Inglês – Anpec 2023

The Pandemic’s Innovation Lessons for the Climate Crisis
May 26, 2022
ANTONIO ANDREONI
Project Syndicate

As with the development of COVID-19 vaccines, confronting today’s mounting climate challenges requires close cooperation between the public and private sectors, as well as between countries. Shaping markets and industries via the right policy mix of targeted government financing and procurement can accelerate the green transition.

While the COVID-19 crisis brought much suffering and many socioeconomic burdens, it has also shown how targeted cooperation between the state and business can speed innovation. Addressing the climate crisis calls for similarly creative collaboration.

In both cases, accelerating innovation and experimenting with local solutions is necessary but not sufficient. Essential technologies – whether vaccines or renewables – must be diffused globally.

The first COVID-19 vaccines were granted emergency-use authorizations in the United States and the European Union less than a year after the pandemic began. Established innovation systems and adequate manufacturing capacity were important factors. Without longstanding cooperation between private and public institutions, and government promotion and funding of research, rapid COVID-19 vaccine development would not have been possible.

For example, the vaccine developers BioNTech and Moderna are university spin-offs that received substantial public funding during important phases of their development. BioNTech, which grew out of the Johannes Gutenberg University Mainz, received about €17 million ($18.2 million) in research and start-up funding from the German Federal Ministry of Education and Research (BMBF) even before the COVID-19 pandemic. Moderna, founded in 2010 by a group of Harvard professors, secured $25 million in funding from the U.S. government’s Defense Advanced Research Projects Agency (DARPA).

Equally important were research institutions such as the University of Oxford in the United Kingdom and bodies like the National Institutes of Health (NIH) in the U.S., both of which were directly and indirectly involved in different stages of COVID-19 vaccine development. Research institutions in some middle-income countries, such as Fiocruz in Brazil, also played a significant role.

Building on this existing capacity, governments then provided targeted support to accelerate vaccine development and de-risk investments in alternative vaccine platforms. First, government funding agencies provided grants. For the development of the joint BioNTech-Pfizer vaccine, Germany’s BMBF provided €375 million in milestone-based funding, of which nearly €240 million was disbursed in 2020. This corresponds to about 25% of the two firms’ development costs up to the time the vaccine was approved. Moderna, meanwhile, received nearly $1 billion in U.S. government funding for vaccine development in 2020, and worked closely with the NIH to conduct clinical trials.

Shortly before that, Moderna received $1 million from the Coalition for Epidemic Preparedness Innovations, a public-private initiative established in 2017 to promote vaccine development to combat epidemics. CEPI also provided over $500 million of funding to different organizations in 2020 for COVID-19 vaccine development. Over 90% of the funding was public, with more than 40% coming from the U.K. and Germany.

In addition, government advance-purchase agreements ensured that the necessary production facilities could be built in parallel. In the event that a developer secured regulatory approval for its COVID-19 vaccine, these contracts provided a procurement guarantee for an agreed number of doses.

Complementing the parallel promotion of supply and demand, jurisdictions accelerated their approval processes for vaccine licensing. Public authorities reviewed available data immediately after each clinical trial phase rather than after completion of the overall trial, as is usually the case. They also supported the preparation and implementation of independent control studies.

So, what is the significance for the effort to combat climate change?

Tackling the climate crisis also will require the rapid acceleration of innovation and the associated scaling of production capacities within the framework of a mission-oriented innovation policy. Demand-side funding in the form of advance-purchase agreements could be applied to climate-related innovation, too. In the U.S., for example, public procurement is now an important component of innovation policy and a key driver of financing. The U.S. government spends an estimated $50 billion annually on innovation-based procurement, equal to nearly one-third of federal spending on research and development.

Other important building blocks include mission-oriented innovation agencies such as DARPA, the Advanced Research Projects Agency – Energy (ARPA-E), and the Biomedical Advanced Research and Development Authority (BARDA). U.S. President Joe Biden plans to establish a new agency to promote climate innovation. At the state level, agencies like NYSERDA (the New York State Energy Research and Development Authority) are experimenting with models to crowd in investments in innovative projects to support the green transition.

The dovetailing of R&D funding and public procurement has been central to U.S. innovation agencies’ success, including with COVID-19 vaccines, and this model should also be incorporated in the coming years into the European Green Deal and associated sustainable-recovery programs. But policymakers must develop new approaches to achieve an appropriate distribution of costs and benefits between private and public actors. Given the German government’s large investments in the development of the BioNTech-Pfizer vaccine, one could ask why it was not possible to influence its subsequent distribution, the use of patents, or even to secure a share of the resulting profits.

As with COVID-19 vaccines, the diffusion of new climate technologies and place-based innovations is still not sufficient, and they remain concentrated in a few countries. The rich world is asking low- and middle-income countries to play their part in mitigation and adaptation, but transfers of technology and financial resources – including debt relief and restructuring – currently fall well short of what is needed. At the same time, the pandemic has accelerated the increase in debt levels in developing and emerging economies that started with the global financial crisis. Private debt in these countries now exceeds 140% of their GDP, on average, the highest level in 50 years and more than double the pre-2008 ratio.

