When the Secretary General of the Organisation for Economic and Cooperation and Development retired earlier on this year, Angel Gurria stated that finance ministers need to be green in today’s world. He had been in this role for 15 years, and during most of this time, environment ministers appeared to have no say at all in decision-making. That has now changed dramatically and issues related to climate change and the environment have taken centre stage. This prompted him to say that finance ministers must place these issues on their agenda.
The head of the International Monetary Fund is being equally supportive of the need to tackle climate change and its impact on the environment. Kristalina Georgieva had made the climate a key priority for more than 20 years in other roles she had, saying that cutting emissions could be a source of growth for the poorer nations.
The president of the European Central Bank, Christine Lagarde, was reported saying that: “Central banks need to devote greater attention to understanding the impact of climate change, including its implications for inflation dynamics”.
Undeterred building development has slowly eaten away at the country’s capacity to produce its own food
The incoming director general of the World Trade Organisation, Ngozi Okonjo-Iweala, said that adopting low carbon strategies would place developing countries on course towards a brighter future. Add to this the European Green Deal developed by the European Commission under the leadership of Ursula von der Leyen and it becomes all too evident that leading international organisations operating in the economic sphere are expecting national governments to address effectively the issue of climate change and will be putting pressure on them to act decisively.
Key players in the international economy are placing greater emphasis on climate change and its related issues, thereby indicating how critical this issue is for future economic growth.
The vice president of the European Commission, Frans Timmermans, emphasised the importance of countries sharing fairly the costs and benefits of a low carbon economy, as this could result in people losing their jobs and countries facing a decrease in their national income. This could very well play into the hands of industries and politicians who have different economic interests and who would try to hinder the development of the green economy.
There are two considerations that need to be made. First, unless climate change and related issues are tackled effectively, giving due importance to the economic issues involved, there is the risk of some very severe consequences. Probably the word ‘sustainability’ is not strong enough as to what could happen on the economic front. We need to consider that one of the consequences of not tackling climate change is a world shortage of food and water.
We know something about this in our country as undeterred building development has slowly eaten away at the country’s capacity to produce its own food. What would be the impact on Malta if there were a global food shortage and we would have reduced our capacity to have a supply of locally produced foods?
The second consideration is that the present generation needs to make some sacrifices such that future generations have a sustainable economy. We need to roll back consumption in certain areas and even be willing to adapt to a new lifestyle, with the economic consequences that this entails.
What is emerging in a very definite way is that we cannot detach economics from climate change and environment issues. The economy is not external to nature and this is why the statement that finance ministers today need to be green is so apt.