Understandably, when the world faced the pandemic, the first and correctly prioritised objective was to protect human lives, making the survival of economies a second priority. Global environmental issues like biodiversity loss and climate change, if left unchecked, might result in environmental, social and economic losses that could be substantially greater than those brought on by COVID-19. Economic recovery plans should therefore be created to build back better in order to preserve life and the conservation of sensitive ecosystems.
In this article we’ll cover the following:
- How does Build Back Better work practically
- A more resilient economy relies on a change to sustainable practices
- Measures governments and authorities should be considering
Practically, How Does Build Back Better Work?
Build Back Better is a policy that suggests that restoring livelihoods and economies back to the “norm” needs to happen in an intersectional way. It suggests that this paramount at ensuring long-term prosperity. This entails investments and cultural shifts that will increase our resilience to shocks when they do occur, whether they are brought on by sickness or environmental degradation, while also lowering the likelihood of future shocks. The transition to inclusive, resilient societies with low toxic emissions and significantly diminished environmental impacts are at the core of this policy.
Improve biodiversity while maintaining a reliable food supply
Ecosystems in their natural state are crucial resilience pillars. Numerous economic activities depend on biodiversity and natural infrastructures, such as forest, wetland, and mangrove ecosystems, which are also the basis of hundreds of millions of livelihoods. However, most of this natural capital is either grossly undervalued in the economy or valued simply as a resource that may be harvested, rather than for the essential ecological functions it offers.
Governments have the power to facilitate the increase in private funding for environmentally friendly solutions through recovery packages and to increase the commitment of companies and investors to assess the consequences, dependencies, threats, and opportunities of biodiversity.
A change to sustainable practices is necessary for a more resilient economy
Even though people who are poor are rarely the main causes of environmental deterioration, they frequently bear the brunt of the harm and are frequently caught in a vicious cycle whereby disadvantaged communities are forced to deplete resources in order to survive. In addition to having an influence on human health, environmental factors caused by greenhouse gas emissions also have an impact on our social lives, causing significant financial disparities, poverty, subpar living standards, theft, a shortage of resources, and a host of other problems. (Bie, 2021).
Smart urban planning is required to produce affordable, inclusive, healthy, and resilient cities with green and sustainable living conditions and systems in order to meet the UN’s SDG 11 (Sustainable Cities and Communities). Although this may appear like an extremely ambitious target, one can strategically accomplish it by educating the public about its relevance. People, profit, economic development, and environmental preservation are all aspects of a sustainable economy and a resilient future (Bie, 2021).
What stimulus measures should governments be considering?
Almost all issues and -isms leave everyone wondering, what can we do every day to contribute to change. These are some of the ways governments can begin to Build Back Better:
- Prioritise implications for longer-term resilience, such as avoiding locking-in emissions-intensive infrastructure and systems, together with benefits for jobs and decreasing inequality.
- Invest in cross-government, cross-sectoral methods that take a long-term, systemic perspective over isolated sectoral results.
By giving development finance institutions more power, such as by expanding their lending authority and co-investment options, the potential for development finance institutions to catalyse private investment will be increased.
Governments must take the lead because market forces alone won’t resolve the issue. Many governments have set goals, some of which are enshrined in legislation. Some countries have pledged to attain net-zero carbon emissions by specific dates, some of which are incorporated in legislation, from as early as 2030 in Uruguay and 2035 in Finland to 2050 for most other countries. It is crucial to note that the US and China, the world’s two largest emitters, have both pledged to achieve carbon neutrality by 2050 and 2060, respectively. In order to meet its sustainability goals, the EU is also setting the pace with a new set of policies. (Atalla et al, 2022).
Many are using a “stick and carrot” strategy, such as imposing green taxes on environmentally harmful activities, tightening regulations, and establishing new environmental standards and certification for energy performance, emissions, and pollutants, as well as offering tax breaks for meeting these standards. In South Africa, the City of Cape Town is seeking Independent Power Producers in an effort to reduce the load that Eskom is struggling to carry. In addition, National Treasury are implementing steep carbon taxes for the coming years in order to meet global climate commitments.
In first-world countries, there are several instances of loans and grants being used to finance environmentally friendly investments in infrastructure for electric vehicle (EV) charging stations, renewable or low-carbon energy sources, energy-efficient buildings, and sustainable agriculture. Additional strategies to increase demand for green goods and services, such as electric vehicles, solar energy, or renewable energy, include subsidies and tax rebates. (Atalla et al, 2022).
To conclude
For Build Back Better to succeed, we all need to work together. Businesses, governments, and people all need to collaborate. This can be done through investments, taxes, subsidies, and societal change. It is critical to reduce the cost of low-carbon substitutes to be competitive in current markets since doing so will ultimately move the world toward a more sustainable future.
Bibliography
Bie, Zainab. 2021. Towards a Sustainable Economy and a Resilient Future. Urban Resilient Hub.
Atalla et al, 2022
Media contacts
Mark van Wyk, Co-Managing Partner
Morné Edas, Co-Managing Partner
About Infra Impact
Infra Impact Investment Managers Proprietary Limited (“Infra Impact”) is a specialised infrastructure and impact investment management business, based in Cape Town, South Africa. Infra Impact manages the Infra Impact Mid-Market Infrastructure Fund 1, a dedicated, closed-ended third party investment fund that makes equity and mezzanine investments primarily in the water, waste, green energy, telecommunications infrastructure and related sectors. Infra Impact Investment Managers Proprietary Limited is an authorised Financial Services Provider (FSP 872).