The Impact of COVID-19 on Climate Finance and Green Development

The COVID-19 pandemic and socio-economic crises that have followed it, have left many countries designing recovery packages to effectively respond to its impacts on markets, human lives and livelihoods. The most common responses have been economic recovery packages designed to stimulate economic activities, which came to a halt under global national lockdowns to curb the spread of the coronavirus. However, as countries continue to address the socio-economic impacts of the pandemic, there is a risk that stimulus and recovery packages designed to resuscitate economies could undermine environmental sustainability due to the urgent need to subsidise health sectors. It is against this backdrop that this paper explores the implications of COVID-19 on green finance flows in the global North and South, with specific reference to emerging market economies (EMEs) and developing countries. This policy brief also provides an analysis of the challenges posed by COVID-19 to green development in the global South and concludes by offering recommendations.