Recession is coming. Policymakers need to start thinking about how investments can be used to avoid future crises.
People across the world are struggling with the impacts of the coronavirus pandemic. What this crisis has shown so far is that in our globalised economy, a virus knows no borders.
To cushion the economic impact of COVID-19, Singapore and other governments in the region have put together stimulus and recovery packages rapidly.
While the outbreak started in China, this could have happened anywhere in the world. Zoonotic diseases are expected to increase in the coming years. The United Nations Environment Programme (UNEP) has noted the increase in such viruses to be driven by factors such as deforestation, the illegal wildlife trade and intensive livestock rearing.
As a serious recession is now expected, with recovery packages being developed across the region, policymakers need to start thinking about how these investments can be used to avoid future crises. A global recovery which tackles the root causes of the pandemic – which is intertwined with our relationship with nature – could help to lower the risk of pandemics in future.
As the old adage goes, “prevention is better than cure”. Sustainable infrastructure can play multiple roles: meeting the Sustainable Development Goals (SDGs), reducing the risk of future zoonotic diseases, reducing the health risks from air pollution, and responding to future risks.
Financial institutions can help prevent the next pandemic
Land-use changes and destruction of natural habitats – such as tropical forests – are responsible for at least half of emerging zoonotic diseases. By contrast, a recent WWF-Italy report shows that forests act as our ‘antivirus’. Protection of natural habitats is key because a diversity of species can counteract the spread of such diseases.
Protection of habitats is particularly important in Southeast Asia, which is a global hotspot for biodiversity. However, deforestation in the region could be making the region more vulnerable to another outbreak. WWF’s 2019 Sustainable Banking Assessment (SUSBA) found that out of the Southeast Asian banks in the study, only 9% of banks had no-deforestation policies. The three Singaporean banks (DBS, OCBC and UOB) are the only banks in Southeast Asia to have adopted such “no deforestation” policies.
It could be even more important for other regional and international banks to follow this example and introduce no-deforestation policies in light of the COVID-19 pandemic. Moreover, it will be important for COVID-19 recovery processes to not lead to a watering down of policies that prevent deforestation.
Sustainable infrastructure increases our resilience to the next crisis
Sustainable infrastructure investments such as energy efficiency, clean energy and sustainable transport investments lower air pollution, which is a risk factor for death during the coronavirus pandemic. According to the World Health Organisation (WHO), air pollution is already responsible for roughly seven million deaths per year with linkages to diseases such as stroke, cancer and cardiovascular disease.
Mr Ngiam Shih Chun, chief executive of Singapore’s Energy Market Authority (EMA) recently pointed out in a webinar reported by The Straits Times that “this crisis could be an opportunity for countries to accelerate their transition to a more secure and sustainable energy future”.
The crisis has also shown that increasing telecommuting and remote working can increase the resilience of businesses to disruption, as well as reducing road traffic pollution and congestion. Reports have indicated that this could potentially lead to lower demand for road transport infrastructure. In the region, the Philippines recently introduced a law to encourage telecommuting in order to help reduce pressure on urban transport and traffic.
Yet, if more people work from home, investments in building energy efficiency will also be needed to ensure home-working has a lower carbon footprint. Building energy efficiency was already a major part of stimulus packages in the last financial crisis in 2009, amounting to around two-thirds of the EU’s total spending, and could be an important priority in upcoming stimulus packages to boost Asian economies. Singapore has recently provided vouchers on utility bills as part of the stimulus package, helping people to offset their utility bills. Additional energy efficiency investments could have a similar effect by reducing energy bills.
Natural infrastructure such as green spaces in cities can also reduce air pollution and improve well-being. There are multiple benefits of trees: keeping cities cool, reducing air pollution and improving people’s health, reducing flooding, managing stormwater and more. There is even research showing trees can improve mental health.
Urban trees have an economic value that has been estimated for 10 megacities as amounting to roughly $500 million. Green spaces in cities should be considered as critical health infrastructure, and during this crisis, many people have appreciated nature and parks as a vital haven from quarantine.
Shifting toward a circular economy that reduces waste and increases reuse of materials can also support improved resilience to supply shocks. In a circular economy, infrastructure systems can be designed to reduce waste streams, and water resources can be reused to provide resilience to supply shocks. Finally, producing food locally could potentially help reduce the carbon footprint of supply chains and increase resilience in the food system. In Singapore, the government recently announced plans to boost local food production to 30% by 2030. The priority of local food production has been underscored by the pandemic.
A green recovery can also protect the most vulnerable and low-income communities, who this crisis has shown often on the frontlines when it comes to pandemics as well as environmental risks such as pollution and climate change.
Investments in sustainable infrastructure are not only sensible to avoid pandemics, but they are also more resilient from the perspective of financial stability. National governments and development banks can explore these win-wins to maximise the benefits of economic stimulus packages. A ‘green’ and resilient recovery can help to address the causes of the pandemic and make our lives better and healthier.
What’s more, in the background to the current global health crisis, the climate emergency has not gone away – making a green, resilient recovery all the more urgent for humanity.
Just this month alone, a huge cyclone struck Bangladesh and India.
We now urgently need bold policies to protect nature in 2020. Infrastructure encroachment into wild areas increases the risk of zoonotic diseases. There are already calls at the UN Convention on Biodiversity for targets to protect at least 30% of habitats by 2030. An ambitious global deal to tackle the extinction crisis will help address one of the root causes of the health risks we face today.
Progress on protecting nature will also support climate action since it has been found nature-based solutions can deliver at least a third of the cost-effective CO2 reductions needed through to 2030.
As we edge towards dangerous tipping points in the climate system, we do not have time to waste.
Main image credit: Morning Brew on Unsplash
The writer is Dr Helena Wright, WWF-Singapore’s Vice President, Sustainable Infrastructure and Energy Finance. She is also the Global Lead for Infrastructure Finance in the WWF network.
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