2021 NATIONAL BUDGET RECOMMENDATIONS A ‘Sustainability Transition Programme’ as a Post-Pandemic Economic Measure

The COVID-19 pandemic has been brutal, forcing economies of varying scale to review operational structures to increase economic resilience, with the aim to safeguard the livelihood of communities. On the climate front, the disruptions of successive global lockdowns caused a temporary drop in carbon emissions globally. Cumulatively, CO2 emissions dropped by almost 17% between April and November 2020, with the bulk of this emission (43%) reduction recorded in the surface transport sector alone, which was greatly affected by the grounding of operations. In individual countries, the emissions are said to have plummeted even by a high of 27%. However, the reduction in emissions is expected to be short lived, as some countries, especially in the global north have already rebound and are expected to increase emissions generating activities as a bid to ‘repair’ the economic damages caused by the pandemic. For instance, emissions by mid-June were at 5% below the 2019 levels -33 gigatons, the highest record since 1990.

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Further rise in emission is projected in the coming years for several reasons. First, this will be prompted by the need to reduce the increasing unemployment rates globally, which increased sharply by over 2.5% between Feb 2020 and July 2020 (from 5.4% to 7.7%), linked to the pandemic. On the local level, the unemployment linked to the pandemic equates to around 50,000; compared to the originally expected number of 100,000. The second factor will be urgent efforts employed to address growing inequalities, which existed, but were exacerbated by the pandemic. A report by the International Monetary Fund (IMF) notes that the impacts of the pandemic are likely to plunge many economies, institutions, and individuals into debt, and this will have a significant bearing on accelerating inequality. This will occur within the mechanisms that countries adopt to regenerate their economies to seal the cleavages opened by the pandemic. As much as there will be urgency to revive economies to address the above issues, and other persistent ones, sustaining old policies, reliant on fossil fuels, especially in the case of Mauritius would be dangerous for both climate and economy as it will secure additional investment in a rapidly depreciating sector while tying the country’s fate to additional carbon emissions generating activities.

Additionally, the Intergovernmental Panel on Climate Change (IPCC), to which Mauritius is a party, noted prior to the pandemic, that the world needs to urgently steer to new policies to retain the global warming rate under 1.5 degrees, which, according to the United Nations Environmental Program (UNEP), would be unattainable if climate pledges, prescribed in the Paris Agreements, are not increased by a factor of 3 to 5. The estimated economic consequences, if temperatures increase above 2 degrees Celsius are devastating, with a decline of 15% of the global GDP, and a drop of 25% for a rise of 3 degrees; akin to the Great Depression where GDP reduced to -26.7%. While the economic impacts of the pandemic on Mauritius have been well documented and mediatized, the impacts on carbon emissions during the pandemic and the environmental impacts of the proposed economic responses are yet to be understood. On this front, it would be timely to quantify upcoming and future post-pandemic economic responses to understand the environmental impacts, more specifically related to emissions generation on both short and medium terms. Besides environmental and climate leadership, this also will provide us with the opportunity to better evaluate our response to environment commitments and to global accords.

With the new Climate Change bill, providing access to funds, the accessibility to climate change mitigation tools and solutions is made possible. However, access to green funding, may not always be advanced as grants, and is packaged in the form of loans – repayable after stipulated time frames. Additionally, there are always an array of requirements to be met by the country in need, which can be problematic for Mauritius as we now fall in the high-income margin group. That notwithstanding, with repayment factors in consideration, green funds, like many other loan structures, can lead to the increasing national debt of many economies, exposing them to even more vulnerabilities due to external and indirect geopolitical forces. However, green loans are not essentially bad, as they form part of a structure that can help the green regeneration of national fabrics, leading to the possibility of spurring new and more sustainable economic ventures; hence, re-orienting national trajectories. Additionally, such loans may even be conceived with zero interest given the current liquidity at banking level. This is further highlighted during the pandemic, where economies, irrespective of size, are economically impacted and are forced to turn to new opportunities while taking stock of increasing environmental challenges – requiring an influx of green capital for the financing of climate change mitigation and conservation. What is important to consider however, are means to reduce loan taking while achieving the same desired trajectory of sustainable transitions. This is key in order to build-back better in a post-pandemic and climate change era, and this can be achieved while tapping into the ongoing wave of developmental agendas; thus, aligning with ongoing national projects, like the Metro Express in the transport and mobility sectors.

