COVID-19-Inspired Longer-Term Changes to the Energy Transition

I started to write this blog on Thursday, June 11th. On that day, Treasury Secretary Steven Mnuchin announced that, “we can’t shut down the economy again.” The Federal Reserve and others had already made grim predictions about the long-term economic impacts of the pandemic. Meanwhile, many countries and some major US states were reporting the virus’ acceleration. It was crystal clear that the coronavirus is still with us and will be for some time. By Thursday, even in the face of this continued threat, the US (and many other countries worldwide) had begun to reopen the economy and ease lockdown protocols.

Secretary Mnuchin’s announcement implied that if the feared second wave materializes (as it almost certainly will), the shutdown steps that proved to be effective in “flattening the curve” in the first wave will not be repeated. He did not specify what would replace them. When the stock market closed a few hours later, stocks had dropped by nearly 6% (S&P 500).

As I have mentioned, the first wave, which, by all accounts is still not over in many places, ravaged the world, with more than 7.5 million confirmed cases and more than 400,000 deaths. The US itself has had 2 million confirmed cases and more than 100,000 deaths. The 1918-1919 Spanish flu marks the only valid global precedent for what we are experiencing now. In that event, the second wave was more damaging than the first.

So how should we interpret Secretary Mnuchin’s pronouncement? The most straightforward interpretation is that a direct threat of 2 million additional cases and at least 100,000 additional deaths will not be enough to convince him to apply the tools that proved to be effective in the beginning of the pandemic. I prefer to be a bit more generous to the Secretary and assume that he is simply discounting the future, hoping that a second wave will not materialize. The stock market’s immediate reaction, however, indicates that the market doesn’t share his blind optimism. It seems that regardless of what the federal government does, the economy will follow the health and safety of the people. Likewise, the real pace of the economy’s reopening will follow the virus and not the government’s official pronouncements.

This discounting of the future has expanded into the private sector with a familiar, “heads I win, tails you lose” twist: management is requiring employees to sign a waiver to go back to work:

Whether companies are liable if their workers and customers catch the coronavirus has become a key question as businesses seek to reopen around the country. Companies and universities — and the groups that represent them — say they are vulnerable to a wave of lawsuits if they reopen while the coronavirus continues to circulate widely, and they are pushing Congress for temporary legal protections they say will help get the economy running again.

In other words, policymakers want to discount our futures, not their own. No wonder there is no mass consensus on the issue.

Now, there is no question that if the lockdowns last much longer, the global economy will freeze and many people will die as a result. Much of the death will take place because of a shortage of necessities such as food, healthcare, and shelter. So, if Secretary Mnuchin had been completely honest, he would have presented the issue as a choice of who will live and who will die. Once the healthcare systems are overwhelmed, this is the kind of choice they face. Politicians never want to present choices in these terms; discounting a possible bad future is much easier because nobody can hold them accountable until the future becomes the present—often after they leave office.

Here is Dr. Anthony Fauci’s take on reopening:

Reopening requires caution, he says. Over the past decades, we have never experienced a shutdown on such a global scale.

“That certainly contained what would have been a much more massive global outbreak, but you can’t stay locked down forever,” he says. “That’s the reason why we’re trying to carefully and prudently, with guidelines, get back to a degree of normality, and we’ve never ever had that situation before.”

During the interview, Fauci digs further into the country’s reopening. He looks ahead at what we may face in the future and shares advice on how we can best prepare. Read the highlights below.

My interpretation: we should open slowly—in stages following the guidelines that make workplaces conform to social distancing protocols—and we should engage extensively in testing and contact tracing. If a serious local outbreak erupts, we close again. The practical implications of this kind of opening are very complicated. Since I am teaching at a university that is trying to follow similar guidelines, I will be able to report on its successes and failures as we go along.

When will all of this be over?  We will be on our way to pre-pandemic conditions, with some pandemic-learned improvements, when vaccines are universally available globally. We need to approach global herd immunity with infection rates (R0) significantly smaller than 1. Even at that point, the virus will still be with us but we will be able to live with it.

Energy Intensity

The condition of an economy obviously drives energy use. The parameter that quantifies this connection is called energy intensity. It ties into the amount of energy we use and how that reflects economic activity, usually measured by the GDP. I have discussed energy intensity on many occasions here; just put it in the search box for more background. The global energy intensity for 2018 was 0.11koe/$2015. To clarify, the units are as follows: 1koe (kg of oil equivalent) = 40,000 Btu or 10,000 Cal; $2015 is the US $ value in 2015. With constant energy intensity, the decline in energy use follows the decline in GDP. However, as we have seen in more recent blogs, the coronavirus drives changes in the kind of energy used in addition to lessening total energy use. Domestic electricity rises but business electricity decreases, resulting in a decrease of total electricity use. In addition, as public transportation is one of the most dangerous virus transmission mechanisms, many people are shifting to bicycles for short distance travel. This shift is positive in terms of a transition to more sustainable energy mix but is likely temporary. We can expect that as the economy starts to reopen, the use of private cars will exceed pre-pandemic use, which is bad for sustainable energy use.

