COVID-19 and climate change: Killing two birds with one stone

COVID-19 and climate change: Killing two birds with one stone

/ News & Interviews / Tuesday, 23 June 2020 07:13

The COVID-19 crisis is likely to have dramatic consequences for progress on climate change. This year, global greenhouse gas (GHG) emissions will fall by more than in any other year on record. The percentage declines likely in 2020 would need to be repeated, year after year, to reach net-zero emissions by 2050.

Instead, emissions will rebound once lockdown restrictions are lifted and economies recover, unless governments intervene. The crisis has demonstrated that governments can intervene decisively once the scale of an emergency is clear and public support is present.

COVID-19 has precipitated a major increase in the role of the state. Decisive intervention has begun to stabilize infection rates, prevent health systems being overwhelmed, and save lives.

The climate emergency is like the COVID-19 emergency, just in slow motion and much graver. Both involve international cooperation, complex science, questions of system resilience, political leadership, and action that hinges on public support.

Decisive state interventions are also required to stabilize the climate, by tipping energy and industrial systems towards newer, cleaner, and ultimately cheaper modes of production that become impossible to outcompete.

Many countries show that people are noticing the clean air, uncongested roads, the return of marine life and birdsong, and are questioning the way we once lived. The direction of COVID-19 economic recovery packages put in place in the coming months will have a significant impact on whether globally agreed climate goals are met.

Researchers from Oxford’s Smith School of Enterprise and the Environment looked at whether economic stimulus packages in the wake of coronavirus would help or harm progress on measures to limit climate change. They found that, far from impeding growth, investing in green policies and infrastructure would lead to both a robust economic recovery and long-term positive outcomes for society.

In addressing the twin problems of the global downturn and climate change, the authors wrote: “The recovery packages can either kill these two birds with one stone—setting the global economy on a pathway towards net-zero emissions—or lock us into a fossil system from which it will be nearly impossible to escape.”

In their paper, to be published in the Oxford Review of Economic Policy, the researchers surveyed 231 key figures from G20 countries, from central bank officials to economists, about the relative performance of 25 types of stimulus measures. The survey found that experts and officials worldwide believe recovery measures can and should be in line with climate goals, and furthermore that such measures produced better economic outcomes than “business-as-usual” models.

“Many climate-positive policies were perceived by our respondents to have high overall desirability; most climate-negative policies had relatively low desirability,” the authors note. “This was true even for climate-positive policies that took more time to implement.”

The researchers further found that recovery packages “will reshape the economy for the longer-term, representing life and death decisions about future generations, including through their impact on the climate.” The authors conclude that green stimulus measures “have better prospects for increasing national wealth, enhancing productive human, social, physical, intangible, and natural capital.”

The authors also cite a list of five policy items that they claim would support the short- and long-term goals of a green recovery, namely: low-carbon infrastructure investment; retrofitting buildings for energy efficiency; training and education investment to alleviate unemployment caused by COVID-19 and decarbonisation; natural capital investment for ecosystem regeneration; and investment in green research and design.

CO2 emissions

Global CO2 emissions from fossil fuels are set to drop by up to seven percent in 2020 because of the coronavirus pandemic, but even this dramatic decline - the sharpest since WWII - would barely dent long-term global warming.

In early April, coronavirus lockdowns led to a 17 percent reduction worldwide in carbon pollution compared to the same period last year, according to the first peer-reviewed assessment of the pandemic's impact on CO2 emissions, published in Nature Climate Change.

Four countries or blocs - China, the United States, the European Union and India - accounted for two-thirds of the downturn across the first four months of 2020, equivalent to more than one billion tonnes of CO2. Total emissions from industry and energy last year came to a record 37 billion tonnes.

“Population confinement has led to drastic changes in energy use and CO2 emissions,” said lead author Corinne Le Quere, a professor at the Tyndall Centre for Climate Change Research at the University of East Anglia. “These extreme decreases are likely to be temporary, however, as they do not reflect structural changes in the economic, transport or energy systems.”

If the global economy recovers to pre-pandemic conditions by mid-June, CO2 emissions in 2020 are projected to drop only four percent, Le Quere and her team calculated. But if lockdown restrictions persist throughout the year, the decline will be around seven percent.

With nearly five million confirmed infections and 320,000 deaths, the COVID-19 pandemic has deflected attention from the climate crisis that dominated global concerns in 2019. But the climate threat remains, other experts warn.

“This will make barely a dent in the ongoing build-up of carbon dioxide in the atmosphere,” said Richard Betts, head of climate impacts research at Britain's Met Office Hadley Centre. “We need to stop putting it there altogether, not just put it there more slowly,” he said.

“It's like we're filling a bath and have turned down the tap slightly, but not turned it off. The water is still rising, just not as fast.”

