Coalition of countries urges greater ambition for Covid recovery plans

Founded in 2014 by the Marshall Islands, the High Ambition Coalition (HAC) for Climate has been at the forefront of lobbying efforts for progressive climate policies. The intergovernmental group played a crucial role in shaping the Paris deal, particularly by succeeding to set the global temperature rise limit to 1.5°C.

The statement was issued by a group of nine countries, who hope to get other HAC members on board before the fifth anniversary of the Paris agreement on 12 December. Geneva Solutions spoke to two of its signatories, Tina Stege, special envoy on climate for the Marshall Islands, and Ambassador Marcel Beukeboom, climate envoy for the Netherlands.

GS: As the ongoing Race to Zero Dialogues build momentum in the preparation of the COP26 summit in Glasgow next year, the HAC is pushing to set the bar higher and faster for the green recovery after Covid-19. What is at stake here?

Marcel Beukeboom: Several studies have pointed out that clear policy objectives are, of course, a starting point but we also need to focus on investments in a green economy to really get there. There is a growing understanding in the financial sector, but also at the multilateral financial institutions such as the International Monetary Fund (IMF), that climate change poses a risk for our economy and our financial stability. So far, we have seen some emphasis on short-term liquidity for the crisis relief, but we know that the Paris agreement sets long-term goals that multilateral institutions, governments and non-state actors alike shouldn't lose sight of.

Tina Stege: A green economy is necessary to deliver on Paris commitments, but it is also a continuity of the solidarity, the collaboration and the compassion that is at the heart of the agreement. For those of us in the Marshall Islands what is at stake is very concrete. The future of my country depends on the recovery decisions that are made today. Research shows that the world can avoid 0.3°C of global warming by the middle of the century if governments invest in a strong green recovery from coronavirus and that can make a critical difference for my own country's survival and the future of the planet.

GS: One of your recommendations is that at least 60 per cent of the recovery funds should be climate-friendly, prioritising the green economy and low carbon jobs, while supporting a just transition for those in fossil-fuel-related sectors. How far are we today from that benchmark?

MB: We’re still pretty far. If you take the recently published green stimulus index by Vivid Economics, the percentage of green stimulus that was quantified was very low. Sixteen out of the G20 countries’ announced stimulus will have a net negative environmental impact, which is backtracking on those goals. One of the arguments behind the initiative of the HAC is that we should keep on pushing this need for green stimulus and stay close to home. The next generation EU recovery package is supposed to be environmentally friendly. The Netherlands pushed hard for this to be as green as possible. Ultimately it landed on around 30 per cent.

TS: The EU committing to 30 per cent green spending in its stimulus funds is certainly a start, but we've also seen analysis from Rhodium Group that indicate that one to three  per cent of stimulus spending related to Covid-19 in the US, China and India was green. We need the major emitters to do much better than they are doing. We also know that the target mentioned in the statement of 60 per cent is doable. We know that economies have done it before, including the EU in its post 2008 recovery process in which about 58 per cent of spending was green according to HSPC research. This has been done before and can be done again.

GS: Another proposition is to accelerate the phasing out of fossil fuels, with an immediate moratorium on coal plants and a phasing out by all major emitters before 2040. How can that be achieved in practice?

MB: The most polluting energy sector is black coal so a moratorium on unabated coal-fired power is where you have to start. It’s something we have done in the Netherlands and even the newly built power plants will have to be closed before the end of their lifecycle. That is what we advocate for in other countries as well. For example, the Powering Past Coal Alliance (PPCA) advocates for a phasing out of coal-fired power but also the financing of that industry. We've been pretty successful for example towards Japan and South Korea to encourage them to take a stronger stand on the issue. From a diplomatic perspective, these coalitions are powerful tools to increase the pressure on those who are unable or unwilling to take those steps.

But also, saying that they should stop using coal is not effective. People are working in that industry; whole areas depend on it and they don't have alternatives or the funds to invest. You have to accompany with concrete help for example through the transfer of new technologies, financing clean alternatives, divesting from coal yourself and investing in a just transition. Governments can do this, but it also helps if the financial sector follows suit. The Dutch financial sector has set itself on a course to full divestment from fossil fuels. Around 80 per cent of its funds are invested overseas so we have quite a bit of impact in other countries.

TS: There is already a transition happening. We were glad to see that the Philippines declared a moratorium on new coal power plants which was a critical step for the region. This is a strong signal to others and to investors they'll be best served by getting on the path of decarbonisation. There aren't many silver linings with the pandemic, but we are in a period of low fossil fuel prices and that provides an important opportunity to reform fossil fuel subsidies.

GS: Developing countries are today struggling with Covid, a recession and climate impacts and you call for "swaps of debt for nature" to relieve the pressure and make sure they can move forward. Can you tell us more about why international solidarity is so important?

MB: Existing inequality will only get worse if we don't pay attention. It was best phrased by our minister for foreign trade and development cooperation before the annual meetings of the World Bank and the IMF: 'Business as usual is not an option.’ Those institutions have a responsibility to invest in green and inclusive recovery, and debt restructuring is one of the main ingredients. Otherwise, developing countries don't have the fiscal space and will have a debt crisis through which they won’t be able to invest in a transition.

TG: One thing that we have learned is that we are only as strong as the most vulnerable in society and if you protect those on the front line you are protecting yourself as well. This is the time for solidarity and compassion. Countries like mine have the climate plans in place to build towards a more resilient future, but we will need support through debt relief and financing as well as the support of international financial institutions. This also extends to the vulnerable within the developed nations themselves. You can see the disproportionate impact of Covid on communities of colour and on those who lack access to health care.