EIC outlines the call to action the UK government has received from the Committee on Climate Change (CCC) to ensure that the road map for economic recovery post COVID-19 aligns with existing environmental targets.
Forging a path
Yesterday, Prime Minister Boris Johnson announced proposed easing on several lockdown measures and made it clear that an exit strategy from COVID-19 was being developed to prevent further infection and revive the UK economy.
While the lion’s share of Johnson’s speech was devoted to these adjustments, he reiterated that maintaining social distancing would be critical in ensuring their success.
The next steps, beyond decreased restrictions on travel and exercise, will be in allowing non-key workers to return to work if their role was site-restricted but to remain working at home if possible. Thus the first sparks of economic resurrection appeared.
COVID-19 has ushered in one of the greatest economic cooling periods in modern history, in combination with geo-political tensions it has brought the oil industry to its knees and exposed many of the frailties in existing energy infrastructure.
In his speech, Johnson expressed the gravity of COVID-19, describing it as follows:
“The most vicious threat this country has faced in my lifetime…. [of a] kind we’ve seen never before in peace or war.”
However fears are now circulating that we will see a retreat away from renewable energy sources as both governments and investors move to revitalise that sector, perhaps at the cost of UK climate targets.
An opportunity in disguise
The CCC, among others, have stated that there is no reason that the economic recovery plan cannot be inclusive of UK climate goals.
“Recovery means investing in new jobs, cleaner air and improved health. The actions needed to tackle climate change are central to rebuilding our economy. The government must prioritise actions that reduce climate risks and avoid measures that lock-in higher emissions.”
Lord Deben, CCC Chairman
Historically, Lord Deben is correct, perhaps the most dramatic green energy success story in recent history is that of the United States. Immediately after the 2008 financial crisis, the U.S. prioritised funding for clean energy which generated 900,000 jobs in a five-year period.
According to a recent insight from the International Renewable Energy Agency (IRENA), in excess of 17m jobs could be generated globally by 2030 through similar investment now-effectively doubling that work force.
Additionally, IRENA have calculated that this model could yield a global GDP gain of approximately $98tn by 2050, returning in the range of $3 to $8 on every dollar spent.
“Things have changed markedly since the last global economic downturn a decade ago – renewables are now cheaper than the alternatives”
Richard Black, director of the Energy and Climate Intelligence Unit
The global picture shows many benefits to leveraging COVID-19 for the purposes of green transition however these gains are logistical as well as financial. As Fatih Birol, head of the IEA, implied, renewables have also proven far more resilient during this crisis:
“Only renewables are holding up during the previously unheard-of slump in electricity use…”
Fatih Birol, head of the IEA
Upon this rock
The responsibility now falls to the UK government to create and enact policies that reflect its commitment to carbon neutral and to an economy for the future instead of simply offering life support to fossil fuels.
Despite not presenting a comprehensive strategy, the prime minister did comment on the UK’s green trajectory while responding to questions after the announcement. Johnson declared the UK’s resolve in meeting net zero by 2050, pandemic or not, saying “…we know we can do it”.
Although COP26, this year’s proposed Glasgow climate talks, are unlikely to go ahead, the UK is still considered a global leader in the fight against climate change, however actions taken now will dictate the fortitude of both our economy and reputation in years to come:
“The UK now finds itself in a unique position to ramp-up climate action at home and supercharge the international response to climate change abroad…”
Baroness Brown of Cambridge,CCC Adaptation Committee chair
Thankfully, while the costs of climate inaction are all too apparent, the benefits of a green transition are more and more becoming a matter of consensus, as Richard George of Greenpeace UK states:
“…200 top economists told us that transitioning to a low-carbon economy was the most effective form of economic stimulus… Now the UK government’s climate advisors have reinforced that message… the debate is over.”
The question then becomes how individuals and businesses can contribute to, and take advantage of, this new green trajectory?
No doubt new legislation will be introduced to further incentivise greener business practices, and the Energy Transitions Commission (ETC) has made suggestions along those lines in a strategic document.
One such suggestion is that the second wave of financial support to UK businesses be conditional on their commitment to climate-friendly policy and practices.
Leveraging the pandemic in order to pressure businesses into adopting sustainable practices may seem extreme however it is in order to prevent a much greater catastrophe and as such might be viewed as both timely and reasonable.
That being said, legislation and compliance will likely become the government’s major tools in achieving carbon neutral within the industrial and commercial sectors. As such, the value of compliance becomes even more pronounced, particularly given the need to reduce costs during and after a period of low income.
Carbon management then, becomes a vital priority as businesses and management professionals try to anticipate and navigate this possible transition. Not unlike the lockdown itself, social responsibility and personal accountability are at the heart of Carbon management and EIC will develop a bespoke plan for your business that reflects that.
Combined with in-house compliance and IoT empowered facility management services, EIC can integrate many of the elements of your carbon strategy into a single cohesive framework for the benefit of your shareholders, team members and clients.