Climate-smart stimulus
THE stimulus packages promised by the federal and provincial governments will certainly offer an important and immediate reprieve in these times, but will have very limited utility in putting the economy on track for inclusive and sustainable development. They will hardly help us ‘build back fast’, let alone ‘build back better’. Pakistan’s stimulus packages need to suit a sluggish economy that is constantly under siege from climate change-induced disasters.
The same politicians who failed the world in the climate crisis are now failing us in this pandemic. Their denialism, rooted in anti-science convictions and political expediencies, has already led to many unnecessary deaths from the virus and brought global temperatures to a perilous junction.
President Trump’s impatience to reopen the economy is rooted in the American economic system and his electoral considerations. The biggest stimulus package in human history by the US administration, valued at more than $2.2 trillion, is primarily geared towards avoiding individual and corporate bankruptcies rather than building a climate-smart economy, which promotes green jobs, renewable energy, and transitions to climate-resilient social and physical infrastructure. Far from drawing lessons from the New Deal of the 1930s, or adapting ideas from the Green New Deal that many Democrats have pushed to become an election agenda, the CARES Act has failed to include any climate provisions. In fact, President Trump has succeeded in keeping a tight lid on any aspirations to bring environment and climate concerns into the relief package. The biggest recipients will be the most polluting big businesses such as the airline and fossil fuel industries, but without any quid pro quo to cut their emissions.
Ironically, the most pollution-heavy industries have contributed the most towards weakening immune systems. The fossil fuel industry, for example, has literally made the pandemic deadlier for the poor, who are more susceptible to disease. Likewise, populations bearing the heaviest burden of the pandemic’s health and economic effects are the same as those bearing the brunt of fossil fuel pollution.
The pandemic has highlighted how inseparably linked the climate and pandemic crises are.
The pandemic has highlighted how intrinsically and inseparably linked the climate and pandemic crises are. Clearly, an important lesson to learn from the pandemic is that there is a global failure in planning and readiness for managing a known risk. Covid-19 has highlighted the need for climate resilience, environmental justice and social equity in no less categorical terms than the climate crisis.
Regrettably, it is people of colour and migrant communities — that have emerged as front-line communities — who are getting infected in disproportionately higher numbers in the US, UK and Europe. Their counterparts in Pakistan are people living in katchi abadis and unplanned settlements. Those who are most likely to die from Covid-19 are the same as those who are most likely to lose their lives to polluted water or toxic air.
UN Secretary-General António Guterres has recently enunciated some principles to guide and inform the stimulus packages: taxpayers’ money should not be given to rescue polluting industries or to subsidise fossil fuel industries, but instead to rescue businesses that can create new jobs and enterprises through a clean and green transition based on decarbonisation of the economy, and to shift fiscal power from grey to green to increase resilience of people and communities in a way that is fair and leaves no one behind.
In Pakistan, nothing spreads disease more than the polluted water we drink. Nothing results in early deaths more than the toxic air that we breathe. Nothing weakens our immune systems more than malnutrition and stunting, and nothing makes us more vulnerable to pandemics and climate change than our population density, poor housing and unplanned neighbourhoods sans schools, hospitals or parks.
The abiding principle in designing the stimulus package has to address climate injustice and reach out to our sprawling slums, congested neighbourhoods, and the formal and informal labourers who are, for the most part, internal environmental refugees. Migration to urban areas is an adaptation strategy for most, leaving behind women, children and the elderly in degraded environments and in non-productive local economies in search of livelihoods. The urban poor’s vulnerability is much more acute because they leave social capital behind in their rural neighbourhoods.
It is therefore critical that the stimulus packages are designed to pump financial support in local economies and create livelihood options for the poor in their own settings. Corner shops in communities are the backbone of our local economy. Let’s not sidestep them by providing ration bags that break their social capital networks and injure their dignity. This is not the time to have Alibaba or Amazon replace our corner shops. We have the technological capacity and experience of disbursing billions of rupees in Swat’s economy while dealing with the IDP crisis. Let’s build upon such success stories rather than opening the floodgates of mistrust and corruption with illusive ration bags, controversial Utility Stores or by testing the limits of income support programmes.
This is the time for our policymakers to set the direction for future development strategies while defining the contours of the package. The response to the pandemic could also inform efforts to cut emissions, control effluents, and protect water, forests and other natural resources. The package should be designed to address connected issues in a way that serves the most vulnerable while building a more just and sustainable economy. Addressing climate change does not have to slow down economic recovery.
Linear thinking in stimulus packages is too inefficient for our limited financial resources. An economy that will contract to about two per cent in FY21 and lose output by about 5pc of GDP cannot expect to turnaround with linear thinking. The government should commit a stimulus of about 3pc of GDP of new and additional finances. We will need a three-year climate smart stimulus to annually transfer 3pc of GDP to serve less privileged communities in order to create green jobs, green start-ups and green businesses for climate-resilient and low-carbon products and services.
The writer is an Islamabad-based expert on climate change and development.
Published in Dawn, May 9th, 2020