ECONOMIC ECO-BOOST POST-PANDEMIA?

 
b7v69dgz2l9mbnsjjqku.jpg
 

The world has changed. More so than post-nine-eleven.

The global pandemic, climate change, biodiversity and economic issues are all linked in the changing landscape of modern global economics where the price of oil collapsed as the world used less of it. Will an oil-based economy ever fully recover? Was this type of energy-driven economy only a short-lived experience in the journey of humanity? Economist Herman Daly once said "The economy is a wholly owned subsidiary of the environment", and that's likely to be the force majeure into the future as human kind licks its wounds and recovers.

Truly, the pandemic, climate, biodiversity triangle is really a big, glorious health and safety issue. The health, the wellbeing of humanity and all the ecosystem that lives on the earth within the narrow quarters of the biosphere are reliant on clean air, wholesome foods and clean water. Burning and emitting carbon and uranium-based fuels into the biosphere does not support life - it inhibits it. Using pesticides to grow wheat to feed the world and anti-biotics to support and encourage dairy farming is another part of the questionable health and safety equation.

The word Economy is derived from the Greek word oikonomia, eco being house or household and 'nomics', being 'the law of', so in general we can translate this to be good "housekeeping" i.e. "prudent handling (as opposed to poor handling) of the matter at hand".

So does the overall picture mean that we are moving towards a friendlier more competent and wholesome economics, with some good housekeeping? i.e. – keeping the house in a liveable, clean and orderly fashion - and balance the books?

Will we see a redistribution of growth from harmful economic activities such as dark oil and coal, nuclear and gas to white and gold economic activities such as sustainability following the virtues of UN Sustainability goals? I think, yes.

Some examples:

LONDON (Reuters): "Hydrogen has long been touted as a clean alternative to fossil fuels. As major economies prepare green investments to kick-start growth, advocates spy a golden chance to drag the niche energy into the mainstream of a post-pandemic world. Green hydrogen was pushed to the fore last week when Fatih Birol, head of the International Energy Agency, said the technology was ready for the big time and urged governments to channel investments into the fuel."

Spain: to help the country recover from COVID-19 Teresa Ribera, vice president and Minister of Ecology in Spain, plans to cut Spain's carbon emissions to net-zero by 2050. The new law once approved, will ban all new coal, oil and gas extraction projects with immediate effect. And there's a raft of items on the list including directing a percentage of the general budget towards the energy transition.

BP, Shell, Repsol and Total: they have set out strategies to reach "net zero" greenhouse gas emissions by 2050 and the longer oil prices remain low many untapped oil fields will not be used. Megan Darby has written a good analysis of the situation in Climate Change News and says:

“The coronavirus lockdown has dealt a savage blow to Big Oil, at a time fears of climate breakdown call the whole basis of our energy system into question”

To prevent further climate change catastrophe oil and gas must stay in the earth’s crust and those that understand the truth of the reality are fast-tracking their corporate and government business into the sustainability path. Environmental, Social and Governance investment factors (ESG) are forming a new investment future.

Look, why invest in oil when there is no come-back? Combine that with international Green Finance requirements to only invest in real-green, white and gold projects to fulfil their ESG needs, and you have a powerful set of trends - and there commercial and economic success beckons.

BERLIN/FRANKFURT (Reuters): Germany intends to use wind and solar energy to produce hydrogen to replace gas and oil in the heating and transport sectors, - especially for heavy goods, but the country is trying to decide whether to roll out 5GW or 10GW of hydrogen electrolysis capability. Either way Economy minister Peter Altmaier has said it will not be possible to produce enough hydrogen from renewables domestically and an import industry must be built up for hydrogen from wind and solar power-intensive countries to achieve CO2 targets. Step in Guernsey.

Wind-Vessel-1024x684.jpg

“one silver lining of the pandemic is that it demands radical action from companies and governments to rebuild and restructure economies now – not  in 10 years’ time, when climate action would  be too late.” Terry Slavin Ethical Corporation Magazine

UN Secretary General António Guterres :“Everything we do during and after this crisis must be with a strong focus on building more equal, inclusive and sustainable economies and societies.”

