This article originally appeared in the World Economic Forum Agenda, in collaboration with the Thomson Reuters Foundation.

What if our new normal offered us more time, health and well-being as well as stronger communities, cleaner air and safer streets? This is the promise driving people and cities across the world to forge a green and just recovery from the COVID-19 crisis.

And it's more than just a promise: The explosion in walking and cycling as equitable, safe, and low-cost transport solutions during recent months is an inspiring example of how this vision is already a reality.

September 7 was the first-ever International Day of Clean Air, a fitting moment to recall the dazzling anomaly of cleaner air and blue skies we witnessed earlier this year, when much of the world stayed home and passenger transport ground to a halt. It’s also a useful reminder of why major cities around the world are aiming higher than a return to ‘business as usual’ in their responses to COVID-19.

Across Europe, nearly two out of every three people say they don’t want a return to pre-pandemic levels of air pollution. Leaders of major cities have set the goal of a better, more sustainable, more resilient and fairer society.

In Milan, clean air, social inclusion and public health are just some of the reasons we moved to create more space for people to walk and to cycle early in the pandemic. With our Strade Aperte (Open Streets) Plan, we set the goal of reallocating 35 km of road space previously used by cars to routes for people to safely walk and cycle.

Even before COVID-19, we knew that walking and cycling are more efficient ways to move people and goods in congested urban areas. They increase everyone’s access to essential services, boost public health and safety, and slash pollution driving both local disease and the global climate emergency.

Italy is known for its fast and sleekly designed automobiles—and the modern, all-electric version has its place in the country’s future. But a densely populated city centre is a place for people, not cars.

The 15-minute city revolves around simple forms of active mobility, ensuring everyone is just a short walk or cycle ride from life’s essential goods and services.

Like many other leading cities across Europe and the world, Milan is now helping drive a new renaissance in people-centred, urban development: the 15-minute city. More convenient, less stressful, more sustainable. It revolves around simple forms of active mobility, ensuring everyone is just a short walk or cycle ride from life’s essential goods and services.

The complex requirements and multiple benefits of the 15-minute city—from high-quality careers to improved health for people and planet—make it an ideal focus for green and just economic recovery packages.

I’m proud of Milan’s innovation and leadership, and I’m inspired by similar efforts bringing this vision to life elsewhere in the world. More than 2,000 km of new cycle lanes have been announced and/or added globally during the pandemic: the distance between London and Rome.

In response to the COVID-19 crisis, Mexico City began the construction of 54 km of new, designated cycle lanes using recycled materials (from old bus lines). The first one runs along Insurgentes, a city landmark and one of the largest streets in the world. The city’s new vision for cycling is to double bike lane capacity in order to have a total of 600 km of cycling paths in place by 2024.

The new paths will not only cover the city centre but will connect areas across the entire city, supporting active mobility out to the wider periphery. Just as in Milan, expanded infrastructure for walking and cycling forms the core of an integrated effort to ensure well-being for all in the near-term context of economic recovery while paving the way for a transformation towards healthy, equitable, and sustainable cities over time.

Also in Latin America, Colombia’s capital Bogotá—one of the first cities in the world to launch emergency bike lanes—has seen major progress in making active mobility a central pillar of its COVID-19 response. Bogotá added 117 km of temporary cycle lanes to its existing, permanent network of 550 km of cycle routes soon after the lockdown began in March.

In Mumbai (India), cycle advocates have recently emulated Bogotá’s approach, appointing a ‘bicycle councillor’ to help promote cycling infrastructure in each of the city’s 24 wards.

As in the U.K. and U.S., the pandemic saw demand for bikes outstrip supply in Bogotá. So a voluntary initiative of civil society and the private sector (Colombia Cares for Colombia) has responded with an integrated effort to develop the broader value chain and policy ‘ecosystem’ required to ensure the city can put cycling and other active transport modes at the centre of recovery efforts. Last month, 19 “bike councils” were formed, with citizen representatives charged with advising local and district administrations on policies for cycling and other alternative transportation modes.

In Mumbai (India), cycle advocates have recently emulated Bogotá’s approach, appointing a ‘bicycle councillor’ to help promote cycling infrastructure in each of the city’s 24 wards. Around the world, many other cities have published hugely inspiring and ambitious plans for better, more equitable road space reallocation: Streetspace for London; Safe, Active Transportation Circuits in Montreal, The Great Walk of Athens and Paris’ RER V Plan, to name but a few.

These are just a few examples of hundreds of initiatives that have sprouted around the world to put walking, cycling, and other urban transport innovations at the heart of recovery efforts. They demonstrate the global shift towards supporting more high-quality walking and cycling infrastructure and highlighting active mobility’s role in ensuring cities are welcoming and attractive to people from all walks of life.

Clean air is just one of the many benefits of active mobility. But we don’t need a perpetual worldwide lockdown to create clean air for our residents. Our responses to the COVID-19 crisis are already showing how the new normal can be more resilient, inclusive and sustainable. Now’s the time for blue-sky thinking.

Trade, if well managed, can be a powerful tool for development. But it must not stand in the way of tackling climate change, safeguarding labour rights, protecting the environment, and achieving the 17 Sustainable Development Goals (SDGs) that world leaders agreed upon at the United Nations in 2015. International agencies, such as the World Trade Organization (WTO), should not operate in a bubble and must mobilize the collective action and political will needed to make difficult decisions.

Introduction

The trade community is abuzz in Geneva after delegations from around the world met with the eight individuals running for the WTO’s top post and heard how they envision the future of the institution and the multilateral trading system.

The timing of this discussion comes at an unusual moment in the trade calendar. Normally, the selection of the next WTO chief would have taken place in 2021, but this process was moved forward by a year after Director-General Roberto Azevêdo announced his plans to depart the post prematurely. Meanwhile, the dates for the WTO’s Twelfth Ministerial Conference are not yet known, after plans to hold the organization’s highest-level meeting in June 2020 were scrapped due to the COVID-19 crisis.

