North-South Green Deal Best Antidote To Looming Recession

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While the Covid crisis improves, another crisis looms. Drastic economic action must be taken to tackle climate change and prevent both ecological and economic disaster. A North-South global Green Deal would do just that, writes Professor Ibrahim Ozdemir.

As countries rollout vaccines and reopening strategies, another crisis lurks: climate change. How governments approach economic recovery will determine how fast they bounce back from the pitfalls of 2020. Yet, it will also be a crucial indicator of how they will fair in the face of future crises. While some countries are using this as an opportunity to ‘build back better,’ developing nations are struggling to keep up – a situation which will leave the world vulnerable to disaster.

Covid-19 has severely impacted our economies. Industrial nations of the North are encountering recessions greater than the 2009 financial crisis – for instance, the UK’s economy fell 9.9%, double what occurred in 2009 – and poorer countries of the South are predicted to lose a decade of development. But scientists are already looking beyond the impending recession to calculate the next calamity. If the world does not address climate change and rising carbon emissions by developing a new ecological approach, rebuilding successful economies in a post-Covid world will be fruitless.

For the foreseeable future we need to stimulate the receding economy while prioritising the environment. A new paper, published in the peer-reviewed Global Policy Journal (GPJ), believes this can be accomplished through new trade deals and ecological pacts. Crucially, a North-South ‘Green Deal’, a global environmental coalition led by the EU, which would encourage sustainable production and boost economic trade.

The UN has already encouraged all governments to view post-Covid recovery as a chance to integrate sustainability practices into economic models, overturning pre-Covid systems and building post-Covid solutions which support net-zero pledges and the Paris Agreement.

Disappointingly, the latest UN report revealed only 18% of the $1.9 trillion allocated for Covid recovery can be considered ‘green’. While disappointing, it is not unsurprising, given the enduring economic model does not reward environmental collaboration or accountability. Indeed, it leaves too much room for narrow minded solutions and paving the way for deadly mistakes.

Even with the lessons of Covid, the world keeps forgetting we are intrinsically connected. If the North succeeds in implementing its versions of the Green Deal – switching to clean industrial innovation while curbing carbon emissions – the planet will still be vulnerable as the South is forced to rely on fossil fuels and deforestation to attain economic stability. If Northern nations, like the EU, truly hope to transition to a post-carbon future and meet its Green Deal promises, they must realise this cannot be achieved in isolation.

This would mean reimagining the current approach. The EU has notoriously overlooked partnership opportunities with producer nations. For example, in an attempt to combat imported deforestation, the EU banned the import of palm oil as a biofuel from 2030. However, this de facto ban has unintended consequences and, as stated in the GPJ, created a trust deficit between the EU and Asia who believe the EU is ignoring science in lieu of its protectionist tendencies.

Palm oil, which is an incredibly efficient plant, is able to produce more oil per area of land than the EU’s replacements of soy, rapeseed, coconut and sunflower. Importantly, Europe’s ban does not stop producer nations from cultivating palm oil. It is believed this ban will only force these nations to sell palm oil to China and India – meaning there will be less pressure for palm oil to meet sustainable standards. Ultimately, the EU’s boycott will cause displaced deforestation and diminish efforts in producer nations to meet sustainable goals.

What the EU seems to be overlooking is that trade is an important tool in achieving environmental protection and economic growth. Trade can be a catalyst; a prime example is a recent UK bill which reveals supply chains and curbs deforestation by forcing UK businesses to import commodities which abide by the environmental laws of producer nations. This obliges UK businesses to collaborate with manufactures and incentivises policies which encourage sustainable production.

If the EU can do something comparable, then they can enter a coordinated, global Green Deal which prioritises sustainable economies and guarantees prosperity for humanity and planet. If the EU adopted this mindset they could partner with already existing mandatory regulations, like the Malaysian Sustainable Palm Oil (MSPO) certification scheme, which if guided by the EU could be better enforced and implemented.

We need a new economic approach which emphasises the environment – a global pact which values mutually beneficial relationships, encouraging the world’s finest sustainability practices across energy, agriculture, transport and health. Importantly, we must address the root causes of pandemics and economic inequality.

Global coalitions can transform national, narrow Green Deal promises into global systems of sustainable advancement and prosperity – new models which offer protection from novel diseases, impending recessions and destructive climate change – the emergencies of tomorrow.

By Professor Ibrahim Ozdemir

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