From Trade-Off To Transition: The Power Dynamics of a Green Industrial Revolution & COVID-19

Featured image by Michal Klodner

By Rebeca Camacho
Managing Editor

From an array of sectors and institutions going remote, to entire countries enforcing strict stay-at-home orders worldwide, it appears as though the coronavirus pandemic has, by and large, completely reshaped society’s energy consumption. According to the International Energy Agency, global greenhouse gas emissions will fall nearly eight percent this year, the largest drop recorded in modern history. The significance of this figure, however, goes beyond the observation of a temporary halt to the population’s general behavioral patterns. Examining governmental responses to the free fall of power usage provides us with a glimpse into how the energy trade-offs of today could pave the way into the transition to a greener future tomorrow.

While it would be overly ambitious to assume that the respite in energy consumption will remain this low even after the economy fully reopens, there are critical vantage points worth highlighting. The first is the relationship between oil prices and government subsidies. With gasoline prices reaching a historic low due to the price wars between Russia and Saudi Arabia beginning earlier this year, in conjunction with lack of international demand, cheap fossil fuels could make way for the potential elimination of the billions of dollars worth of government subsidies that prop up the oil and gas industries. Fossil fuel special interest groups and lobbying efforts aside, funding could be reallocated towards green stimulus packages which embody a triage approach of taking on the economic recession, providing new green jobs, and directly combating effects of climate change. 

In fact, several governments all over the world are taking this opportunity to provide variations of such a stimulus. The Chinese government for one, is devoting an anticipated $1.7 trillion in seven low-carbon and energy fields included within their “new infrastructure” projects to be rolled out in the next six-year period. Additionally,President Charles Michel of the European Union,  recently pledged to remain committed to a green transition as part of the road to recovery from the pandemic. When it comes to the United States’ leadership however, a very different story unfolds. 

Source: Financial Times

Where The Grass Is Not Always Greener  

Between crisis management and his 2020 reelection campaign, a transition to green energy could not be lower on United States’ President Trump’s list of priorities. In the past, Trump has made comments discrediting the green energy movement such as insinuating that wind turbines cause cancer or claiming that coal is the cleanest energy source. While Americans nationwide are scrambling to find ways to make ends meet and the economy is in desperate need of assistance, the Trump administration sits on over $43 billion of undistributed low-interest loans intended for clean energy projects. The truth of the matter is that the power dynamics between fossil fuels and green energy are undergoing a major role reversal, and Trump’s resistance is only delaying the inevitable. 

With the highest greenhouse gas emissions in the country coming from the transportation sector, the nation’s leadership—both the current administration and industry leaders— presents a dichotomy in the way that the public and private sector are distinguishing their roles as either roadblocks or catalysts for a transition away from fossil fuels. This past month, the Trump administration rolled back the Obama-era fuel efficiency standards for car manufacturers, a plan which experts say could cost our economy $22 billion, and slow our progress for the scaling of electric-powered vehicles and alternative sources of liquid transportation fuels. Such setbacks, however, have not deterred many industry players from recognizing that deployment of green technology is crucial both for remaining economically competitive and maintaining consumer confidence.

University of California, San Diego’s Professor of Cell Biology and Director of the California Center for Algae Biotechnology—Dr. Stephen Mayfield—shared with us his recommendations on how to navigate the transition away from fossil fuels. 

“I think the biggest chance for fossil fuel emissions reduction lies in electrical power and electric cars,” Mayfield told Prospect. “We should go all in on those and transition as fast as we can. Especially the cars.” Dr. Mayfield is an expert in the development of biofuels and biodegradable plastics, and explained how the shift towards heavier reliance on electric vehicles and the use of biofuels is perhaps the most effective way to keep carbon emissions down. 

Whether it be through neutralizing carbon footprint levels in the manufacturing process or diverting to renewable energy products, transportation industry leaders across the nation are already pledging to the commitment of greener business models. American automobile powerhouse and the nation’s largest carmaker, General Motors, pledged to invest $20 billion this year on its next generation of electric vehicles, and its plans to launch twenty new E.V. models by 2023. 

Two Birds, One Stone: Climate Change, COVID-19 & Job Creation

With the unemployment rate climbing to higher rates than witnessed during the Great Depression, any plan to revitalize the economy while addressing climate change would have to focus on job creation. With the service industry being the most heavily affected, plans like the Green New Deal that vocalize the necessity for sustainable jobs require greater consideration. That is, the attention that similar proposals receive in other developed countries such as those propagated by the EU, or even many Arab states as they invest in solar energy

While service sector jobs do not necessarily translate into green jobs, what better time than during an international economic downturn for a new demand to arise in the aftermath of the current lack of jobs, and potentially sparking a shift in labor supply. Desperate times call for desperate measures, and we cannot let this recession go to waste.

As the pandemic is beginning to present major economic hurdles, it would be far less tolling on our government’s budget for there to be a greater focus on the frictional unemployment manifesting now than the inevitable structural unemployment that will occur further down the line when climate change leads to irreversible economic consequences. What countries do now will greatly determine the magnitude of government aid needed further down the line. 
By placing green industrial policies and investments in green industries at the heart of their recovery plans, governments can bolster their countries’ economic growth and competition and create jobs, while simultaneously preparing themselves to face the climate emergency. The window of opportunity is closing and it is time to realize that the only moment is now.

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