Heading into the discussions, one of the most important issues for delegations to consider is how the next WTO Director-General will work to shore up the organization’s sustainability credentials, especially given the long-standing difficulties in fulfilling the development mandate of its multilateral negotiating agenda. The tenuous state of its dispute settlement mechanism and the heightened trade tensions among WTO members these past few years have also placed in sharp relief the institution’s ability to weather crises and ensure that the voices of all actors are well taken into account, especially those that have traditionally received less attention.

Eight candidates are in the running, with nominations submitted by Egypt, Kenya, Mexico, Moldova, Nigeria, Saudi Arabia, South Korea, and the United Kingdom. Over the coming weeks, they will be working to make their case to WTO members, arguing why they are best suited to take the helm of the global trade club for at least the next four years.

Below, we outline the questions that these candidates should be able to answer in the selection process ahead.

1. How would you seek to generate political commitment to multilateralism in major economies and rebuild trust and confidence among WTO Members?

The WTO has found itself caught in the middle of rising trade tensions between major economies, not least the United States and China. The new Director-General must be able to spell out why working together on trade will deliver benefits to countries both big and small—especially in the face of entrenched skepticism or outright hostility from key players—and forge new ways of overcoming political deadlocks.

2. How would you help overcome the Appellate Body crisis and ensure that the WTO has a properly functioning system for the peaceful settlement of disputes?

The dispute settlement system of the WTO is one of its core pillars, serving as one of the few international forums where countries, regardless of size, can file legal claims and obtain binding, enforceable rulings. However, its highest court, known as the Appellate Body, has been paralyzed since December, without a quorum to operate after the United States repeatedly blocked the start of the selection processes for any new appointments or reappointments. The new Director-General will need to figure out how to bring WTO members together to resolve this crisis, while also working with them to develop novel ways to resolve trade-related disputes.

The WTO's dispute settlement system is one of its core pillars, but its highest court has been paralyzed since December. The new Director-General must resolve this crisis.

3. How would you seek to ensure the WTO contributes to the realization of human rights, in particular labour rights and the opportunity for decent work (SDG 8)?

Workers and policy-makers in many countries fear trade can undermine sustainable development if companies fail to respect labour rights in attempts to be more competitive. While many regional trade agreements now include chapters on labour rights, the discussion at the WTO in this area has been lacking—despite a commitment at the 1996 Singapore Ministerial Conference for the WTO and ILO secretariats to “continue their existing collaboration.” The new Director-General will need to respond meaningfully to these concerns and revitalize the WTO’s relationship with UN agencies responsible for business and human rights, and employment.

4. How would you ensure the WTO supports environmental sustainability, including the potential of fossil fuel subsidy reform to support progress tackling climate change (SDG 12, SDG 13)?

Given the ambitions of the UN’s Paris Agreement and the reference to sustainable development in the preamble to the WTO’s rulebook, the new Director-General will need to foster a more open discussion on how the organization can tackle the challenges posed by climate change and other environmental risks such as biodiversity loss. This will involve making sure trade rules do not undermine environmental protection as well as exploring how trade rules can support environmental objectives.

5. How would you seek to ensure the WTO contributes to “building back better” post-COVID?

The new Director-General will take office during a historic economic downturn and a major slump in global trade. Governments have responded with much-needed economic recovery packages, often introduced with little consultation or coordination: many now fear these will inadvertently entrench support for unsustainable firms and sectors and create new market distortions which unfairly harm producers in low-income countries. Positioning the agency as a positive force in the transition to a more sustainable and more equitable trading system will be a key challenge for whoever takes over the role.

6. How would you seek to advance the commitments on trade and sustainable development set out under SDG 17, including those related to the specific challenges faced by Least Developed Countries  (LDCs)?

LDCs make up a minuscule portion of goods and services trade, with their percentage share in the single digits. While WTO members have made commitments to provide duty-free, quota-free access for nearly all LDC goods exports and provide preferential access for LDC services and services suppliers, the implementation of these and other measures has been far from sufficient. The new Director-General will need to foster a renewed commitment from members to fulfil these existing decisions and generate new ideas to ensure that trade benefits developing and LDC members.

7. How would you seek to ensure the WTO respects the SDG 14 commitment on fisheries subsidies?

SDG 14 on life below water has a dedicated target for WTO members to fulfil: to conclude by 2020 their decades-long negotiations on setting binding disciplines on harmful fisheries subsidies, along with eliminating those subsidies that support illegal, unreported, and unregulated fishing.

Before 2020 draws to a close, the new Director-General will need to help members make tough political choices to bring fisheries negotiations across the finish line.

With just months to go before 2020 draws to a close, the new Director-General will need to help members make the tough political choices to bring this negotiation across the finish line—including, for example, on the question of what kind of special and differential treatment for developing countries would be appropriate and effective.

8. How would you ensure the WTO helps to overcome poverty and inequality (SDG 1, SDG 10)?

Although the growth in trade has coincided with a historic reduction in poverty levels, income inequality remains acute, both within and among countries. With commitments in these areas central to progress on Agenda 2030, the new Director-General will need to be able to articulate how policies affecting trade and markets can contribute to more inclusive economies—and galvanize WTO members to take action in support of them.

9. How would you seek to advance gender equity, both within the WTO as an institution and through the impact of the WTO in the global economy (SDG 5)?

While academics, civil society groups, and some international agencies have long worked on understanding the gender-differentiated impacts of trade, at the WTO the topic has only recently grown in profile with the launch of the Buenos Aires Declaration on Trade and Women’s Economic Empowerment in 2017. The new Director-General must guarantee that the momentum around these discussions is not lost, along with ensuring that women are fully represented in senior leadership positions in the secretariat.

