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COVID-19: An opportunity for the road not taken?

15 April 2020

Amidst the suffering and economic hardship caused by the COVID-19 emergency, one silver lining has emerged: an interruption to the greenhouse gas emissions and environmental degradation stemming from human activity. Numerous heart-warming images highlighting these benefits, including the return of crystal-clear water to the canals of Venice in northern Italy, have been beamed across the world.

There has also been a marked improvement in air quality. A widely circulated series of maps documents the dramatic reductions in nitrogen dioxide pollution across much of Europe. These benefits have been felt in China, too, where reductions of up to 30 per cent in nitrogen dioxide levels and of approximately 25 per cent in greenhouse gas (GHG) emissions have been observed. Globally, emission levels could fall by as much as 5 per cent, the largest year-on-year drop since World War II.

However, these developments should not be viewed as progress in the fight to mitigate climate change. We can look to what happened during the 2008–2009 global economic crisis as evidence. The onset of the financial crisis saw a similar instant impact on global GHG emissions. Total emissions dropped to 48.6 gigatonnes of CO2 equivalent by the end of 2008, down from just under 50 gigatonnes in 2007, and fell further to 48.15 gigatonnes in 2009. But by 2010, GHG emissions had rebounded to almost 51 gigatonnes, including a 5.4 per cent increase in emissions from fossil-fuel combustion and cement production alone, coinciding with economic recovery and stimulus packages.

Unless we ensure a shift away from business-as-usual policy and pursue an economic pathway that takes into account the costs of zero action and the externalities that have important consequences on environmental sustainability and climate change, the positive environmental impacts we are witnessing now will be similarly short-lived.

The current situation – and the numerous stimulus packages to come – represent a fork in the road in this regard. Policymakers could continue down the well-worn path of quick wins and short-term financial gain – or they could take decisive action now and put sustainability before profit. For example, bailouts for companies involved in carbon-intensive industries, such as aviation, could be tied to commitments to pursue structural R&D realignment towards sustainability and a carbon-neutral economy. Stimulus packages could also be paired with GHG-related taxation to create a business model where developing and utilizing renewable energy technologies makes financial as well as environmental sense. Decisive action towards a low-carbon, sustainable-growth path could yield a direct economic gain of US$26 trillion through to 2030, as compared with maintaining a business-as-usual approach. It is imperative that governments seize the initiative and pursue this development pathway, given that COVID-19 has the potential to derail much of the momentum that had been gathering around climate change, including causing the postponement of the COP26 climate conference.

The current situation also underlines the need to increase resilience, particularly among smallholder farmers. The predicted economic recession associated with the current pandemic could endanger many in low-income countries. For every percentage point of economic slowdown, the amount of people suffering from poverty increases by between 1.9 and 3 per cent. We can thus expect that the imminent economic situation will bring between 14 and 22 million additional people into poverty, threatening to erase much of the progress made over the preceding years.

Additionally, protectionist policies are beginning to become more widespread due to the concerns surrounding COVID-19, with key producer countries, including Kazakhstan, Russia and Viet Nam, imposing export limits on key commodities. Similar measures undertaken in 2007 and 2008 greatly inflated the price of staple crops, thereby putting countries that rely on food imports in a compromising position, with knock-on effects for food security.

Similarly, although labour shortages caused by travel restrictions are a growing concern worldwide, they are especially keenly felt in low-income countries. During the Ebola outbreak, for example, labour shortages and road blockages rendered it impossible to access seeds and other vital inputs, and around 40 per cent of the agricultural land in West Africa went uncultivated.

COVID-19 is not unfolding in a vacuum. Smallholders across the world remain exposed to climate change and hunger. Women farmers continue to face crippling inequality on a daily basis. Young rural dwellers need viable employment opportunities more than ever. It is therefore paramount that a plunge in development assistance akin to that of 2009 be avoided at all costs.

It is for this reason that IFAD will continue to work hand in hand with vulnerable smallholders, striving to improve their resilience to these and other shocks. IFAD has a number of safeguards and procedures in place to ensure that our interventions do no harm and build maximum resilience. The Social, Environmental and Climate Assessment Procedures (SECAP) tool has quickly become IFAD’s main method for enhancing environmental sustainability and resilience in small-scale agriculture throughout all our projects. Proper utilization of this procedure could help IFAD and the countries it works with identify, redirect and repurpose uncommitted resources to respond to the COVID-19 emergency and enhance national contingency plans.

As we begin our twelfth replenishment cycle, we at IFAD have committed to continue investing in resilient practices. With an overall target of building the climate resilience of 24 million people by 2025, at least 25 per cent of our portfolio of loans and grants will be invested in climate-focused activities until December 2021. We know the future of rural agriculture must be sustainable and resilient – and we are committed to helping producers, policymakers and governments plan for, and benefit from, forward-thinking avenues of support to ensure that our partner countries and smallholders recover from the wholesale impacts of COVID-19.