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The first domino to fall

COVID19 disrupts energy, mobility, everyday life. Moreover, there will be longer-lasting implications for the energy transition away from fossil fuels. Therefore it is crucial not to rely solely on short-term effects – a mosaic of measures, planned and implemented over the long term, is most likely to seize the catalytic effect of the pandemic.

by Timour Chafik 

To put it straight: There is no good time for a pandemic. There is nothing to be gained from it. Not yesterday, not today, not tomorrow. No »every crisis is also an opportunity» mantra can help. Who, if not everyone, would wish for nothing more than for the everyday life before COVID19 to be everyday life again today?

 

Everyday life is change. It always has been. But now a global pandemic has also become part of our 24/7 rhythm. This is a reality that entire societies have to face, and one that raises fundamental questions: Which consequences of the pandemic are already visible today, which will only become apparent over time? How will our behavior change, and with it our consumption of space, time, and energy? 

Use the crisis to move forward

Or, to put it another way: Can't the pandemic be used to initiate things, to question them, and thus to move them forward? In other words: can we use the COVID19 crisis to move towards a more sustainable energy market and economy?

 

At first glance, the answer seems clear: Yes, we can. In fact, we already did. In »Forum«, the Quarterly Journal for Debating Energy Issues and Policies published by the Oxford Institute, Professor Pedro Linares writes as early as July 2020: »The current reduction in mobility (and the corresponding reduction in the demand for oil), and the decrease in the demand for the natural gas and coal that feed our industries and shops is indeed causing a drastic reduction in CO2 emissions – some put it at 20 per cent of annual emissions – as well as an even more noticeable reduction in urban pollution levels.«

 

However, Linares added, these would settle back to pre-COVID19 levels once we return to a normal, or new-normal, life. »Therefore, when we are able to get back to our jobs and other economic activities, and at least in the short term (until we are able to change our technology), pollutant emissions will climb back again«. 

 

Is it all just a flash in the pan?

Linares classifies into short-term effects - »COVID19is a much closer and more urgent threat right now, and the sacrifices required are expected to be limited in time« - and in long-term perspectives: climate change is still a long way off, he says, and will require permanent changes in the way we live. That's why »we seem to be more certain about the impact of our actions on COVID19, and hence more willing to spend the resources required, than to invest them fighting climate change«.

 

So it's all just a flash in the pan, a snapshot, a »long absent, soon forgotten« as the pandemic nears its end?

 

Not really, it's a bit more complicated than that: just as the pandemic moves in waves, action at a wide variety of levels - from society to business to politics - requires the greatest possible adaptability, a »thinking in phases« a change of perspective. It requires clear answers to equally clear questions: how to ensure that the right investments are made, not only in physical but also in human capital? Do these coincide with long-term decarbonization strategies as well as sustainable development criteria in general? Will this create jobs and economic activity in sectors with future potential, ideally via projects that are »shovel-ready«? 

How to fight climate change now

Siemens Energy CEO Christian Bruch says the time has come for a radical transformation and decarbonization push to make our energy systems more sustainable.

»The COVID19crisis puts climate change in the spotlight: green stimulus measures are on the table, fossil investments are becoming increasingly risky and are challenged, and the lockdown restrictions show that quite radical behavioral change is possible«, says Xander van Tilburg, senior advisor international energy and climate at TNO, an independent research organization, headquartered in Amsterdam.

 

However, there is a real risk that the crisis will widen the development gap. »Some countries, especially in the developed world, expect to be well-positioned and have the opportunity to buffer the shocks caused by the economic crisis, accelerate their clean economic transformations, and even become strong players in the new clean technology markets.« Many developing countries, Tilburg continues, face fragile supply chains, reduced liquidity, and increased debt. »They will more than ever be dependent on international investments and support to come out of the crisis prosperously and green«.

Vision and transparency

Van Tilburg is nevertheless optimistic: an international survey among policymakers conducted by TNO last year shows growth in domestic support for climate policy and action and that there is quite some momentum behind the transition. »Some of largest emitters are sending strong signals: the EU with its 55 to 60 percent target for 2030, the Chinese with their decarbonization pledge for 2060, and the US has re-entered the Paris Agreement and is expected to release a wide-ranging climate strategy soon.«

 

At the same time, van Tilburg pledges for a long-term view that does not allow itself to be clouded by current developments and figures: »I see much attention for ambitious 2030 emission targets, which is great, but it would be wise to also look beyond 2030 to the decade that follows. In 2030 we will have to be prepared to accelerate even further and also confront the more difficult mitigation options«.

 

In his opinion, every government and business should be able to show how they plan to reach or deal with the need for, full decarbonization around 2050. For governments that includes a vision on public spending, innovation, and industry policy; for businesses it would include full transparency in reporting.

Stability, foresight, transparency - what applies to the overall pandemic situation also applies to individual markets such as the energy market. »The biggest unknown is what policymakers will do«, says Daniel Klein, Head of Future Energy Pathways scenario planning at S&P Global Platts Analytics. »For Europe specifically this is an opportunity to accelerate its low carbon goals. And a few other countries around the world are probably doing similar – but there are probably equally as many, if not more, that are just saying, hey, we need to stimulate the economy however we can.« New airports, new roads, new whatever, he adds. »We're giving tax cuts to people and they're going to go buy new internal combustion powered vehicles«.

 

Indeed, one of the bigger barriers to the energy transition is that long-term oil prices will probably lower than a forecast a year ago. »So electric vehicles become a little bit more expensive relative to internal combustion engine vehicles and the ability on an economic basis to shift away from carbon-emitting resources to non-carbon emitting resources is a little bit more costly«, says Klein.

A mosaic of solutions

What the pandemic reveals is that it's a mosaic of solutions beyond just renewables and fossil fuel demand destruction that will be needed. Hydrogen, carbon capture utilization and storage, and biofuels will all likely play roles in transforming and decarbonizing the interconnected global energy system.

The mosaic is developing, Klein continues. »Electrification of vehicles is a great way, building renewables is a great start, but to get to sort of net-zero, they are not enough alone to fundamentally change the energy system to get to the point where we all want to go.«

 

The pandemic might not be the pivotal moment, the great reset and rethink. But it could be the first domino to fall to bring about these sorts of changes on an individual, corporate, and government basis.

In conversation with energy expert Dr. Rabia Ferroukhi of IRENA

How does COVID 19 impact the field of global energy transition? And could it even foster a collective, global response to climate change? We spoke to Dr. Rabia Ferroukhi, Director of the Knowledge, Policy and Finance Centre at the International Renewable Energy Agency IRENA.