Exploring the impact of COVID-19 and recovery paths for the economy

Nature-based Solutions (NbS) to climate- and development-related challenges have recently gained attention in development cooperation. This Working Paper focuses on nature-based solutions to climate change adaptation, also known as Ecosystem-based Adaptation (EbA). It provides an overview of selected lessons learnt from EbA in the context of development cooperation, with a particular emphasis on the opportunities and risks regarding poverty alleviation and rights. This Working Paper is based on a desk study of selected academic literature and policy- and project-related publications and reports. It has been prepared by DIIS as part of the project 'Research and Evaluation of Development Cooperation' with funding from the Danish Ministry of Foreign Affairs. The Working Paper seeks to generate learning for Danish development cooperation, including future programming under Denmark's 2021 development strategy, in which NbS approaches are emphasised. However, the paper can also be read as a general discussion of experiences with EbA in the development context.We provide a model-based update of the potential impact of the COVID-19 pandemic on the Irish economy, originally published in the Autumn 2020 Quarterly Economic Commentary. The update reflects more recent data, the evolution of the pandemic including the third wave of early 2021 and uses early indicators to anticipate the evolution of the economy in the short term. The analysis focusses on the same channels, mainly an internal shock with a considerable impact on the non-traded (domestic) sector, with reduced consumption, investment, employment and output. We also provide three new alternative paths for the Irish economy, which depend on many potential factors including the vaccine rollout, the need for continued public health measures and new lockdowns, the emergence of new virus strains and differences in the behavioural responses of economic agents.