting countries to design and implement three main elements ofa successful climate change action agenda:
- Design ofLong-TermStrategies (LTS) for net-zero emissions and climate resilience:A long term strategy provides the climate vision for a country and is the base foraligned and forward-looking climate policy.In the region,Chile, Colombia,Costa Rica, andPerucreated or are in the process of creating their LTSwith support of the IDBGroup’sNDCINVEST.TheseLTS offer a great platform forformalizing ambitious goals such as net-zero by 2050and long-term climate resilience.
- Design of alignedNationally Determined Contributions(NDCs):NDCs are thebackbone of a countries approach toreach the Paris Goals, detailingmitigation ambitions and adaptation actions.Within the LAC region,12 countries have so far updated their NDCs in preparation of COP26 in Glasgow inNovember2021.Amongst these countries,four(Chile,Costa Rica,Mexico,Suriname) received support through NDCINVESTtocreate their NDCsand present more ambitious climate actions aligned with their national climate strategies.
- Design ofInvestment plans and finance strategies:Defining and closing the financial gap for climate action is another key element toreversetheclimatecrisis. Through NDCINVEST, weaim atmatchinginvestment demandand offer through various instruments.For instance,the IDBGroupthroughtheNDCINVESTplatformhavebeenactively involved in designing thefirst finance strategyaimed atachievingthemitigation and resilienceambitionsof Chile, andto build a base for a justtransitionwithin the next decades.Another example isthecooperationwith theClimate Investment Funds(CIFs)to support climate mitigation and adaption action throughout theLACregion. So far, more than a hundred IDB Group operations have received support from the CIF.
Together, we want to take advantage of Earth Day 2021 and continue our efforts in the LAC region to design and implement a just transition and green, inclusive, resilient Covid-19 recovery. With support from the IDB Group’s NDC INVEST platform, countries are ready to double down on the efforts to translate this momentum into just and sustainable climate action that creates social improvements and economic growth throughout Latin America and the Caribbean.
Further reading:
How can climate and biodiversity action deliver sustainable recovery from Covid?
5 things we learned from the road to a sustainable recovery from COVID-19
Investing in nature to reverse the biodiversity crisis
Follow us on Twitter: @BIDCambioClima
Photo: Andreas Fazekas