Earth's average surface temperature has so far risen by one degree Celsius above pre-industrial levels – enough to amplify deadly droughts, heatwaves and superstorms engorged by rising seas. Under the 2015 Paris climate treaty, nearly 200 nations pledged to cap global warming at “well below” 2°C.

The UN's Intergovernmental Panel on Climate Change (IPCC) subsequently determined that 1.5°C is a far safer temperature guardrail. The pandemic has underscored just how difficult it will be to hit that more ambitious target.

The future of fossil fuels

Global energy demand for the first quarter of this year fell by 3.8% compared to last year, the IEA says. With more than half of the world’s population (representing 60% of global GDP) under lockdown, the IEA says the impact on energy use will depend on how long restrictions continue.

Assuming only a gradual easing of lockdown measures, the IEA says global energy demand could fall by 6% this year. The decline would be more than seven times the impact of the 2008 financial crisis, bucking the trend for growing energy demand over the last five years.

Fossil fuels bore the brunt of the fall in demand and the hardest hit energy source was coal. Restrictions on economic activity pushed global coal demand down by 8% in the first quarter of 2020, mostly down to a drop in electricity needs. Industrial coal demand also fell, especially in China as its coronavirus restrictions halted factory production. It has been estimated that China’s shutdown in February resulted in a 25% decline in CO2 emissions due to lower coal and oil consumption.

Restrictions on travel contributed to a 5% fall in demand for oil, with fewer cars on the road and a sharply reduced demand from the shipping industry. As airlines grounded their fleets worldwide and countries closed their airports, jet fuel requirements have hit rock bottom.

The virus and the oil price collapse have already caused the top-10 oil majors to slash their capital expenditures by nearly $30 billion, which could impact their spending on renewable portfolios.

Conversely, oil price volatility could lead oil majors to increase their investments in renewables which produce more stable returns. For the first time in history, some of the world’s largest oil and gas companies are seeing their wind and solar assets outperform their oil assets.

“The pandemic has shown us that major structural changes in the transport and energy systems are required,” noted Mark Maslin, a professor of climatology at University College London.

 Some experts have suggested the pandemic could speed up that transition.

“Fossil fuels seem to be getting hit harder relative to renewables,” said Glen Peters, research director of the Center for International Climate Research in Oslo. “If this continues, we may come out of COVID-19 with emissions going down, since renewables have been able to take more relative space, pushing out some of the most polluting fossil fuels, especially coal.”

Europe’s top oil and gas companies have diverted a larger share of their cash to green energy projects in a bet the global health crisis will leave a long-term dent in fossil fuel demand. The plans of companies like BP, Royal Dutch Shell and Total are in line with the European Union’s efforts to transition to a lower-carbon economy and away from a century-old reliance on oil.

This reflects the widening rift with the US where both the government and top drillers are largely staying committed to oil and gas. Multi-trillion dollar rescue packages are being hastily assembled to stave off another Great Depression, sending mixed signals when it comes to building a green global economy.

‘Building back better’

There is a high risk that short-sightedness will lead governments to lose track of the bigger picture and continue to allocate large amounts of money into highly polluting sectors that have no place in a zero-carbon society, according to Michael Liebrech, BloombergNEF founder and senior contributor.

The real opportunity lies in the economic rebuilding phase. “No bailout should benefit industries or business models that are not viable in the coming low-carbon world – such as low-cost airlines, coal-fired power generation, or uneconomic operations in shale oil and gas, oil sands and deep offshore oil.”

With climate change set to happen regardless of the pandemic, and a renewed focus on resilience among policymakers, more than 150 of the world’s biggest companies, including Salesforce, Colgate Palmolive, HP, Unilever and Diageo, have urged governments to align their recovery efforts with climate science. This will boost resilience and help companies to accelerate action to tackle climate change.

The companies signed a statement backed by Antonio Guterres, the United Nations Secretary General, urging governments around the world to align their COVID-19 economic aid and recovery efforts with the latest climate science. The choices that governments make today will affect the global environment for decades to come.

As debates on recovery packages around the world ramp up in the coming weeks, the companies, which are all part of the Science Based Targets initiative and come from 34 different sectors in 33 countries, are calling for policies that will build resilience against future shocks by supporting efforts to hold global temperature rise to within 1.5°C above pre-industrial levels, in line with reaching net-zero emissions well before 2050.

“Saving lives and livelihoods, and building a prosperous, inclusive and sustainable future, are at the heart of our efforts to recover from COVID-19. We can beat the virus, address climate change and create new jobs through actions that move us from the grey to green economy,” Guterres said.

“Many companies are showing us that it is indeed possible and profitable, to adopt sustainable, emission-reducing plans even during difficult times like this.”

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