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Opinions of Saturday, 18 April 2020

Columnist: Kenny Oladipo

Coronavirus: Can the World economy run in a degraded mode?

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The unfortunate outbreak of the coronavirus COVID-19 is currently exerting substantial financial stress on the global economy and the knock-on effect on economic growth cannot be overstated.

Rattled stock markets are projecting a potentially significant slowdown in economic activity down the pike as supply chains are being disrupted in China due to restrictions on industrial activities to contain the outbreak.

The risk of momentary global recession is also apparent if the outbreak continues to take economic activity offline for much longer than anticipated. We may have a black swan event around the corner that may take the hammer to the global economic wall already weakened by the trade war.

As a consequence of the outbreak in China, manufacturing activity dropped off and the movement of goods and services severely limited. Industrial plants have been either shuttered or operating below capacity.

This relative inactivity has however created an unintended consequence of controlling global pollution rate over the same period.

NASA said pollution monitoring satellites detected massive decreases in nitrogen dioxide over China, partly due to the economic slowdown caused by the outbreak.

Similarly, Copernicus Sentinel-5 Precursor Satellite that tracked nitrogen dioxide emissions across Europe from January 1 to March 11 saw a decline in pollution in Italy and particularly evident in the northern region that entered lockdown ahead of the rest of the country.

With all the doom and gloom forecast for the global economy and health across the world, could coronavirus inadvertently have provided a hitherto unknown or overlooked solution to the climate crisis by its outbreak? Governments are now constrained to take inconvenient but necessary measures to contain the spread, and the default strategies are shutdown of movement and quarantine.

Factories are shut, airlines scaled back flights to affected areas, oil producers recalibrating output, major events requiring the large gathering of people temporarily suspended and so on.

These enforced slowdowns though not ideal may just have been what the world needs to save our planet. Right now the global economy is operating at a degraded mode. The loss or slowdown in economic activity could be a eureka moment for the planet as we battle the palpable effects of climate change.

In Reliability Engineering one of the options to consider in failure consequence mitigation planning is to probe the asset’s capacity to operate in a degraded mode or rating in the intervening period before a total shutdown is required.

For instance, if the installed capacity or rating of the asset is 90%, can it run at 60% or less for some time while the fix is being considered. To put it in the nominal term, if while driving a car on the highway one of the tires gets punctured and as tire pressure begins to decrease, the instinctual response of the driver will be to slow down and drive at a lesser speed till a gas station or mechanic shop is found to pull into.

Although the car can safely travel at 60mph on four good tires, as a result of the failure event the driver keeps moving in a degraded mode of say 20mph till a corrective action is taken to restore the installed capacity of the punctured tire.

Similarly, the outbreak could be described as a puncture to the tire of the global economy’s vehicle that has to operate in a degraded mode for some time until a proper fix is in place. Instead of the markets freaking out, can global leaders and planners test the economy by running it in synchronized degraded mode continent by continent to control the debilitating effects of global warming and climate change? The outbreak made difficult choices somewhat easy for governments and political leaders and affected localities or regions barely raised any discernible objection or opposition to the enforced closures and travel bans.

There seems to be a mutual understanding and common ground rooted in the fact that the actions were warranted for the greater good. That said, is there now a way to translate this unfortunate situation into an opportunity to save our planet? The oft-used political parlance “don’t let any crisis go to waste” may be useful here.

Governments and Political Leaders must not allow the coronavirus crisis to go to waste, it is time to take serious and decisive action on the global climate crisis. Can global leaders and CEOs come together and set apart at least one full month in a year where the global economic activity will not operate at full tilt? It could be staggered days in the year or a full 30 unbroken days of limited economic activity globally.

It will be akin to worldwide self-quarantine to reduce pollution and carbon emission. This activity holiday for heavy industries producing and releasing largest amount of pollutants to the environment as well as other related human activities in the aviation industry can have profound rehabilitative effects on the environment when coupled with other green energy technologies already in service and carbon capture technologies under development.

According to available climate data, 2.75 million pounds (1.25m kg) of carbon dioxide CO2 is emitted to the atmosphere every second.

And a total of over 45 billion tons per year going by 2017 estimates. The top 5 emitters are China at 30%, the US at 15%, India at 7%, Russia at 5% and Japan at 4%. In all, 20 countries are responsible for over 75% of the world’s greenhouse emissions.

Climate scientists have warned that global rise in temperature above 2 degrees celsius (3.6 degrees Fahrenheit) will have dire consequences on our way of life. Ocean levels will rise posing a direct threat to coastal cities, vegetation will singe and lakes stanched.

