blue and yellow graph on stock market monitor

A world haunted by the spectre of a seemingly never-ending pandemic has been mobilizing trillions of US-dollars to prop up its ailing economies. Now, as a historically unprecedented roll out of vaccines raises the hopes of a swift end to the tragedy, further fiscal and monetary tools are being deployed to path the way for a swift and – at least so it is being heralded by the general chorus – sustainable recovery. Indeed, “building back better” has become a catch phrase in political circles, not only here, but also overseas. Many governments around the world have yet to deliver on their promises and pledges, though. Otherwise, we risk squandering a – what is likely to be a – once-in-a-generation opportunity to create an environmentally, socially and economically more sustainable production and consumption system.

Indeed, we risk missing out on a unique opportunity to avert an even greater threat to mankind than Covid-19, i.e. global warming, while tackling not only those economic challenges that have been caused, directly or indirectly, by the pandemic, but also those that have been undermining the long-term sustainability of the economic system well before the advent of the crisis. For decades, the working and middle classes in Western societies have been suffering from stagnating or even declining disposable incomes. Secular shifts in the economy have led to a greater concentration of the upside of any economic activity, while its cost and downside risk is increasingly being borne by the broad masses. Major calamities such as the 2008-9 Financial and Economic Crisis and the Covid-19 pandemic have further aggravated this situation as the quantity and quality of income prospects have declined in the wake of major layoffs, restructuring, fixed-term contracts, and misguided austerity policies, while the tab that the taxpayer had to pick up in the form of bailouts has increased manifold. The rise of parties on both extremes on the political spectrum over the last couple of years pointed already to some of the major rifts caused by such developments to the fabric of society. These are only to worsen unless the underlying disequilibria are not appropriately addressed. The economic system itself suffers from such disequilibria, because a severely weakened consumption sector cannot support the demand required for economic growth, and we cannot borrow from the future indefinitely.

In other words, the world is currently facing multiple, yet interlinked, challenges that require a well-coordinated, multi-dimensional, systemic approach (i.e., a focus on illusory one-dimensional metrics such as GDP and the current performance of major stock market indices simply won’t do(!)). The urgency of these matters, and the window of opportunity afforded by the current political situation makes immediate action imperative, while their nature necessitates that we get it immediately right to minimise the chance and negative impacts of any unintended consequences. Let’s begin with surveying the current situation: The full economic damage inflicted by the Covid-19 pandemic needs yet to be fully determined. Recent estimates put the figure for the economic contraction at around 3.5% (IMF, 2021). Further, amidst widespread business closures and extensive job losses, poverty increased for the first time in over two decades (UNDP, 2020), while income and wealth disparities has skyrocketed. So, what has been done so far to address the situation? The world’s fifty largest economies have pledged around USD14.6tn (excl. the commitments by the EC; if those were included, total spending would approach USD17tn) in fiscal measures since 2020, of which approximately USD 11.1tn have been directed to more immediate economic support efforts, while USD1.9tn has been pledged to long-term recovery measures. Findings by Oxford University suggest, however, that only a very small percentage of that spending is likely to promote climate-friendly economic growth (e.g., only 18% of recovery spending and 2.5% of total announced spending is estimated to reduce GHG emissions). It seems, that the world is squandering a major opportunity to transition to an environmentally sustainable growth path. It might also be forfeiting economically attractive investment opportunities, as a growing body of evidence (e.g., Hepburn et al., 2020), suggests that ‘green’ fiscal spending can deliver stronger economic returns than traditional spending alternatives.

The thinking of decision-makers thus seems to be stuck in those type of old, one-dimensional patterns that have traditionally focused on the maximisation of some – entirely inadequate – metric such as GDP growth or the recent surge of some major stock market index that even fail to accurately gauge the state of the economy itself, never mind the state of our society and of the environment.

Supported by the IMF and GIZ, Oxford University, UNEP and their partners have made an important first step toward addressing this one-dimensional and short-termist approach that risks further exacerbating socio-economic and environmental crises long-term through the creation of the Global Recovery Observatory, which aims to significantly increase the transparency of such policy decisions by tracking the fiscal rescue and recovery spending programs of the world’s fifty largest economies. The greater transparency will hopefully push governments around the world to adopt the type of longer-term and systemic approach that is urgently required if we want to successfully navigate the treacherous waters between Scylla and Charybdis in order to meet the long-term economic, social and environmental objectives in alignment with the 2030 Agenda for Sustainable Development and the UNFCCC Paris Agreement.