10. How would you ensure the WTO contributes to ending hunger and malnutrition, and promotes sustainable agriculture (SDG 2)?

With climate change among challenges facing the global food system, the WTO’s farm trade rulebook has been widely criticized as overdue for an update. The new Director-General could help ensure the trade body contributes positively to efforts to tackle hunger and malnutrition, support farmer livelihoods in developing countries, and promote sustainable agriculture by helping to revitalize talks in this critical area.

The idea that stimulus spending should drive a green, resilient recovery has wrongly become a partisan issue in this country, apparently playing a role in the departure of Bill Morneau as finance minister on one side and highlighting the lack of strong Conservative leadership on climate on the other.

Ensuring a resilient recovery is not just a question of what’s good for the economy or what’s good for the environment. It is now an issue of national competitiveness.

Leaders around the globe and across the political spectrum are making historic commitments to build a low-carbon future, rejecting the false compromise between economic growth and climate action. The scale of investment and economic change around the world illustrates the urgency with which Canada needs to lift its eyes to this horizon.

Read the rest of the article in the Ottawa Citizen.

Plastics are one of the most popular materials in existence. They are durable, relatively inexpensive to produce, and versatile enough for use in a diverse range of products.

Here in Canada, less than 10% of plastics are recycled, contributing to over 3 million tonnes of plastic being thrown into landfills or into the environment each year. Over a third of plastics produced in Canada are for single-use packaging or products—such as plastic bags, take-out containers, and bottlecaps—which constitute one of the largest sources of plastics found in fresh water.  

What Impact Do Plastics Have on Fresh Water?

Plastics are released into our freshwater systems in many different shapes and sizes, and through various means—including wastewater treatment plants, landfill leakage, storm drainage, agricultural runoff, effluent and scraps from industry, inadequate waste management procedures, and litter.

Over time, environmental conditions—such as wind, rain, waves, and sun—cause plastics to break down into smaller pieces (< 5 mm) called microplastics.

Over the past few years, the study of microplastics has grown immensely, but much is still unknown about their short- and long-term ecological effects. As an emerging threat to freshwater environments with potential human health implications, further scientific research on the sources, fate, and effects of microplastics is critical. 

How Has COVID-19 Impacted Plastics Usage and the Health of Our Fresh Water?

As part of the changes to our daily life brought about by COVID-19, Canadians’ reliance on certain types of single-use plastics has increased. Policy-makers are also facing pressure to reverse or suspend legislation that would address plastic waste and pollution, such as Canada’s proposal to ban harmful single-use plastics by 2021.

For example, at the height of the outbreak, some provincial health officials advised against using reusable bags and containers in grocery stores, with several chains banning them outright in favour of plastic bags. Although many of these restrictions are now being lifted, it may still be a while before consumers return to reusable bags and coffee cups.

COVID-19 has also brought a new source of plastic pollution in the form of single-use personal protective equipment (PPE), such as masks and gloves. Single-use PPE is a necessary and effective public health measure, but these products are not always discarded properly and may end up as litter that enters our waterways. Indeed, a recent study identifies plastic face masks as a potential source of microplastic fibres in the environment. Although research is already underway to develop biodegradable or recyclable masks, even a temporary surge in plastic litter can lead to long-term impacts for freshwater environments.

What Needs to Happen Now?

First up, researchers at IISD Experimental Lakes Area have already proposed a whole-lake experiment (in this case, by carefully and safely adding microplastics and closely monitoring the ecosystem), to allow us to better understand the impacts on the whole lake and food web that it supports.

More than 50 years of existing data about the chemistry, biology, and weather patterns at the site will help us understand and validate what we discover. And once we know more about what microplastics do to our freshwater lakes and the aquatic life residing within, we can then work directly with governments and industry to develop relevant and effective policies and procedures that protect our precious freshwater resources from plastics pollution.

When it comes to larger policy changes to reduce the impacts of COVID-19 on plastic pollution in our fresh water, the Government of Canada should:

Move forward with the Canada-wide strategy on zero plastic waste: Canada should proceed with implementing its existing strategy and legislation on plastic waste reduction, including a ban on harmful single-use plastic items by 2021.

Provide educational resources to the public on more sustainable PPE use and disposal: Use social media and traditional marketing campaigns to raise public awareness about proper disinfection, reuse, and disposal of PPE to help ensure we do not produce excess waste and that it does not end up as litter in our environment, including fresh water.

Invest in research and innovation on plastic pollution in fresh water as part of sustainable recovery measures: Part of Canada’s action plan to ensure a green recovery from COVID-19 should include the implementation of financial programs and incentives for small businesses, entrepreneurs, and researchers to develop innovative and sustainable solutions to reduce and prevent plastic pollution in fresh water, as well as better understand its effects.

Support and develop sustainable plastic waste management systems: The federal government needs to work in collaboration with industry, provinces, territories, municipalities, and Indigenous governments to coordinate localized and harmonized waste management procedures, as well as invest in appropriate infrastructure and markets to help implement a circular economy for plastics within Canada.

Today’s USD 3 trillion fashion industry offers eco-minded consumers a plethora of “sustainable” and ethical clothing options, from organic cotton t-shirts to leggings made from recycled plastic bottles.

However, assessing the environmental and social impacts of the various materials used in such apparel can be tough in a marketplace where brands will deploy any number of tactics to sell you a hemp scarf that warms your shoulders while easing your conscience.

In a recent report, IISD provides a market performance overview of the most popular fibre used in textiles and a pillar of the fashion industry—cotton. One thing is clear: consumers must consider many factors when shopping for eco-friendly garments. Sustainability performance can vary between products of the same brand, and transparency gaps abound in the garment industry, which can make informed decisions challenging.

