Covid and the climate emergency

by John Quiggin on November 23, 2020

(Another extract from the climate chapter of my book-in-progress, Economic Consequences of the Pandemic)

The Covid-19 pandemic has accelerated a variety of social and economic trends, some beneficial and some harmful, that were already underway before 2020.

An important example of a beneficial effect has been an acceleration of the decline of carbon-based fuels. Lockdowns early in the pandemic produced a substantial reduction in demand for both electricity and transport. As well as providing a brief glimpse of a world with greatly reduced atmospheric pollution, the lockdown accelerated shifts in the energy mix that were already underway.

Since solar PV and wind plants cost nothing to operate, the reduction in electricity demand fell most severely on carbon-based fuels, particularly coal. As a result, the combined contribution of PV, wind and hydroelectricity to US energy generation surpassed that of coal for the first time in 130 years.

Official projections from the EIA suggest that coal use will return to its gradually declining trend in the wake of the pandemic, exceeding renewables for some years to come. However, the pace at which coal plants are being closed or converted to run on gas has accelerated during pandemic. Meanwhile, despite weak demand, wind and PV plants are being installed at a record pace, partly because near-zero interest rates make capital investments cheaper.

The reduction in transport usage reduced demand for oil, at one point leading to a startling situation where the price of oil was negative, as unsold oil exceed the capacity for storage. Although the price has recovered somewhat, it seems unlikely that transport demand will return to its previous trend.

At the same time, there has been continued progress, both technological and political, in the electrification of transport. British Prime Minister Boris Johnson recently announced that the sale of petrol and diesel cars would be prohibited after 2030, an advance on previous commitments. The decline in long-term interest rates also enhances the economic position of electric vehicles, which have higher upfront costs and lower operating and maintenance costs than petrol and diesel vehicles. https://www.prnewswire.com/news-releases/auto-loan-interest-rates-drop-in-may-to-lowest-level-since-2013-according-to-edmunds-301069143.html

Not all energy-related developments associated with Covid have been positive. The convenience and cheapness of online taxi platforms like Uber and Lyft has reduced use of public transport in many cities. The pandemic, with the need to avoid crowded spaces like buses and subway cars has exacerbated this trend. And, while the option of working remotely reduces the need for travel, it has encouraged a more dispersed workforce with less need to commute to the central city locations best served by public transport.

{ 18 comments }

1

bad Jim 11.23.20 at 9:57 am

The example of east Asian countries suggests that, with universal masking, the risk of travel by mass transit is slight. However, those countries are have nearly negligible levels of community spread of infection, which renders any assessment less than conclusive.

It’s clear by now that temperature screening is merely security theater. (I enjoy it; it lets me say “I’m cool”.) Performative santization may also be likewise unuseful; the evidence that this thing is spread by hands is nearly negligible, which is not to say that hand hygiene is not important; we’re beset by pathogens on all sides.

There’s every reason to think that the risk is manageable if everyone is masked, which is to say the coming winter is going to be horrific.

2

Plucky Underdog 11.23.20 at 12:14 pm

3

Plucky Underdog 11.23.20 at 12:18 pm

An important example of a beneficial effect has been an acceleration of the decline of carbon-based fuels

The atmosphere would beg leave to disagree

Disheartening, I know, but it would be interesting (albeit time-consuming) to get some stats on this year’s cancellations of coal-fired generation capacity adds. Maybe 2020 will be an inflection point.

4

DCA 11.23.20 at 2:24 pm

I think “cost nothing to operate” should be quantified, since maintenance costs remain. I’m sure these are much below fuel costs for a coal plant, and maybe so much less that they can be neglected, but still: windmills have a lot of moving parts.

A knockon effect with coal is the emissions needed to get it out of the ground and from pithead to boiler.

The auto loans for my last two purchases were both 0% APR (one last summer, one 2013).

