In the mid-1940s, Europe was left in rubble after two world wars in 31 years. The only way to rebuild was the Marshall Plan, a $15 billion program sponsored by the United States. The four-year plan helped rebuild cities, industries and infrastructure. Today, Europe is a superpower economy that benefits from a single currency and open borders among its 27 member states.
Almost 70 years later, the world could use another “Marshall Plan” to build sustainable, environmentally friendly cities, industries and infrastructure from the ground up. “We set up a world order after WWII,” Jenefer Morgan, executive director of Greenpeace International, told the World Economic Forum (WEF) in October. “It was a different world than the one we are in.”
Egypt’s government has laid out an expedited green development plan starting in 2021. “The pandemic and resulting lockdowns showed all of us how much air and noise pollution can be reduced. In the short term we must maintain, and in the long term improve on, those levels,” said Environment Minister Yasmine Fouad in October to Al Masry Al Youm. “As a ministry, the work we do in Egypt is linked to the latest developments in the world.” She credited the 2016 Paris Agreement to limit greenhouse gas emissions for boosting national plans.
Acceleration
Throughout 2020, the WEF stressed the close link between overcoming COVID-19 and building an environmentally sustainable economy. “We have to tackle climate change during the recovery from coronavirus,” it noted in an October video report.
It said everyone had seen a glimpse of what a cleaner world could look like, and what it takes to reach that level. China’s full lockdown for 75 days resulted in a 25 percent drop in carbon dioxide emissions, while India’s mix of full and partial lockdowns caused air pollution to drop to a “20-year low,” said the WEF. In Italy, efforts to curb the spread of the virus caused a notable improvement in air quality.
“It is a moment to step back and really rethink everything,” Morgan told the WEF.
Rebuilding the world economy will open the door, like never before, to environmentally friendly investment. “The recovery comes in 2021 courtesy of trillions of dollars in stimulus money,” said Morgan. “There is an opportunity to put those funds straight into jobs that increase the pace of decarbonization.”
Sustainable Egypt
The Ministry of Environment has focused on irrigation and waste management in the agriculture sector. “Our traditional work was always with irrigation, Nile water cleaning, pesticides and treating stagnant streams,” Fouad said to Al Ahram in October.
That will change after President Abdel Fattah el-Sisi mandated in 2020 that government projects and policies must take into account their environmental and carbon footprints. “The attention to the environment started when el-Sisi was a speaker at the 2018 Biodiversity Conference,” said Fouad.
Ongoing projects entering 2021 include the Prepare for Green campaign launched a year ago. Under the initiative, the government uses advertising and partners with educational institutions to raise awareness of the importance of protecting the environment. In addition, the New Capital and New Alamein are being developed in line with international environmental standards.
New this year is a feed-in tariff for anyone using waste to produce electricity to feed the national grid. “That should attract private investors,” said Fouad. The Ministry of Environment, for the first time, will work with the Ministry of Planning to ensure that all government projects include environmental feasibility studies. “We will also work directly with the ministries of trade and industry, petroleum and higher education, in addition to irrigation and agriculture,” she said.
Other plans for 2021 include increasing the number of environmentally compliant factories. In 2019, there were 2,800 compliant factories, then only 1,600 in 2020.
This year also will see more financing for environmentally friendly projects. “We will increase our work with international institutions such as the World Bank,” noted Fouad. Meanwhile, the Ministry of Finance now allows the issuance of sovereign and private “green bonds” for environmentally friendly projects. “The money will go into infrastructure, such as solid waste ‘graveyards’ and new environmentally friendly products and tools, such as the electric train connecting Cairo and the New Capital,” said Fouad.
A second financing tool is the Green Fund, announced in November 2019 in cooperation with French company AFD. The EBRD-GCF (European Bank for Reconstruction and Development-Green Climate Fund) consortium “will focus on financing private sector green projects and investments,” said Fouad.
Anticipating broad participation, Fouad said the ministry is working on a new environmental law that will include “almost all aspects of promoting an environmentally-friendly economy. Its ultimate goal is to formalize local unregistered businesses in recycling, garbage collection, green tourism and electricity generation from waste.
Fouad hopes those measures will attract EGP 10 billion ($638 million) in infrastructure investments and EGP 8 billion to manage a fully fledged waste recycling system.
The long-term aim is to cut 2015 emission levels in half by 2030, as mandated by the Sustainable Development Strategy: Egypt 2030.
New opportunities
The 2016 Paris Agreement on climate change ushered in a wave of new investment opportunities worldwide.
Those opportunities are most evident in emerging economies. “Developed economies had obligations [to reduce emissions] … But the developing world didn’t,” said Martin World of the Financial Times in December 2019.
Much to the surprise of some, investments in solar and wind energy are larger in developing than in developed countries,” said World. The expectation was that developed countries were already highly invested in those projects.
The most prominent example is China, which has the largest number of electric vehicles. Beijing also has invested in R&D to develop more effective and efficient batteries. According to news reports, the Chinese government has allocated $780 billion for solar and wind energy. “They see environmentally friendly technologies as the next industrial revolution,” said World.
In Egypt, the headline-grabbing investments are in the Benban solar-power project near Aswan. It ultimately aims to provide 30 percent of the country’s total electricity generation by 2030, said Rania Al Mashat, minister of international cooperation, according to the European Investment Bank Climate Survey in November. “This technology is only getting simpler, faster to build and cheaper,” said World.
Kevin Sneader, global managing partner at McKinsey & Co., wrote in August that investing in environmentally friendly supply chains is a stepping stone toward achieving the Paris Agreement’s goals.
Another investment opportunity is in extracting heavy minerals and mining, said Jonothan Woetzel of McKinsey in August, as the surge in demand for silicon and other high-tech minerals continues. He identified “two key areas of adaptation”: modifying plants to deal with disasters and inventory management. “We find that building disaster-proof plants means additional costs of roughly 2 percent,” he noted, adding that dispensing with the cost effective just-in-time model in favor of a “meaningful buffer in case of supply chain disruption could increase input costs by less than 1 percent.”
Fouad, the environment minister, acknowledged the importance of committing to more environment-friendly investments, saying, “Those investments never existed before. That means jobs that don’t exist today.”
