United Nations Secretary-General António Guterres has called on governments to make sure coronavirus bailouts, especially those in the transport sector, are compatible with the goals of the Paris Agreement on climate change.
The economic slump caused by the pandemic has prompted governments to shell out billions in state aid to prop up businesses most affected by the outbreak. In Europe, that has ranged from the travel and tourism industries to retail and cultural sectors.
Guterres told an International Energy Agency (IEA) summit last week (9 July) that he was “encouraged that some COVID response and recovery plans put the transition from fossil fuels at their core”, citing efforts by South Korea and the EU as examples.
However, he added that “many have still not got the message” as some countries choose to “prop up oil and gas companies that were already struggling financially. Others have chosen to jumpstart coal-fired power plants that don’t make financial or environmental sense.”
Guterres reminded the summit that the Paris Agreement’s signatories have committed themselves to limiting global average temperature rise to 1.5 degrees Celsius and that the world must achieve net-zero emissions by 2050 to stay under the benchmark.
“Every financial decision must take account of environmental and social impacts,” he added. On Sunday (12 July), EU legislation aimed at doing just that came into force, as the bloc’s so-called taxonomy rules kicked in.
The Portuguese politician also insisted that “bailout support to sectors such as industry, aviation and shipping should be conditioned on alignment with the goals of the Paris Agreement.”
As part of its common position for the UN General Assembly in September, the European Council stated on Monday (13 July) that “recovery efforts have to be consistent with the low emissions transition agenda”.
The list of priorities for the meeting also insists that virus policies “should not exacerbate existing interrelated climate and environment emergencies” and that “a new reality after COVID-19” needs new, more sustainable clean energy efforts.
Lack of coherence
European governments have decided to shell out more than €30 billion in airline bailouts, most of which do not set strict environmental criteria. Earlier on Monday, the European Commission gave its blessing to the Dutch government’s €3.4 billion in aid for KLM.
The EU executive’s competition regulator, led by Danish official Margrethe Vestager, has cited the green aspects of some bailout schemes, including Renault’s, but is ultimately limited in how much it can do to attach green strings to aid packages.
Although less prolific, the shipping sector has also been given virus recovery support. The French government granted container shipper CDA-CGM €1.05 billion in May, even though environmental groups have pointed out that vessels still do not pay to pollute.
Faïg Abbasov, an expert with clean mobility group T&E, said that cash should be “made conditional on full implementation of the EU Green Deal’s objectives, including extending the EU carbon market to ships and achieving full decarbonisation by 2050.”
Shipping is currently exempted from the Emissions Trading Scheme (ETS), although work is in motion to fold it into the carbon market. MEPs recently backed a plan that will obligate the Commission to also set efficiency standards for vessels.
The Environmental Defence Fund (EDF) published a study last week urging the International Maritime Organisation (IMO) to take a leaf out of UN counterpart the International Civil Aviation Organisation (ICAO) when it comes to policy-making.
“The IMO and the shipping industry need to put in place the right rules for alternative fuels to truly drive the decarbonisation of the sector and it does not need to start from scratch. The rules recently adopted by ICAO offer valuable lessons and a good starting place,” said EDF’s Aoife O’Leary.
ICAO’s carbon offsetting scheme for aviation – known as CORSIA – includes robust accounting rules and criteria on biofuels that do not automatically class them as zero-emission options. EDF insists that the IMO should mirror the positive aspects of the scheme in maritime transport.
CORSIA itself has its critics. At an ICAO meeting in late June, countries agreed to tweak the scheme’s rules so that only emissions generated by aviation after 2019 need to be offset by buying pollution credits.
That prompted EU lawmakers and climate groups to warn that CORSIA no longer had the bite needed to decarbonise the sector, as airlines are unlikely to have to offset any emissions for three years, due to the slump in air travel demand caused by the pandemic.
[Edited by Zoran Radosavljevic]