Here are some guidelines to help make the process easier:

Look for Brands With Public and Ambitious Sustainability Commitments

Our cotton report, launched in July 2020, tracks how large fashion brands are driving the growth of cotton produced under voluntary sustainability standards (VSSs), such as the Better Cotton Initiative (BCI), Organic (including Global Organic Textile Standard [GOTS] and Organic Content Standard [OCS]), and Cotton made in Africa (CmiA). VSS-compliant production of cotton made up at least 14.1% of the global total in 2016 and is expected to rise in the coming years.

VSSs push cotton producers to limit their negative environmental and social impacts, for instance, by reducing water and pesticide use and improving wages and working conditions.

Big apparel companies such as H&M, C&A, and Nike have all publicly pledged to source 100% sustainable cotton by 2020. Commitments like this should be the norm, and companies should disclose their performance progress to promote accountability. These public pledges encourage companies to be more accountable and put pressure on the rest of the industry to improve their sustainability performance.

Not All Voluntary Standards Are Created Equal

Our research shows the most prevalent VSS schemes in the cotton sector (in order of production volume) are the BCI, CmiA, Organic, and Fairtrade International. While all of these standards can push producers to mitigate negative environmental and social impacts related to cotton production, their compliance criteria vary.

Assessing the environmental and social impacts of various materials used in a product can be tough in a marketplace where brands will deploy any number of tactics to sell you a hemp scarf that warms your shoulders while easing your conscience.

For instance, schemes such as Organics, GOTS and OCS ensure that certified cotton is labelled and identified as such at all stages of the supply chain (identity preserved), this means that organic fibres are not mixed with conventional ones, while others, such as BCI, provide physical traceability of certified fibres at the farm and gin levels, and allow the mixing of certified and conventional fibres after the ginning process. Also, some standards (such as BCI), allow the use of genetically modified cotton, while Organic, Fairtrade, and CmiA do not.

Natural vs. Synthetic? It’s complicated

The negative environmental impacts come early in the life cycle of natural, plant-based fibres such as cotton, linen, and hemp. For instance, farming can often involve intense water and pesticide use. However, after production, these natural fabrics perform well on sustainability because they are often recyclable and are fully biodegradable.

Concerning cotton, VSSs are helping to mitigate the negative impacts of producing the crop by prohibiting the use of pesticides, reducing water usage, improving soil fertility, and creating positive impacts on health and working conditions in farming communities. One study by the Textile Exchange found that farming organic cotton reduces the crop’s global warming potential by 46% compared to conventional cotton.

VSSs are helping to mitigate the negative impacts of producing the crop by prohibiting the use of pesticides, reducing water usage, improving soil fertility, and creating positive impacts on health and working conditions in farming communities.

Synthetic fibres such as polyester and nylon are based on oil, which has major environmental and climate change impacts, including a high level of greenhouse gas emissions in the extraction of oil and processing of the fibres. On the flip side, synthetic fabrics often use less water, last longer, and can be produced from recycled plastic.

It’s important to note that there is no middle ground here: blending natural and synthetic fibres will sacrifice a garment’s recyclability and biodegradability.

Read Labels Closely

Brands are eager to put the sheen of sustainability on their products, but be wary of vague claims, such as “Made with recycled material” (or other eco-friendly fabric), which doesn’t mention how much of the garment is comprised of the sustainable material. Look for clear, quantified sustainability claims, often expressed as a percentage.

Stay Informed

More-informed consumers can make more-informed demands in the marketplace. Platforms such as CottonUP and Fashion for Good have surfaced to promote more sustainable decision making in the marketplace. In our research on cotton, we’ve seen how consumers can play an important role, as environmental and social concerns have pushed some of the big global brands to purchase more VSS-compliant cotton.

Moving something as large as the global fashion industry toward sustainability will take a massive effort, but the payoff could be huge; if the sector continues on its current path, doing “business as usual,” it may comprise up to 25% of the world’s carbon budget by 2050, making it the second most polluting industry after oil and gas.

Nordic countries are well recognized for combining healthy economic growth with strong social and environmental policies. Since 2000, the Nordic economies grew 28%, while carbon dioxide emissions fell by 18%. Denmark, Finland, Norway and Sweden aim to be carbon neutral by 2050, driven by investments in renewable energy, bioenergy, and carbon offsets. Denmark recently made achieving “net zero by 2050” a legal responsibility. What is their secret?

One of the keys to Nordic success was their pioneering use of energy taxation in the early 1990s when faced with a recession caused by a major banking crisis arising from excessive financial deregulation, exacerbated by low oil prices in the late 1980s (for Norway) and the collapse of the Soviet Union (for Finland). While the conditions of the 1990s recession were different from today, the Nordics have shown how to use energy taxation to recover from an economic crisis.

Turning crisis into an opportunity for reform

In the wake of an economic crisis, governments desperately need cash. Nordic experience shows that taxing fossil fuels is an effective way to raise revenues and reduce budget deficits.

Finland became the first country in the world to introduce carbon pricing in 1990, followed by Denmark. Sweden introduced a suite of new energy taxes, including on carbon and sulphur emissions in 1991, accompanied by a reduction in income taxes. Norway implemented a carbon tax in the same year and applied the highest rate to the oil and gas production sector, beyond what has been achieved by many countries.

Contrary to arguments against energy taxation, these measures did not cause an economic slump. The Nordics thrived. In Sweden, economic activity grew by 58%, while CO₂ emissions declined by 16% from 1990–2011. Denmark increased industrial output by 27% while achieving a 7% decline in industrial emissions from 1991–1999. Over the past 30 years, the Danish economy grew by 78% while energy consumption stayed largely unchanged.

Norway’s GDP grew 73% between 1990 and 2012. Growth was partly driven by oil and gas extraction, with a resultant rise in overall emissions. However, Norway’s reforms still achieved significant reductions in emissions per unit of GDP arising from reduced energy intensity, changes in the energy mix, and cutting process emissions. 

