Subscribe to Outbreak, a daily newsletter roundup of stories on the coronavirus pandemic and its impact on global business. It’s free to get it in your inbox.
Fighting the coronavirus is like a war. But to address climate change, “we need to win the peace,” says Mark Carney, UN special envoy on climate action and climate finance, and governor of the Bank of England until earlier this year.
The spread of the coronavirus has created a life-or-death crisis not just for individuals and for health care systems—but for businesses and economies as a whole. As governments and businesses face down the coronavirus crisis, the question will be where this war leaves the challenge the world was facing before the coronavirus—and will face again after: climate change.
Will the devastation of the coronavirus offer a chance to intervene on a mass scale to support renewables and cut emissions—or cause a potentially fatal loss of momentum?
“Winning the peace” won’t be easy, Carney acknowledged at a recent event on investors and climate change. “Because the costs of fighting the pandemic will diminish the capacity of governments, businesses, and financial institutions to tackle the next crisis—and we should acknowledge that,” said Carney.
But the current situation should hold a lesson, he added: If the world can address the coronavirus, it can address climate change too.
Survival first, climate later
Before the coronavirus, momentum seemed to be building behind governments and businesses taking steps to address climate change. As 2020 began, wildfires were destroying vast swaths of Australia; the Swedish climate activist Greta Thunberg had become a household name; and major investors like BlackRock had pledged to put climate at the center of their portfolios. It would also be a critical year for fulfilling climate goals. In order to meet the Paris Agreement guidelines of cutting emissions to net zero by 2050, emissions must fall by half by 2030—so there’s not a year to waste.
But the spread of the coronavirus has thrown an even more urgent crisis at governments and business: how to save the lives of millions of people, prevent health care systems from collapsing, and shore up economies that must now enter something comparable to an induced coma.
Brian Murray, director of the Duke University Energy Initiative, says when he talks to executives, the message is clear: “I have to prioritize the survival of my company right now, and I’ll get back to you on that climate stuff after we’ve survived.”
That has put into question not only whether fresh commitments to cut emissions will be made, but also whether companies that have already made commitments will aim to keep them—or be able to.
While global emissions are likely to plummet this year due to the vast restrictions on travel and industry that have already produced cleaner air in major cities and manufacturing regions, those emissions are declining due to “economic meltdown” rather than long-term policy change, said Fatih Birol, executive director of the International Energy Agency, in a conference call with the Atlantic Council.
Unlike in 2019, when emissions unexpectedly flattened due to long-term changes—developed nations moving away from coal, in particular, and ramping up renewable energy sources—any drop could be undone by a rapid restart of economic engines and the jettisoning of climate commitments in the name of recovery.
“Before this crisis, many governments around the world, many companies around the world have set targets how much and how seriously they will reduce emissions,” said Birol. “Now in my view, this is a test, to see if they will go through with their commitments. It will not be easy.”
“We’re in a catastrophe”
However, some analysts hold out hope that after confronting a crisis of this scale of the coronavirus pandemic, people will start to look at addressing climate change differently.
“What I think of the reality is, we’re in a catastrophe,” said Rebecca Henderson, a professor at Harvard Business School and author of the forthcoming book Reimagining Capitalism in a World on Fire. “And I hope it will make it much more likely, and easy to understand, that we have some larger catastrophes coming our way.”
Henderson says she is “very hopeful” that after a career trying to persuade people that the future is unlikely to be business as usual, the coronavirus crisis will make people realize that, in fact, the future is not fixed.
But others are less optimistic.
“My own feeling is people will try to get back to the lives they had back in December as quickly as possible,” says Mark Barrett, a professor of energy and environmental systems modeling at University College London.
While the crisis could drive home the risk of not facing up to climate change—and introduce the public to harsh interventions—rapidly reducing emissions is a different kind of problem.
“There’s no sort of quick fixes, like social isolation. It requires investment, planning, over long periods,” Barrett said. “It’s going to be disaster on an epic scale—10,000 times greater than the coronavirus.”
“Once the war is over”
Still, there is an opportunity here for governments that are willing to seize the moment.
“I don’t by any stretch of the imagination think climate change is going to drop off the agenda,” said Fiona Reynolds, CEO at the UN-backed Principles for Responsible Investing. “We’re already seeing investors and governments talking about [how] the shape of the recovery needs to be green and sustainable.”
In March, UN Secretary-General António Guterres urged governments to attach green provisions to relief deals and put the Paris Agreement at the center of such deals, arguing, “We must keep our promises for people and planet.” It would be a window, in other words, to kick-start a Green New Deal.
That call is being heeded more in Europe, Reynolds notes. The EU as well as the U.K. have already committed to reaching “net zero” emissions by 2050.
At the U.S. state level, too, some are calling for green intervention as a key part of policies to rebuild the post-coronavirus economy. In the presentation alongside Carney, Betty Yee, California’s state controller and a board member for Calpers, the country’s largest public pension fund, said that there should be a “climate risk component” in all public and private financing, and monetary policy, directed toward rebuilding the economy.
But at the national level in the U.S., elements of the $2 trillion relief bill that would prioritize green development were stripped away—an inevitability, said Duke’s Murray, to get support for businesses passed without creating a “political hell storm” that could delay the bill.
Still, speaking about the post-coronavirus economy, Carney noted that in Britain, the period after World War II—a period that has been routinely referred to in recent weeks—brought about massive changes in society: the creation of the country’s welfare state, as well as reforms of health care and education. The same could be true this time, he said.
“Once this war is over, may the challenge really be to create a planet that is fit for our grandchildren,” he said.
More must-read stories from Fortune:
—The great African air conditioning boom is about to begin—and it could strain the planet
—As the U.K. goes into lockdown, London faces isolation—and clear skies
—Big Oil’s Hail Mary
—Business is finally starting to reckon with climate change—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: PSEG CEO on climate change action: “It should have been done yesterday”
Subscribe to Outbreak, a daily newsletter roundup of stories on the coronavirus pandemic and its impact on global business. It’s free to get it in your inbox.
