In the shadow of Covid

Has our climate change agenda been eclipsed by the coronavirus?

IF the first six months of 2020 should offer any wisdom about the human race, it is that we are seldom prepared for scenarios that present high risks but have a low probability of happening.

The Covid-19 pandemic is exactly such a scenario.

In just seven months, the novel coronavirus went from being completely unknown to officially sickening more than 15 million across the world, of whom more than 630,000 have died.

In the meantime, nationwide lockdowns across the planet and a halt in economic activity have spooked many people into wondering if this is an apocalyptic movie.

This visible unpreparedness - evidenced in the many countries scrambling to treat the infected while stemming the spread of the disease - perhaps does not bode well for another potential mega disaster that would fall under the same category: the climate crisis.

"From an organisational point of view, both of (these) in risk maps and risk registers have been classified as 'high impact, low probability', and most times, actually climate change is not even on the risk map," Cherine Fok, director of sustainability services at KPMG Singapore, tells The Business Times.

"So I think the challenge is that while knowing that these things might happen ... organisations are still not prepared to deal with such an event."

Yet, the severity of the climate crisis almost needs no introduction. Eight years out of the last decade are officially among the top 10 hottest years on record; glaciers and permafrost are melting at a faster rate than ever; and natural disasters and freak weather patterns have become more prevalent, according to various scientific agencies globally.

"Climate change is arguably far more deadly in the long run (than) Covid-19 and is likely to have more lasting and more permanent impacts on human welfare, but the fact is it has been happening at a gradual pace so far," says Kim DeRidder, the regional director of environment programmes at The Asia Foundation, a non-profit organisation based in Bangkok.

"Moreover, the people dying so far from climate change are those who have remarkably little voice in the politics of the respective countries - these are the poor and disenfranchised, who die from increased rates of malaria and diarrhoea, heat exposure and undernutrition caused by climate change so far," he tells BT.

The uneven impact and lack of immediacy has thus created a degree of complacency in the policy responses of most countries, Mr DeRidder says, adding that issues surrounding climate change have often been "subordinated" to issues of economic growth.

Lessons

Beyond just a "weather issue" or "physical risk", Ms Fok says, the impact of climate change has social and financial implications, much like how the pandemic has highlighted the problem of social inequality.

Nadim Farajalla, director of the climate change and environment programme at the American University of Beirut (AUB) in Lebanon, notes for example that the rate of infection and mortality is highest among the most destitute in the United States and in poor segments of society that lack access to proper sanitation, while the elderly in Europe suffered the most.

"This clearly indicates that groups that have been identified as vulnerable did in fact bear the brunt of the infection," Dr Farajalla tells BT.

"The impact of climate change will hit the same communities and segments within hardest and these have been shown to be unable to cope," he points out. This means countries must prepare their most vulnerable communities and economic sectors to adapt to climate change, he says.

This points to a need to acknowledge climate change as not just an environmental issue, but a social one as well, Ms Fok says.

Estelle Forget, founder and senior adviser to sustainability consultancy Ergapolis, says one key lesson from Covid-19 is that "everything is connected with everything".

"The conclusion of all this is that we have to connect the dots to think (of) a virtuous development of our societies," Ms Forget says. "If governments are truly committed to the common good, then they now have the opportunity to launch bold sustainable development policies, and people and companies will understand the basis for them and accept their implementation," she adds.

Indeed, Ms Fok believes climate change is still high on the agenda for regulators, who are aware how unprepared they have been with Covid-19 and know they cannot afford another such situation.

"If you look at RFPs (request-for-proposals) that are being issued, there is a clear indication that climate change is still very important," she says. Meanwhile, the translation of climate change into implications is crucial in pushing corporates into action, she says.

However, with the Covid-19 crisis far from over - since there is as yet no viable cure or vaccine in sight - other observers are concerned that the issue of climate change may once again be back-burned.

Already, the 2020 UN Climate Change Conference, originally scheduled to be held in Glasgow, United Kingdom in November, has been postponed.

"In 2015, many of the countries in the developing world already have put forward conditional climate targets, where they rely on international support, funding, capacity building and things like that, and these may have slowed down because of the pandemic," says Melissa Low, a research fellow at the Energy Studies Institute (ESI).

"So I wonder whether or not countries will be able to fulfil their commitments," she says.

"The mechanism of the Paris Agreement is such that there are no hard punitive measures ... so if you cannot fulfil your climate targets, say by 2030, you would need to explain why, and I think that countries that were not able to would simply cite Covid-19."

Cutting emissions

On the bright side, the pandemic did produce a temporary good outcome for the planet, which got a breather as billions of people across the world stayed home due to nationwide lockdowns, resulting in a drop in carbon emissions.

The question is whether we can sustain this lower economic activity without being forced to do so by a pandemic.

Ms Low says what this experiment has shown instead, is that it is very difficult to rely on reducing economic activity as a means to lower emissions.

