McKinsey Quarterly: April 7, 2020

For governments, we believe four sets of actions will be important.

1. First, build the capability to model climate risk and to assess the economics of climate change. This would help inform recovery programs, update and enhance historical models that are used for infrastructure planning, and enable the use of climate stress testing in funding programs.

2. Second, devote a portion of the vast resources deployed for economic recovery to climate-change resiliency and mitigation. These would include investments in a broad range of sustainability levers, including building renewable-energy infrastructure, expanding the capacity of the power grid and increasing its resiliency to support increased electrification, retrofitting buildings, and developing and deploying technologies to decarbonize heavy industries. The returns on such investments encompass both risk reduction and new sources of growth.

3. Third, seize the opportunity to reconsider existing subsidy regimes that accelerate climate change.

4. Fourth, reinforce national and international alignment and collaboration on sustainability, for inward-looking, piecemeal responses are by nature incapable of solving systemic and global problems. 

We can already start seeing how the coronavirus pandemic may influence the pace and nature of climate action, and how climate action could accelerate the recovery by creating jobs, driving capital formation, and increasing economic resiliency.

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