The financial fallout from the COVID-19 pandemic is much reaching and ongoing, affecting all nations all through the world. Whereas there are nonetheless many unknowns — How lengthy will the pandemic final? Will and when might we see a vaccine prepared for distribution? What’s going to the top financial image appear like? — we have to think about post-pandemic financial restoration methods and the alternatives that could be accessible to construct a extra sustainable way of life for the long run.
A extra sustainable mannequin primarily based on a round financial framework might ease monetary restoration whereas additionally working in direction of reaching web zero carbon targets.
A gaggle of teachers from the UK, Malaysia, Nigeria, UAE and Japan — led by WMG, University of Warwick — has investigated how the constructive and detrimental results of COVID-19 will be leveraged to construct a brand new, extra resilient and low-carbon economic system.
Publishing their paper within the journal Resources, Conservation and Recycling, the researchers concluded that adopting round economic system methods could be one of the simplest ways for the world’s economic system to get better, whereas enabling the transition to a low-carbon economic system.
COVID-19 has disrupted and strained international provide chains, and unsettled the monetary market, leading to cross-border financial devastation. Lockdowns and border closures have destabilised fashionable world economies, with the financial shock nonetheless being weighed throughout the globe. Economically, the results will be felt in all places as a consequence of vital monetary losses throughout macro and micro ranges of the economic system, together with international provide chains, worldwide commerce, tourism and aviation, and plenty of different sectors.
On a extra constructive observe, the pandemic has resulted in modifications to behavior and attitudes, with constructive influences on human well being and the planet. A few of the advantages embody:
- Air high quality enchancment.
- Discount in environmental noise and visitors congestions has led to a rise within the variety of folks exercising exterior.
- A discount in vacationers has lowered exploitation of seashores, resulting in elevated cleanliness.
- Decline in international main power use. Coal use decreased by 8%, oil by 60% and electrical energy plummeted by 20% in comparison with the primary quarter of 2019, resulting in report low international CO2 emissions.
- Consciousness of the necessity for diversification and circularity of provide chains, and public insurance policies for tackling pressing socio-economic crises.
To make the world resilient post-COVID-19, the researchers suggest that every one sectors undertake a round economic system framework.
“The pandemic has highlighted the environmental folly of [the] ‘extract, produce, use and dump’ financial mannequin of fabric and power flows; nonetheless, the short-term resolutions to deal with [the] pandemic is not going to be sustainable in the long term, as they don’t replicate enhancements in financial buildings of the worldwide economic system,” stated WMG’s Dr Taofeeq Ibn-Mohammed.
“We due to this fact suggest round economic system adoptions for all industries, with totally different methods for every one. For instance, embracing the transformative capabilities of digital applied sciences for provide chain resilience by leveraging: massive knowledge analytics for streamlining provider choice processes; cloud computing to facilitate and handle provider relationships; and Web of Issues for enhancing logistics and delivery processes.
“The post-COVID-19 investments wanted to speed up in direction of extra resilient, low-carbon and round economies also needs to be built-in into the stimulus packages for financial restoration being promised by governments, for the reason that shortcomings within the dominant linear financial mannequin at the moment are recognised and the gaps to be closed are recognized,” he defined.