Covid-19 is a product of environmental degradation, and has been dubbed “the disease of the Anthropocene”. This pandemic, and the recovery we need, give us an opportunity to understand and explore how to do capitalism differently, towards a climate-resilient, long-term and sustainable economy. This requires a rethink of what governments are for: rather than simply fixing market failures when they arise, they should move towards actively shaping and creating markets to take on society’s most pressing challenges. The green transformation of our economies is not an expensive luxury, but rather the only way through the Covid-19 crisis that ensures resilience against future risks of the same size, scale and severity.

With 10 years recognised as the window of opportunity to keep global temperatures within the 1.5°C increase agreed in the Paris Accord, the clock is ticking to mitigate the worst outcomes of the climate crisis. But fear does not get us a green recovery. Only by turning climate change into a positive opportunity for investment and innovation will a green transition come about, affecting production, distribution and consumption across the economy. 

The Green New Deal plans that have been picking up traction around the world over the last few years must have aspirations far beyond just mitigating the climate crisis, and be focused on new opportunities for investment and innovation – they must include finding clarity and courage in the policy arena, unlocking hoarded investment in the business sector, and supporting workers to acquire new skills. Now, these have turned into ‘Build Back Better’ and Green Recovery plans, as, post-pandemic, the need for an economic renewal plan for the entire economy, across different sectors and actors – public, private and civil society – is being recognised. 

What is required is a mission-oriented innovation approach, which sets a clear direction for change and renewal, while at the same time using the full range of government instruments – from procurement to guaranteed loans, grants and prize schemes – some of which are now more fully open to experimentation in the Covid-19 response, such as conditionalities on government assistance. The change must occur at all levels: local, regional, national and international. 

In the current crisis, for instance, several countries have adopted conditionalities to the bailouts related to the reduction of emissions, protection of workers’ rights and banning of financialised practices. In France, government bailouts for both Renault and Air France were conditional on carbon-reduction commitments. France, Poland, Belgium and Denmark also denied state aid to any company domiciled in an EU-designated tax haven, while also barring large companies from paying dividends or making share buybacks until 2021. And in the US, largely due to campaigning by Elizabeth Warren, corporations receiving loans through the Coronavirus Aid, Relief and Economic Security (CARES) Act were banned from using the funds for stock buybacks.  

Markets will not find the green direction on their own: there is not yet a ready-made route that will make multi-directional, experimental, green innovation profitable. Regulation and innovation will only converge on a green trajectory when there is a stable and consistent direction for investment. Business does not invest unless it sees an opportunity for growth – so turning mitigation and adaptation into opportunities for investment and innovation is key. This requires more than market-fixing ‘bandages’ like tax incentives alone: it requires bold investments like those witnessed in Roosevelt’s New Deal in the wake of the Great Depression.

The 1960s moonshot mission – to get to the moon and back again in one generation – was clear on the goal, clear on the expense required, clear on the risk and uncertainty, and clear on why it is ‘worth it’. This is a good guide. Mission-oriented innovation policy defines an ambitious goal, and then uses this to create a long-term policy landscape, setting out concrete tasks that mobilise various actors for bottom-up experimentation across different sectors. In the same way that going to the moon required investments in nutrition, textiles, electronics and metals, green missions will require investments in energy, transport, nutrition, health and areas that will allow manufacturing to reduce its material content.

To battle the climate crisis, and use it as a spur for a green economic recovery from the Covid-19 pandemic, we can transform today’s fears of uncertain outcomes into missions to be accomplished, that are as bold and inspirational as the 1969 moonshot. This will require visionary leadership, patient strategic finance, a grassroots movement and bottom-up innovation – taking the complexity and difficulty of the threat seriously, and mobilising across the economy to meet it.