An equitable post-pandemic policy approach is required, balancing the urgent need to regenerate economies to encourage sectoral development, while keeping track of sustainability and climate goals for sensible long-term planning. Adopting a green pathway as a post-pandemic response will also enhance the resilience of the economy, leading to a frontier of unlimited opportunities on the economic front (including job creation). This approach aligns with ratified policies like the 2015 Agenda for Sustainable Development of the United Nations, through the Sustainable Development Goals (SDGs), and with new undertaking of numerous sustainably conscious economies, adhering to our same lifestyle.

In light of this, with the last national budget (2020) having principally been geared at supporting our economy in a time of crisis and uncertainty, the upcoming national budget (2021) must be geared to ‘build-back-better’ economic recovery policies that are both inclusive and responsive to our ideals of achieving a sustainable future. This can be achieved through the re-evaluation of our ‘old’ models and turning to new and innovative frameworks, while keeping disruptions that may be viewed negatively, to a minimum by enforcing strong and sustained transition pathways -that can benefit both large and small scaled organisations alike.

Acknowledging the limited funding capacity, due to the pandemic, to single-handedly finance green and inclusive recoveries, it becomes paramount to speedily review existing economic models and to encourage the uptake of Public-Private Partnerships (PPP) as well as non-conventional mechanisms at community level, like crowd funding and cooperative activities; particularly at a time where consumers become prosumers. Through this approach, we can encourage the private sector as well as the community at large to invest and participate in governmental agendas of post-pandemic sustainable recovery, while benefiting both economically and socially in the process. Such a partnership allows for a win-win-win scenario for the government, the private sector, and the community; ultimately, leading to increased investment in areas in demand, especially those that seek to strengthen climate change resilience and promote green growth in varying sectors.

To showcase a strong commitment to the pursuance of green and inclusive post-pandemic recovery pathways, a dedicated ‘Sustainability Transition Programme’ is proposed as a fiscal measure, accompanied by a series of policy recommendations. The upcoming national budget provides a perfect landscape to enact those measures aimed at economically incentivising investment in a sustainable transition through a multisectoral perspective.

Dr. Zaheer Allam, Université Paris 1 Panthéon-Sorbonne

Dr. Khalil Elahee, University of Mauritius

Jean Claude de l’Estrac, Former minister of Foreign Affairs, Republic of Mauritius

Armoogum Parsuramen, Former Minister of Education, Republic of Mauritius

Dr. Yousouf Ismael, Secretary General, Mauritius Chamber of Commerce and Industry

Prof. Peter Newman, Lead Author, Intergovernmental Panel on Climate Change

Gaëtan Siew, Special Envoy for the Republic of Mauritius, UN HABITAT

Prof. Didier Chabaud, Université Paris 1 Panthéon-Sorbonne

Umar Timol, Artist

Dr. Vincent Florens, University of Mauritius

Cassam Uteem, Former President of the Republic of Mauritius

Prof. Nikos Salingaros, University of Texas San Antonio

Claude Wong So, Past President, Institution of Engineers Mauritius

Jeevesh Augnoo, Past President, Rotaract

Urvashi Babajee, Research Assistant, University of Mauritius

Jaya Patten, Former leadership, Morgan Stanley & Llyods Bank

Dr. Phillip Roos, Live+Smart Research Lab, Deakin University

Jason Lily, Singer and Writer

Blair Palese, Founder and Former CEO, 350 Australia

Dr. Myriam Blinn, Academic & Gender Economist

Jerome Boulle, Former Lord Mayor of Port Louis, Republic of Mauritius

Thomas Berman, Impact Katapult (Mauritius)

Dr. Devina Lobine, Postdoctoral Researcher, University of Mauritius

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