5

Omega Centauri 11.23.20 at 5:09 pm

I see too many egregiously wasteful practices, such as the heating of outdoor spaces increasing. Increased indoor ventilation also leads to increased heating demand. Like the decrease in use of mass transit, these practices are likely to at least partially continue after the pandemic reasons for implementing them are over.
Then we will have the many economic losers from the pandemic. Will short-term relief, such as bailing out failing fossil fuel based industries, including airlines as well as oil drillers and so on dominate the recovery period? Or will be able to instead aggressively invest in climate friendly solutions which don’t automatically promise good jobs for the newly dispossessed?

6

d 11.23.20 at 10:59 pm

Reduction in pollution reminded me of what a Tokyo tour guide told while there in 1967. The Fire Bombing of Tokyo made it possible to see Mt Fuji for the first time in decades.

7

notGoodenough 11.24.20 at 8:41 am

Again, due to workload I can offer tea-break thoughts only, so I´m afraid these will be a bit handwavey:

DCA @ 4

The economics are, I´m afraid, a little out of my scope, but perhaps Lazard´s Levelized Cost of Energy [1] might be interesting? I don´t know enough to know how reliable such estimations are, but if there are significant criticisms levelled at these numbers I´ve missed them. Regardless, hopefully this is interesting reading.

Omega Centauri @ 5

“Will short-term relief, such as bailing out failing fossil fuel based industries, including airlines as well as oil drillers and so on dominate the recovery period? Or will be able to instead aggressively invest in climate friendly solutions which don’t automatically promise good jobs for the newly dispossessed?”

These are interesting questions, but I take (slight) issue with the second which seems to suggest that climate friendly solutions cannot promise good jobs for the newly dispossessed in the same way other recovery investment can. While perhaps this is arguing against a point you are not actually making, I would like to note that it appears plausible that climate-friendly investment could easily be linked to good jobs, and I it does not seem axiomatic to me that it is any less able than any other form of countercyclical spending (at the minimum, in comparison to those alternatives you listed).

Vermont, perhaps, provides an interesting case study[2], where workers in the clean energy sector are (supposedly) at a premium and ca. 16% of the workforce are in related jobs (as of pre-COVID data) which seem to be (by US standards) reasonably “good”. Given that one of the big limiting factors has been the lack of workers skilled in relevant areas, it would seem to suggest that if (as many proposed plans are purported to do) some minor investment in in training and education was undertaken[3] then plausibly this would be a good way of supporting both the green industry and help people transition into new sectors of employment

While I don´t have the time to fully expand in this brief thought, I just wanted to note that it seems – at least to me – that investment in clean energy seems to be a pretty good way of spending money (in the sense of actual infrastructure investment) and creating jobs in the process. If you disagree, perhaps you can elaborate? I would genuinely be interested to hear more on this topic.

[1] https://www.lazard.com/perspective/levelized-cost-of-energy-and-levelized-cost-of-storage-2020/
[2] https://publicservice.vermont.gov/sites/dps/files/documents/Renewable_Energy/CEDF/Reports/VCEIR%202019%20Final%20Signed.pdf
[3] Personally I am in favour of free education for everyone regardless, but given the practicalities it is likely such investment will end up specific to jobs in this area.

8

Omega Centauri 11.24.20 at 4:00 pm

notGoodenough
I agree that the clean energy jobs could substitute for the fossil energy jobs. But the issue is convincing those with fossil careers, that they will be the ones benefiting from the new jobs. I thinks thats a PR heavy-lift. Particularly when the fossil interests and rightwing propaganda are telling them otherwise. Of course there is angst over whether one will be up to the challenges of the new career -he was just getting comfortable with the old one. Change is scary for most people, because there is always uncertainty over how will one will fit into the new reality. Especially when your special skills that you worked so hard to master, no longer are valued.

9

Omega Centauri 11.24.20 at 6:05 pm

10

notGoodenough 11.25.20 at 9:37 am

Omega Centauri @ 8

Thanks for the reply, and for the article. I agree that convincing people can often be quite tricky. One thought is that if renewable jobs are formulated so as to have better working conditions (whether that be salary, holiday, health care in the countries which don´t offer that as standard, etc.) then those jobs will surely become more desirable. As I noted in a thread a while ago, we could do with both social and technological approaches. While some people are going to be pretty intractable no matter what, I suspect that if the opportunity to qualify for “good” jobs (which are more secure and with better benefits than those they are currently in) is offered for free (with those qualifications gained involving transferable skills) then people will be attracted to those jobs…

It does depend a little on what you have in mind in terms of “fossil energy jobs”. A coal miner offered a job with better conditions, more secure benefits, etc. might be more open to the idea than an oil-drilling specialist on >100K a year!

