Will COVID-19 boost or block carbon reduction ambitions?

Earlier in the year, societal pressure to address the climate emergency had never been higher. Ignited by movements such as the School Strike for Climate and Extinction Rebellion, this was meant to be the start of a decisive decade, one that would put us on a path to balancing our carbon emissions - to being a “net zero” carbon society - by 2050. Instead, 2020 will be remembered as the year that COVID-19 took hold. 

For many, net zero aspirations have been pushed down the agenda behind more pressing medical and economic considerations. Putting aside the immeasurable cost to human life, the economic fall-out of COVID-19 has been unparalleled: the International Monetary Fund is predicting a 4.9% drop in global growth this year. 

But, as the world readies itself for the next wave of the pandemic as we move towards the end of 2020, others see COVID-19 as a “once in a lifetime” opportunity to radically cut carbon dependency. The pandemic and resulting lockdowns of a third of the world’s population in the first half of the year led to some rapid – and enlightening – improvements in urban air quality and noise pollution, while biodiversity thrived in what was dubbed the “anthropause”. Above all, global daily carbon emissions during the period dropped significantly, down by almost a fifth. Within a matter of months, COVID-19 demonstrated the link between the environment and human health (and wealth), and that failure to protect the first risks jeopardizing the second. 

“This is the perfect opportunity to multi-solve and to address, concurrently, health issues, economic recovery, equality and our carbon reduction targets,” says Julia Langer, CEO of The Atmospheric Fund, which works to scale up low-carbon solutions in Toronto. The question is, will governments notice this apparent silver lining amid the storms circling their post-pandemic economies? And if not, can others step in to help ensure that the current crisis doesn’t just serve as a prelude to an even greater one?

There is a growing chorus of voices from across the social, political and commercial spectrum globally to ‘build back better’. Many governments are allocating unprecedented sums of money to revive economies, with an emphasis on lower-carbon outcomes and green-focused sectors. Germany, for example, earmarked €40bn in climate-related spend out of a total €130bn stimulus package. In Canada, government loans in support of big businesses are conditional on recipients publishing annual climate disclosure reports. More recently, the French government unveiled a €100bn COVID-19 plan, of which almost a third is intended for green investments. And China, the world’s biggest emitter and one which has failed to make any long-term goals until now, has just pledged to achieve carbon neutrality before 2060, with peak CO2 emissions before 2030. While announcing his country’s intentions to the UN General Assembly, President Xi Jinping called on all countries to focus on a “green recovery of the world economy in the post-COVID era”. He added that COVID-19 is an opportunity for humanity to trigger a “green revolution”.

Eliot Whittington, director at the University of Cambridge’s Institute for Sustainability Leadership, views such measures as simple logic. “The ‘build back better’ message captures the essential need to ensure that resources are not misspent on dying industries, but are instead invested in new approaches that have the potential to support thriving new industries while also providing better health and environmental outcomes.”

Of course, there were similar declarations of green intent following the 2008 global financial crisis, the majority of which turned out to be short-lived. But WSP UK director of sustainability, David Symons, feels that post-COVID the outlook is different. “After 2008, despite assertions from government and business to the contrary, green issues were very quickly dropped from the agenda; this time round the atmosphere in most markets is completely different. There’s a real desire to use the downside from COVID-19 as an upside to drive fundamental change.”

Charles Haine, technical director, environmental at WSP in the UK, describes our current predicament as a “Ctrl-Alt-Delete” moment: “I've never seen a push like it. There is a hugely diverse body of voices all demanding that we use COVID-19 as an opportunity to build back better and to lock in more renewable energy, circular-economy principles, quicker transitions to net zero emissions and less damage to nature. We know these are going to be differentiators as we work out how recovery is a catalyst for new business thinking and performance.”

But under immense social and political pressure to address the immediate hardship facing millions of people directly impacted by the pandemic, there will be a temptation to slip back into old habits. “There’s a real risk that in our hurry to make sure that sectors continue grinding out contracts and giving employment to people, we could miss unique opportunities for change,” warns Haine.

In New Zealand, a country that has emerged relatively unscathed from COVID-19, the government has identified a clutch of infrastructure projects for rapid implementation as part of its recovery plans. But are these “shovel-ready” projects “shovel-worthy”, asks Dr Rowan Dixon, principal specialist in sustainability and resilience at WSP in New Zealand. “They were imagined and designed under a prior paradigm – using business case processes that depend on pre-COVID assumptions. But will they deliver the broader outcomes and the carbon reduction potential we want? There’s a sense that, as these projects go ahead, a significant chunk of the next five to ten years of spending is locked in. Some of this spend is pretty broad and there's still some room to wiggle and set carbon performance targets within those decisions. But we must be careful not to miss key opportunities to rethink our built environment, to strive for a transformational shift to carbon-positive communities.”

The University of Cambridge’s Whittington suggests that, inevitably, while in the grip of the pandemic, initial crisis-related spending can be “hard to green”. Regardless, it’s essential, he argues, that we’re as focused as possible on ensuring recovery funds are aligned with climate, health and resilience goals. And this because “these kinds of investments are also the ones that deliver the best bang for your buck in terms of jobs created and economic return on the money spent.”

Obviously not all countries will heed this call. The resolve to achieve net zero varies enormously across geographies, with only a handful of governments having enshrined the 2050 net zero emissions target in law.

