By Majidah Hashim, Communications, AFI

One evening, not long ago, I received an unexpected group message from a friend that I have not heard from for a while. While the COVID-19 induced movement controls have indeed led to many reunions with long lost friends, this one was different.

“Go outside and look at the sky NOW!” the message simply said. No greeting. No small talk. Yet, something about the message conveyed such childlike excitement, I immediately stepped out to behold the night sky.

Expanded before my eyes, as wide as the universe itself, is a sky full of sparkling stars unlike any that I have seen in the city.

At that moment, I know that I am not the only one with this incredible sense of hope. With the momentary reduction of emissions in dense urban areas, photos of clear blue skies against concrete cityscapes all over the world have crept onto the Internet.

Of course, this temporary halt is certainly not enough to reverse the effects of climate change already felt globally. The movement restrictions currently enforced in most of the world are putting a damper everywhere, not only in global and national climate action, but equally in financial inclusion. In fact, spikes in greenhouse gas emissions were recorded worldwide in 2010 when economies were on their way to recovery from the 2008 financial crisis. Should we expect the same fate post COVID-19?

Maybe.

But for now, we get a glimpse of the cleaner world we could possibly live in and wonder: What if…?

What if we could heal the damage done to our environment with future forward ambitions and a mid- to long-term strategy? What if we can mobilize innovative technology to mitigate the impacts of climate change? What if we can build resilience so that people who are most vulnerable to its devastation are able to ‘weather the storm’?

Transition to low-carbon technologies is a positive step in the right direction. Through lending quotas and refinancing of green lending, central banks such as Bangladesh Bank, Nepal Rastra Bank, and the Reserve Bank of Fiji are facilitating the construction of more solar power, biogas and hydropower projects.

Micro- Small and Medium Enterprises (MSMEs) are the backbones of developing economies. Nevertheless, just as COVID-19 outbreak, extreme climate events can and do affect MSMEs the most. Investments into green sectors can create jobs, but also business opportunities for MSMEs. For this reason, financial regulators such as the Central Bank of Egypt, the Central Bank of Seychelles and the State Bank of Pakistan, have created innovative investment and refinancing schemes as well as credit facilities targeted especially to MSMEs, inspiring them to embark not only in renewable energy projects but also sectors deemed critical for development.

With the climate becoming more and more unpredictable, people who work in industries vulnerable to erratic weather, such as agriculture, fisheries and tourism, are finding it harder to adapt and recover from losses when disaster strikes. In order to narrow the financial inclusion gap in these areas, the climate risk borne by farmers need to be shared. Risk sharing mechanism such as those implemented by the Central Bank of Armenia and Central Bank of Nigeria provide much needed safety nets that can be opened at times of crisis.

Will all of this be enough to bring the blue skies back to our cities and stars to our nights?

One of the most important things that needs to shift towards this direction is our outlook onto the environment itself. At AFI, we call this the act of ‘Moral Suasion.’ Our member institutions such as Bangko Sentral ng Pilipinas, Bank al-Maghrib, and the Bank of Thailand are some of the front runners in promoting the business case of inclusive green finance to their stakeholders.

An AFI colleague told me over the weekend that he saw eagles flying from his apartment and asked me if what he saw was real.

Yes, I told him. The air had finally cleared enough to see eagles fly in our city.

As we all look forward to the post- COVID-19 world, one of the things that we will take with us is that glimpse of a world filled with natural wonders that we had a taste of when we made minimal footprints onto it. A world that we may be surprised to realise that we can live in. A world that I hope we all want to live in.

AFI’s Inclusive Green Finance (IGF) workstream is part of the International Climate Initiative (IKI)  supported by the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU), based on a decision of the German Bundestag.