The post-virus economy: will the grass be green on the other side?

Read time: 5 minutes

One side effect of the sudden global cessation of tourism and travel due to Coronavirus (COVID-19), is the dramatic reduction in air pollution levels. Scientists estimate that nitrogen dioxide levels have decreased by up to 30% in China, and up to 40% in Italy. Widely publicised pictures show the clear waters of the Venice canals as gondolas and motor vessels no longer churn up the silt. With thousands of flights grounded, individuals residing under the Heathrow flight path say the air has never felt fresher and the birdsong has never been more audible.

As the world is effectively put on pause whilst we all focus on our health, it is worth considering what has been proven to be achievable, and the opportunities for the post-virus economy, given this unprecedented decline in carbon emissions.

In the last six months, there has been a marked rise in the number of climate litigation cases:

  • In November 2019, the Dutch Supreme Court prevented the Dutch Government from lowering the percentage target for their national emission reduction, on the basis that increased carbon emissions could result in climate events that endanger the lives of citizens.
  • On 27 February 2020, the Court of Appeal held that the UK Government's failure to consider the Climate Change Act 2008 and the Paris Climate Agreement had rendered the decision to build a third runway at Heathrow unlawful.
  • On 3 March 2020, the environmentalist and broadcaster, Chris Packham announced a crowd-funded legal challenge to HS2 on the basis of the Government's failure to quantify and address the likely carbon emissions of the project, in light of the UK's 2050 net zero emission target. Although the High Court has since decided there was ‘no real prospect of success' for a judicial review, this initiative has attracted considerable publicity.

All of the above suggest that individuals and organisations are becoming disenfranchised from climate change agreements which lack substance, and are no longer content for businesses and governments to sign up to emission targets without a demonstrable and accountable commitment to meeting the agreed goals. 

With Coronavirus effectively enforcing the most rigorous test of global capacity to reduce carbon emissions ever seen, it may become harder to argue in the aftermath of the pandemic that meeting climate change targets is an 'impossible goal'.

Of course, this impromptu experiment coincides with the closure of many businesses across different sectors and has been devastating for the global economy. To help them recover from the impacts of the virus in the UK, the Chancellor has promised a £multi-billion package of grants, guarantees and loans. However, in the rush to pursue a rapid upturn, there is a danger that businesses will revert to polluting at pre-virus levels. As environmental law charity, ClientEarth, explained at Michelmores' recent GC Forum Event on Sustainability, this is not a trajectory which is either desirable or justifiable in economic or environmental terms.

ClientEarth highlighted that one of the many financial risks businesses may encounter due to climate change was a shift in societal attitude and behaviour, which may modify demand for products or services. This seems particularly relevant in these uncertain times. The huge and sudden alteration in social practices: working from home; a near-total reduction in travel; the closure of all but the virtual strands of the leisure and hospitality industries; indicates that when faced with unparalleled upheaval, we can all make significant adjustments to our daily routine to accommodate and mitigate the threat. These bring with them the prospect of whole sectors being fundamentally re-shaped post-virus.

Helen Mountford, vice president for climate and economics at global research organisation the World Resources Institute, suggested that by investing some of the pandemic-related bail-out monies in green industries, technologies and fuels,

we can implement measures to help boost the economy, create jobs, and build climate resilience".

With the opportunity that this (open-ended) hiatus offers, and with climate litigation on the increase, businesses may find it worthwhile to conduct an informal assessment of their own 'climate resilience' and their scope for adaptation. This includes considering whether any of the emergency measures which have been put in place as a response to Coronavirus could become more permanent, and setting and achieving positive environmental change targets. Examples include:

  • Building and reinforcing an online brand.
  • Promoting continued home-working where possible, to save on commuting emissions and the energy consumed by large office buildings.
  • Utilising the statistics of the carbon emissions saved during this period as a positive marketing tool.
  • Considering switching to renewable energy sources where possible, particularly in light of the tax increase on corporate gas consumption set out in the 2020 budget.
  • Considering greener procurement: Could supply chains be more localised? Are products being sourced in a sustainable way?
  • Investigating the possibility of collaboration with environmentally-friendly organisations or similar ventures.
  • Simple adjustments, such as encouraging the online review of documents to save on paper, and switching milk supply from plastic to glass bottles.

The global threat of climate change, although perhaps less immediate than that from a virus, is no less a 'pandemic', and one which should not be side-lined when the time comes for post-virus euphoria. It should be a core aspect of forward planning and one which we can begin to address now.

There is likely to be a strong focus on swiftly re-building the economy as part of the corporate re-awakening. We will watch with interest to see whether businesses and the Government also take time to reflect on the drastically-reduced emissions that the various forms of lockdown have proved to be viable, and to explore the potential for investing in measures to make the grass quantifiably greener on the other side.

We will write more about the evolving climate change agenda, including topics such as: impact investment; environmental, social and governance issues; net zero emissions; and sustainable agriculture, in future articles.

If you would like to discuss any of the questions raised above, please contact Jonathan Kitchin or Nirav Patel.

This article is for information purposes only and is not a substitute for legal advice and should not be relied upon as such. Please contact our specialist lawyers to discuss any issues you are facing.