Confronting today’s mounting climate challenges – like developing safe and effective COVID-19 vaccines – requires innovative forms of cooperation between the public and private sectors, as well as between countries, designed to channel resources toward a new sustainable technological and economic paradigm. Shaping markets and industries via the right policy mix of targeted government financing and procurement promises to open new windows of opportunity and accelerate the green transition.

6 months after the climate summit, where to find progress on climate change in a more dangerous and divided world
The Conversation | May 10, 2022

Six months ago, negotiators at the United Nations’ Glasgow climate summit celebrated a series of new commitments to lower global greenhouse gas emissions and build resilience to the impacts of climate change. Analysts concluded that the new promises, including phasing out Coal, would bend the global warming trajectory, though still fall short of the Paris climate agreement.

Today, the world looks ever more complex. Russia is waging a war on European soil, with global implications for energy and food supplies. Some leaders who a few months ago were vowing to phase out fossil fuels are now encouraging fossil fuel companies to ramp up production.

In the U.S., the Biden administration has struggled to get its promised actions through Congress. Last-ditch efforts have been underway to salvage some kind of climate and energy bill from the abandoned Build Back Better plan. Without it, U.S. commitments to reduce emissions by over 50% by 2030 look fanciful, and the rest of the world knows it – adding another blow to U.S. credibility overseas.

Meanwhile, severe famines have hit Yemen and the Horn of Africa. Extreme heat has been threatening lives across India and Pakistan. Australia faced historic flooding, and the Southwestern U.S. can’t keep up with the wildfires.

As a former senior U.N. official, I’ve been involved in international climate negotiations for several years. At the halfway point of this year’s climate negotiations, with the next U.N. climate conference in November 2022, here are three areas to watch for progress and cooperation in a world full of danger and division.

Crisis response with long-term benefits

Russia’s invasion of Ukraine has added to a triple whammy of food price, fuel price and inflationary spikes in a global economy still struggling to emerge from the pandemic.

But Russia’s aggression has also forced Europe and others to move away from dependence on Russian oil, gas and Coal. The G7 – Canada, France, Germany, Italy, Japan, the U.K. and the U.S. – pledged on May 8, 2022, to phase out or ban Russian oil and accelerate their shifts to clean energy.

In the short term, Europe’s pivot means much more energy efficiency – the International Energy Agency estimates that the European Union can save 15%-20% of energy demand with efficiency measures. It also means importing oil and gas from elsewhere.

In the medium term, the answer lies in ramping up renewable energy.

There are issues to solve. As Europe buys up gas from other places, it risks reducing gas supplies relied on by other countries, and forcing some of those countries to return to Coal, a more carbon-intense fuel that destroys air quality. Some countries will need help expanding renewable energy and stabilizing energy prices to avoid a backlash to pro-climate policies.

As the West races to renewables, it will also need to secure a supply chain for critical minerals and metals necessary for batteries and renewable energy technology, including replacing an overdependence on China with multiple supply sources.

Ensuring integrity in corporate commitments

Finance leaders and other private sector coalitions made headline-grabbing commitments at the Glasgow climate conference in November 2021. They promised to accelerate their transitions to net-zero emissions by 2050, and some firms and financiers were specific about ending financing for coal plants that don’t capture and store their carbon, cutting methane emissions and supporting ending deforestation.

Their promises faced cries of “greenwash” from many climate advocacy groups. Some efforts are now underway to hold companies, as well as countries, to their commitments.

A U.N. group chaired by former Canadian Environment Minister Catherine McKenna is now working on a framework to hold companies, cities, states and banks to account when they claim to have “net-zero” emissions. This is designed to ensure that companies that pledged last year to meet net-zero now say how, and on what scientific basis.

For many companies, especially those with large emissions footprints, part of their commitment to get to net-zero includes buying carbon offsets – often investments in nature – to balance the ledger. This summer, two efforts to put guardrails around voluntary carbon markets are expected to issue their first sets of guidance for issuers of carbon credits and for firms that want to use voluntary carbon markets to fulfill their net-zero claims. The goal is to ensure carbon markets reduce emissions and provide a steady stream of revenue for parts of the world that need finance for their green growth.

Climate change influencing elections

Climate change is now an increasingly important factor in elections.

French President Emmanuel Macron, trying to woo supporters of a candidate to his left and energize young voters, made more dramatic climate pledges, vowing to be “the first major nation to abandon gas, oil and coal.”

With Chile’s swing to the left, the country’s redrafted constitution will incorporate climate stewardship.

In Australia, Scott Morrison’s government – which supported opening one of the world’s largest coal mines at the same time the Australian private sector is focusing on renewable energy – faces an election on May 21, 2022, with heatwaves and extreme flooding fresh in voters’ minds. Brazil’s Jair Bolsonaro faces opponents in October who are talking about protecting the climate.

Elections are fought and won on pocketbook issues, and energy prices are high and inflation is taking hold. But voters around the world are also experiencing the effects of climate change firsthand and are increasingly concerned.

The next climate conference

Countries will be facing a different set of economic and security challenges when the next round of U.N. talks begins in November in Sharm el-Sheikh, Egypt, compared to the challenges they faced in Glasgow. They will be expected to show progress on their commitments while struggling for bandwidth, dealing with the climate emergency as an integral part of security, economic recovery and global health.

There is no time to push climate action out into the future. Every decimal point of warming avoided is an opportunity for better health, more prosperity and better security.