The global economy is expected to shrink by up to 3% in 2020 due to the COVID-19 pandemic response, leading to “the worst economic fallout since the Great Depression” according to the International Monetary Fund. The International Labor Organization warns that the pandemic will have a devastating impact on employment, “wiping out 6.7% of working hours globally in the second quarter of 2020 – equivalent to 195 million full-time workers.” Already in the US, 22 million people have registered for unemployment benefit out of a workforce of 167 million. Around the world, the pandemic has upended people’s lives and made more visible stark structural inequalities in society.
The current pandemic presents a unique opportunity to governments and policymakers to enhance the resilience of political and financial systems to the climate crisis. They can achieve this in particular through implementing green deals and legislation that requires banks and financial institutions to phase-out fossil fuel investments and transition to a greener economy.