There has been a lot of discussion about how the coronavirus could change life, the economy and the world. It’s led to some breakthrough moments already, such as South Korea’s Green New Deal. In many other places there’s a grim determination to get back to ‘normal’, however inefficient, unequal and unsustainable normal may be. For every story about environmental positives during lockdown, it seems like there’s a negative headline keeping it in balance.
My hopes that the coronavirus might bring about lasting environmental change received a boost this week from an unlikely source: BP. Generally speaking, bad news for the fossil fuel industry is good news for the climate. (It used to be bad news for the economy too, though that effect is slowly unwinding.)
This week BP announced that they were revising their forecasts and writing off a bunch of investments because they expect oil prices to stay low. “BP’s management also has a growing expectation that the aftermath of the pandemic will accelerate the pace of transition to a lower carbon economy and energy system, as countries seek to ‘build back better’ so that their economies will be more resilient in the future.”
A portion of the investments that BP is writing off are in exploration, which means that they are anticipating a longer term change. The International Energy Agency has forecast a fall in oil demand of 9% for this year, 8% for coal and 5% for gas. At the same time, solar power is up 16% and wind up 12%. Renewable energy is relatively unaffected by coronavirus, and with costs now at parity or better, its success is beginning to displace fossil fuels.
Carbon Tracker have put this all together and speculated that as coronavirus feeds into a global downturn, any uptick in fossil fuel use next year won’t be big enough to make up the lost ground. If renewable energy keeps moving forwards, then fossil fuels might never recover. 2019 would be the peak year for fossil fuels.
I won’t be counting my chickens, but BP’s actions this week suggests Carbon Tracker may be onto something. If the energy transition is real, then sooner or later fossil fuels were going to peak and start to cede ground to renewables – like they have done in Britain already. So it’s not unexpected, but it is sooner than many thought, brought forward by coronavirus.
We’ll have to wait a couple of years to know whether it’s happened or not, but perhaps we are witnessing a corner being turned, and the downslope of the fossil fuel era lies before us.