It’s now or never. Or in the words of BP’s CEO Bernard Looney: “as the world emerges from the Covid-19 pandemic, it feels like we are at a pivotal moment.”
Despite all the destruction caused so far, the coronavirus health and economic crisis may offer the opportunity to a sustainable recovery. Companies such as BP see now is the time to adapt and push with transition measures towards a zero-carbon future.
“For BP, the pandemic has only reinforced our commitment to our ambition to become a net zero company by 2050 or sooner and to help the world get to net zero, by highlighting both the fragility of our planet and the opportunities it provides to truly build back better,” CEO Looney said last week.
He is optimistic the net-zero target can be achieved if existing technologies are used at pace and scale. And 8BP is delivering a strategy shift to create a more diversified, resilient and lower-carbon energy company. It’s reinventing into a leaner, lower cost organization. It’s getting ready to invest less in fossil fuels and more in renewable energy.
The management at the British oil major has “growing expectation that the aftermath of the pandemic will accelerate the pace of transition to a lower carbon economy and energy system.”
That’s exactly what the International Energy Agency (IEA) has been making a case for. The Paris-based agency is advising governments and policymakers to take action now to ensure both sustainability and recovery, post pandemic, Kallanish Energy reports.
Looking at the impacts of Covid-19 in the energy industry this year, the IEA estimates a 20% decline in global energy investment this year, coupled with a drop of 6% in energy demand worldwide and roughly 3.2 million energy jobs at risk or already lost.
The coronavirus crisis has caused the worst economic shock since the great depression of the 1930s, IEA’s executive director Fatih Birol said in a new commentary on Monday. Governments must act now to support an economic recovery that will repair the damage inflicted by the crisis, “while putting the world on a stronger footing for the future,” he said.
Through a collaboration with the International Monetary Fund, the IEA published the Sustainable Recovery Plan last week, which “shows governments have a unique opportunity today to boost economic growth, create millions of new jobs and put global greenhouse gas emissions into structural decline,” Birol added.
The energy industry should play a key part into national recovery plans, also known as green recovery in Europe — as it highlights the emphasis given to clean energy. Decisions, policies, investments and financial support taken today under these packages will shape infrastructure and industries for decades to come.
“(They) will almost certainly determine whether the world has a chance of meeting its long-term energy and climate goals,” the director noted.
The point made by the IEA and several other organizations is that investment in energy can sustain and boost employment while helping to deliver affordable and reliable energy and to improve the resilience of energy systems. This in turn helps to support higher employment and activity levels in all parts of the economy. Investment in energy measures can then induce indirect economic benefits, which extend far beyond the energy sector.
The unprecedented times brought up by a novel coronavirus has highlighted the high degree of volatility in global energy markets, with a major drop in oil and natural gas prices in early March. Such declines are hitting O&G producing countries the hardest, with their income estimated to drop by as much as 80% in 2020, according to the IEA.
Countries such as Iraq, Nigeria, Algeria, Oman and Angola are all exposed to this hardship, and could face the lowest income level in over two decades at a time social and health support are crucial. This vulnerability reinforces the importance of economic diversification and urgent action.
This post appeared first on Kallanish Energy News.