“By the end of the coming decade we will be on one of two paths. One is the path of surrender, where we have sleepwalked past the point of no return, jeopardizing the health and safety of everyone on this planet,” the Secretary-General of the United Nations’ Climate Change Conference COP25 told his audience last December. “Do we really want to be remembered as the generation that buried its head in the sand, that fiddled while the planet burned? The other option is the path of hope.” The global economy has already been on a trajectory toward greening its energy sources and (very) slow and steady decarbonization. But for all the progress being made, the global energy industry has not been changing nearly fast enough to meet the benchmarks set by the Paris agreement, and, by the assessments of many experts, will not be enough to avoid the negative consequences of climate change. The world’s premier authority in the matter, the Intergovernmental Panel on Climate Change (IPCC), has compiled a damning report which shows that in order to keep global warming within 1.5 degrees Celsius above average pre-industrial temperatures, the world would have to cut carbon emissions down to zero by the middle of the century - a feat that seems all but impossible in any scenario even close to business as usual.
This is exactly why the novel coronavirus pandemic, a global tragedy that is both a health and economic disaster of historic proportions, is being seen by some as a harbinger, not of doom, but of positive change. The COVID-19 pandemic has made business as usual an impossibility as the global economy has ground to a halt and markets have gone haywire, with oil even plunging into negative pricing, with the Brent Crude Intermediate benchmark reaching nearly -$40 per barrel last month.
The World Economic Forum has questioned whether this disruption could bring a “new energy order” and a Forbes headline proclaimed that “In A Post-Pandemic World, Renewable Energy Is The Only Way Forward.” And, while the huge decline in energy demand due to the novel coronavirus pandemic has caused oil and gas prices to plummet, there have been some benefits for the renewable energy sector. “As shutdowns aimed at stemming the viral spread have caused global energy demand to plummet,” says Yale, “renewable sources have accounted for an increased share of power generation. That is in part because of the low cost of solar and wind power means they are often dispatched to grids before other sources such as coal and nuclear power.” Despite this silver lining, however, the green energy revolution has been slow to spark. “Now, the virus-induced economic shock is likely to slow the expansion of wind, solar, and other clean power sources, at least temporarily, experts say,” writes Yale Environment 360, citing a report by the International Energy Agency (IEA). “But while lockdowns, social distancing requirements, and financial uncertainties have put some new projects on ice, the underlying strengths of renewables remain strong, and analysts expect their economic advantage over volatile fossil fuels will only increase in the long term.” But that all depends on how policymakers and world leaders choose to go forward. “Which means 2020 is shaping up to be a pivotal moment for renewables — and the world’s hopes of checking warming.”
But for now, the renewable energy sector is plagued with many of the supply chain failures that have plagued so many other industries during the pandemic, meaning that the growth of renewable energy capacity has slowed just when we need it to be increasing exponentially on the eve of climate change tipping point. “We were expecting a boom year” in 2020, IEA senior renewables analyst Heymi Bahar told Yale. “So this becomes very bad timing.”
Adding to the difficult future prospects of the clean energy revolution, “COVID-19 could bump climate change down the list of leaders’ priorities.” But if these leaders do take the chance to invest in a cleaner tomorrow, Yale has a number of recommendations of how it could be done. Since solar and wind have become competitive and have outgrown direct subsidies, “they would benefit from upgrades that make power grids smarter and more flexible, and therefore better able to utilize renewables. Spending to expand electric vehicle charging networks is essential, too.” The list of recommendations also includes improved access to credit for the renewables industry, which lacks the capital of fossil fuels, policy changes including “national, long-term carbon-cutting commitments” and green stimulus initiatives to create clean energy jobs to address the current unemployment crisis.
As countries begin to reopen, will leaders take advantage of this rare pause in the international economic momentum? Do we aspire to return to the status quo that was leading us to what the IPCC says is surely environmental and climate devastation? Or do we seize the opportunity to course-correct?
By Haley Zaremba for Oilprice.com
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