The novel coronavirus crisis delivered a small respite to toasty little planet Earth. COVID-19 quarantines reduced greenhouse gas emissions by double-digit rates in April and the International Energy Agency expects industrial emissions to fall by 8 per cent this year, compared with 2019.
Declining emissions – and breathable urban air – might be the sole bit of good news to come out of the coronavirus crisis. The bad news for the environment is that the emissions downturn will not last as economies lurch back to life.
The really bad news is that the “green recovery” touted by some governments is already looking like a lot of hot air. Only tiny amounts of the trillions of dollars, euros, pounds and yen devoted to the revival will be spent on the transformation to low-carbon and zero-carbon economies.
The priority is restoring employment in a hurry – all the better to win elections – not decarbonizing the way we live and create wealth. “I suspect an awful lot of the environmental agenda and targets will be put on the back burner for a number of years,” Michael O’Leary, chief executive of Ryanair, Europe’s biggest discount airline, said last month.
He may be right.
On May 30, Germany opened the enormous, €1-billion ($1.5-billion) Datteln 4 coal-fired power plant in North Rhine-Westphalia, even though Chancellor Angela Merkel had vowed last year to close all of the country’s 84 coal-fired plants by 2038. Datteln sneaked in under the wire, revealing the power of the coal lobby has barely waned. In a tweet, Greta Thunberg called the plant’s opening “a shameful day for Europe.”
Meanwhile, China is building coal-fired generating plants with abandon even though the country, with waning economic growth rates and a robust renewable-energy industry, doesn’t really need them. Local governments appear to be using their construction as employment projects.
In the United States, President Donald Trump is busy gutting the Environmental Protection Agency. Last week, he used executive orders to waive the environmental reviews of infrastructure projects as he tries to jump-start construction.
Some governments are attaching green or greenish conditions to their stimulus and bailout packages. No industry has suffered as much as airlines during the pandemic, and almost every carrier has begged for handouts. The French government is giving Air France-KLM a €7-billion ($10.5-billion) package of loans and loan guarantees on the condition that it halves emissions from domestic flights over the next four years, meaning it will end routes that compete with high-speed electric trains.
But the Air France bailout seems to be the exception that proves the rule. Germany’s Lufthansa shook down the government for even more loot than Air France, but the bailout sadly came with no emissions restrictions.
Bloomberg New Energy Finance reported that most government stimulus spending around the world will be used to prop up high-carbon-intensity industries, with relatively small amounts devoted to renewable energy. Over all, the notion of helping dirty companies to clean up their acts so countries can meet their emissions targets under the 2016 Paris agreement has gained little traction.
Any economic transformation comes with political risk, and the virus crisis is a case in point. The effort is focused on returning economies to “normal,” not to reinventing them. But there is a way to accelerate the green agenda without triggering spasms of fear among politicians, at least in the Western world: Ease off the subsidies for fossil fuels and put new taxes on their consumption.
Prices for oil, natural gas and liquefied national gas were falling even before COVID-19 flattened economies. In spite of the recent price rally, oil, at about US$40 a barrel, is still down 35 per cent over the past year and trades at half of its 2018 peak. Last week, the IEA called the low prices a “golden opportunity” to get rid of fuel subsidies, which are forecast to cost governments US$180-billion this year.
At the same time, the low prices make it easier to lift carbon taxes. A Project Syndicate article published by the Brookings Institution said a tax of US$200 per metric tonne of carbon emissions would result in a 50-cent rise per gallon in the price of gasoline, taking it to about US$2.30. Historically, that’s still cheap. In 2014, gas reached US$3.70 a gallon and it was higher still in 2008.
The new carbon taxes would encourage consumers to cut their emissions by, for instance, purchasing smaller cars or zero-emissions cars. Higher carbon prices would also accelerate the trend toward renewable energy, creating green economy jobs. At the same time, the extra tax revenue would help governments reduce the enormous debts taken on to finance their stimulus packages.
In time, the COVID-19 pandemic will go away, as all pandemics do. When it does, we will still have a warming planet. Why make the climate problem worse by not using the virus crisis to reduce our collective carbon footprint?
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