Economists and environmentalist are of the conclusion that the Corona virus that has led to some serious change in the lifestyle and working patterns across the globe, has actually taken the world’s focus away from the more pressing problem at hand. We are faced with a bigger disaster in the making and that is the climate crisis.
A World Bank report says that we can overcome this hurdle if we work towards making smart investments in order to make a smart recovery from the Corona Virus setback. According to senior advisor on Climate Finance, Peer Stein from International Finance Corporation, “There is mix bag right now of countries that have recovered and those that are still recovering from the pandemic induced slowing down in the economy. Massive investment is definitely needed to manage the damage done by the Corona virus. But more importantly, we need wise green investments that help build more resilient economies for the future.”
Green energy investment market has huge potential. According to the ongoing debate over green investment future, it is imperative that economies look at green investments now, in order to avoid future climate crisis. There is an estimated $23 trillion worth of potential for growth and investment in areas like renewable, energy efficiency, transportation, building and construction between now and 2030. Many job opportunities are therefore in climate related investment to grow much faster than in many other conventional areas.
In Stein’s opinion, stimulus packages that are being drawn in various countries could be looked at being utilized towards climate finance, especially when it comes to construction related work. Both the public sector, banks and capital markets, have more than $50 trillion in assets and debt capital markets has $15 trillion. This might be the single largest opportunity in green financing as a business opportunity for the next decade.
Also, World Bank estimates that climate related lending will outpace that of conventional lending by banks. This makes it a huge opportunity for them to come back into business and the identity of responsible climate change players. It is estimated that banks share will grow from the 7 percent pre Covid to at least 20 percent by 2030. Being a green bank can be a huge advantage for many banks in coming times. A classic example is Ukraine’s largest bank that has made a name for itself by lending for green financing. This is going to the time when green investment will outperform conventional investments.
Construction and building industry will be requiring low utility cost and higher resale values, something that can significantly out-pay the cost needed to build them. Post Covid, quick recovery is what this sector would be looking at. Here is where more energy efficient green buildings will come to their rescue.
Renewable energy is going to be another area of investment. With one time cost of installation, they have worked well in the time of Covid crisis serving more than 4 million people worldwide. Prioritizing them now as a part of Covid recovery plan is a good strategy for all those nations who would like to be ready before a climate related crisis brings forth another bigger setback. Climate related crisis is as manmade as the Corona virus pandemic has been. It is time for wise investments so that we can be more prepared than feel sorry when the time comes.