"We need to be on a path of net zero, but even with a pandemic, we're still on the 'plus', we're still increasing, the net emissions are still growing around the world, so I think that indicates how important economic drivers are," Ms Low says.

Ms Fok believes economic activity and lower emissions are not necessarily at odds with each other. Instead, she says the focus should be on finding environmentally-friendly solutions to generate economic activity.

Meanwhile, an oil price crash in early March could be good news for the climate, if it means wider use of renewable energy.

Last month, British oil and gas giant BP said it would be writing down about US$17.5 billion worth of assets for the second quarter, reflecting the company's expectations of lower oil prices in the long term.

"With the Covid-19 pandemic having continued during the second quarter of 2020, BP now sees the prospect of the pandemic having an enduring impact on the global economy, with the potential for weaker demand for energy for a sustained period," the company said in a statement on June 15, four months after it made an ambitious target to become a "net zero company".

Tomoki Fujii, an economist from the Singapore Management University, believes oil demand is likely to return to pre-pandemic levels "in a couple of years, if not in a year".

He says while low oil prices would promote substitution towards oil, it could also lower the returns on oil-related projects.

"Coupled with the fact that getting 'dirty' projects financed will be getting harder and renewables such as wind and solar have become economically competitive, the shift towards renewables may advance when oil prices continue to be suppressed," Assoc Prof Fujii tells BT.

Energy costs

However, while the cost of renewable energy technologies has been falling in recent years, fossil fuel plants are still cheaper for now, which means countries that are less well off could be priced out of the former.

This means that removing fossil fuels from the options of energy sources or supply shelves will deprive the energy options for the poor, says Chang Young Ho, an energy economist from the Singapore University of Social Sciences.

"The poor (end) up paying with a larger share of their income to get the amount of energy to make their economy function fully or getting far lower amount of energy they need to make their economy function.

"Energy is the key input for an economy, whether poor or rich. The lower the energy input, the lower the economic growth. Unless this relationship is broken, a sufficient amount of energy, whether in the form of fossil fuels, renewable energy or both, should be supplied continuously," Assoc Prof Chang says.

He noted that in Singapore's case, while oil is the input for the petrochemical industry, oil is an intermediate good and not a final good as shown in fuels for transportation.

Given that the oil industry also serves secondary industries like chemicals, plastics and pharmaceuticals, Assoc Prof Chang believes the importance of oil as an industrial feedstock will not be diminished unless those products fall out of use.

Political will

Apart from economics, the issue also comes down to political will.

ESI's Ms Low notes that while Singapore does not have natural resources, countries in the region "literally are sitting on oil, gas and coal".

"It's unfair, almost, to tell them that they cannot use it, they have to keep it in the ground. So this goes back to the developmental argument," she says.

AUB's Dr Farajalla says it could also depend on how countries manage their post-pandemic recovery - by going for the quick fix or taking a long-term view. A quick fix for political gains could lead to a quick rebound but it may cause oil demand and prices to exceed pre-pandemic levels.

With governments now introducing post-pandemic stimulus packages, Mr DeRidder believes these packages could be an opportunity for countries to throw support behind renewable energy, if they want to.

"Fossil fuel subsidies have never made good economic sense for any country for the long term, and with the current low price of oil, now would be an excellent time to do away with these subsidies," he says.

He notes that response has been mixed so far, with South Korea arguably being the greenest, China and India somewhere in the middle, and Japan on the other spectrum.

In particular, China has a unique opportunity to take the lead in transitioning out of coal and into renewables, both domestically and as part of its foreign assistance programme, he said.

On a wider scale, global issues like climate change no doubt require an international response, and perhaps the pandemic, equally a global problem, offers a peek at how this will take shape.

Unfortunately, Covid-19 struck at a time when nationalism was already on the rise around the world, Mr DeRidder points out, including among countries that historically have played a role in global leadership.

"And so we have seen rifts and fault lines among our global superpowers in this time of crisis when we should have been seeing collaboration and cooperation," he says.

Dr Farajalla says international cooperation has been "demoralisingly lacking", noting that Europe by and large fell apart, and countries like Spain and Italy were left to fend for themselves, while the US competed with poorer countries to secure medical equipment.

"Such selfish reactions bode ill for cooperation on climate change and makes all the calls for cooperation on climate change that were made pre-Covid-19 appear duplicitous. The trust needed to proceed in fighting against climate change has been severely eroded and it will require a lot of effort and hard work to rebuild it," Dr Farajalla says.

Ms Fok however presents a more optimistic view of the future. Technology and tools have helped people to simulate scenarios and hold constructive discussions. More importantly, she says, the younger generation feel strongly enough about the issue to speak out.

Although climate activists have been lobbying for change for decades, it was in the last two years that a global momentum led in part by youths like Greta Thunberg has helped the climate agenda gain traction.

Says Ms Fok : "It's just that this generation, who are motivated to do some things, maybe they are not in a position of power yet, but it will change very soon."