How has Covid-19 Impacted Climate Risks?

Published on Thu, 11/03/2021 - 11:11
John Scott, Head of Sustainability Risks, Zurich
John Scott, Head of Sustainability Risks, Zurich

The real danger is that Covid-19 will accelerate climate change by compounding all the risk factors that threaten long-term sustainability, writes John Scott, Head of Sustainability Risks, Zurich

As countries start to emerge from the immediate Covid-19 crisis and work on rebooting their economies, there are worrying signs of a slowing or multi-speed transition of economies and industries. Some regions, including the EU, have a green deal in place to align fiscal policies with clean growth, but these are long-term policies that have not yet had an impact on emissions. Other countries and regions are focused on delivering an economic rebound through brown stimulus measures, including cuts in sustainability investment and weaker commitments to climate and nature action.

The stark reality is that global carbon dioxide emissions rebounded strongly by the end of 2020, driven by the economic recovery and a lack of green energy policies [1] In the early part of last year as a result of the lockdowns put in place to deal with the Covid-19 healthcare crisis, industrial output plummeted, cars disappeared from roads and planes were grounded. The environmental cleansing and the slowdown in greenhouse gas emissions that we experienced was a silver lining to the economic and healthcare hardships. The air was cleaner, there was less pollution, and nature began to regain control and restore the balance.

Statistics back this up. According to the International Energy Agency, global greenhouse gas emissions fell by 2 billion tonnes in 2020 compared with 2019; and in early April 2020, when the world was in lockdown, daily global carbon emissions dropped by 17% compared with 2019. However, by early June, the Global Carbon Project reported that we were only about 5% below the figure for the previous June, indicating a return to the same depressing, carbon-intensive recovery trajectory.

Worse, it’s not simply that we were going back to where we were, erasing the temporary benefits from lockdown. The real danger is that Covid-19 will accelerate climate change by compounding all the risk factors that threaten long-term sustainability. Although it has provided a glimpse of a greener future, Covid-19 underscores the challenge of meeting the UN target to limit global warming to 1.5°C.

It's not all doom and gloom though. Post-Covid-19, changes in our working practices, attitudes towards travelling, commuting and consumption should make it easier to find business opportunities to capitalise on a lower carbon and more sustainable recovery. This could enable society to adapt responsibly, to return cleaner and greener, and to develop through sustainable growth with people and communities at the centre of society.

The message is clear: recovery without sustainability is a big mistake. To quote the World Economic Forum’s Global Risk Outlook which Zurich contributed to: “The gravest environmental fallout for the world is a shortfall of investment in climate action, because perpetuating carbon-intensive practices, will increase global greenhouse gas emissions.”