The fear is that this divergence will only be exacerbated by the COVID-19 crisis, says Elliott Cappell, climate change and resilience director at WSP in Canada. “In resilience, disasters or shocks are described as ‘accelerators’ – they make everything move faster in whichever direction they were going; they also act as a magnifying glass showing us the stresses and cracks in society or business. COVID-19 is a huge shock and it’s accelerating the trends.”

In other words, for those who were already committed to carbon reduction, COVID-19 could spur them forwards, while for others, now juggling competing priorities, their focus will be on patching up more immediate cracks and stresses.

However, even in jurisdictions where cutting emissions is not as high on the government agenda, COVID-19 could still be a catalyst for change, believes Kieran Power, national lead – resilience and climate change at WSP in Australia. “The strong drive to cut carbon emissions among state governments and the private sector is not currently matched at a Federal Government level [in Australia], but the pandemic gives those advocating for a national net zero approach a lever to change the discourse. Our extensive wind and solar resources represent a significant area of competitive advantage; a push to net zero could provide a means of economic recovery.”

The US also lacks ambition at federal level. That’s not to say however that individual states that had been focused on cutting emissions pre-pandemic – as exemplified by the #wearestillin movement following US withdrawal from the Paris Agreement – are less committed. “There is undoubtedly a notion of ‘build back better’ in states such as New York and California, but private entities will need to take an even larger role because state governments simply won’t have the money,” warns Michael Mondshine, director of sustainability, energy and climate change at WSP in the US.

A private-versus-public divergence is sharply evident in Brazil too. Sustainability ambitions following the 2016 Rio Olympics failed to translate into concrete actions, and the current government views environmental concerns as a barrier to growth, according to Paulo Mario Correia Araújo, president of WSP’s ECOLOGY Brasil. The government’s stance puts it at odds not only with some of its own agencies – not least the Institute of the Environment and Renewable Natural Resources (IBAMA) – but also with some of the country’s biggest brands. Even as Brazil battles the virus, mining giant Vale recently committed US$2bn to fund initiatives to help cut its carbon emissions by 33% by 2030, as part of its plan to be carbon neutral by 2050. Cosmetics firm Natura & Co is another company whose carbon resolve has strengthened rather than waned during the pandemic, becoming one of the founder signatories of the Transform to Net Zero forum (see below).

So where public ambition may be lacking, or distracted by COVID-19, the onus will increasingly fall on the private sector. But how much influence can brands and companies wield?

The Atmospheric Fund’s Langer feels that the corporate world has not quite moved beyond the “early adopters” stage. “Net zero or carbon-neutral targets are still largely the domain of early adopters who are the leaders and the thinkers; they’re doing the demonstrating and de-risking. But they’re reaching out to try to bring in some of their peers and build that momentum.”

The challenge now is to move from early adopters to “early majority”.

For some companies, the demographic of their end markets could prove critical to hardening their net zero credentials, says Mondshine. “The textile and apparel industry, which is heavily focused on youth dollars, is a perfect example of a sector that has been frozen due to Coronavirus, but once the pandemic passes or there is a vaccine, they will be very aggressive on the carbon front. Because if they are targeting the Millennials and Gen Zs, they’re going to have to have clear net zero statements to capture that market.”

But the timing of the launch of Transform to Net Zero – announced in July – suggests that a broader cross-sector consensus may be building irrespective of COVID-19. Founder members of the corporate initiative include AP Møller – Maersk, Danone, Mercedes-Benz, Microsoft, NIKE, Starbucks, Unilever and Wipro. Their stated aims include “to make net zero implementation possible and viable, becoming a new norm for all companies”.

There are many other examples of cross-sector initiatives announced in the midst of the pandemic. In May, a partnership of Danish firms from the aviation, logistics, shipping and energy sectors revealed plans to develop an industrial-scale sustainable fuels production facility in Copenhagen. The European Commission recently issued a hydrogen strategy “in support of the decarbonization of industry, transport, power generation and buildings across Europe”. Meanwhile Australia recently granted ‘major project status’ to the world’s largest solar energy farm which will power Singapore via a 2,400-mile undersea cable – evidence perhaps that attempts to “change the discourse” are already having an effect.

But if the pandemic has presented unexpected opportunities in tackling climate change, it has also underlined the scale of the challenge ahead. The latest data suggests that global carbon dioxide emissions are already rebounding to pre-COVID levels. And while the global lockdowns are predicted to cut global greenhouse gas emissions by 7.5% this year, even intervention on this unprecedented scale is insufficient in carbon terms. “We need 10% year on year for the next decade if we’re to hope to achieve net zero by 2050,” says Haine. “It’s evident that the enforced lockdowns are not going to solve that.”

Samantha Gross, director of energy security and climate initiative at US research group the Brookings Institution, points out that the drop in emissions stems only from “a precipitous drop in economic activity”. Home working and less business travel can only ever be a small part of the solution. “Lasting significant reductions in GHG emissions will require changes in our energy systems – more zero-carbon electricity, zero-carbon transportation systems, changes in industrial processes and our building stock.”

It is too soon to say whether the pandemic will decisively change the course of the climate crisis, but it has at least changed the debate and momentum appears to be growing. In Mondshine’s mind, there is one conclusion that can no longer be avoided: “There has long been an argument that it’s a choice between economics and the environment, but what we have learned in this pandemic is that if the environmental assets upon which we depend are not healthy then our economy is never going to work.”