Almost every major transition starts with the destruction of business as usual habits, followed by trial-and-error-established alternatives (have a look at the September 17, 2019 blog about polar bears). Throughout history, we have been better at the destructive part of the process, while the constructive part requires more pain and effort. But eventually we learn how to benefit from the transition.

We are currently facing the virus-driven destructive phase. Many of us are now thinking about the transition and how we could shape it to help mitigate the coming climate change disaster.

The International Energy Agency (IEA), one of the most influential international organizations in the energy field, has taken some flak for its approach:

(Bloomberg) — The International Energy Agency marginalizes key climate goals in its research, according to an open letter from dozens of investors, business leaders, researchers and climate policy advocates.

The Paris-based organization is largely funded by rich countries and advises nations on energy policy. It publishes an annual report called the World Energy Outlook, which projects how the global energy system is likely to look in years to come. The scenarios it uses have become the bedrock of energy policy for governments around the world and provide key insights for global investors to check whether they are putting money in the right places.

The letter sent to Birol this week, which was coordinated by campaign group Mission 2020, asks the agency to make central an energy-use scenario that shows how quickly emissions must fall to see the Paris Agreement’s more aggressive target of limiting global heating to 1.5°C. The signatories include Laurence Tubiana, chief executive officer of the European Climate Foundation; Nigel Topping, climate action champion for the COP26 climate meeting; Christiana Figueres, former chief climate negotiator at the United Nations; Oliver Bate, chairman of the board at Allianz SE; Jesper Brodin, chief executive officer of Ikea Group, among others.

If the world were to warm just a few tenths of a degree further, the economic damage wrought would be in the hundreds of billions of dollars. It would bring the forced migration of millions, and the extinction of thousands of more species, according to an influential 2018 report from the United Nations.

The world has warmed 1°C since 1880, and the pace of warming has accelerated in the last three decades.

The same article cites the IEA’s response to the letter:

The IEA’s Sustainable Development Scenario does show which energy pathways are consistent with a 50% chance of keeping global temperatures from rising beyond 1.5°C, an IEA spokesperson said. The critical lever that would help achieve it is called “negative emissions,” or removing CO₂ from the air by natural means or technology.

Under the most ambitious climate target, scientists warn that global emissions must reach net-zero around 2050. The most aggressive scenario in the WEO sees carbon emissions fall to about 10 billion metric tons globally by 2050—a quarter of 2019 emissions.

Next week we will see how we are doing in adopting, or expressing intentions to adopt, some of the IEA’s recommendations.

About climatechangefork

Micha Tomkiewicz, Ph.D., is a professor of physics in the Department of Physics, Brooklyn College, the City University of New York. He is also a professor of physics and chemistry in the School for Graduate Studies of the City University of New York. In addition, he is the founding-director of the Environmental Studies Program at Brooklyn College as well as director of the Electrochemistry Institute at that same institution.
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16 Responses to COVID-19-Inspired Longer-Term Changes to the Energy Transition

  1. Johanna Lora says:

    The shut downs due to the pandemic has definitely shown how much energy we used reduce and the change in our air quality but we can’t live in a world where we are on locked-down. I think is time the government and big corporation adopt more Sustainable resources for everyday life to lead a path to a greener world.

  2. ioannis kakaris says:

    The covid pandemic has allocated a great opportunity towards climate researches in respect to viewing a world with greatly minimized carbon emissions and logging this data has shown that reduced use of “dirty” energy sources can greatly change our outcome in terms of future climate disasters. On the flip side the covid pandemic has been had a massively detrimental effect on all other aspects of the human life ranging from economic, social, and even health to the point where we must debate whether locking the world down is better than accepting the risks of living as normal alongside covid. Its honestly a disgusting debate to be having and of course people are free to make the choice for themselves rather than listen to the science but on a good note the pharmaceutical industry is making great strides towards creating a vaccine in record time.

  3. Vincent Tang says:

    The closing down of businesses due to the virus has led to a reduction of energy use. However, this energy use will go back up once business start back up again. I believe that the best way is to have people be more educated on the subject of energy use. Prior to taking this class, I hadn’t paid much attention to how much energy I used throughout the day, but I have after taking it become more cognizant of the activities I do and the energy I use. I believe that if the entire world were more aware of how much energy they use and work towards reducing it, even just a little, the world would be better off.

