There is not a single public policy issue discussed these days without a COVID-19 relationship. In the environment and energy space, the pandemic also pops up in most conversations. The reason — the possibility of sustaining and gaining on an expected 8% drop in global GHG emissions in 2020 from 2019 levels (or about 2.6GT[1]) as one outcome of the coronavirus crisis.[2]

The current extraordinary situation makes it easier to imagine a different future because the world as we know it has changed. People have stopped consuming, many companies have stopped producing, and ordinary citizens have ceased much of their normal activity. As a result, worldwide energy demand has plunged, according to the International Energy Agency by as much as 25%, with the picture varying across countries depending on whether governments’ mandated shutdowns were partial or full. As energy consumption has fallen, transport, industrial production, and other activities that generate emissions have been scaled back, thus reducing GHGs. But, as economies restart, jobs return, and people start to move and consume again, emissions will rise. How fast and by how much is the real question, further complicating an already challenging recovery process.

The economic carnage done by COVID-19 is breath-taking. And while the full tally is not yet known, it is now possible to imagine the outcomes of a short, sharp, and fast transition to 2030 GHG targets — whether these aim for emission cuts of 30%, 40% or 45% [3] does not really matter. The likely impacts of a rapid transition away from fossil fuels are sizable and probably not what many would wish for, even some who have advocated for a quick transition.

For context, the global IPCC target means all countries and all activities around the world could only emit a maximum of about 17 GT[4]in 2030. Anything above this would need some sort of offset such as carbon capture or other real offsets — the essence of net zero — all of dubious technical and economic feasibility. So, when comparing the Paris reduction target to the 2019 global level of 33 GT, and factoring in inevitable population and economic growth over the next decade, the magnitude of the challenge is clear.

B.C. is in the same difficult position as others — in fact, reducing emissions is even harder here than in other advanced economy jurisdictions, since the electricity system is already almost carbon-free. Achieving the province’s 2030 GHG reduction target of 40% below 2007 levels means removing some 39 MT — 4 MT per year — from the emissions inventory (and by extension, from the economy) over the next decade.[5]By any measure, this will be a Herculean task.

The anticipated 8% drop in global emissions this year, as referenced by the IEA, if applied to B.C.’s 2018 measured GHG emissions, equals 5.4 MT (2019 data is not available). This is a large number, one we believe is unlikely to be realized, in part because B.C.’s economy was only partially shut down.

But we know that on May 11, 2020 B.C Hydro noted a fall in electricity demand by at least 10%.[6]Gasoline sales data are not yet available, but stay-at-home orders have kept many drivers off the roads, so it is safe to assume a sizable drop in transportation fuel use as well — B.C.’s largest source of emissions. When combined with an economy that could shrink by more than 8% (in real GDP terms) in 2020,[7]a one-time4% drop in B.C.’s GHG emissions this year is plausible (slightly more than the growth in emissions between 2017 and 2018). This equates to a ~2.7 MT decline in emissions in 2020, which is small beer compared to what would be required each year for the next decade to reach the NDP government’s legislated 2030 goal. If delivering this quantum of reductions was hard to fathom before COVID-19, it is even more so now given the changed economic and fiscal landscape — including significant added debt burdens (corporate, government and individual), higher unemployment, widespread business destruction, and the likelihood of a slow recovery that will weigh on government revenues to finance new programs or initiatives. A similar extrapolation can be made for Canada.

For any rational conversation about what we can or should do to reduce emissions, we must acknowledge that action by B.C. affects about 0.2% of global emissions. Choosing cost-effective policies that produce multiple and clear benefits with limited to no additional costs is where policy-makers should focus. In this equation, we cannot forget B.C.’s relatively positive CO2e/$GDP performance (Figure 1), our lower-carbon-per-unit-of output natural resource and manufacturing industries (mainly due to B.C.’s clean electricity inputs), and overall good environmental management.

With COVID-19, we now have a better idea what a short, sharp energy transition might feel like. It is not something we should wish for.

Figure 1

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[1] https://www.iea.org/reports/global-energy-co2-status-report-2019: 2019 emissions are noted as ~33GT.

[2] https://www.nature.com/articles/s41558-020-0797-x.

[3] These are Canada’s and British Columbia targets as well as the IPCCs as noted in their 2018 Special Report.

[4] Year 2010: 31 GT *0.45 = 2.6.

[5] 2007 levels 64 MT * 40% = -26 MT. Add in growth of 1.5% per year, a reasonable given historical trends and population growth = ~39 MT.

[6]https://www.bchydro.com/news/press_centre/news_releases/2020/report--covid-19-leads-to-drop-in-power-usage-and-operational-ch.html.

[7]https://bcbc.com/reports-and-research/business-alert-preliminary-estimates-of-the-impact-of-covid-19-and-related-containment-measures-on-the-b-c-economy-in-2020.