The European Bank for Reconstruction and Development (EBRD) has emphasized the importance of aligning fiscal support for businesses affected by the COVID-19 pandemic with environmental sustainability. The organization argues that, in light of increasing climate change, there is a heightened risk of future pandemics.
A report by EBRD economists highlights how substantial public investment aimed at mitigating the pandemic presents a unique opportunity to promote a transition towards a low-carbon economy.
Despite some Eastern European nations advocating for increased funding for high-carbon industries, the report strongly advises against such measures. It warns governments not to be swayed into backing fossil fuels during economic recovery efforts.
Historically, during the 2008-2009 financial crisis, global greenhouse gas emissions initially fell but rebounded swiftly. This rebound was partly attributed to missed opportunities where public funds could have been strategically invested in green initiatives.
To ensure a significant environmental impact in exchange for public funding, the report proposes that recipient firms commit to reducing their ecological footprint.
Furthermore, the report asserts that governments must prioritize climate action and resilience within economic stimulus frameworks, directing support towards environmentally friendly businesses. This approach aims to tackle both the immediate economic challenges and the ongoing climate crisis.
The report warns that neglecting these dual concerns could exacerbate the climate emergency and increase the frequency of future pandemics. It states, “The interconnected nature of climate change, biodiversity loss, and economic instability parallels the COVID-19 situation, necessitating cooperative action well before crises escalate.” Additionally, it points out that factors such as deforestation and biodiversity decline significantly enhance the likelihood of pandemic outbreaks, with the Intergovernmental Panel on Climate Change indicating that global warming may accelerate the emergence of new viruses.