UN chief: don’t use taxpayer cash to rescue carbon-intensive industries

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Governments should not use taxpayer cash to rescue fossil fuel companies and carbon-intensive industries, but should devote economic rescue packages for the coronavirus crisis to businesses that cut greenhouse gas emissions and create green jobs, the UN secretary general has urged.

“Where taxpayers’ money is used to rescue businesses, it must be creating green jobs and sustainable and inclusive growth,” said Antonio Guterres, speaking at the Petersberg Climate Dialogue, a virtual meeting of more than 30 governments on the climate crisis, which concluded on Tuesday. “It must not be bailing out outdated, polluting, carbon-intensive industries.”

His call was echoed by Angela Merkel, the German chancellor, who led the meeting, which was also attended by the UK and China. “The coronavirus shows us that international cooperation is crucial and that the wellbeing of one nation always depends on the wellbeing of others,” she said. “There will be a difficult debate about the allocation of funds. But it is important that recovery programmes always keep an eye on the climate. We must not sideline climate, but invest in climate technologies.”

She confirmed German support within the EU for a target of cutting emissions by 50-55% by 2030 compared with 1990 levels. The target is currently the subject of debate within the bloc.

Many countries are planning big investments in fossil fuel industries as part of their economic rescue packages. For instance, in the US the bailout of the airline industry is set to go ahead without conditions attached on their emissions, while the White House has moved to weaken a raft of environmental regulations. In China, subsidies for fossil fuel vehicles and the easing of permits for coalmining are also likely to raise emissions.

While greenhouse gas emissions are set to fall this year, perhaps by as much as a tenth, any beneficial impact on the climate is likely to be short-lived and could quickly be outweighed by increased emissions if the economic recovery resumes on a high-carbon path. Low oil prices mean producers are running out of economic ways to store their excess.

Antonio Guterres is seen on a screen during the video conference of the Petersberg Climate Dialogue in Berlin.

Campaigners and experts have been calling for economic rescue packages to be directed towards environmentally sustainable ends and for sectoral stimulus cash to come with green strings attached.

Dominic Raab, the UK’s foreign secretary, said: “It will be the duty of every responsible government to see that our economies are revived and rebuilt in a way that will stand the test of time. That means investing in industries and infrastructure that can turn the tide on climate change and doing all we can to boost resilience by shaping economies that can withstand everything nature throws at us.”

However, he failed to set out any measures on how the UK government would ensure that its rescue packages – for instance, those called for by the airline and car manufacturing industries – were balanced with conditions that would ensure benefiting companies had to take action to reduce carbon use in the future.

Richard Black, the director of the Energy and Climate Intelligence Unit, said it was time for such measures. “Backing for a clean recovery is now widespread, led by governments and major businesses,” he said. “For actions to match rhetoric, concrete policies are going to be needed very soon – for example, the UK government delivering new policies that get the nation on track to its legally binding net-zero target, and making sure the world doesn’t bounce back into high-polluting ways as soon as the lockdown eases.”

Guterres called for tougher action on cutting emissions, as well as more investment. “Public funds should invest in the future by flowing to sustainable sectors and projects that help the environment and climate. Fossil fuel subsidies must end, and carbon must have a price so polluters will pay for their pollution,” he said.

Guterres also called for developing countries to receive $100bn (GBP82bn) a year, a longstanding goal under the global climate negotiations, to help them curb emissions and cope with the impacts of climate breakdown, and he hinted at moves to reduce the debt on many developing countries, which has been mooted as a way to help them during the Covid-19 pandemic. “We cannot allow the heavy and rising debt burden of developing countries to serve as a barrier to their ambition [on the climate],” he said.

Rich countries must all commit to zero-carbon emissions by 2050, added Guterres, with a particular nod to the US and China. “The Paris agreement was largely made possible by the engagement of the US and China. Without the contribution of the big emitters, all our efforts will be doomed.”

Helen Clarkson, the chief executive of The Climate Group, a set of businesses accelerating action on the climate, said companies were still committed to climate action. “With the right green stimulus policies that ramp up investment in long-term sustainable solutions from electric transport to clean efficient energy, we can deliver on the goals of the Paris agreement without compromising on economic growth,” she said.

The UK will host global climate talks next year, after the UN’s Cop26 summit had to be postponed from its original date of this November. No date has yet to be set for the rearranged meeting, but work is continuing on diplomatic engagement aimed at encouraging countries to come forward with more ambitious climate plans, according to the UK government.

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