Never let a good fit go to waste

This article is part of The FIF China 2021 Report

The Covid-19 pandemic has interrupted billions of lives and threatened years of development gains, with the poor and vulnerable most affected. It also served as a reminder to strengthen the resilience of economies and societies. The pandemic hasn’t stopped the concentration of greenhouse gases in the atmosphere from remaining at record levels and continuing to rise – the world is set to experience its five hottest years on record. The threat of climate change is forcing people to evacuate their homes and grappling with food insecurity, along with the impacts of deforestation and biodiversity loss, health and economic impacts. Without urgent action, climate change could push 100 million more people into poverty by 2030. As Winston Churchill said of the training in UN after the world war II: “Never let a good crisis go to waste” – this crisis calls for an equally urgent and exceptional response.

Nations now have a unique opportunity to embark on a path of green, inclusive and resilient development. Making the right investments now can pay off in the long run. Seizing this opportunity is at the heart of the World Bank Group strategy (GBM‘s) to help countries cope with the unprecedented impact of this crisis. In the short term, we are responding to the health threat and providing immediate economic relief. We are also taking advantage of new opportunities to support countries and build a more sustainable, inclusive and resilient future in a world transformed by the pandemic. Supporting a green recovery includes building a climate resilient green infrastructure, investing in healthy ecosystems to reduce exotic diseases, supporting fuel subsidy reforms, carbon pricing to rebuild fiscal space and l acceleration of the transition to a digital economy.

Financing the green recovery

Victoria Kwakwa - IFF China 2021 headshot 3-03

Victoria kwakwa

the GBM is also developing a methodological framework called Rise (resilient, inclusive, sustainable and effective) as a potential organizing framework to promote a green and resilient recovery. Rise will enable countries to identify opportunities to improve the quality of nations’ Covid-19 recovery programs using a range of global datasets. the GBM looks forward to sharing this exciting framework and tools with its customers, countries and partners.

For example, in Malawi, the GBM funds a project to improve watershed services to support government efforts to restore landscapes and improve water security and agricultural productivity. The project is expected to restore 95,000 hectares of degraded landscapes. In addition to investment loans, the GBM also uses development policy to support political reforms. In Tunisia, the GBM works to help mainstream climate responsibility into social safety net reforms, by collecting and harmonizing information on climate vulnerability, promoting resilience and adaptation to climate change, and facilitating the production of renewable energy.

Increasing funding for a green recovery cannot be based solely on public funding. In addition to direct funding, the GBM also mobilizes private investment and helps open new low-carbon markets. In Bangladesh, a private investment and digital entrepreneurship project promotes job creation, private investment and environmental sustainability in economic zones and technological pathways. He will work with the Bangladesh Economic Zones Authority to demonstrate how non-traditional climate sectors can meet long-term climate needs and complement national climate action.

In China, the GBM is preparing a project to create a strategic green investment fund to mobilize private capital from domestic and foreign investors for a green recovery. It will direct investment flows to sectors such as renewable energies, electric mobility solutions and improved waste management. Covid-19 in China has been largely contained, and attention is now turning to medium-term development priorities under the 14th Five-Year Plan (2021-2025) for national economic and social development and long-term goals until 2035 This is a great opportunity to consider the benefits of a green recovery. China is already taking steps to combat the negative and environmental effects of its past rapid growth, and President Xi Jinping’s announcement to achieve carbon neutrality by 2060 has been welcomed.

The relationship between the GBM and China started 40 years ago, and the GBM is proud to have supported China’s achievements. Today the GBM adapts its partnership to increasingly focus on global “public goods” and greening the Chinese economy. This includes reducing marine pollution from plastics, strengthening the performance of food systems to improve food safety and security, protecting natural habitats and ecosystems, and supporting measures to promote decarbonization and an economy. low carbon emission.

The pandemic has exposed the vulnerability and inequalities of our societies. The world now has an important opportunity to establish policies to support a recovery that is not only economically strong, but more sustainable and resilient. China could lead by example in developing green and resilient development during the post-pandemic recovery phase. the GBM is ready to build on our 40 years of partnership to contribute to
such a direction.

This article is part of the FIF China 2021 Report, which draws primarily on content provided by the China-based think tank, the International Finance Forum, and is published in association with Central Banking.

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