By the end of the 1990s, all Nordic countries had turned their budget deficits into surpluses and significantly reduced their unemployment rates.

Today, countries such as India and Costa Rica have increased taxation on oil and gas consumption as a way to generate funds for their COVID-19 responses. But more countries could seize the opportunity for reform. A tax of 12.5 cents per litre on gasoline and diesel, for example, could raise USD 1 billion per day globally.

Using energy taxes to fund social spending

The Nordics wisely combined higher energy taxes with a drop in income taxes, social security contributions, and pension payments for employers. The shift in taxation from labour to fossil fuels ensured the Nordics had enough revenue to maintain high social spending and reduce the impact of higher energy prices on the public. As a result of such policies, the Nordics have a lower Gini coefficient (a measure of inequality) than the OECD average and perform well on the Human Development Index.

Shifting spending in this way also helped to avoid the public backlash that frequently accompanies higher energy prices, such as France’s yellow vest movement and Ecuador’s protests against the removal of fuel subsidies in 2019.

The shift in taxation from labour to fossil fuels ensured the Nordics had enough revenue to maintain high social spending and reduce the impact of higher energy prices on the public.

For countries with less well-developed tax systems, alternative benefits can be provided through other tools such as basic income payments, cash transfer schemes, or free public transport. Using revenues to fund employment, health or education programs is another way to enhance the acceptability and inclusiveness of higher energy taxes while stimulating economic capacity and growth.

Energy taxes as part of a green recovery package

The Nordics included energy taxation within a package of policies to support clean energy and combat pollution. Clean energy is a strong generator of employment, while pollution taxes drive technology adoption and improvements in air quality.

Denmark earmarked electricity taxes to subsidize wind energy, leading to the country becoming a global leader in wind energy. To drive energy efficiency, Denmark provided higher carbon tax rebates for companies that signed energy efficiency agreements and invested in energy-saving equipment.

Nobody likes a tax increase, especially following an economic crisis. But what if we were consulted about how the money will be reinvested to make our quality of life better?

Sweden put a tax on nitrogen oxide (NOx) for large combustion plants, which resulted in a 60% decline in these emissions from 1990–1995. A similar story can be found in Norway, where an NOx tax, combined with investments in energy efficiency, led to a 21% decline in NOx emissions since 2008. Sweden also introduced a renewable energy certificate scheme in 2003, which led to renewables moving from 4% of the electricity mix to 15% by 2017. Finland encouraged the use of wood waste for biofuels and biogas as well as investments in energy efficiency through its voluntary agreements.

Today, similar green energy packages have been put in place, as evidenced by the EU, South Korea’s Green New Deal and Spain’s draft climate law.

Putting people first

Nobody likes a tax increase, especially following an economic crisis. But what if we were consulted about how the money will be reinvested to make our quality of life better? In Sweden, public acceptance of the carbon tax was bolstered by extensive social dialogue and public deliberation. Earmarking funds for popular and worthy purposes can help. Management of energy tax revenues by an independent institution, such as Denmark’s Energienet.dk, can build confidence that funds will be spent as promised.

Nordic green recovery from COVID-19

In response to the COVID-19 crisis, several Nordic countries are continuing their trend of investing in a green economy. Finland’s recovery plan includes approximately EUR 500 million for green investments, including public transportation, recapitalizing its climate fund, and phasing out oil heating. Denmark has adopted 13 climate partnerships with the business sector to build a green economy. The energy and industry agreement includes 4 gigawatts (GW) of offshore wind, subsidies for energy efficiency, tax reform for heating (higher taxes on fossil fuels, lower on green electricity), and consideration of green tax reforms that will make it easier to choose solutions that reduce negative impacts on the environment.

Experience from the Nordic countries demonstrates that increasing taxes on fossil fuels provides an effective way to raise cash for social welfare and economic stimulus. At a time when governments around the world are facing unprecedented costs, reduced revenue, and climate change, taxing fossil fuels simply makes sense.

Eight candidates are now competing to head the World Trade Organization (WTO)—reviving a long-overdue debate about how trade can support sustainable development, especially now, as the world continues to weather the COVID-19 crisis and lays the groundwork to rebuild. But while the question of who will lead the WTO is important, political leaders must also renew their commitment to working together across forums if trade is to contribute to a more equitable, sustainable, and resilient post-COVID-19 world.

Today, the WTO is overshadowed by tensions between major economies, putting into question countries’ ability to find multilateral solutions for global problems. Meanwhile, the pandemic has shown how critical it is for them to collaborate on trade—not just so essential goods such as food and medicines can cross borders, but to safeguard decent work and livelihoods, and help us ensure a just transition to a low-carbon economy.

With COVID-19 sparking border closures, decreases in trade volumes, job losses, and declines in remittances, the world economy is more fragile than ever. Governments and companies now need to rethink how trade can contribute toward sustainable, equitable economies by realizing fundamental human rights and promoting human freedom and dignity. That means ensuring that trade and markets help improve respect for labour standards, create jobs, improve gender equity, and contribute to sustainable development across its core pillars.

The pandemic has shown how critical it is for world leaders to collaborate on trade—not just so essential goods such as food and medicines can cross borders, but to safeguard decent work and livelihoods, and help us ensure a just transition to a low-carbon economy.

It also means making sure that actions taken by the largest exporting and importing countries don’t harm producers and consumers in the world’s smallest economies. More equitable trade rules also need to ensure that countries can foster the resilience of their value chains to external shocks, including by adding value to their domestic output.

