PART 1 – Selfless vs Selfish
It has been fashionable to look for equivalences between the Covid pandemic and the climate crisis. These have often had the form of: Covid is a global problem, the virus doesn’t respect national borders, and coordinated multilateral response is needed, short-term pain for long-term gain etc. Then, add on the clear and present benefits – clear air, bird song and a slower pace of life and equivalence becomes clear (at least for richer people). We can solve the pandemic through mutually supportive action, through following the science and we may even have the recipe to solve climate change into the bargain. Build Back Better.
However, as the virus goes from epidemic to pandemic to endemic, so cracks in this narrative are showing.
- We see an unequal availability of vaccines between richer countries and poorer ones.
- We see the beginnings of squabbling between richer countries (multiple examples, just one below).
- We see a mismatch between intention and practice. For example, Canada has pre-ordered 5x more vaccine doses than it needs for its entire population (through an abundance of caution it hedged its bets on all the big vaccines before efficacy was known) – BUT – in practice it has almost no actual vaccines, it has to rely on imports. Having contracts is nice, having vaccines and/or manufacturing capability is (much) better.
- We see reliable partners twitching at supplying foreign markets: the big manufacturers (India and Brazil), both struggling with very high rates are starting to think about who is best served.
- The EU is accusing one company of shopping its vaccines to the highest bidder despite “agreements”, and the EU-UK post-Brexit trade fault-lines are opening.
Luckily, and despite the tragic loss of life to date, Covid is not anywhere near as bad as some other pathogens – the “Spanish Flu” being an obvious example; and we should be incredibly grateful that so-far outbreaks of Ebola have been contained – it has a mortality rate of close to 50%. The most amazing story of containment comes from Nigeria.
If Covid-19 was much nastier than it’s infection fatality rate of 1%, it’s no stretch to think that such niceties would fall by the wayside and it would become a free-for-all as money and muscle replace diplomacy, contracts and convention.
For almost a century the “Rules Based System” has helped create unparalleled peace and prosperity. Could it be trampled in the rush of nation states to look after themselves?
Covid and Energy
So why the musing on human behaviour in face of a not-quite-existential threat? Well, if you recall before Covid crashed the party a year ago, all we ever heard about was the climate emergency – obviously it hasn’t gone away, but it is clear that focus has shifted to a more clear and present threat. If/once Covid is contained and/or we learn to live with it, focus will return to climate and energy.
As you will know if you have read my previous posts, I am firmly in the camp that believes we are heading for a major energy crisis – the ideological drive to transition – which has culminated in a belief that we simply don’t need fossil fuels – will lead to an inevitable supply-side train wreck, long before we have transitioned. Of course I have no idea when this will happen, but plus-or-minus a few more years of Covid, I’d suggest anything from 2-10 years from now.
How will the world react when energy prices go through the roof, purchasing power collapses, our debt mountains come home to roost? Will we calmly coordinate and find the most equitable solutions such that everyone gets enough, or will it be muscle and money fighting for nation-states selfish interests?
Energy security has become all-but invisible, just like pandemics were pre-Covid.
Covid may well be giving us an unpalatable foretaste of what the next energy crisis will look like. Unequal access to resources, squabbling or worse, contracts not being honoured, supply being restricted, and supply going to the highest bidders.
Food for thought.
PART 2 – Big Pharma lessons for Big Oil – to follow!