Recovery and Resilience

While the COVID-19 pandemic we are in now is nothing like we have seen for over a century, we will come out of it. And it is important that we come out of it stronger and more resilient, particularly for the United States.

by Laurie Stone
April 2020

As we face one of the biggest health and economic crises of our lifetimes, our first response must to be to ensure people’s health and address the needs of those who have been negatively impacted economically, including through loss of employment. But then we need to think more broadly about where we go from here. While the pandemic we are in now is nothing like we have seen for over a century, we will come out of it. And it is important that we come out of it stronger and more resilient.

Unfortunately, this is not going to be the only crisis we confront this decade and this century. In the face of climate change, this pandemic may only be a preview of things to come. But this tragedy has shown us where we have cracks in our system, and we can take it as an opportunity to learn from our failures and build back better.

On March 23, a group of US economists, professors, and veterans of the last financial crisis sent a letter to Congress calling for “a green stimulus of at least $2 trillion that creates millions of family-sustaining green jobs, lifts standards of living, accelerates a just transition off fossil fuels, ensures a controlling stake for the public in all private sector bailout plans, and helps make our society and economy stronger and more resilient in the face of pandemic, recession, and climate emergency in the years ahead.”

One of the authors of the letter, University of California, Berkeley Professor Daniel Kammen, believes that the recent $2 trillion stimulus may have been the right short-term move but is the wrong strategy overall. “We have a massively unequal and unjust society in which we have guaranteed that the poorest get the least quality medical care, have to drive long distances to work, and suffer the most from climate change,” he says.

This reluctance to invest in the public good has put the United States in a situation today where we are failing to provide healthy living situations for many in the country, due to circumstances such as polluted air, land, and water; lack of adequate health care; absence of a safety net; and ecological destruction.

“As a country, we have lagged other developed economies in public investment in mass transit, clean energy technologies, and the climate in general,” according to Uday Varadarajan, a principal in RMI’s electricity practice and former program examiner in the US White House Office of Management and Budget. “COVID-19 is foreshadowing the consequences of neglecting such public goods, and gives us the opportunity to avoid suffering the same fate moving forward,” he says. By building back our economy in a more resilient way, we will be better able to not only endure but also prevail over future crises when they come.

Resiliency through Clean Energy

Any recovery that we undertake must be consistent with the long-term goals of a clean and secure energy future. Thus, we must rebuild in ways that focus on clean energy technologies, but in a manner that does not inhibit the business models and interests of the stakeholders and individuals who are struggling to recover. In other words, we can enhance those industries by building back sustainably.

Over the past month in the United States, and prior to that in China, we have seen reduced carbon emissions due to the economic downturn caused by the coronavirus. However, as we saw from the 2008–2009 global financial crisis, those reduced emissions were short lived. Global carbon emissions dropped 1.4 percent in 2009, but then rose 5.4 percent in 2010 (and grew more than 4 percent in the United States), as the economy recovered. What we need is sustained structural change.

Instead of building back the energy systems that are causing climate change, this time we need to focus on low-carbon energy systems that are more resilient. “Hopefully there will be a bump in economic activity as we come out of this crisis, and that needs to be directed toward a future that is livable,” says Kammen. “Every dollar not spent on a cleaner more resilient future is a dollar wasted.” We are in a much better place to do that today than we were in the 2009 crisis, as over the past ten years, we have seen greatly reduced prices and improved performance of renewable energy and storage technologies. In fact, renewables are the cheapest option going forward today.

“Every dollar not spent on a cleaner, more resilient future is a dollar wasted.”

— Professor Daniel Kammen

Fatih Birol, the executive director of the International Energy Agency, has urged countries to make large-scale investment in clean energy technologies part of any COVID-19 stimulus package. “It will bring the twin benefits of stimulating economies and accelerating clean energy transitions,” he wrote in an op-ed. “The progress this will achieve in transforming countries’ energy infrastructure won’t be temporary—it can make a lasting difference to our future.”

In addition to being the most economic choice, solar and wind power are also more resilient because they can be distributed and modular. When Hurricane Sandy hit the eastern seaboard of the United States in 2012, millions of people in New York and New Jersey were left without power. Yet many small renewable energy systems kept communities throughout the region up and running.

Another benefit to investing in solar and wind projects right away is that they are “shovel-ready.” “One of the lessons we learned from the 2009 American Relief and Recovery Act (ARRA) is that money needs to get out the door and have impact right away,” argues Kammen. “Solar and wind projects can be up and running in two years; faster than if we invested in new oil, gas, and especially nuclear.”