  4. Jasmary Garcia says:

    I agree that lockdown can cause our economy can fail, but if we open up too quickly we can see a rise in cases quickly. Obviously if it gets as bad as before we will have to shut down all over again. Our biggest hope is getting a vaccine.

  5. Cristian Amendano says:

    Opening slowly is not effective without a vaccine. If we don’t have a vaccine, we will continue to stay close, the economy is going to drop and we’re going to face the consequences. Hopefully, a vaccine comes very soon.

  6. Jennifer Dong says:

    I think this is an interesting topic! Many people say that COVID was a chance to see what reducing our energy does to our planet, but this is only a temporarily solution. Many do not have the time or resources to do this after COVID. Especially now because more and more businesses are opening and restrictions are less strict now. Our economy can’t afford a lockdown, so this isn’t a solution to global warning. One thing I did notice was that it was colder faster last year and I think it does have to do with COVID and our energy use. That is just what I believe though.

  7. Lily Zheng says:

    Since the lockdown energy used seems to decrease but now that the nation is open up slowly the amount of energy used will also increase. The more energy we use the more we affect the climate so even with the reopen of the nation we shouldn’t overuse energy and add up to the issue we had already with climate change.

  8. Lina Ou says:

    Indeed, if our blockade is too long, it will cause huge damage to our economy and may have many undesirable consequences. I hope that medical institutions can develop the cure gor Coronavirus as soon as possible, and I hope that the government can prevent bad situations that will happen in the future.

  9. Dalziel Garcia Filpo says:

    I thought that this blog post was very good. You can compare climate change and covid at the moment since there’s no stop to it. Climate change and global warming has been a problem for years because we aren’t doing the right actions to prevent it since every day humans are trashing the environment. With covid, there’s no stop to it because it’s still gonna exist with large numbers of people who have it when there’s no vaccine. If we take the right approach and do the right actions, both problems could be less impactful on us humans and on the environment. In my opinion, opening slowly because of covid doesn’t matter because people can still get the disease without knowing how they got it and without showing any symptoms meaning they can spread it on to others without knowing they have it and not doing testing.

  10. Eric Ma says:

    My thoughts on opening slowly is that: if we do so currently, it will not help. This pandemic problem isn’t an issue that can be solved without a systematically structured solution. Without no vaccine in production or yet confirmed, opening slowly will only give rise to confirmed cases. Better than opening everything immediately, but cases will still rise without a vaccine. Opening slowly would only be effective if herd immunity is achievable. Without vaccines, it is not.

    I believe we can only start opening things up slowly when a vaccine starts distributing. The logistics in distributing a vaccine will be a nightmare and wouldn’t get solved as easily as the logistics in distributing protective equipment, such as masks, the world has seen earlier this year. That’s because of the cold chain. With today’s infrastructure in vaccine distribution, not only do we need to improve it, but many hospitals don’t even have the necessary equipment to store the currently “promising” vaccines that are in testing today at the needed temperature.

  11. Sydney Rodriguez says:

    The government needs to take effective actions to keep everyone safe from COVID and climate change. Just like climate change, COVID is a very real thing and how we handle it will affect our future. There are no clear-cut answers on how to deal with either, but the government needs to take action NOW instead of waiting until it gets worse.

  12. Kristina Wetterich says:

    Climate change is definitely a pandemic within itself and though we have contributed less and less, we are still no where close to where we need to be if we want to save the earth. We need to make minor changes at a time and thoroughly work to create a climate change plan so that we can beat it before it beats us.

  13. Christopher N Huth says:

    Its funny how these companies only care about the short term profit rather than long term stability. Regarding both corona virus and climate change. Rather than seeing how we can climb this mountain of problems together as a community they are seeing how to make money while absolving themselves of any damage or even death that might come as a result.

  14. Aaliyah Copeland says:

    Global warming has been our nation’s problem for a while now. It’s typically on the backburner compared to other catastrophes this world is facing. At the rate, the government is going irreversible consequences are going to be set in motion.

  15. Mhetaz Karim says:

    The pandemic has reduced the amount of energy use temporarily but in a post pandemic world if everything starts recovering energy usage will increase drastically. Measures should be taken to use clean energy going forward.

  16. Roksana Jasiewicz says:

    In order for our planet to avoid the consequences of rising global temperatures, people need to act fast. If the governments wait too long, they might not be able to get ahead of the damage.

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