The coronavirus crisis will likely lead to the largest ever decline of global carbon emissions on record, according to research from Goldman Sachs, illuminating the potential for a long-term low carbon recovery.

The coronavirus crisis means we may have already reached peak carbon- oil and gas 360

Source: CNBC

The Covid-19 outbreak has meant countries around the world have effectively had to shut down, with many governments imposing draconian restrictions on the daily lives of billions of people. To date, confinement measures have been implemented in 187 countries or territories in an effort to try to slow the spread of the pandemic.

A side-effect of these measures, which vary in their application worldwide but broadly include school closures, bans on public gatherings and social distancing, has been a dramatic fall in the level of global carbon emissions.

Analysts at Goldman Sachs said in a research note that they expect energy-related carbon emissions (which account for two-thirds of total greenhouse gas emissions) to fall by at least 5.4% this year alone.

To be sure, that’s roughly five times that of previous crises, with the potential for “much larger” declines depending on the length of disruption to the transportation sector and industrial activity.

‘This time could be different’

“Energy-related emissions have always rebounded post crisis,” analysts at Goldman Sachs said, citing data which showed carbon intensity improvements in the year after every major crisis since the 1970s.

“This time could be different as we have potentially already reached peak energy-related carbon,” they added.

Total global greenhouse gas emissions were estimated to peak around 2030, according to the Intergovernmental Panel on Climate Change’s most aggressive current policy estimates.

However, research from the IEA published in early February found global energy-related carbon emissions had already started to flatten, potentially leading to a peak in global greenhouse gas emissions a decade early.

The IEA’s Executive Director Fatih Birol has since argued that progress made in transitioning the energy production mix could mark 2019 through to 2020 as the definitive year for peak energy-related carbon emissions.

“A significant effort will be needed to ensure that global greenhouse gas emissions don’t just peak but decline rapidly in order to meet climate ambitions,” analysts at Goldman Sachs said.

Why might China’s response to this crisis be so critical?

“This crisis has demonstrated our vulnerability as a world to global threats,” Bob Ward, a director at the Grantham Research Institute on Climate Change at the London School of Economics, told CNBC via telephone.

“Climate change is a massive global threat that will still be there after we have overcome this pandemic and we will need to be working very hard to avoid that becoming something that undermines lives and livelihoods,” Ward continued.

If China, the world’s largest emitter of carbon emissions, chooses to recover from this crisis “by relying on coal and other fossil fuels then its emissions will go up next year and maybe for many subsequent years.”

“But, also, it will set an example to other developing countries that that’s an acceptable way — and that might be even more damaging,” he added.

Climate scientists have said it is important to recognize the climate emergency, much like the coronavirus pandemic, as a global health crisis.

Stringent measures to curb the pandemic’s spread has coincided with a significant improvement of air quality in many cities across the globe. In fact, in Europe, the effects are visible from space.

The European Space Agency, citing data from the European Union Copernicus program, said Thursday that some cities in the region had recorded a massive decline in nitrogen dioxide concentration levels in recent weeks.

From March 13 through to April 13, the ESA said that compared to the same period the previous year, Madrid, Milan and Rome had all reported decreases of nitrogen dioxide concentrations of around 45%. Paris, meanwhile, saw a “dramatic” drop of 54%.

“I think we have been given a window, out of a very tragic situation, to look at a reset in a way that we did not think possible three months ago,” Gail Whiteman, director of the Pentland Centre for Sustainability in Business at Lancaster University, told CNBC via telephone.

“Peak carbon isn’t a dream. It is not a utopian vision. It can happen but there will be pushback, there is no question,” she added.

The LSE’s Ward said it was important to understand that confinement measures should not be viewed as a template for how world leaders should address the climate emergency, given the outbreak was also causing economic havoc.

“The way in which we have tackle to climate change is to continue to improve living standards around the world while reducing emissions by cutting the link between economic growth and pollution.”

“I think the absolutely critical element here is governments must understand that if they rebuild in a high carbon way then all they are doing is locking in the risks of climate change in the future, making us more vulnerable and exposed,” he concluded.




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