When the Coronavirus pandemic has passed we need an economic recovery with clean energy at its core
The Coronavirus pandemic is arguably the worst global crisis since the the Second World War. The virus has resulted in tens of thousands of deaths and the unprecedented shut-down of all non-essential economic activity throughout the world.
It is hoped that the pandemic will pass in a few months and that things can return to normal as soon as possible. However, once the immediate threat to health and wellbeing has been blunted, there will still remain the Herculean task of resurrecting a global economy that has been shattered beyond recognition.
We believe that this great challenge offers a singular opportunity to break with the past and design a fresh new beginning in our economic strategies.
With interest rates at record lows, now is the time to tackle the climate crisis by investing in the sustainable future we so desperately need – creating thousands of jobs and rebuilding our communities to exist and thrive in harmony with nature and with each other.
From the rubble of the Second World War came the foundations of the National Health Service and the modern welfare state. We hope that the legacy of the Coronavirus will be a new global economy where social and environmental impacts are considered and costed into every decision we make.
The global economy has been wrecked by Coronavirus - let's spark a revival with a sustainable stimulus package
In an effort to slow the spread of the Coronavirus outbreak governments around the world have issued decrees advising citizens to stay at home as much as possible.
This has been backed up by orders to close all pubs, restaurants, shops, theatres, cinemas and sports venues, which will undoubtedly reduce the spread of the virus but which comes at an enormous economic cost.
Once the lockdown has ended and normal activity can resume, we expect many businesses to have suffered irrecoverable losses, and there is likely to be high rates of unemployment and financial hardship.
We believe that these circumstances present a compelling argument for the UK Government to undertake a programme of unprecedented infrastructural development, which will simultaneously stimulate massive job creation while establishing the foundation we need to radically decarbonise our society.
As well as accelerating the rollout of new solar and wind power installations around the country, this is an opportunity to implement essential improvements to the efficiency of the UK’s existing “leaky” buildings, in addition to transforming our travel systems to support an electric vehicle infrastructure, promote cycling, including electric cycles and lower the cost of and improve the reliability of public transport.
A sustainable stimulus package like this could invigorate the energy efficiency and renewable energy sectors which have been struggling for years as a result of absent government support. Large scale investment in these sectors now could ensure that they are able to expand and thrive at a time when there is a tremendous demand for employment and an even greater urgency for action on climate change
Re-aligning the rules to finance a post-Coronavirus economic recovery
To stem the worst economic affects of the Coronavirus pandemic the new Chancellor Rishi Sunak has implemented a radical financial package to rescue the UK economy.
In addition to a £330 billion bailout to compensate businesses and workers for loss of earnings, the Bank of England has cut the base rate of interest to a historic low of 0.1%, making it cheaper than ever before to borrow money.
These are welcome measures that have had a positive short-term impact on the country’s finances, but we believe there is scope to establish a more permanent economic legacy.
In the past, during the financial crisis of 2008 the Bank of England used ‘Quantitative Easing’ to inject an adrenalin shot of £1 trillion to prevent to collapse of the financial sector.
In the present, we are hoping that a ‘Coronavirus QE’ will act as a financial safety net to protect people’s livelihoods and wellbeing.
In the very near future, we must initiate a ‘Net Zero QE’ to rapidly advance our journey to a decarbonised economy. This time, the banks must relax their lending criteria to actually lend to small and medium sized business, who make up the majority of our economic livelihood, to employ more people, to invest in communities and to build our Net Zero economy.
Taking advantage of record low interest rates to fund the post Coronavirus recovery
Since borrowing money offsets costs from the present to future generations, it is our duty to all future living beings to take action now to avoid the worst case scenarios of climate change, which will be irreversible once certain tipping points are crossed.
It is widely accepted that the costs of dealing with climate related disasters in the future far outweigh the cost of implementing preventative measures today, which is why it makes economic sense to invest wisely now.
Furthermore, whatever the Government invests in creating new green jobs it can expect to recoup through income tax, NIC and VAT receipts.
Thinking long-term, investing in improvements to the energy efficiency of our homes and businesses will improve levels of health and wellbeing in the future and lead to a corresponding reduction in demands on the NHS. The same logic applies when considering investments in improving the electrification infrastructure for motor vehicles.
Introducing progressive taxation to discourage carbon intensive activities and support sustainable business and travel
With economic output at a standstill, now is an ideal time to take a step back and re-evaluate our existing tax laws.
We need a tax that is prohibitively high on fossil fuel powered activities such as motor vehicles and aviation.
Levying a high tax on these types of travel could generate huge Government revenues that can be used to subsidise environmentally sustainable methods of transport like electric cars, e-scooters and e-bikes.
Online shopping and home deliveries have become a more common feature of our daily lives. The creation of improved delivery infrastructures, using electric powered lorries to deliver goods in urban environments, would further accelerate the decarbonisation of this growing sector.
Instead of using taxpayer money to build more roads, we could instead bring rail services back under public ownership and use tax revenues to improve the service and subsidise the cost of rail travel.
The goal must be to encourage people to leave their cars at home. Because cars are an important part of our personal freedom, we should provide financial incentives for car owners to switch to electric vehicles. Councils should integrate electric vehicle charging points across cities and prioritise parking for EVs in city centres (phasing out diesel vehicles from city centres all together).
In the case of air-travel, a progressive tax like this could be used to support the emergence of sustainable alternatives such as biofuels, which are available now but which airlines consider to be prohibitively expensive.
Time to rethink how we generate, transmit, and use our energy
The energy industry is another obvious example where tremendous progress can be made towards decarbonisation using funds raised through new economic initiatives.
The energy sector remains one of the most polluting industries. There are many ways to reduce carbon emissions from our gas and electricity supply, all paid for through a combination of:
- a high tax on carbon intensive generators,
- tax breaks for energy producers and energy efficiency practitioners, like 5% VAT levied on all products helping to achieve Net Zero,
- subsidy support for clean energy producers and energy efficiency practitioners, where the long term benefit to the economy and environment can be demonstrated as compared to business as usual,
- direct investment through a programme of Net Zero QE
- encourage the co-operation between local energy generators and network operators to develop local and regional micro-grids.
To stand any chance of achieving our Net Zero emissions targets, we need to develop local micro-grids where communities generate and buy their own low cost heat and electricity. This shift from transporting electricity for long distances across the country to more efficient localised energy production will lead to much greater efficiencies in the system, as well as increasing regional resilience and stakeholder engagement.
Towards a kinder community - what we can learn from the Coronavirus pandemic
Once we are on the other side of this terrible pandemic we must come together and demand that a new green economy is established, one that treats people and the environment with consideration and kindness, compensated by those who harm our communities and our natural world.
Taxpayers money must be invested in producing our Net Zero carbon emissions future. There must be a vital shift in current expenditure to support the infrastructural changes that are needed to live within the safe natural boundaries of our planet.
The UK should and must lead the way on this. Other nations will be sure to follow as the benefits, and our prosperity as a result, become abundantly obvious for the rest of the world to see.
We must stop subsidising the fossil fuel industry and discourage the financial sector from continuing to pour billions of pounds into new extraction ventures around the world.
We need a new economic model where community and nature are embedded into the decision-making process.
And we need to start as soon as the Coronavirus pandemic is over.
What do you think? Share youre thoughts on the post-Coronavirus economy in the comments section below