COVID-19: The Can’t Miss Opportunity for Clean Energy
Despite the harm it has caused the health sector and the global economy, COVID-19 has presented the world with a can’t-miss opportunity to accelerate the switch to clean energy.
When it comes to the environment, lockdowns across the world have greatly reduced air pollution in major cities, slashed CO2 emissions, and halted the harm caused by air transportation. However, these positive changes are only short-term. It is probable that climate change could pose a similar, or heavier, economic threat than the coronavirus pandemic, with predictions that the “global economy will be 3 percent smaller by 2050 due to lack of climate resilience”.
So, what’s the plan?
In order to create long lasting solutions to our growing vulnerability, we need to plan for climate change’s physical shocks and plan seriously. That’s right: we need to be treating climate change with the same amount of gravity as the COVID-19 pandemic.
Why is COVID-19 a great opportunity for clean energy?
Politicians and business leaders in Europe have been prioritizing environmental incentives when bailing out businesses who have suffered due to country-wide lock-downs. For example, the EU commission’s new €750 billion recovery programme is prioritising funding for businesses spending money on green projects. The UK business secretary, Mr Alok Sharma, has also stressed the urgency to recover in a clean and scientific way, citing a green recovery will lead to more jobs and economic resilience. Similarly, Andrew Lee, UBS Global Wealth Management’s head of sustainable and impact investing, states “the health crisis highlights the linkages between sustainability issues [and] the economy…thus heightens investor focus on these issues.”
This new wave of sustainability-focused momentum is helping society to think seriously about developing and expanding new or existing low-carbon solutions. With electricity generation being the sector most guilty for CO2 emissions (accounts for 32% of emissions in the U.S.), a glaring place for improvement is switching to cleaner energy.
What does this switch look like?
Switching to cleaner energy simply involves adopting technologies that have existed for decades, such as wind and solar power. However, the difference nowadays is that these solutions are, in many places, cheaper than electric grid prices.
In addition, the International Renewable Energy Agency issued a report stating that limiting global temperatures to rise lower than 2 degrees Celsius “would cost $19 trillion more than a business-as-usual approach, but would bring benefits worth $50–142 trillion by 2050, growing the world’s GDP by 2.4%”.
Thus, although the investments required are large, the returns on investment are predicted to be significantly larger in the long term. In short, reinvesting in existing infrastructure such as fossil fuels will only create higher exposure to the risk of climate change, and the impacts will be felt for much longer than the immediate returns.
With regards to business investments in sustainability, the magnitude of investment suggested is predicted to create up to 21 million new jobs by 2050 in the clean energy sector alone. Businesses: take advantage of environmentally-friendly incentives being put in place by the government, and realize how investing in sustainability makes clear economic sense.
Why now?
It is clear that clean energy is the right path to go down both financially and socially. However, it is even more important to realise that the economy has taken a serious downturn and thus we need to decide how we should rebuild it again. Covid-19 showed us that physical shocks need to be anticipated for, and an imminent and foreseeable shock on our horizon is climate change. Fortunately, we have the power to reduce the risk by acting sooner rather than later. Let’s start by tackling the largest polluting sector and switch to renewable energy.
