Suggestions for Making Coronavirus Economic Recovery Climate Wise in the UK

Due to the UK lockdown that began on March 23rd, businesses, schools, and all non-essential workplaces have been closed down and people began working from home. Where working from home is not possible, many companies have opted to furlough their employees, meaning employees are temporarily laid off and instead receive 80% of their income from the government. Reports from the Office of Budgetary Responsibility have suggested that under a three-month lockdown scenario, the UK economy could shrink by 35% in the second quarter of this year. They have also estimated that the number of unemployed people will rise to 2 million in the next quarter.

The government has promised that £14 billion of the coronavirus emergency response fund be available to businesses, charities, and households. It also includes the small business loan scheme known as CBILS that can provide loans of up to £5 million. However, only 1.4% of these loans have been approved and despite these important short-term actions, there is no plan in place to ensure the national economy can survive the long-term economic impact of the lockdown. The CBI (Confederation of British Industry) met on the 14th of April to discuss what should be included in an economic recovery plan. The focus currently resides on the issues with rising unemployment and supply chain disruption, especially concerning international trade. They recommend continuing high investment rates rather than drastic austerity measures, to simulate a sharp V curve in economic growth. Unsurprisingly, Climate Change is not at the top of the agenda, but it still needs to be a key consideration in any economic recovery plan going forwards, especially when considering supply chain resilience and small business investments.

Take the agricultural sector, for example. Before the lockdown, the UK was beginning to consider the benefits of relying on food imports, rather than subsidizing a UK agricultural sector to enable self-sufficiency as we have done since the end of WWII. Relying on food imports opened the door to more green spaces across the UK and re-wilding programs. However, post-coronavirus, the empty supermarkets and supply chain disruptions will likely mean we begin to reinvest in UK agriculture and try to be more resilient in this sector while helping farmers recover. With regard to climate change, despite there being less potential green space in the UK, self-sufficient food supplies could result in a reduction in fossil fuel emissions used to transport food and keep food chilled along the way. There is also an opportunity to ensure more sustainable farming practices if an economic recovery plan includes policies that restrict excessive water use and place greater limitations on pesticide use. This will need to be aided with continued small business loans and low-interest rates to boost sustainable technological innovation and development.

Similarly, there has been major supply chain disruption in the retail sector, specifically coming from parts of Asia and increasingly Europe. As China recovers we are seeing some improvements to these disruptions. But what does this mean? “Fast fashion” has been a growing source of fossil fuel emissions and is at the epicenter of a materialistic society that produces vast amounts of waste. Restoring these international trading patterns may improve the economy and employment levels, but it will also put greenhouse gas emissions back up to their original height. The government needs to find a balance between these coexisting agendas. It is agreed an economic recovery plan should consider increased investment rates rather than induce austerity measures which would affect what we now refer to as “key workers.” These investments need to continue bolstering UK-based small businesses rather than foreign imports and we need to promote investment in green technologies that will create an opportunity for major green growth in the UK.

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Dear Mr. Bowman,

In the coming weeks, as we reach the “peak” of the coronavirus spread in the UK, an economic recovery plan is needed to ensure long-term economic growth in the UK. Such a plan should be two-fold. First, we need to look at the lessons learned during the current crisis to understand the long withstanding structural failings in the UK which have increased the impact of this virus and led to such poor economic prospects for the rest of 2020 and beyond. By this, I refer to the under-funded healthcare system, but also the high austerity measures post-2008 and a reliance on foreign imports that have led to unsustainable supply chain disruptions during this time. Second, we must consider which sectors of the economy are most in need of heavy investment and how we will help small businesses to recover post-lockdown. It is here that I urge you to consider the climate crisis in every decision made.

In an unprecedented opportunity to restructure the economy and refocus investments, there is also an opportunity for green growth in the UK. Moving away from unsustainable global supply chains, I suggest instead focusing on small business investments that promote the development and deployment of green technologies. In particular, we now understand that by neglecting the UK agricultural sector and relying on foreign imports, the UK was less resilient to the high demand caused by the coronavirus. This structural failure can be readjusted by investing in this sector to promote greater resilience. In doing so we can reduce the global footprint of UK food supplies, but there is also an opportunity to supplement investments with policies that help small farmers invest in greener practices. This model of thinking will lead to sustainable, resilient supply chains. Not just in agriculture, but also in retail and manufacturing.

The focus should remain on investing in UK-based small businesses and green technologies, practices, and spaces to ensure we not only recover from this current pandemic but also are more resilient for all future global crises that are a result of climate change. Thank you for taking the time to consider these actions,

Many thanks,

(sign name)

Contact Details for Office for Budget Responsibility

Name: Scott Bowman, Head of Economic Analysis

Address: Office for Budget Responsibility, 14T, 102 Petty France, London SW1H 9AJ

E-mail: Scott.Bowman@obr.uk

This post was submitted by Climate Scorecard Country Manager: Zara Holden
Contact: zaraholden@hotmail.com