Spearheaded by British non-profit Icebreaker One, which aims to reduce climate risk and transition the global economy in line with climate science, the initiative is receiving support from the UN’s Environment Programme (UNEP); the University College Dublin (UCD) and the University of Edinburgh’s Global Open Finance Centre of Excellence. It is called ‘project Cygnus’, after the constellation.
Project Cygnus will analyse current investment trends in terms of their economic and environmental impact by the end of 2020, taking in funding provided by national and devolved governments, public sector bodies and private corporates and investors.
These trends will be compared to the scale of the climate and nature crises, and to the economic fallout of the pandemic, in order to create blueprints for investors and policymakers seeking to deliver more environmentally sustainable, socially just and resilient economies post-Covid-19. The blueprints will contain deadlines and numerical targets, highlighting both risks and opportunities to users.
Icebreaker One said that the tool will cover the shipping, transport, energy, built environment and agriculture sectors in the first instance. It has received €1m from the European Institute of Innovation and Technology’s Climate-KIC initiative to complete these initial frameworks.
“Both Covid-19 and climate change are major economic and social threats: it is vital that we tackle them in tandem,” Icebreaker One’s founder and chief executive Gavin Starks said.
“As the saying goes, ‘never waste a good crisis’ — as vast investments are unlocked to help restart our economies we have a unique opportunity to build into the future we want. This project will help us make decisions based on facts and evidence combined with cutting-edge research and data science.”
The first phase of the project is due to be completed by the end of 2020. After that, the project partners will develop practical tools for users. Icebreaker One has said it will continue to encourage national and regional administrations, asset managers, investors and leaders to engage through the development stage, in addition to using the resulting frameworks.
Building back better
Despite the prevalence of strong rhetoric about the green recovery and building back better, it is widely expected that Covid-19 recovery packages will not be aligned with the Paris Agreement on a global scale.
The Energy Policy Tracker, updated every week, shows that governments are collectively funnelling billions of dollars more into fossil fuels than into the renewable energy and energy efficiency sectors through their stimulus packages. The worst offender by far is the US, which has confirmed more than $72bn of unconditional financial support to oil, gas and coal since March.
Elsewhere, the International Energy Agency (IEA) is warning that the pandemic has dampened investment prospects for many clean technologies as well as for the fossil fuel sector – often the subject of headlines. Recent research from the Agency found that only six of the 46 technologies it classes as key to the energy transition are receiving adequate levels of funding and policy support and warned that this challenge is likely to get worse post-lockdown.
This is despite the fact that McKinsey has proven that government investment in renewable energy and energy efficiency is more effective at creating jobs and boosting the economy than investment in fossil fuels.
Responding to these trends, a group of economists penned a letter in The Guardian this week calling for recovery packages which bring about the end of the “carbon economy”.
The cohort draw links not only between the carbon economy and climate change, but between high-carbon technologies and nature degradation, racial inequality, wealth inequality and other socio-economic factors.
They call for an end to fossil fuel subsidies and bail-outs for fossil fuel companies, which accounted for 6.5% of global GDP in 2017. This call builds on the Financial Times’ call for a ‘reset’ of capitalism and the World Economic Forum’s ‘Great Reset’ campaign.
The letter also states that investors should divest from fossil fuel firms altogether and NGOs should help citizens organise and advocate for a fairer political system – with Ministers taking their demands seriously. It has been co-signed by more than 100 economists from the US and UK.
“If we fail to act now, the present moment may merely be a preview of what is to come, as we are forced into ever-more-painful situations and tradeoffs,” it warns.
Sarah George