Achieving progress in these areas will require more than just improved trade policies and rules. Governments will need to rebuild trust and show they are willing to make the tough political choices to ensure a better world post-COVID, rather than reverting back to old positions and holding onto past disagreements. They will have to engage in meaningful global collaboration at the WTO to address the impacts of the pandemic on its most vulnerable Members, who were and are dependent on the interconnected globalized world that was largely designed to support the most powerful.

They will also have to reassess the current trade rulebook in light of the pandemic, and rewrite its provisions where needed to help ensure protection of the most vulnerable from future trade shocks, working with the International Labour Organization (ILO) and others. The trade community will have to engage more closely with the UN’s climate change talks and find creative, robust ways to tackle trade-related issues, such as carbon pricing and fossil fuel subsidies. In addition, they will have to deliver an ambitious and fair outcome at the WTO on fisheries subsidy reform in time for the 2020 deadline set in Sustainable Development Goal (SDG) 14, as one step toward the conservation and sustainable use of the earth’s resources, while ensuring that the development dimension remains at the core of any trade negotiating process.

The COVID-19 crisis has shown us that it is more urgent than ever for trade and markets to contribute to promoting sustainability, overcoming inequality, and improving resilience. A new WTO Director-General could contribute to galvanizing collective action on the shared problems we face as we grapple with the pandemic and its aftermath.

However, achieving real change will require more than a changing of the guard at the WTO and other global institutions concerned with the governance of trade and markets. World leaders in key countries will need to agree to work together to “build back better”—and ensure that delivering equitable outcomes on trade is first and foremost when they do so.

Nathalie Bernasconi-Osterwalder is the Executive Director of IISD Europe and Senior Director, Economic Law and Policy. Peter Wooders is IISD's Group Director, Energy.

The world is far from being on track to achieve SDG2—zero hunger—by 2030. At present, 2 billion people face moderate or severe food insecurity. These numbers have been going in the wrong direction since 2014, up by 60 million in the last five years alone.

The COVID-19 pandemic will likely push the overall number even higher, between 83 and 132 million. An additional USD 10 billion is needed this year to prevent millions more people becoming food insecure as a result of COVID-19-related measures, and half of this money needs to come from donors.

The latest report of the UN Committee on World Food Security’s High Level Panel of Experts on Food Security and Nutrition, Food and Nutrition Security: Building a Global Narrative to 2020 outlines the steps needed to get the global community on track to meeting SDG2.

As the report makes clear: Simply cranking up food supply hasn’t put us on track to meet SDG2, and it will not address the current food crisis. Hunger is rising not because there is a shortage of food. In fact, world food stocks are near record highs.

The COVID food crisis is different from past crises and is made all the more challenging by its multiple moving parts. The lockdowns to control the pandemic, for instance, have disrupted global food supply chains, leading to cancelled export for farmers, empty shelves, and in some cases higher prices for many consumers. The prices that cocoa farmers can fetch for their crops has fallen sharply due to a drop in consumer demand. Meanwhile, wheat flour has been cleared out of supermarket shelves in many countries due to hoarding, driving up its price.

The lockdowns have also trigged a severe global economic recession, resulting in massive losses of jobs and incomes. Global economic growth is expected to fall anywhere from 5%–10% in 2020. When incomes fall, so does people’s capacity to acquire food. This collapse in purchasing power has occurred alongside unprecedented food waste due to food being unable to reach markets, creating contradictions of hunger amid plenty. Food system workers and farmers are among the hardest hit from the slowdown, with nearly one in three livelihoods in the sector now at risk.

People experiencing malnutrition in all its forms are especially vulnerable to COVID-19, while falling incomes mean a growing number of people cannot afford diverse and nutritious foods. These dynamics are creating a dangerous self-reinforcing cycle of risk and disease. 

The crisis is also affecting different countries and groups in different ways. Food system workers—often paid low wages and working in crowded conditions—are among the most vulnerable to the virus, while their livelihoods are at heightened risk. Meatpacking workers and migrant farm labourers—as we have seen in Canada and around the world—have experienced disproportionately high infection rates.

Countries that depend on food imports also face challenges, especially due to price increases for certain foods, such as wheat and rice, on which some exporters have placed restrictions during the pandemic. Many poor countries have seen their currencies decline in value in the wake of the global recession, pushing up the local prices of imported foods.

Tackling a Complex Crisis With Fundamental Policy Shifts

How can we tackle the current crisis and reverse the longer-term trend of rising hunger? The High Level Panel of Experts on Food Security and Nutrition (HLPE) report advocates for urgent policy shifts that aim for a transformation of food systems as a whole.

What does this mean in practical terms? It means moving from a singular focus on increasing food supply through specialized production and export to making fundamental changes that diversify food systems, empower vulnerable and marginalized groups, and promote sustainability across all aspects of food supply chains, from production to consumption.

We need to diversify food systems, empower vulnerable and marginalized groups, and promote sustainability across all aspects of food supply chains, from production to consumption.

It also means shaping food policies in ways that recognize inter-system linkages—ensuring, for example, that food systems, ecological systems, and economic systems create positive synergies rather than working at cross-purposes.

And it means incorporating a greater understanding of the complex interaction of different forms of malnutrition occurring simultaneously within societies, including not just hunger and undernutrition, but also obesity and micronutrient deficiencies.

Above all, the COVID-19 pandemic is showing us that transformative food policies must be flexible to allow for diverse approaches; we must stop trying to find one-size-fits-all solutions.

Diverse Systems Are Key to Building Resilience

As the HLPE report outlines, transformation across food systems would help to alleviate many of the problems unleashed by the pandemic. Policies that promote diverse farming systems—such as agroecology—are typically more ecologically sustainable than systems geared for specialized production and long-distance trade. More diverse production systems contribute to more nutritious diets by providing a wide variety of foods essential to good health.

Support for more regional markets—sometimes referred to as territorial markets—can provide farmers with outlets for their crops that are closer to home and better meet local demand, reducing the risks associated with relying on global market conditions.  