Thereby, accelerating internal dislocation of social, economic and political order. The next wave of internally displaced person IDPs won’t be war or terrorism refugees it will be climate refugees across the globe. Global warming is now an attrition point in international diplomacy, limiting intergovernmental cooperation.

For example, Egypt and Ethiopia are presently at loggerhead over the Nile River, on which Ethiopia is building a massive hydro-electric dam. Egypt is fearful of getting less water for irrigation and other water needs as water volume decrease upstream due to climate change, human activity and a growing population. And as the saying goes No Nile No Egypt.

The Egyptian president even threatened to start a war with Ethiopia over the River Nile if all other options fail. It appears water may become the most precious commodity in a few decades for which nations will be prepared to go to war as they do for crude oil today.

In sub-Sahara Africa, Lake Chad that once used to be the source of commerce and supports the unique way of life of people in the adjoining areas is drying up very fast, inducing tension among residents as they jostle for the remaining shrinking share of the lake.

Itinerant herdsmen across West African nomadic population are increasingly clashing with farmers as vegetation comes at a premium in the region. Likewise, the intensity, severity and regularity of wildfire outbreaks in California and Australia is another case in point.

Not to forget flooding in the US and Italy, the killer heatwave in India, dangerous smog in China, deforestation in the Amazon Brazil. The list goes on and touches all continents.

These events have a real human toll and component to them and must be addressed from a human angle. In 1896, Swedish scientist Svante Arrhenius became the first scientist to link carbon dioxide CO2 gas from burning fossil fuels with a warming effect on the environment. And since then more gases have been added to the cluster known as greenhouse gases.

Intergovernmental Panel on Climate Change IPCC, a UN body that tracks the emission of greenhouse gases and impacts on the environment identified these gases to be carbon dioxide CO2, methane CH4, nitrous oxide N2O, industrial gases SF6s and NF3s.

In 2015, the Paris Climate Accord Action Plan estimates that the world technically has only 20% of its “Carbon Budget” remaining to avoid warming the Earth more than 1.5 degrees celsius. The total carbon budget is 2.8 trillion metric tons and we have used up 80% already.

Which implies that we have less than 500 billion metric tons remaining and at a current annual emission rate of over 45 billion metric tons, the Earth’s climate credit card will max out within the next 10 to 12 years.

Although COVID-19 pandemic may have intervened in lowering this year’s rate and pace, unwittingly buying the Earth valuable time in the process. The truth is, stock markets and investors will rebalance and adjust to a routine and coordinated global economic slowdown, as it won’t come as a shock to the system rather as a planned and measured event. No surprises equal no freefall in stock values.

The G7 nations, China, India, Russia and other G20 countries may consider this option to limit the ongoing effect of human activity on the climate. And there’s no significant downside to the global economy if it runs at 50% capacity in one month during a fiscal year.

As only about 0.12% of the aggregate global GDP will be shaved off during this managed slowdown. The upside however is, the lead time to carbon budget max out gets extended, giving additional time for emerging climate technologies to take hold. If the outbreak of the coronavirus as distressing as it is has taught the world anything, it should be the fact that governments can indeed make difficult choices and that the people stand ready to accept them in times of emergency and grave danger.

Climate change is a global emergency and we ought not to allow the lessons currently being learned to go to waste in finding an interim solution to our global climate crisis in the intervening period between now and 2030. When scientists have projected irreversible damage will be done to the environment if nothing drastic is done and by which time we may have run out of both time and options.

We have a full decade to do something and 300 days over the same period to try out a different, perhaps controversial but political orthodoxy-neutral approach. Let’s strike the iron while it’s hot and gathers global consensus while there’s a window of opportunity to do so. And here’s the deal, even if anyone truly believes that climate change is either a hoax or conspiracy concocted by fancy scientists and liberal media, that belief or non-belief still won’t protect anyone from the effects of global warming. There’s no safe or exclusion zone when Mother Nature visits.

Think of it for a second, no one needs to believe that gravity exists before it acts on everyone on Earth. Gravity’s effect is independent of political, economic, religious or social beliefs. Same way climate effect will be universal and an equal opportunity catastrophe if left unchecked. Expectedly, the outbreak will eventually be brought under control in the coming months and the surge will peter out.

But when the news of this pandemic recede from public view and consciousness, let’s not forget the useful lessons learned amid the crisis and remember to apply same to address the looming existential threat of climate change. It is time for all nations in the world to either return or joins the 2015 Paris Climate Agreement for effective international coordination of mitigation plans. We have a collective duty to shape the future of our planet now because the competition for the future is won today.