February 18, 2021
Green is the new black.
The pandemic and the ensuing economic crisis have underscored the importance of environmental health and resilience as a critical complement to public health. Better air quality, improved water quality, effective waste management and enhanced biodiversity protection will not only reduce the vulnerability to pandemics but will also improve overall societal well-being.
Against this backdrop, it is clear that addressing global issues such as climate change, air and water pollution, biodiversity loss, ocean degradation, and inefficient resource use has become even more important as countries seek to rebuild their economies. The global rallying call to “build back better” is a testimony to this sentiment and the European Union has been a trailblazer in this regard.
The European Green Deal announced by the European Commission is the first comprehensive plan to achieve sustainable development in any major world region. As such, it becomes a global benchmark – a “how-to” guide for planning the transformation to a prosperous, socially inclusive, and environmentally sustainable economy. Europe’s Green Deal is in fact a demonstration of successful European social democracy. A mixed economy, combining markets, government regulation, the public sector, and civil society, will pursue a mixed strategy: public goals, public investments in infrastructure, private investments in industrial transformation, public-private research and development missions, and an informed population. In fact, it is industrial policy at its most sophisticated. It is also at the heart of the EU’s strategy to drive the economic recovery from the pandemic.
The details of the EU Green Deal were aptly covered in an opinion piece last week entitled No delay of green economy which not only highlighted the sectoral approach that the Green Deal must take but also how Malta can benefit from this unique package. In fact, the Green Deal is a way to support and relaunch Malta’s economic recovery. Through a well-thought implementation of the EU Green Deal initiatives and the substantial budget allocated to the Green Deal at an EU and national level, Malta has the potential of kickstarting an economic recovery which is green at its heart and which can transform Malta into a new wave of economic growth and development.
This was also echoed by the Malta Competitiveness Report 2020, which was published by the National Productivity Board earlier this week. Through a very thorough analysis of the economy’s performance over the past few years and by also integrating the impact of COVID, the report highlights a number of recommendations that at its core are based on digital transformation and the greening of the economy.
A green recovery is a win-win strategy for Malta and businesses and moving forward, Government should step up actions for a green and inclusive recovery; speed the transition to a low-emissions economy; track progress through pertinent, comparable and timely data; and leverage finance to invest in the green recovery.
To be fair, a number of initiatives have been mentioned both in policy documents, speeches and the national Budget. However, it is pertinent that a holistic approach is taken towards the green economy which needs to encompass access to finance, skills required, research and much more. This is because the green sector has the potential to unleash innovation, attract foreign investment, kick-start a green start-up hub, open up new financial markets and products whilst establishing Malta as a regional hub for green tech and green start-ups. And Malta has the credentials to champion this just as it did when it pioneered at a global level the common heritage of mankind. Malta can leverage size; regulatory innovation and European funds to truly usher in a new kind of economy, one which is green, sustainable, innovative and efficient. It is also a route to achieve societal well-being and for us to start looking beyond the headline GDP figures. This reiterates the call made in a recent report Seed and EY launched together with the Commission of Justice and Peace entitled Beyond GDP.
The green economy can indeed usher in a much-needed new type of economic activity in Malta. Yet, for this to materialize we need to translate policy into concrete action and the Green Deal is a good way to structure and steer such action. We need to support local businesses to tap into funds and to participate in European calls for them to be protagonists in this new economic wave.
If you are involved in the construction, tourism, infrastructure, energy, agricultural, architectural, retail, digital or innovation-based sectors, then support in the form of funding, grants and expertise is available for you to embark on this green transition and revolution.
There is over €540 billion available for Europe to make this transition and Maltese businesses should and need to access these funds to embrace this green and digital revolution.
The writing is on the wall. The opportunity is up for grabs and the resources are there. We have a unique opportunity to start building a new type of economy which is resource-efficient, carbon-neutral, innovative and sustainable. Green is truly the new black!
JP Fabri is partner at Seed