The COVID-19 pandemic is transforming how we think about our economies and our societies. The policy choices governments make today will determine their success in building a transition to a greener, more inclusive and more resilient tomorrow. It is an opportunity to chart a path that empowers everyone to face the future with confidence.
Q1 2022 inflation is now projected to be 5.6% in the US, revised up from 4.6% in September and 3.0% in May; in the euro area, 3.2%, 2.1% and 1.2%, respectively. Disruptions in energy, food and commodity markets and supply bottlenecks have been a feature of the recovery since economies reopened in 2021.
While economic output in most OECD countries has now surpassed where it was in late 2019, supply and inflationary pressures – along with renewed fears over new COVID variants and associated constraints on healthcare capacity – risk stifling the global economic recovery.
Enhanced global co-ordination on vaccines is key: better vaccination efforts, especially in lower-income countries, should lower the risk of mobility restrictions and consequent effects on economic activity, which are a major source of current supply chain pressures.
Nuclear energy's low carbon footprint means it displaces 1.6Gt of CO2 a year, or two years of global aviation emissions. Increasing nuclear output three-fold is one way to reach the world's 2050 1.5° target.
Global green bond issuance volumes topped USD 362bn in the nine months to September 2021, according to Refinitiv data – more than double the volume in the same period 2020 (their share of global bond issuance surging from 2.1% to 4.6%).
A shift in investor sentiment has driven the market’s rapid growth. Unlike conventional bonds, investor proceeds must be earmarked for “green” projects, as part of the wider effort to reallocate capital to lower-carbon, less-polluting economic output. (“Sustainable bonds”, a broader category that includes green bonds, “social bonds” and others, now accounts for nearly 10% of all global bond issuance volume.)
There are challenges, including methodological frameworks on third party verifications and quantifiable impact assessments. Investor sentiment will continue to drive market growth – but whether green bonds are greening the economy remains to be seen.
Excess deaths reached 2.5 million in OECD countries in the 18-month period since January 2020. The highest excess mortality rates for this period were recorded in Mexico (4 456 per million people) and Poland (3 663). Apart from Norway, all OECD countries registered more deaths during those 18 months than on average in the corresponding time period between 2015 and 2019.
Excess mortality is a measure of deaths from all causes over and above what could normally be expected for a given period, accounting for unreported COVID-19 deaths and deaths indirectly caused by the virus.
As of early October 2021, shares of populations fully vaccinated were lowest in Colombia and Mexico (33.6% and 35.4%, respectively).
Government support measures for fossil fuels across 81 economies tumbled to USD 351 billion in 2020, 45% off its peak two years earlier, according to OECD and IEA data, as energy prices fell following the COVID-19-induced economic shock.
As economies have reopened, energy prices have soared, with fossil fuel subsidies and other types of support measures expected to follow suit in 2021 (although complete data are not yet available).
Support for fossil fuels encourages their continued production and consumption, crowds out investment in sustainable energy infrastructure and other public services, and disproportionately benefits households that use more fuel and energy, which tend to be wealthier. This is a challenge for governments’ net-zero pledges. Seeking ways to target support for low-income households may be the key.