With flights grounded and cars off roads, this week has seen historic declines in oil prices.
While reduced emissions from transport may have environmental benefits, the economic impact of lockdown could also
hinder climate change mitigation strategies.
The SMC asked experts to comment on the impact of COVID-19 on climate change.
Professor Alan Brent, Chair in Sustainable Energy Systems, Te Herenga Waka – Victoria University of Wellington,
comments:
“Globally, the price of crude oil has plunged due to lockdowns and travel restrictions. Standard Chartered has projected
a 20% drop in the demand for oil in 2020 from the world’s typical usage of 100 million barrels per day.
“We have yet to see what the real implications will be for New Zealand. However, the Government has not deemed oil
production an essential service. Nearly all of the roughly 25 to 30 thousand barrels per day are exported – and
therefore not required for domestic energy security, so we can expect that to drop sharply. The major clients of the
Marsden refinery, which includes the aviation industry that reduced to a near-halt, have negotiated an around 50%
reduction in refining output for the next two months, so we can expect our crude oil imports, of around 105 thousand
barrels per day, to also decrease by around 20% over 2020, similar to what is projected globally.
“This means a significant reduction in the use of transportation fuels, which account for nearly 50% of our
energy-related emissions. If the projected reduction in oil imports do realise, that could mean a reduction in carbon
emissions of around 10%; to levels last seen at the turn of the century. And, of course, carbon emission is but one
metric of the environmental performance of the economy. For example, local air pollution levels have dropped
significantly since the start of the pandemic.”
No conflict of interest.
Professor C. Michael Hall, Department of Management, Marketing and Entrepreneurship, University of Canterbury, comments:
“COVID-19 will likely have some short-term benefits in terms of emissions reduction in tourism, primarily because of the
decline in aviation which is most significant sector in terms of tourism’s contribution to climate change. COVID-19
therefore represents a major opportunity to change the trajectory of tourism’s emissions away from business as usual,
but I doubt that this will happen for several reasons.
“Most countries’ bail-outs of airlines are not coming with conditions that would improve long-term sustainability. Many
in the aviation industry are pushing back hard against such measures. Even if airlines do go under, the infrastructure
remains and, combined with an available workforce seeking employment, you have a recipe for yet further budget airlines
moving people around cheaply but without consideration of environmental costs. The majority of destinations desperate to
make a quick economic recovery and reduce unemployment will try to get as many tourists through the door as possible –
even at low prices.
“A crisis such as this does provide opportunities to rethink tourism. Encouraging domestic tourism, for example, not
only reduces emissions but also helps retain money that might have otherwise gone overseas. COVID-19 also highlights the
need for the real environmental and biosecurity costs of tourism to be covered by the tourist and business.
“Unfortunately, when you have a crisis like this, we too often find that the more sustainable alternatives that look to
provide longer-term economic solutions will be rolled over by the short-termism of Business As Usual because that’s what
people know and think they understand. All too often, at times like these, we are dealing as much with a crisis of the
economic imagination, and how the economy ultimately depends on social and environmental wellbeing, as we are with
COVID-19.”
No conflict of interest.