25 Mar Building a stable and resilient industry for the future
Markets worldwide have experienced some of the worst levels of performance witnessed for years and the enforced restrictions on free movement have continued to disrupt global economic activities. Leading energy industry professionals have indicated that the changes brought on by coronavirus will have implications on how we intend to tackle climate change. There is a clear correlation between economic activity and carbon emissions, associated strongly with our continued reliance on fossil fuels. What is more important is how the current crisis will influence our long term investment plans and in turn our impact on the rate of global emissions production.
Emission decline was expected and was evident during the global financial crisis experienced years ago. Emission reductions resulting from previous economic events also suggest that we will likely experience a rapid recovery of emissions once the pandemic has passed. Analysts suggest that strategic spending of economic stimulus measures combined with a shift in our working habits could have a significant impact on how emissions develop in the years to come.
The self-isolated measures that have been implemented worldwide have led to a rapid halt to many workplaces, schools closing and events being cancelled. The Intergovernmental Panel on Climate Change has confirmed their upcoming meeting will be held virtually. The significant ‘lockdown’ enforced in China resulted in a 25% decline in energy consumption and emissions generated. Further reductions are now being viewed in Italy and will inevitably be recorded elsewhere as other nations follow a similar path.
This is clearly a positive sign in the short term, but many believe that this period of emission decline will not continue once the pandemic eases. With governments announcing significant stimulus packages to support economic recovery there is a good chance that emissions growth will continue to grow once again. Previous financial crises have shown periods of decline and negative growth followed by a surge of activity and an increase in emissions.
The pandemic is unlikely to influence the upward trend of emissions for the long term. We are however in a transition period where Governments worldwide are releasing new economic measures and have the opportunity to strategically determine how emissions will evolve in the future.
Now countries have the opportunity to invest in infrastructure and structural changes that can lead to a reduction in emissions, supporting clean energy projects and avoiding being over-reliant on volatile oil and gas markets. The pandemic has also created a rapid transition to flexible and remote working, a significant reduction in work travel replaced with online meetings and conferences. If these work habits remain and become ingrained in our work culture then there are prospects for further long-term emission reductions.
Undeniably our health and wellbeing are the main priority right now but preparing for the future, our children’s future should also be considered. Implementing strategic measures that are resilient and provide higher levels of economic stability and support our fight against climate challenges need to be addressed.