One of the things which concerns me is the way a lot of clean-energy has basically been left in the hands of the Silicon Valley tech bro culture – which is not typically known for its overly thoughtful approach. One suspects that if the money being raised for stimuli is spent sensibly, it could lead to the establishment of better working conditions in general – raising not only the welfare of the general populace, but also helping the economy. One also suspects that the chances of this actually happening – particularly if we don´t keep our “eyes on the ball” – are maybe not so high. Having said that, many of the blah-blah around green-new-deal-type-proposals includes these sorts of ideas – of course, talk is cheap, but perhaps there is some hope there…

But then again, I don´t really understand most people or their motivations, so I am probably not the best person to offer opinions regarding optics – though I think optics backed by action is more convincing than just optics by itself (i.e. it is harder to convince people through propaganda that X is bad if they can see it isn´t – not impossible, but harder).

Rushing again, so possibly not the best observations, but hopefully it is clear-ish enough to get the idea!

11

Omega Centauri 11.25.20 at 7:35 pm

Fossil fuel related jobs go well beyond extraction. Diesel mechanic, or automotive mechanic are dependent upon the current fossil fuel economy, although the engines will stay in service for a decade or more after they are no longer made. Petroleum engineer. The people who design and manufacture drilling equipment. The auto dealership network depends heavily upon service fees, but these will be dramatically impacted by EVs which need little maintenance.

Of course there are many secondary jobs related to renewables, and their buildout. Electricians will be needed to install solar systems and vehicle charging infrastructure are a few obvious ones. The PR job convincing the masses in the working class will be difficult though.

12

mike_h 11.25.20 at 9:15 pm

Once again, thanks for sharing these excerpts, JQ; it’s an interesting and illuminating excercise for me, at the very, very least.
I’ve looked at the interesting, informative, comments at your “other home” and a couple of folk have already made similar points. So what follows (an omnibus comment) is probably redundant.
Here goes. The one thing that really presents itself, in my reading of your posts, is that climate change (covid being, currently, an almost coterminous event) is, uncontroversially, a public health issue then that, addressed as it is in your posts, it nonetheless needs greater emphasis as a focal point in these chapters?
Death Valley/Siberian temps, and such events, are dramatic indicators of CC and with very real, potentially horrible, consequences. But, equally so (as one example) does effects of heat on human health/mortality; having affects, impacts on economies globally in all sorts of ways (i.e. not just in food production). <¡>PLOS Medicine and Lancet Planetary Health appear to have some interesting papers/correspondence on this. (If relevant to you, of course).
And. I take the point made elsewhere about too much cold. But, the general point has been made previously, and seems to slip from view, that minima are on the rise and it’s what ensues from that, that we might need to remind ourselves about.
Public Transport? Uber and Lyft might be a thing for some (potentially well-heeled) folk but others need public transport regardless. It’s no secret that PT has been under attack by governments of certain persausions for a long time. South Australia had a go recently. Oddly, young SA Transport Minister Thingo allegedly had trouble dealing with his work expenses. Poor sausage. Good at making PT “efficient” though! Northern Adelaide was made very “efficient” (this occurred in pre-covid times). There’s been a lot of “efficiency” that’s been on offer in ex-Holden-land! The exercise in “reducing emissions” (closing the car factory) helped by the Feds running off at their collective mouths, hasn’t done much for the local community. (I did have direct experience of the impacts of these things for folk in this area: when I retired I supported a person with disability who lived there).
But. Unsurprisingly. The community did recently have a covid outbreak. Possibly something to do with the scourge of precarious work?
(I suspect though, despite these blatherings, your book is directed somewhat towards the USian market?)
And. Sheeting this stuff home to the usual “non-alarmed” suspects? Naomi Oreskes (and collaborators) seems to be worth a mention somewhere? Or. Is she too controversial?
I recently read Lewis Lapham’s essay on Literary Hub: ‘The Rise of the Stupified Plutocrat’, which I understand is his new foreword to his funny, caustic, book ‘Money and Class in America’ (The Equestrian Classes, and their mimics, are, seemingly, ubiquitous, in our so-called post-industrial times). I can’t help but think he nails all this down very clearly: it’s the old story, but new version, of the political economy of “maintenance of the lifestyles” of some segments of our societies,including the aspring tiers of middle classes that’s potentially driving our current situation.
Covid has made this abundantly clear; the volume of grief/nostalgia/denial/whatever, related to “my life and ways-of-being in pre-covid times” has been illuminating. (Too harsh? The virus might have started in a gruesome market in China, but it was carried, unknowingly, by well- and moderately well-heeled travellers. Self-reflection? Much needed?).
But, then, some things don’t, won’t, change much at all: quite a number of folk, were already living, emphatically non-well-heeled, restricted lives in “pre-covid times”. Sadly, they will carry on doing so, if current indications are any guide.
It’s an old, old, tiresome, sad, grim, story, with a shiny new gloss. As old friends used to say: ‘it’s a mudguard situaion, mate: shiny on top, very shitty underneath’.

