Coronavirus may slow pace of decarbonisation, but will not derail it

The coronavirus pandemic is bringing economic downturn in its wake. That dive will deplete funds for decarbonisation. There is a solution that maintains the mission — albeit more slowly

AT the beginning of the year, the World Economic Forum released its Global Risks Report for 2020. The headline was that all the top five risks in terms of likelihood and three (arguably four) of the top five in terms of impact were environmental.

The last time the threat of pandemics was included in the top five lists was in 2008, when chronic disease also made an appearance in the likelihood list, and in 2007.

This is a catalogue of what keeps economists awake at night. It is meant to provoke stimulating discussion at the annual forum in Davos, Switzerland. It invariably does. Not surprisingly, the lists are swayed by recent experience: sabre-rattling among the big hitters in the economic world leads to “weapons of mass destruction” appearing high among the impact chart (highest threat in 2017, 2018 and 2019; second highest in 2016 and 2020).

So it was to be expected that extreme weather, biodiversity loss and environmental disasters both natural and human would be high in the lists for 2020. Four months on, the economists are struggling to tackle the gravest health crisis since the Spanish flu epidemic of 1918-19 and the gravest economic crisis since the Great Depression of the 1930s.

Consequently, the question being raised is whether the push for decarbonisation — in all forms of transport — that has followed so many extreme weather events and natural disasters has been derailed by the developing economic crisis that will follow the coronavirus outbreak.

The WEF report provides evidence to support its risk rankings. Infectious diseases are not very likely, but would have an impact matching cyber-attacks and human-made environmental disasters.

The reason for this, the organisation suggests, is that “changing societal, environmental, demographic and technological patterns threaten to undo the dramatic gains in wellness and prosperity that health systems have supported over the past century”.

Progress against pandemics has been undermined for many years by vaccine hesitancy and drug resistance. Killing off pandemics such as polio, tuberculosis and malaria has been thwarted by persistent political instability and community resistance on the perception that the huge sums spent on the final effort could have been used to address other health priorities. The World Health Organization considers reluctance or refusal to vaccinate to be among the top 10 threats to global health.

Shipping is often described as the servant of world trade. If world trade is suffering from the gravest shock since the 1930s, shipping will also suffer. The funds available for investment in new technologies and new fuels will be in short supply as shipowners take a more cautious and more short-term approach. This suggests there will be obstacles in the road to decarbonisation.

But that is not to say progress will be stopped altogether. Last week, Green Ship of the Future, a public-private collaboration in Denmark seeking to reduce the negative environmental impact of shipping, published the findings of its Retrofit Project.

The conclusion was that significant reductions can be made to emissions and cost simply by retrofitting existing technologies rather than by investing in new systems and processes.

In other words, the economic fallout of the coronavirus pandemic means it will be many years before shipping runs on greenhouse gas-neutral fuels. The industry can either allow decarbonisation to be derailed or, hopefully, focus on what can be done with existing technologies.

The negative impact will be lessened slowly and steadily rather than dramatically and overnight. Evolution instead of revolution.

The push for decarbonisation is, therefore, unlikely to be derailed by the coronavirus. However, the pace of progress will slow and the inevitable pain suffered by the industry will be softened.

A carbon-neutral fuel would be an even better solution, but it is now less likely to be rolled out across the industry for many years.