The coronavirus crisis is, of course, all-consuming right now, but for those who spend their careers working on climate change it is both a preview of what responding to extreme climate change might look like — a worrying distraction from a global problem that’s still happening — and, potentially, a path to some changed habits that could actually help us fight warming in the long run.
I spoke with Jay Koh, managing director of the private equity firm Lightsmith Group, which invests in climate tech. He said investment is down, but that’s not the only concern. The following is an edited version of our conversation.
Jay Koh: We see a couple other effects too. One of them is what we are really worried about or calling kind of the double whammy effect, which is nothing stops the impact from climate change from happening right now, or over the course of the next three to six months. You have an increasingly fragile environment that’s been created by the pandemic and the knock-on effects we’re going to see from the economic adjustments that still makes it even more vulnerable to the impact of climate, which is certainly not gone away. But you’re right, I think what we’ve done is steadily load the dice against ourselves and each time that they don’t turn up the wrong way for us, we feel like it’s pretty much the same as usual. But when they do actually manifest, we have to have this sudden reaction, and it’s dramatically more expensive and problematic, particularly for the most vulnerable populations at the time that we actually realize the impact of it.
Molly Wood: What does happen to the fight against climate change when the whole world goes on pause because of coronavirus?
Koh: I think there’s two possible effects. On the one hand, how much more intervention do you have? It’s amazing that you can mobilize $2 trillion of activity in the United States in the space of less than three months. The flip side to that is lots of people’s budgets for doing anything else have now vanished. Let’s say you do get a double whammy situation, or you try to prepare against the loaded dice on the climate side as well, how much money is left in the kitty to do that is a really interesting question, in addition to the attention-span piece of it in the fact that it’s hard to do very much more than react to the immediate set of circumstances we have right now, and they’re very, very serious.
Wood: You say “interesting,” but I hear “challenging” at best, like it’s an interesting question, but it sounds a little like a scary question.
Koh: The question is also what do you do with that $2 trillion? You could re-orient it so that you try to have the reverse of the double whammy effect, where you actually take the spending and a massive amount of stimulus and the massive amount of mobilization and orient it at making sure that we do accelerate the transition on the carbon side, to try to reduce the trajectory that we’re on on the climate change cause side of the equation. Also, do it in a way that actually builds up our resilience to the potential impact and risk that we’re going to see from climate change at the same time.
Wood: Let’s talk a little bit about what’s happening right now. As so many of us are working from home and conferences are canceled, are there habits that we might end up adopting permanently, or discoveries that could actually be good for the short term mitigating carbon emissions?
Koh: I think that you are seeing that effect right now. There’s been a lot of commentary about how there’s reduced airborne pollution. You’re seeing definitely reductions in air traffic, which has a very high carbon budget to it. I think that there is a real chance that we can think about what we really need to do to change the way that we actually consume energy, need to travel, need to meet people. I think some of those habits really can transition. Some have already transitioned for the younger generation. Our 11- and 9-year-old and 4-year-old are all very naturally engaged in videoconferencing right now, I’d say. It also is something that creates a very stark understanding of how the digital divide also impacts people as well. We were talking to some counterparties in Kenya, and they said working from home for them means no internet access, [and that] it’s great that you guys can jump on Zoom and travel around and then virtually visit people and connect. There’s going to be a dramatic difference in the way that the poor population has that experience as well as developing countries have that experience.
Wood: I wonder, though, what will this do for data collection? If we have six months or a year where human carbon emissions dramatically decrease, where the transportation that we have just assumed could not change — like this is just how life is — everybody flies this much and drives this much — is forced to change in a way we never would have imagined, what kind of data could we take away from that that could, frankly, demolish some excuses?
Koh: I think you can really show people how their consumer preferences can permanently change. I think you’re right, that your individual carbon footprint can change in a more permanent way, so the need to do all these things, the pace at which we were doing them, and the ultimate result, I think, is going to be recalculated. Whether that is true of a lot of different things, I think the challenges that people are facing right now is if you’re trying to close transactions or make new relationships happen for the first time, the human element is very much missing from that equation. I don’t know if a lot of investors are going to invest in companies that they’ve never met the management team personally, at least in private investing, or a lot of transactions can close without folks meeting face to face in a real environment, though, that I think can culturally change as well.
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A little more on what this data around pollution might mean. The New York Times has a piece that connects that story with reports that show that black Americans are getting infected and dying from COVID-19 more than any other group. The EPA and other research bodies have found over and over that communities of color are more likely to live in polluted areas closer to coal plants, refineries and industrial manufacturing sites. Exposure to that pollution can exacerbate underlying health conditions — comorbidities —that make COVID-19 more likely to be fatal.
The pollution data about coronavirus, as I said, is still preliminary, but if true, it’s yet another example of how natural disasters, like viruses and storms and global climate change, disproportionately impact vulnerable communities, and there’s nothing natural about how they got that way.
On the topic of pollution, we’ve been hearing a lot about visibly and measurably cleaner air as global pollution and even global carbon emissions are falling because people all over the world are in lockdown to avoid spreading the virus.
Another New York Times article points out that our recovery efforts from the coronavirus have the potential to have a huge impact on climate change and emissions if we take this as an opportunity to change not only our transportation habits but the way and the amount in which we consume and create goods, since industrial manufacturing, even more than driving and flying, is the source of most of the world’s carbon emissions. Or we could go the other way and reduce pollution oversight, encourage everyone to buy SUVs with all that cheap gas and set aside global emissions treaties to deal with the short-term crisis in front of us. Option 2 is already starting to play out in the U.S. and other countries, but let’s not give up on Option 1.
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