Enough already from me.

13

Kiwanda 11.25.20 at 10:46 pm

Omega Centauri:

I agree that the clean energy jobs could substitute for the fossil energy jobs. But the issue is convincing those with fossil careers, that they will be the ones benefiting from the new jobs.

It may help that the skills needed to drill for oil and gas might carry over to drilling for geothermal district-wide systems for heating buildings, and for generating electricity.

notGoodenough:

One of the things which concerns me is the way a lot of clean-energy has basically been left in the hands of the Silicon Valley tech bro culture – which is not typically known for its overly thoughtful approach.

Oh, for Pete’s sake. I wonder about the 25% or so of techdudebros from India, and the 25% or so from east Asia. How do they, and all those nerdy, grinding, math/CS majors you knew in college, manage to transform themselves into swaggering, shoot-from-the-hip, macho, testosterone-poisoned techdudebrohim once they hit the Valley?

14

Kiwanda 11.26.20 at 1:15 am

(Yes, I am sure there are plenty of macho, swaggering, shoot-from-the-hip, testosterone-poisoned men in/from India and China, and in all the world. The men who study their asses off and come to the U.S. for tech jobs, not so much. And “tech bros” are native-born white Americans, after all, right? We all know dozens, I’m sure.)

15

notGoodenough 11.26.20 at 8:53 am

Kiwanda @ 13 and 14

“and “tech bros” are native-born white Americans, after all, right?”

Given that I made no mention of race or ethnicity in this thread until this very second, I am baffled that you would think this is at all a relevant comment (let alone, as you appear to imply, that this is my position). It is especially odd, given you did the same thing on a previous CT thread [1] where you seem to get very exercised and convinced people are discussing these things when they have made no mention of these topics at all.

Since you ask, as far as I can tell the toxic behaviours I associate with tech bro culture (which can include, but are not necessarily limited to, one or more of: anti-union behaviour, indifference or contempt for the well-being of others and those working under one, an in-built assumption that technological solutions are the answer to everything, a certain degree of macho obnoxiousness/toxicity, prioritising “success” over respect for others, introducing superficial improvements to the workplace while ignoring important ones, a general lack of concern with the overall well-being of the world, etc.) are not limited to any particular race or ethnicity.

And, as you appear to be highly confused regarding this, allow me to clarify. For example, I would not worry about much of renewable energy storage being in the hands of Elon Musk because he is a white American (particularly given his South African and Canadian citizenships seem to predate his American citizenship), I would worry because Tesla appears [2] to encourage anti-union behaviour and bad workplace conditions. Given my comments were about “how to ensure the jobs in renewables are attractive”, I would hope it seems somewhat obvious that such an approach would seem to run counter to a corporate culture which does not appear to overly value its employees.

“Oh, for Pete’s sake. I wonder about the 25% or so of techdudebros from India, and the 25% or so from east Asia. How do they, and all those nerdy, grinding, math/CS majors you knew in college, manage to transform themselves into swaggering, shoot-from-the-hip, macho, testosterone-poisoned techdudebrohim once they hit the Valley?”