Transformative food policies must be flexible to allow for diverse approaches; we must stop trying to find one-size-fits-all solutions.

More localized markets are also more empowering for vulnerable and marginalized groups because they create livelihood opportunities not only for local farmers, but also for local traders and processors. Grounded in communities and catering to their specific needs, these more localized market systems can respond to changing conditions more quickly and reduce the need for an excessive reliance on imports.

The threat to food security in this current moment is immense, and old approaches have not been up to the task. This was evident even before the outbreak of the pandemic. Policies that support transformative initiatives help to build more diverse food systems that are not only more likely to achieve SDG2, they will also be more resilient when the next crisis hits.

Jennifer Clapp is a Professor and Canada Research Chair in Global Food Security and Sustainability and a member of the High Level Panel of Experts on Food Security and Nutrition of the UN Committee on World Food Security.

Sustainability-linked bonds can play an important role in allocating capital toward COVID-19-related relief or recovery measures.

With infection rates still stubbornly high in many countries, it has become clear that mitigating the economic impact of COVID-19 will require ambitious stimulus measures and spending. This is where COVID-19 bonds have a vital role to play, given their ability to tap into international capital markets while taking advantage of the increasing popularity of sustainable investing. They can be the ideal financial instrument for investors seeking to allocate capital toward COVID-19-related relief or recovery measures.

While COVID-19 bonds can be issued by both corporate and sovereign, supranational and agency (SSA) issuers, 90% of the issuance as of April 28, 2020, fell into the latter category. However, the share of corporate issuers should increase over time and mirror the composition of social bond issuers, especially if the need for pandemic-related financing is drawn out due to a longer, U-shaped economic recovery. In 2019, 56% of social bond issuers were from the private sector, while the rest of the issuers were SSAs. If COVID-19 bonds indeed followed a similar pattern, the financing burden of COVID-19 measures would be better distributed across public and private issuers.

The COVID-19 bond issues to date have either been designed as (1) general-purpose bonds, as part of a wider COVID-19 response plan of the issuer, or (2) use-of-proceeds bonds financing specific COVID-19-related projects. The majority of social or sustainability bond issues fall in the second category and follow the relevant principles and guidelines of the International Capital Market Association (ICMA). Going forward, issuers should consider a third type of structure for their COVID-19 bond issuances: sustainability-linked bonds (SLBs), also known as key performance indicator (KPI-) linked bonds. They would be well-placed to channel financing into both prevention and post-COVID-19 recovery while putting incentives in place for issuers to ensure that pandemic-related health objectives are met.

Sustainability-Linked Bonds: An increasingly popular instrument

The ICMA defines SLBs as “any type of bond instrument for which the financial and/or structural characteristics can vary depending on whether the issuer achieves predefined Sustainability/ESG objectives” (p. 2). While SLB issuance has been limited to date, sustainability-linked loans experienced a 78% growth in 2019, with issuance worth USD 465 billion. SLBs are expected to build on the popularity of their loan counterparts and will benefit from the ICMA’s recently published Sustainability-Linked Bond Principles, which provides issuers with the necessary guidance to raise capital with this new sustainable debt instrument.

SLBs can be issued by any company or public entity and provide a strong incentive to issuers to deliver on their impact commitment, as their cost of financing is now linked to how well they perform on predetermined sustainability KPIs

SLBs are an especially interesting option for financing pandemic-related measures, as they can be issued by any company or public entity—unlike use-of-proceeds bonds, given the difficulty some issuers face in earmarking these funds for a limited set of eligible projects. In addition, SLBs provide a strong incentive to issuers to deliver on their impact commitment, as their cost of financing is now linked to how well they perform on the predetermined sustainability KPIs.

For example, Enel, the energy company, recently issued a 5-year SLB, where the coupon (i.e. the interest payment) would increase by 25 basis points if the installed renewable energy capacity does not achieve the bond’s sustainability performance target within a predetermined time frame. These SLBs can also go beyond coupons and can be linked to other bond characteristics, such as maturity.

Adapting to the COVID-19 Context: Setting meaningful KPIs

In the case of COVID-19 SLBs, the KPIs would depend on the type of issuer and the industry the issuer operates in. For example, for SSA issuers, the KPIs could involve the number of infections in the country within a specific time period or the number of intensive care units available. For corporate issuers, where remote work is not possible, KPIs could include the number of infections in the workforce compared to a predetermined baseline or compared to peers in the same industry.

Companies in the healthcare sector could set KPIs linked to the amount of preventive equipment or ventilators produced. KPIs that focus on the recovery, in case of a financial institution, for example, could involve the number of loans provided to small and medium-sized enterprises (SMEs) in the hardest-hit sectors, such as tourism. Recovery-related KPIs for SSA issuers could be the number of people applying for unemployment benefits or GDP growth.

Companies in the healthcare sector could set KPIs linked to the amount of preventive equipment or ventilators produced. KPIs that focus on the recovery of a financial institution could involve the number of loans provided to small and medium-sized enterprises (SMEs) in the hardest-hit sectors

The inherent challenge with SLBs is to set KPIs that are ambitious enough but, at the same time, achievable. To address this, issuers should work with sustainability experts to design KPIs that are material and meaningful. The issuer’s existing sustainability strategy could be a good starting point.

Another challenge is how to link sustainability performance to the bond’s coupon. Issuers should be careful when designing SLB structures with coupon step-downs. In this case, the issuer pays a lower coupon when KPIs are achieved. Portfolio managers have difficulty valuing step-down structures, and therefore they will be hesitant to integrate them into their fixed income portfolios. For this reason, all SLB issues to date have had coupon step-ups, where the issuer needs to pay a higher coupon if the KPIs are not met.

