Headline: RIFS Blog April 2020

The corona pandemic caught our society off guard. That is one reason for the scale of the crisis. This makes it all the more important to learn from the current situation, not least in the area of climate and energy policy. In what follows, I discuss the lessons we can draw from the crisis in reflections clustered around the terms vulnerability, resilience and solidarity.

The corona crisis is not only threatening our health; it’s also shaking our economic systems to the core. A fall of global stock markets by as much as35 per centin the first quarter of this year means that a recession is imminent. The energy sector is also affected, with the price of oil plummetingand renewable energies also facing difficulties. Coronavirus infections, prolonged curfews, short-time work, and border closures are all affecting the supply chains of wind and solar energy technologies. Investment has all but dried up. In this situation we can learn from the experience of tackling previous economic crises and should opt for a “green” stimulus package in a three-step government programme of relief, recovery and reform. To accelerate and bolster the energy transition, all of the measures implemented in these three steps need to be scrutinised for their long-term viability.

The international health crisis has exposed a serious problem for energy systems – we’re not taking renewable energy technology seriously as a critical asset. Most solar panels today are made in China, and a shortage of key components means that Europe is now facing major delays in new installations. Wind power faces a double whammy – manufacturing is down, and countries may not have the personnel and parts locally to keep systems running. Countries should aim to build up national clean tech infrastructure in the same way that they ensure strategic reserves of fossil fuels.

The Europe-wide shutdown is reducing both energy consumption and carbon dioxide emissions. At first glance, this might seem like good news. But it has also caused CO2 certificates traded under the European Union Emissions Trading System to lose a third of their value since March. Economic activity is expected to be significantly depressed over the coming weeks and months and production capacities underused.