COVID-19 response and the climate crisis: people and planet first!
The monetary policy decisions taken on April 30 by the European Central Bank (ECB) Governing Council are not on the way to meet a green recovery from the coronavirus crisis. Forty-five NGOs and think tanks have written to ECB President Christine Lagarde demanding action.
As the health crisis ask extraordinary measures from States and international institutions, the financial response to the Covid-19 pandemic will also require exceptional measures to mitigate the impacts of the shutdown of our economies. While the pandemic crisis and the series of responses taken exacerbate the already existing inequalities within countries, affecting disproportionately the most marginalized by the system, the post-Covid economic recovery must not be climate-blind.
For this reason,45 NGOs and think-tanks have sent a letter to ECB President Christine Lagarde on April 30 to call for remembering that the health and economic crisis came at a time of climate crisis too, « and we cannot address one crisis while ignoring the other». Indeed, as the Covid-19 crisis unfolds, the ECB’s financial strategy is being changed to the detriment of green investments. In the letter, the organizations makes recommendations to the ECB to initiate a coordinated structural response to both the COVID-19 and climate crisis. These , includes:
- Align its asset purchasing programmes and collateral frameworks with the Paris Climate Agreement, to support the low carbon transition.
- Align its refinancing operations to the banking sector with the Paris Agreement to encourage more sustainable bank lending and fill the green investment gap.
- Support asset markets for sustainable investment and coordinate operations with the European Investment Bank (or other equivalent European institutions) to ramp up green investment and lock-in a low carbon future.
- Implement prudential measures to increase the resilience of the European banking sector to climate risks and reduce brown financial flows (e.g. financing fossil fuels).
- Lead by example on climat disclosures and transparency by assessing and regularly communicating to elected officials the alignment of its operations with the Paris Agreement and that of the European banking sector.
You can access the letter here.
A briefing paper providing more informations is also available here.