This does not mean that COVID-19 SLBs should replace general-purpose or use-of-proceeds bond structures, but rather that issuers should explore SLBs as an alternative approach to structuring COVID-19-related debt financing. The beauty of SLBs is that they can be issued by any entity with access to capital markets. Therefore, issuers have no excuse not to participate in financing COVID-19 measures now, should they wish to do so.

This blog was originally published by IISD-GSI on 7 July 2020. The estimates of public money commitments for different energy types have been updated on July 15 2020 due to both the issue of new government policies and additional research. 

Early findings from our research show that, between the beginning of the COVID-19 pandemic in early 2020 and July 15, 2020, G20 countries have committed at least USD 151 billion to fossil fuels and at least USD 89 billion to clean energy in their stimulus and recovery packages. Another USD 28 billion went to “other energy” that is not straightforward to categorize.

This public money flows to energy production and consumption through direct budgetary transfers, tax expenditure, loans, loan guarantees, transfers induced by government regulations, and various hybrid mechanisms. It is in addition to many other government policies that are, and were, supporting different energy types before the COVID-19 pandemic and the collapse of energy commodity prices earlier this year.

These numbers, reported as of July 15, 2020, are a work in progress based on analysis of official government documents. They speak only for measures specific to both energy production and consumption as already approved by governments. More stimulus and recovery packages are still being discussed as proposals for later release, but several important trends are already evident.

Pre-COVID Trends Continue

The COVID-19 crisis and governments’ responses to it have expedited trajectories that existed before the pandemic struck. National and subnational jurisdictions, which heavily subsidized the production and consumption of fossil fuels in previous years, are once again throwing lifelines to oil, gas, coal, and electricity. Meanwhile, economies that had already started the transition to clean energy are now using stimulus and recovery packages to continue this.

According to the consortium’s estimates, as of July 15, 2020, the only G20 countries where national and subnational-level public money commitments to clean energy exceeded those to fossil fuels are Brazil, China, Germany, Japan, and the United Kingdom. The opposite holds true for Australia, Canada, France, Indonesia, India, Italy, Mexico, Russia, Saudi Arabia, South Africa, Republic of Korea, Turkey, and the United States. For Argentina,  there was not enough data to quantify support measures specific to the energy sector. Finally, in the European Commission’s pledges, it was difficult to disentangle support to fossil fuels from support to clean energy, and these public money commitments were “other energy”—a large category in other G20 countries as well.

Green Strings Attached and Different Shades of Green

The recovery picture is not black and white, or, rather, grey and green. While USD 121 billion (80% of the total USD 151 billion) is going to support fossil fuels with no environmental conditionality, some countries have attempted to attach at least some green strings to the public money being funnelled toward high-carbon assets. For example, the French government made its bailout of Air France conditional on reducing the airline’s emissions.

The “fossil conditional” category of public money commitments includes support to airlines, car manufacturers, fossil fuel companies, power plants, and producers of “blue” hydrogen (hydrogen-based on fossil fuels but with carbon capture and storage), with the requirement that they must reduce their overall environmental footprint. While such conditionality is a step in the right direction, the bottom line is that governments are still providing significant funding to fossil fuels and are also violating the “polluter pays principle.” The research consortium estimates the value of “fossil conditional” measures at USD 30 billion (20%) out of the total USD 151 billion committed to fossil fuels in the G20 countries as of July 15, 2020.

Similarly, there are different shades of green. According to the 14 expert organizations, solar, wind, energy efficiency, small hydro, “green” hydrogen (hydrogen based on renewables), cycling, and walking are “clean unconditional” and account for USD 16 billion (19%) out of the total (nearly USD 89 billion) committed to clean energy. The bigger chunk (81%) is over USD 72 billion in support for “clean conditional” energy realities such as electric cars, rail, public transport, “advanced” biofuels, large hydro, grids, and storage—these have great potential to reduce carbon emissions but can still cause environmental harm depending on how the energy is sourced.

Finally, at least USD 28 billion has been committed to “other energy”—a category including support for multiple energy types (e.g., in power generation or hydrogen of unspecified origin), which are impossible to disentangle. Researchers included nuclear, “first generation” biofuels, and waste in this category due to their predominantly negative impact on the environment over time.

Tip of the Iceberg

Our bottom-up estimates are possible for only about 3% to 5% of the total stimulus and recovery commitments. A considerably larger amount of public money committed to supporting the G20 economies in response to the crisis may also benefit different elements of the energy sector. However, these values are not available from official sources and are therefore not included in the consortium’s estimate. Countries such as Italy and Japan are deliberately designing their recovery packages in an industry-neutral way. However, in reality, even support from central banks through mechanisms such as quantitative easing is not entirely neutral and benefits the incumbents, which, in the energy sector, are predominately fossil fuels.

The first wave of stimulus and recovery packages has been rushed out. In fact, some G20 countries face difficulties efficiently disbursing the funding they have committed to recovery. Now is the time for more strategic responses to the COVID-19 crisis, and G20 governments still have an opportunity to green their stimulus and recovery packages to help create a low-carbon future for generations to come. The staggering amounts of public money already committed in this recovery show that, when governments need to mobilize fast, they can—an attitude that should be applied to climate action. We will continue to monitor these funding flows to ensure that our leaders are held accountable for their decisions.

The consortium behind the estimates includes 14 expert organizations: International Institute for Sustainable Development (IISD), Institute for Global Environmental Strategies (IGES), Oil Change International (OCI), Overseas Development Institute (ODI), Stockholm Environment Institute (SEI), Columbia University in New York City, Forum Ökologisch-Soziale Marktwirtschaft (FÖS), Fundación Ambiente y Recursos Naturales (FARN), Instituto de Estudos Socioeconômicos (INESC), Institute for Climate Economics (I4CE), Instituto Tecnológico Autónomo de México (ITAM), Legambiente, REN21 and The Australia Institute (TAI).

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