Greater (financial) commitments and pledges will, however, not suffice to ensure a successful transition. It is crucial to thoroughly understand the nature and dimension of the task at hand: The cyclopean task involves no less than the restructuring of major parts of the production and consumption system as we know it, a system that has evolved under the pressures and incentives of the purely economic imperative created by the respective socio-technical and institutional frameworks. No financial or technological silver bullet solution exists for the problems that the world is currently facing. In fact, technological solution in the cleantech sector might even face major uphill battles as they are often targeting large, well-established markets (e.g., energy markets) that are dominated by powerful companies with vested interests. Further, the risks associated with the development and commercialization of such technologies are often too great for the private sector to assume, particularly as their introduction often requires significant complementary and add-on investments, e.g., infrastructure. For instance, electric cars need a network of charging stations. Besides, these assets are not always of a tangible nature. Sometimes, significant investments in intangibles are required that only the public sector might be capable to stem (e.g., research funding) and to protect (e.g., via patent laws). Also, the existing institutional framework might be underdeveloped. The transition therefore won’t occur through market forces alone. In fact, in several instances, markets might have to be created in the first instance (e.g., feed-in tariffs in the early stages of solar energy). The role that the state needs to play for this transition to be successful will therefore extend beyond its role as a provider of money and lender of last resort. It needs to play a greater role in coordinating the activities of the relevant stakeholders, to support the development and commercialization of new technologies, to assume risks where necessary, to create new markets where required, to tackle market failure and to ensure an equitable distribution of the economic benefits of the transition.

Written by Dr. Norman Ebner, CRES strategic advisor


The development of a sustainable food-production and -distribution system will be central to many of the world’s pressing challenges, including food poverty and hunger, climate change and pollution associated with agricultural practices. Even though substantial progress has been made in reducing the number of people dying from famine during the last century, in 2017, the UN officially declared that the spectre of famine had returned to Africa. The COVID-19 pandemic has further aggravated the situation as global supply chains became strained due to draconic lockdown measures and growing political tensions in certain countries. According to estimates from the IPCC’s Special Report on Climate Change and Land (2019), about 8.5% of all anthropogenic greenhouse gas (GHG) emissions come from the agricultural sector, with a further 14.5% resulting from land use change, i.e., primarily deforestation. The two biggest sources of greenhouse gas emissions from the agricultural sector are: (a) nitrous oxide emissions from agricultural soils; and (b) methane emissions from livestock and manures. In case you were wondering energy use accounts for less than 1.5% of total emissions of the agricultural sector.

Current practices in the livestock sector might also harbour a further health crisis. The World Resource institute estimates that it requires about nine kilojoules of animal feed to produce one kilojoule of poultry meat. The production of one kilojoule of protein from poultry, the most ‘climate-friendly’ type of animal agriculture, is responsible for 40 times as many GHG emissions as one kilojoule of protein from legumes. Moreover, approximately 80% of all antibiotics sold in the U.S. are currently used for the mass-production of animal products. This widespread (mis-)use significantly increases the risk of more strains of bacteria developing antibiotics resistance. The possible ensuing public health issues are frightening; it could deprive us of one of medicine’s most powerful tools, leading to huge social and economic costs. The costs of antibiotic resistant infections to the U.S. health care system alone sum up to tens of billions of US-dollars annually.

Could cultured meat be a potential solution to some of the aforementioned problems? Cultured meat is produced by in vitro cell cultures, using tissue engineering techniques similar to those used in regenerative medicine, rather than from slaughtered animals. Developments in this sector are still in their infancy, but progress has been rapid. This could cause an enormous disruption in the agricultural sector through a resource-efficient production of protein that could deliver many benefits including the eradication of famine. At least that is the general account provided by promoters of cultured meat. Currently many ambitious claims are being made around the potential benefits of the new technology, e.g. that cultured meat could significantly lower environmental impacts compared to conventional meat production, or that the use of cultured meat could help protect and restore biodiversity and halt the slaughtering of animals. It’s also been claimed that a large-scale adoption of cultured meat would not only significantly reduce the use of antibiotics in the meat production process, but that it could also significantly decrease the risk of the emergence and spread of animal-borne diseases like bird- and swine-flu. Further, the exposure to harmful substances such as pesticides and fungicides would be greatly reduced. But then again, what goes into the cultivated meat production process? What types of chemicals, and what’s the water and energy requirements to culture adequate amounts of cultured meat to cater for the growing demand for protein? Would it be ‘healthier’ than conventional meat, and, most importantly, would it be more sustainable?

For the time being, several of these points are largely speculative in nature and insufficient to draw any firm conclusions from; a systems approach could be the only way forward to determine the true benefits and to uncover potential hidden trade-offs that have to be taken into account by industry and policy makers alike.

Written by Dr. Norman Ebner, CRES strategic advisor

The impact of COVID-19 on the plastic recycling industry

set of medical protective face masks
facial mask discarded on ground
Photo by Ryutaro Tsukata on Pexels.com

Plastics are made from oil.

The global economic slowdown following the draconic COVID-19 lockdown restrictions led to a plunge in oil prices, adding to the surplus of cheap input material available for the production of plastic resin. Unsurprisingly, plastic resin prices plummeted.

With a glut of cheap virgin plastic flooding the market, the use of secondary, i.e. ‘recycled’, plastic material turned into an economically unattractive option. Lower demand for its output has put the recycling sector into a dire financial situation, threatening the economic viability of the industry and putting many jobs in peril. 

For the plastic system to be sustainable, the reliance on virgin material needs to be minimized and the management of plastics waste optimized. This can only be achieved, however, once the intrinsic complexities of the system and the respective dynamics between production, consumption and governance parts are properly understood. What can be done to ensure that the sustainability of the plastic system does not end up as yet another victim of COVID-19?

To find out more, read the article Why the pandemic could slash the amount of plastic waste we recycle” featuring in The Conversation, written by Norman Ebner and Eleni Iacovidou.