It’s been a long and challenging year, one in which we have learned to communicate virtually, linked by our screens to the outside world. And this is only for those fortunate enough to work from home. Then there are those on the frontlines of the struggle with COVID-1, risking their lives to keep the wheels of civilization turning, while others have been forced to migrate away from their homes and life as they knew it.
As governments struggle to redress the dire public health and deeply unsettling economic consequences of the pandemic, we have witnessed unprecedented fiscal and monetary efforts to stabilize and recover from the effects of lockdown. Since March 2020, the top 50 economies alone have announced nearly $15 trillion in spending – and this excludes and additional estimated $6 trillion in central bank purchases.
Such are the findings of the new Global Recovery Observatory – launched on 10 March 2021 by the Oxford Smith School of Enterprise and Environment and the United Nations Environment Programme (UNEP), among others – which shines a light on efforts to put the recovery onto a solid footing. The Observatory tracks over 3,500 policy moves since March 2020 by country and by sector of the economy.
As money is brought forward from the future to cover current costs and restart the economy – borrowed from the future at a scale not seen since World War I and II – the Global Recovery Observatory asks the simple yet elusive question: are we building back better? Will our economies, as a result of the massive spending, be any closer to the goals embodied in the 2030 Agenda for Sustainable Development, or to the agreements reached in Paris in 2015 to stabilize and reduce CO2 emissions?
Our new report, entitled “Are We Building Back Better?” examines patterns of rescue and recovery spending, and unearths some remarkable findings. For example, total green recovery spending is a fraction of the total – less than 20% to be precise. And of the $341 billion announced green recovery spending, the total is compromised of spending by less than a dozen high-income countries. To put this figure in perspective, each year global spending on fossil fuel subsidies averages more than $350 billion.
In other words, in the wake of a once-in-a generation pandemic and economic crisis, spending on green recovery is less than an average year’s worth of subsidies on fossil fuels.
We can, and we must, do better than this if we are to reach what UN Secretary-General António Guterres has called “our best and only plan” – the 2030 Agenda that comprises the Sustainable Development Goals, or SDGs. This is our common plan and our common agenda, and recovery efforts must take us forward in this direction.
High-income and advanced economies have a special role to play here. The data from the observatory indicate that advanced economies outspent emerging and developing countries by a factor of 17 to 1. This will only widen and increase existing inequalities, as a generation of progress in alleviating poverty is undone by the effects of the pandemic and lockdown.
Given the interconnected state of the world – where environmental and climate and health issues no longer respect or contained by national borders – we all share an interest in seeing solutions that increase human well-being and capacities everywhere. This includes our basic life support systems – a stable climate, healthy ecosystems, and clean air and water.
By looking at the past, we can see into the future. One year from the onset of the pandemic, a window for transformational spending and investment is open, with sums being brought forward that were unthinkable only a while ago. We cannot afford to lose this opportunity to redirect our economies to their most basic purpose: jobs, income and restoring a balance with nature.
The Global Recovery Observatory will serve as a reference tool to navigate towards a more sustainable and inclusive future, one aligned with the 2030 Agenda and the Paris Agreement.
Join us in welcoming and using this new tool – a compass for navigating into the future.
