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Now’s the Time to Herald in a Wirtschaftswunder

Post Corona crisis: We should not simply revive the same economy. Let's use the recovery funds promised by the federal government wisely to set the course for a more liveable future.


The coronavirus crisis has rattled the world, but it also provides a unique window of opportunity. The pandemic is a burden on societies that has cost and will continue to cost many lives while severely impacting global economic activity and overall well-being. Almost all countries have imposed severe restrictions to control the outbreak. These restrictions do help to block transmission of the virus, but affect most seriously the social and economic life of any society. Restrictions will need to be in place until herd immunity is achieved and/or a vaccine is available. On a positive note, the proliferation of the coronavirus has changed people’s attitudes and mindsets, the world has seen a resurgence of community spirit, solidarity and a shared re-thinking of societal systems as well as economic needs.

Switzerland is seen by many as a model of financial, economic, environmental and social stability. The crisis, however, has put our institutions, especially the federal government, to the ultimate test, the capacity to find the right balance between saving human lives and preserving economic prosperity. Right at the beginning of the pandemic, the Swiss Federal Government has very rightly chosen the path of saving as many lives as possible, while aiming at reviving the economy after the pandemic has peaked. Our struggle, therefore, will consist of two phases: firstly, controlling the epidemic in the long-run and secondly, reviving the Swiss economy. For the latter challenge, massive financial support is required, as this could become by far the greatest economic shock in modern history. Thanks to its financial strength, Switzerland is in the unique and also very privileged position to master this challenge while heralding in a new era.

Indeed, the massive support with public monies offers our government a unique window of opportunity to prepare the economy for the other major menaces, climate change & environmental sustainability. Both menaces, which are arguably as formidable as the current one, have been announced by scientists for decades, yet they triggered insufficient action. Preparing the economy for such a monumental task, requires significant transitions that are hard to implement. There is never a better time for improvement than during a re-construction.

We now have to put our money where our mouth is. It is now the time to set the course, to revitalize economic activity along a sustainable trajectory. The government is intervening on both the demand and the supply side of the market, which gives it double levers to orient whole economic sectors towards a net-zero emission world. It should incentivize the demand for low-carbon options while simultaneously supporting the supply of such options. A simple example is income support through vouchers for local farm products combined with helping local farmers increase their production and improve their distribution channels.

How can this be achieved in other areas? Here are a few examples. Airline bail-outs should be conditioned to the step-up of alternative fuels and the retirement of older, inefficient planes, thereby reducing fleet size and emissions, while travellers should be incentivised to local holidays and long-distance travel by train. The existing incentives for cleaner trucks and the shift of freight onto trains should be strengthened. Wider bicycle lanes in cities would make cycling safer while relieving local public transport and its infection risk and keeping people out of cars. The whole building stock should be made climate-neutral over the next decade, through the deployment of the best, currently available solutions supported by incentives owners cannot turn down. Relieve funds should be channelled to short, sustainable and crisis-resistant supply chains, supported by the retraining of workers from doomed climate-intensive production sectors. Priority sectors are the production of strategic goods such as pharmaceuticals, medical technology, food or hygiene articles, which should be re-patriated to create both economic sufficiency and new jobs. Most importantly, the concept of a circular economy has to be widely embraced; the reutilization and repair of goods will minimize our dependence on resource imports. Recovery funds are an excellent tool to lift such an economy out of infancy.

While the recovery funds can firmly position Switzerland among the leaders of the sustainability transition, they should not make it a self-centered fortress. Just as the transition must be socially inclusive, we must exercise solidarity with people of the world who are in a less privileged situation and who are particularly exposed to the impacts of climate change and environmental degradation, for which they bear little responsibility.

In short, economic recovery funds have to be used to build a climate-neutral, sustainable economy that serves the people while preserving the eco-system. The opportunity at hand can and should not be wasted – let us trigger a Green Wirtschaftswunder.


Prof. Dr Philippe Thalmann is Professor of Economics at the Swiss Federal Institute of Technology Lausanne and President of ProClim.

Dr Oliver Inderwildi is Head of ProClim and a Senior Visiting Scientist at Cambridge CARES in Singapore.

Dr Urs Neu is Deputy Head of ProClim and Head of Energy Commission.


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Dr. Urs Neu
Energy-Commission of the Swiss Academies of Arts and Sciences (Energy-Commission)
Casa delle Accademie
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