The COVID-19 pandemic has brought into sharp contrast some of the main environmental impacts of human activities: cities have seen clearer skies, wildlife reclaimed some human-occupied areas and climate-altering carbon emissions are projected to decline 5-8% in 2020.
So a logical question to ask is how these impacts might change the energy landscape in the United States and globally. I believe that we are at a critical juncture that will substantially shape the kind of world we will pass on to the next generations. Will we continue to derail the climate with an energy system built on and for fossil fuels or will we retool it for climate stability? While it is too early to project with certainty how a post-pandemic energy sector might look, it is clear that the sudden, steep drop in global economic activity is roiling the industry like few volatile periods have before.
Before the pandemic, the US energy mix was already transforming. Cheap natural gas and oil from fracking had sparked a fossil fuel glut in 2008 that undercut prices and set the United States on a path to become a net energy exporter. Meanwhile, prices for major renewables such as solar PV and wind energy continued their downward trajectory, further stiffening competition for traditional fossil fuel producers, especially coal, a trend that even the fossil fuel friendly Trump Administration could not reverse.
Since February, however, energy producers have seen crude oil prices drop from $60 per barrel to as low as $12 per barrel. Oil futures even went negative in early May due to excess production and limited storage facilities. With such a gloomy outlook and many oil companies requiring at least $50 per barrel to break even, drilling has slowed down markedly, many wells have been idled, and tens of thousands of oil & gas workers have been laid off. Similarly, utilities have accelerated the retirement schedules for additional coal-fired power plants as commercial demand for electricity has declined. What’s more, renewable energy from hydro, solar, and wind has generated more electricity than coal in the US for a record 40 days in a row this spring.
So, as governments are working out and passing massive economic recovery packages, this presents a unique opportunity to wean our economic engines from dirty fossil fuels.
A multi-pronged, integrated strategy could help bring people back to work, create new jobs, make our energy system more resilient and climate ready and lock-in the environmental benefits we have seen during the involuntary lockdown. While the pull of a business-as-usual recovery is strong, the widespread impacts of COVID-19 mean that all governments, and down to the local level, are grappling with the question of how to get out of the slump and create the systems and processes to be better prepared for the next pandemic. In short, this presents and unprecedented opportunity for system change, including:
- the adoption of a revenue-neutral carbon fee and dividend like the one proposed by the Citizens Climate Lobby or the conservative Climate Leadership Council;
- the scheduled phase-out of hundreds of billions in fossil fuel subsidies at state and federal levels and redirection of the funds toward increasing renewable energy generation capacity, grid management, and storage capability;
- job training in renewable energy systems and job transition assistance for fossil fuel workers;
- Incentive programs, building code updates, and adoption/tightening of state renewable energy portfolio standards to increase renewable energy penetration; and
- A federal infrastructure fund to support public infrastructure upgrades, including freight and commuter rail, wastewater treatment plants, roads and public property that include clear and measurable climate change mitigation and adaptation goals.
Each of these steps has many technical, social and financial details to be worked out, for sure, but collectively they can provide economic relief while substantially moving the needle on US carbon emissions and building a greener, more resilient future. The playbook for such a sizable, concerted program does not even need to be invented from scratch: blueprints exist in the form of Germany’s Energy Transition plan, IRENA’s Global Energy Transition 2050 Roadmap, and the EU commitment to become carbon-neutral by 2050. The U.S. also has a starting point in the Green New Deal proposed by Representative Alexandria Ocasio-Cortez (D-NY) and Senator Ed Markey (D-MA). While the current Administration is unlikely to take any meaningful action, an important chance for collective action is on the horizon: Tuesday, November 3, 2020.