The Big Winner of COVID-19: The Environment

by Lane Brugman

I know this is not news to anybody, but COVID-19 is the defining story of 2020. The pandemic began as an unknown infection in Wuhan, China and over the past three months has transformed into an inescapable topic in every facet of society and media. Every organization, regardless of industry, is now dealing with the fallout from an expanding pandemic.

Personally, my family is dealing with the fallout from the cancellation of my brother’s wedding in Seoul, South Korea. My brother and sister-in law are crushed. Our whole family is in the thick of trying to recover as much as possible from the flight, tour and hotel bookings. At the same time, we are grateful that none of us are dealing with the virus itself.

In fact, as COVID-19 progressed, the financial implications have become scarier to me than the health impacts. This is selfish but real. The risk of dying from the virus for me or my family members is very low. The impact from a financial crisis however, will be felt by everyone. At the same time, we’ve come to know that a strong economy is, in simplistic terms, horrible for the environment.

The longest bull market ever recorded had pushed stocks to their highest levels. Global consumption had never been higher. The environment is at a tipping point. Enter coronavirus and within two months, the economy has shed trillions of dollars in value and things are slowing down around the world.

Oil demand has plummeted since the virus began having larger economic effects in China in December. The loss in demand then triggered an oil ‘price war’ between Saudi Arabia and Russia. This has cut major oil indexes in half since the beginning of the year. The US – now the largest producer of oil and gas – is bearing the brunt of this because the fracking technology that led to our energy independence is only profitable at $35-50 per barrel or higher. The reduction in oil demnad, as many financial pundits have commented, is having a greater effect on the economy than COVID-19.

Whichever way you cut it, real people around the world are going to feel the economic impact. Other than Purell and toilet paper… consumer spending will fall through the floor. People will insulate themselves. Italy just closed all non-essential businesses like restaurants and bars. The negative savings rate – that the United States averages – is going to rear its ugly head. Most hourly workers will have very difficult months ahead.  This is also completely omitting the health impacts of those who contracted the virus and will be hospitalized and die.

All this negative… where is the positive?

Let’s look back at another tragedy – 9/11. In the hours after the World Trade Centers were hit, the FAA ordered all of the planes in US airspace to land immediately. Canada did the same shortly after. The grounding of passenger aircraft lasted for three days. It was a break in current conditions as the country grieved and attempted to figure out what was going on. It was also a fantastic time to gather atmospheric data and those 72 hours revealed to scientists the insulating effects that contrails have.

The point is COVID-19 will provide the same ‘break from the norm’ conditions. With college campuses shutting down, businesses installing remote work mandates and every public gathering of real size being postponed – we are about to learn a great deal. It is critical that we collect as much data as possible in the next month or two. Because that data will be what the future decade is built on.

Companies – if they are smart – will be tracking productivity, employee satisfaction, overhead costs and the impacts on corporate culture during these remote working mandates. Post COVID-19, will we see a large shift to more flexible remote working conditions? Smaller company offices? Greater employee flexibility? Less dependence on ‘butts in chairs’? Will this create a happier populous?

Will the reduction in spending translate into a reduction in the mindless consumerism that has grown unabated in the United States for decades? Will it change the way we think about things? About how much we NEED versus WANT? How much less plastic waste will we witness with less consumption? Will the demand drop for items across the board that it is no longer viable to deforest rain forests for beef and palm oil production?

The stark reduction in the travel industry, global manufacturing and increase in remote work will see our planet consume drastically fewer fossil fuels. Over the next month, will we be able to cut our greenhouse gas emissions to the levels required to avoid a greater than 2*C global temperature rise as outlined in the Paris Agreement?  Can we prove to ourselves that we can achieve large scale reduction in our carbon footprint? How many natural areas planned for oil & gas exploration will be protected because the plans are shelved or paused?

COVID-19 will be a catalyst for large scale change long after the virus is contained and treated. It will affect the next stage of development in the economy, the workplace and society. I hope that others with more research-based minds see it that way too and can help quantify the valuable data that comes in the next few months. With all of it, I sincerely hope that this pandemic can be mitigated, and the societal and economic results will forge a culture reminded of the importance of interpersonal connection and environmentalism.

One can hope right?