Transitioning the Workforce

However, we have to be mindful of the regions with economies that have traditionally relied on oil, gas, and coal production. Many of these communities were already hurting before the latest economic crisis. We had already been seeing significant reductions in coal use, and now the Energy Information Administration predicts that coal-fired power plants will see a decline in generation of about 20 percent over the year. It’s possible that unlike other industries, the jobs in fossil fuel production will never come back. And it would be economically foolish and socially unjust to leave those workers behind. Therefore, we must work on a mindful transition for that workforce.

This starts with a demand for workforce training. In other words, instead of penalizing the dirty legacy industries, we should provide positive incentives to drive decarbonization, which will create many new jobs. Offshore oil and gas workers can transition to offshore wind or other careers of their choosing with training they choose. If they choose, coal miners can be put to work on environmental remediation with minimal job retraining. The point is to look at who is in distress, consult with them to understand their needs, and match their skills to an opportunity appropriate for their geography.

Of course, we will also need to train new workers for the new clean energy industries and also provide a way for those close to retirement to exit the workforce with financial security. This could include shoring up pension funds and increasing funding of health care for coal miners. “We can either spend our time getting money from the bad actors, or trying to address people who are suffering now,” says Varadarajan. “In my opinion, it’s time to be addressing people who need the help now.”

Decarbonizing Energy Intensive Industries

After the last crisis, ARRA focused on helping green industries to recover. According to Varadarajan, “While this effort had some big wins—nearly tripling US renewable production, catalyzing US leadership in EVs, updating building codes across the country—the perception that the effort singled out green industries while neglecting workers and companies in other industries hit by the crisis created a political backlash that has lasted for more than a decade and contributed to a lack of trust in the government to invest appropriately.”

Companies across the board have been hit hard by this crisis, and some of the hardest hit industries are the most energy intensive ones, such as aviation and manufacturing. Instead of only focusing on green industries in the recovery process, we must focus on making all industry greener. Many of these energy-intensive companies are now sitting idle and their credit is fraying, and they desperately need help. However, if we bail out the energy-intensive industries in a way in which they rebound and come back the same as they were before the crisis, we have failed.

As we help these industries recover, we must give them the support they need to make their operations more resilient so they can withstand the next crisis and be robust in the face of climate change. This should be done not by mandating that they build back a certain way but by giving them incentives so they can start planning how to manage the transition to more efficient, cleaner technologies. For instance, we can give them an incentive to take a significant step toward decarbonizing their operations by conditioning debt forgiveness on verifiable long-term carbon reductions.

Rethinking Mobility

This pandemic and the numerous “stay at home” and “shelter in place” orders across the United States have left US roads uncharacteristically empty. Almost 60 percent of US transportation emissions—the country’s largest source of greenhouse gases—came from passenger vehicles and light-duty trucks in 2018. That has greatly changed in the past month. In fact, gasoline supplied to the domestic market fell by 2.2 million barrels during the last week of March.

“This is a perfect opportunity to invest in zero-carbon mobility,” says Carla Frisch, an RMI principal working on America’s Pledge. “In this downtime of reduced ridership, we can be retrofitting for efficiency and hybrid technologies, and use it as a stepping stone to build toward zero-carbon fleets—while of course being very careful to provide any workers that do that work with appropriate health protections.” We could even continue to have people leave their cars at home when we get to the other side of this crisis, by making public transit free. Over 100 cities around the world, mostly in Europe, and even a few cities in the United States, have abolished public transit fares.

Lessons Learned

We have learned many lessons from ARRA and from other recovery acts across the world. Perhaps the most important lesson, according to Frisch, is to “find a balance between providing funds for communities and workers to do what works for them and shaping the requirements for those funds in a way that helps them move toward more clean technologies.” Another big lesson is the need to be flexible. “Just as COVID threw a big curve ball, climate change will do the same,” says Kammen. “We can’t anticipate all the impacts of climate change ahead of time.” Thus, the need to focus our recovery efforts on resiliency.

“We must find a balance between providing funds for communities and workers to do what works for them and shaping the requirements for those funds in a way that helps them move toward more clean technologies.”

— RMI Principal Carla Frisch

As Helen Mountford, vice president of climate and economics at World Resources Institute, writes in a recent blog post, “While COVID-19 and its economic repercussions are rightfully the primary focus of many governments today, as we look to boost the economy, we also need to consider tomorrow. For countries looking to shore up their economies in turbulent times and achieve long-term sustainable growth, climate action offers a compelling opportunity.”

One thing COVID-19 has given us is the opportunity to focus on making sure that those individuals, businesses, and industries that have been negatively impacted do not come back to the same situation they were in before but come back better off. “We must build back in ways that are more sustainable and resilient,” says Varadarajan, “so that we have a better America at the end of the day.”