As I am not a social scientist, I have no idea if this happens or – assuming it does – why. Given that, again, I have made no discussion regarding race or ethnicity, and have only pointed to a corporate culture which appears to value little the well-being of its employees, I see no reason why you would ask this question – it is, like the rest of your comment addressed to me, pretty irrelevant.

If I had to make a guess (and it would be purely a guess) about how people in general become toxic, I would imagine a good place to start would be to see if the culture in which one is immersed encourages or even promotes such attitudes. If, for example, the workplace does not punish inappropriate behaviour, and there are few effective routes for people in positions of little power to seek redress, it seems quite likely that inappropriate behaviour will occur. And, again (purely for example), if the people in positions of authority have no issue with such behaviour – or, potentially, even encourage it – then perhaps that might be another point to consider.

However, as I have noted, I am not well-suited to answer this question. Perhaps, rather than getting quite so aggressive when people make comments regarding the anti-worker nature of corporations, you could spend time looking into this yourself since it appears to interest you so greatly?

Final remark

I have no idea why you seem so acutely sensitive to the relatively unremarkable observation that corporate culture can be abusive (particularly in cases where there is little oversight or work-force protection). I am also confused as to why you keep trying to divert the topic into other issues when they haven´t been raised. Perhaps, rather than doing so, your efforts might be better spent if they actually relate to what people have actually said? Just a suggestion.

For example, as I said in my comment, this is a “concern”, not a demand for action regarding something I hold to be absolutely true. One could, were one interested, easily assuage my concern by demonstrating that this isn´t an issue – and that would, I feel, be more productive than diverting the conversation into things I haven´t even raised and which don´t appear to be relevant at all.

As I have noted, I am rather busy at this present moment, and so do not have much time to indulge myself by commenting on topics of interest to me. I would ask that you bear that in mind, and perhaps – should you wish to continue discourse with me – restrain yourself to things I did actually say.

[1] https://crookedtimber.org/2020/09/23/story-ate-the-world-im-biting-back/#comment-805234
[2] It is, of course, entirely possible I am misjudging this – maybe the workplace is amazing, understanding, and deeply invested in the well-being of the workforce, and the apparent stories regarding anti-union practices [a] and disregard for workplace safety [b] are misunderstandings or have nothing to do with the corporate culture there.

[a] https://www.theverge.com/2019/9/27/20887897/tesla-elon-musk-tweets-union-nlrb-illegal

[b] https://www.forbes.com/sites/alanohnsman/2019/03/01/tesla-safety-violations-dwarf-big-us-auto-plants-in-aftermath-of-musks-model-3-push/?sh=7b496ea054ce

16

reason 11.26.20 at 11:53 am

Omega Centuri @11
These sort of thoughts are why I don’t think you pull of a green transition without a UBI. The problem is simply that specialization means there is always a strong vested interest against change of any sort. While people’s survival depends on them selling their specialized labour, given that losses are felt more acutely than gains, massive change becomes politically impossible. So you need to reduce that bind and enable people to survive without selling their labour (at least now).

17

Omega Centauri 11.27.20 at 12:57 am

Given the US electorate, a UBI is not in the cards in the timeframe needed for climate change.

18

nastywoman 11.27.20 at 6:44 am

”The Covid-19 pandemic has accelerated a variety of social and economic trends, some beneficial and some harmful, that were already underway before 2020”.

and still the utmost revolutionary trend is the radical change of any economy which was – or is depended on ”Service” – like two of three restaurants in Paris or NY which won’t make it – to the destruction of nearly the entire tourism industry – which was/is mainly responsible for ”the decline of carbon-based fuels and a substantial reduction in demand for both electricity and transport.

So – the New Social Distant World actually – accelerated shifts in the energy mix that were already underway.

And wouldn’t it be interesting also for economists to finally focus on the ”variety of social and economic trends” – ”the people” experience every day in this ”New Life” and weigh the ”beneficial and some harmful” consequences more… may I say:

”Like the owners of my favourite restaurants”?

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