Who will be the Pfizer of climate change?
What are the lessons of the Covid 19 pandemic for the energy sector and for all those from Governments to energy users facing the risks and uncertainties of climate change?
- Sense of urgency – crisis is happening now and need immediate response
- Need for state intervention – pushing changes in individual behaviour
- Difference in interests between China and the West
- Will the energy sector adapt as quickly as the health sector?
At first sight the pandemic and the prospect of a destabilised climate are completely different – one a medical emergency, the other a series of changes in the atmospheric conditions which determine the patterns of the world’s weather. Both, however, are global phenomena requiring global solutions. What—if anything—can our experience of the first over the last 18 months tell us about how to approach the second?
Treated as distant issues
Perhaps the first lesson is that risk management requires immediate flexibility in the face of the unexpected. Pandemics and climate change have long been concerns but have largely been treated as distant issues for the medium- and long-term future. Pandemics have been on the list of risks drawn up by scientists and government planners for several decades but, once noted, have been sidelined. Few—if any—real preparations were put in place after the UK government’s desk exercise in 2016, nor after comparable exercises in the United States and elsewhere. The climate debate has focused on what might happen in 2050 if we fail to move away from a carbon-based economy. The last 18 months have demonstrated that the crises are occurring now and require immediate responses. As the residents of the flooded states in Germany or those suffering from wildfires in Oregon or the heatwave in Canada can tell you, climate change is not a problem which will will emerge gradually over three decades. It is as immediate a challenge as the waves of Covid and its variants which continue to spread across the world.
States pushing changes
The second key lesson is that both crises impose new demands on governments already overstretched and ill prepared. Covid has required lockdowns and detailed control of social interaction, from enforced distancing to the wearing of masks to the restriction of travel and free movement—measures alien to most governments. Climate change will require even greater state intervention: pushing changes in individual behaviour, forcing individuals and businesses to transform their homes and factories and raising the money through charges or taxation to pay for vast amounts of new infrastructure. Governments weakened by decades of low taxation and a preference for private over public provision will have to be rebuilt.
National governments at least exist. Global government is non-existent. Covid has shown up the reluctance of nation states to cooperate even in the direst circumstances. Information was not shared by the Chinese in the early days of the crisis. Vaccines have not been shared to any significant degree, with the result that the latest Covid variants are surging through Africa and parts of Asia. Something similar is happening on climate change. The European Union, usually one of the most enlightened forces in the global climate debate, has adopted a policy of tariffs to protect European business and jobs from energy-intensive imports from countries whose poverty has held back the transformation to a low-carbon economy. Instead of investment in the modernisation of India and other such countries, Europe will impose a Carbon Border Adjustment Mechanism. If carried through—a big “if” given the complexity of the proposal, as spelt out in a 291-page document published by the European Commission last month—Europe will be able to reduce the 10 per cent of global emissions it currently produces without losing jobs while India and others will be poorer and less able to invest in the necessary move away from coal. The result will be a clean Europe in a dirty world—an outcome which will do nothing for climate security.
China and the West
Equally unproductive in solving either problem is the continuing conflict between China and the rest of the world. The Chinese leadership continues to cling to its approach of secrecy and denial. On Covid its treatment of the doctors and scientists who wanted to tell the world the truth was shocking, as detailed in a new book by Jeremy Farrar the head of the Wellcome Trust one of the world’s great medical charities. On climate, President Xi and his successors must see that global warming will impose desertification across the Gobi Desert and other parts of Western China and water shortages throughout the country. The consequent migration to the cities of the Eastern seaboard will have an impact far exceeding any migration yet seen in Europe. The Chinese climate is already changing. According to a paper published at the beginning of August by the Chinese Meterological Administration the average temperature across China has risen by an average of 0.26 degrees centigrade per decade since 1950 – a figure significantly higher than the global average of 0.15 degrees per decade. Equally, the developed world should see that its climate security depends on cooperation with a country which now produces almost 30 per cent of daily global emissions. Few things are more important in the complex world of climate diplomacy than a prudent rapprochement between China and the West.
Health sector has adapted – so must the energy sector
One of the hardest lessons of the last year is that neither Covid nor climate change will go away. With good policies and cooperation, both can be managed and perhaps contained. But Covid variants are likely to continue to spread especially in areas with weak health systems—most of Africa, Latin America and South Asia. In a world of global trade and travel, the disease will continue to reach Europe and the United States. Even the best vaccination systems will struggle to keep pace with the challenge of new variants. Similarly, some of the worst effects of climate change could be averted, but the process of disruption to the global climate has already begun and the build-up of emissions in the atmosphere will continue to have unpredictable impacts on temperature and weather conditions into the future. Some problems simply cannot be “solved” in a definitive way. To talk of adaptation can sound like defeatism—but for climate change as for Covid it begins to look like an essential part of strategy for survival.
The great hope, of course, is science and technology. Vaccines are beginning to protect the developed world from Covid. Over time, vaccination can become commonplace. Science has reduced many health risks over the last century. Covid-19 is just the latest challenge. Science can also provide the answers to climate change, given the resources. That will require the development of low-cost, low-carbon sources of energy capable of transcending all national boundaries, and capable of sweeping away low-cost but high-carbon sources such as coal on economic grounds alone.
Just as the health sector has adapted and responded to Covid so too now must the energy sector. Business exists as a function of society – organised to meet human needs through the application of skills and resources, solving problems and expanding the range of what is possible. For many the energy sector is seen as part of the problem when it comes to climate change. That perception has to be changed if the sector is to avoid pariah status.
The changes involved will be disruptive breaking down old business models and forcing asset revaluations. For those who take on the challenge, however, there is a great prize to be won both in terms of a vast global market and of reputation and public confidence. The competition for that prize is open. We do not yet know who the Pfizer of climate change will be.