BUSINESSES SHOULD FIGHT CLIMATE CHANGE – FESBC

MBABANE - The COVID-19 outbreak calls, first and foremost, for a health response to detect and contain infections, provide emergency care, and maintain public health systems. 

In addition, there must be a response to broader societal needs and the economy, as many countries are entering a recession of uncertain duration and magnitude. In the midst of all these challenges, we have the responsibility to rebuild our economies and prepare for the future—and climate must be a part of our thinking.

This is the message that the Federation for Business Community (FESBC) is sending to the local business community. 

FESBC Vice President Hezekiel Mabuza said until December 2019, climate change was widely considered humanity’s biggest challenge. Now that the world is at a time when a Bill Gates video warning of a pandemic went viral, it’s important to remind ourselves of the countless warnings from scientists in recent years about the future impact of climate change on our society, economy, and health. 

“We cannot continue to ignore those warnings. Even before the COVID-19 crisis began, we were facing a 30 per cent loss in GDP per capita globally by the end of the century if we remained on the path of 3° to 4°C global warming. And while COVID-19 slows down economies and emissions globally, the structural long-term challenges of climate change persist,” he said.  

The Climate-COVID-19 Economic Link.

The response to COVID-19 provides the opportunity to use our government’s proposed financial and economic stimulus packages to address the climate challenge and, by doing so, boost growth in jobs and several sectors of our Eswatini economy. 

Fortunately, Eswatini Government is setting very ambitious economic response plans to COVID-19. So far, our Eswatini Government has proposed a package equivalent to 4 per cent of its GDP: and many other SADC and African countries are doing the same. As of now, these packages have primarily translated into measures to stabilise the economy in the short term, including lower interest rates, mortgage holidays, grants, and loans for our local MSMEs (micro small and medium enterprises).

But economic packages should also focus on measures that stimulate our economy in the mid to longer term—with infrastructure investments as a core tool. For example, investing in climate infrastructure will not only help our Eswatini business communities build a sustainable future but will also provide meaningful economic benefits, even within SADC countries that move unilaterally.  

As the SADC Governments design stimulus plans, they should focus on those areas of climate mitigation that maximise the speed and size of impact and job creation while generating long-term benefits for our Eswatini economy and society: For example

Deployment of large-scale renewable energy projects, such as biomass, tree planting, forest management and conservation, plus solar, and wind farms 

Renovation programme for (retrofitting) buildings, such as insulation and electricity-based heating and cooling

Expansion of our electricity grid, including smart grid and EV- (electric vehicle) charging points

Incentives and rewards for improving efficiency in our local industry and manufacturing Ambitious plans to scale up carbon capture, utilisation, and storage (CCUS) and green hydrogen. Expansion of public transport services, from urban systems to high-speed rail in the SADC region

Now is the time to move beyond the climate status quo.

approaches

While the SADC regional specifics require tailored approaches (such as choosing to focus on offshore wind versus solar), the broader approach applies to all SADC countries. Those that drive an economic stimulus programme during this time of unexpected crisis should do so strategically. But instead of maintaining our emissions-intense status quo, let’s take this opportunity to invest in the future of our kingdom. 

For these reasons, Government’s financial stimulus packages should maximise the mobilisation of private-sector investment in climate solutions. In addition; FDIs (Foreign Direct Investors) are still standing by their commitments to climate change, even in the face of current market volatility and credit constraints. Indeed, many are now realising that the COVID-19 experience is an early sign (indicator) to the kind of system-level impact that climate change could have on our national and regional economy. 

As such, longer-term government stimulus efforts should include financing that provides risk mitigation instruments, as well as efforts to support the growth of the market for green bonds, sustainability linked loans, and other tools that will be needed to realise the goal of the Paris Agreement.Furthermore, our energy companies in Eswatini and SADC region, from integrated oil majors to PPP (private power producers) and utilities, should not reduce investments in growth areas related to the energy transition.

 efforts

Now is the time to double down efforts and investments and build those businesses that will be resilient and sustainable in the longer term. Such business organisations should create deep public-private partnerships (PPP) with our national, regional governments and other players across the value chain. In addition the private sector should accelerate initiatives like Mission Possible (in harder-to-abate sectors like CCUS and green hydrogen) to make concrete progress toward net-zero emissions.

It is well noted by our FESBC Business Experts that the investments required to reach the Paris Agreement goal range from 1.0 per cent to 3.5 per cent of our SADC countries’ GDP and can be compatible with the ambitious plans that our government leaders in the region are proposing today.

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