Business leaders call for green economic recovery programme

A coalition of business leaders has added its voice to the growing demands for governments to examine economic recovery packages to focus on a transition to a low-carbon global economy.

The Energy Transitions Commission, which includes a range of business leaders from organisations including Heathrow Airport, National Grid, Saint Gobain and BP, has sent a letter to governments with recommendations on how nations should “unleash massive investment in renewables,” phase out fossil fuels, and incentivise businesses to set net-zero emissions targets.

The letter states: “Today, we call on governments of the world to spend economic stimulus spending wisely and invest in the economy of the future. We come from global organisations across the energy, industry, finance and civil society sectors. Our companies and organisations have been impacted by the economic downturn. We are acutely aware of the imperative to support corporates shaken by the crisis and restart the global economy fast. We are also committed to learn the lessons from the COVID-19 crisis, which has dramatically demonstrated the unpreparedness of the global economy to systemic risks, despite early warnings from scientists.”

Clean energy, low-carbon and digital solutions are fundamental pillars of a better economy: they can improve the quality of the air we breathe, enhance our quality of life, and limit the occurrence of climate-related disasters. They can also underpin new businesses and new jobs: according to IRENA [International Renewable Energy Agency], the cumulative gains for transforming the energy system could reach $98tr between 2020 and 2050, greatly exceeding the related investment costs ($15tr).”

One key recommendation is the inclusion of “climate conditionalities” into stimulus packages that enable different-sized corporates to recovery through sustainable actions. These should include defined decarbonisation commitments set for 2030, with an end goal of achieving net-zero emissions by 2050. The packages would also require businesses to disclose climate-related financial risks from 2021 onwards.

The ETC recommends boosting the construction sector via green buildings and infrastructure. It states: “Building retrofitting (including electrification of heating) can often be undertaken more rapidly than new infrastructure projects and thus provide an initial wave of demand for the construction sector when larger projects might not yet be shovel ready. In the longer term, it could also contribute to the return to financial equilibrium of local governments by lowering their operational costs. 

“Energy retrofitting of a broader set of residential and commercial buildings can then offer a second wave of demand for the construction sector. These retrofits will benefit businesses and households in the medium-term as they translate into lower energy bills. However, government-backed schemes –– covering the often dissuasive upfront cost of insulation, boiler replacement, heat-pump installation, on-site solar and building efficiency digital controls, and implemented through large-scale projects at neighbourhood level to reduce costs – will be essential to incentivise a wave of retrofits in a depressed economy.”

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