ENV/WKP(2022)3
13
2.
The need for a sustainable recovery and the role of carbon pricing therein 2.1. The need for a sustainable recovery from COVID-19 The COVID-19 health crises caused significant human suffering with the global death toll reaching almost 5 million by the end of October 2021 (WHO, 2021[10]). The crisis has also had significant social and economic ramifications across the globe while revealing multiple significant vulnerabilities of our current economic system. Global interconnectedness accelerated the spread of the virus in the early days of the pandemic while complex global value chains struggled to deliver key medical material in time to protect people, notably those on the front line (OECD, 2020[11]). In addition, the crisis has exposed key social inequalities, exacerbating those both across and within countries. Poor people were disproportionately affected by COVID-19 (Patel et al., 2020[12]), unemployment rates sharply increased across the world and more than 100 million people fell back to poverty, undoing several years of progress on eradicating poverty (Lakner et al., 2021[13]). Other emergencies, notably environmental degradation including climate change, are unfolding in parallel to COVID-19, representing an even bigger threat to people’s livelihoods in the future and risking to further entrench pre-existing inequalities. Even if these emergencies (air pollution, biodiversity loss, climate change) are unfolding at different time scales, some of the effects are already being felt. Air pollution kills 4 million people per year, species extinction rates are unprecedented and further accelerating and the physical and economic effects of climate change are increasingly felt across the globe (IPBES, 2019[14]). Even though 2020 saw reduced GHG emissions growth globally due to the lockdowns, the impacts of climate change materialised in extreme weather events that broke records across the world, including heatwaves in Australia, hurricanes and cyclones in the US and India, as well as wildfires in the US, notably in California, where the single-largest wildfire ever recorded burned more than 4% of total Californian land (WMO, 2021[15]). With continued accumulation of GHG emissions, the number and severity of those extreme events are expected to further increase, in addition to further spur biodiversity loss and threaten food security (IPCC, 2018[16]) (IPCC, 2021[17]). Again, the poor, especially in the global South, are expected to be most affected as climate change will reinforce vulnerabilities of which the poor have limited capacity to adapt, further exacerbating pre-existing inequalities (IPCC, 2019[18]). Governments’ responses to the pandemic will have potentially large environmental and social impacts in the short and long-term due to the sheer scale of recovery measures, amounting to more than 20% of global GDP (GRO, 2021[19]), yet significantly higher percentages of domestic GDP are seen in some jurisdictions (Buckle et al., 2020[3]). In order to meet international goals, avoid the worst impacts of climate change, and considering the scale and lasting impact of investments, recovery packages will need to take broader environmental goals into account. This framework would not only tackle climate change (and avoid carbon lock-in), but also advance the SDGs (notably income and jobs), improve resilience to environmental stress, limit the transgression of planetary boundaries (loss of biodiversity, and pollution from phosphorous and nitrogen), and address the growing inequality gap and the health crises, all of which are interrelated problems (Buckle et al., 2020[3]). Returning to ‘business as usual’ would seriously hamper efforts limiting
Unclassified