The UK government strategy on economic recovery post-pandemic is likely to build upon their existing Green Industrial Business Strategy which has been amassing apace amidst and despite the pandemic concerns.

gov.uk Published 18 February 2020: £90 million UK drive to reduce carbon emissions. The fund will help deliver first green hydrogen plants for heavy industry with projects on the Wirral, Humber and Aberdeen. Domestic energy schemes are part of the package.

gov.uk Published 21 May 2020: “Government launches new £40 million Clean Growth Fund to supercharge green start-ups”.

UN Webcast (ReNEWS) 1June 2020: The UK is hosting the COP26 in 2020 and its President Alok Sharma has announced the UK will emerge from the coronavirus pandemic with a green recovery.

London (The Independent) 2 June 2020: Over 200 top UK businesses, organisations and investors have called on the government to seek an environmentally focussed recovery from the impact of the pandemic.

New York, PV Magazine report: Legislation making renewable energy integral to New York state’s post-COVID-19 economic recovery was included in the state’s annual budget, signed into law by New York Governor Andrew Cuomo on April 3rd 2020. And “demonstrates how forward-thinking policy can be used to boost the state economy and create jobs while bringing abundant, clean, renewable energy to all New Yorkers,” said Rossana Rosado, New York’s Secretary of State.

 
Seascape Cable Link to Sark.jpg
 

Post-Pandemia Pathway for Guernsey

What should Guernsey do to escape the Covid-19 economic nervous breakdown?

A Bailiwick-wide collaboration to Green Industrial Business Strategy for a start and I will focus on Guernsey only for this exercise. Here’s 7 easy steps for economic recovery:-

1. Create an Energy Transition Task Force to manage the 7-step recovery.

2. Aim to be an “Energy Positive” island by 2030 with on-island carbon-zero emissions by 2035, encompassing hydrogen as a major fuel source.

3. The States of Guernsey to ensure its operations are carbon-zero met by on-island generation, energy conservation and efficiency by 2030.

4. Tax all energy imports from outside the island’s jurisdiction, encouraging on-island generation and within our territorial limits.

5. Set up a Renewable Energy Training Centre for all trades and across-the-board upskilling/retraining available to all citizens, backed by a self-certification set of renewable energy installation standards.

6. Ensure that Guernsey Electricity is the sole transporter of electrical power on-island, protect its guardianship of the electrical infrastructure, whilst rescinding the generation licence path, allowing many to generate unhindered and contribute to the island’s power needs. Invest in Smart Grid and Metering.

7. Create a University for Sustainability within a renewable energy tech park, focussed on renewable energy, the local marine and land environments, Green Finance and Digital Economy.

Source: Guernsey Hydrocarbon Demand Forecast by CH2M and PWC Their forecasts in red, orange brown. The States of Guernsey ambition is in Green. My forecast is in Purple https://www.gov.gg/CHttpHandler.ashx?id=108310&p=0

Source: Guernsey Hydrocarbon Demand Forecast by CH2M and PWC Their forecasts in red, orange brown. The States of Guernsey ambition is in Green. My forecast is in Purple https://www.gov.gg/CHttpHandler.ashx?id=108310&p=0

The outlay by the States of Guernsey government would be zero over time as the investment in green energy would pay off quickly after an initial investment. This investment would encourage local renewable energy start-ups who would need to seek training and qualification in order to comply with the standards. There would be massive savings available by negating the need to keep spending money on the hydrocarbon supply program. The island can earn an income from exporting its many GW potential of sea-based energy and at the same time earn credentials in the global Green Finance markets.

By encouraging talent to come to the island for educational reasons and by encouraging locals to be educated and prepared in a worthwhile careers we retain top people in the most important skills positions. All supported by digital skills exploring the cross section of AI, Blockchain, coding and apps required to transform our economy as envisaged in these 7 steps.

We need to move fast.

Paul Fletcher