Summary
The COVID-19 pandemic has radically altered the energy outlook, both in economic and geopolitical terms. Climate governance has also been significantly affected in a key year for increasing ambition. This working paper analyses the impact of the coronavirus crisis on the geopolitics of oil and gas, on the evolution of the European Green Deal and on climate governance, updating and deepening a previous policy brief published in Spanish.1 It concludes that, while the priority of governments and citizens is undoubtedly the fight against coronavirus, the radical change in the short-term context should not distract energy and climate policy from the challenges it faces over the medium and long terms. Furthermore, energy and climate policies will be key to shaping an optimal policy response to the crisis.
Introduction
The coronavirus crisis has completely transformed the global landscape, and energy and climate issues have not escaped unscathed. Rarely have analysts had to rectify so much in so short a time. One of the problems facing social scientists in this context is that, unless they specialise in matters related to public health, there is still no academic literature available to guide the reflections of public decision-makers and think-tanks, which are starting to respond to the challenge necessarily in a reactive way. Not only oil prices and production forecasts have drastically changed: the very nature of global oil diplomacy has mutated, with the OPEC+ and the G20 reaching unprecedented agreements that signal the exceptional times the market is undergoing.
It has been said that the coronavirus crisis has led to ‘a situation of radical uncertainty, which may persist over time’.2 To some extent this observation may be viewed as an amendment to almost all the conjectures made about the possible course of 2020 at the beginning of the year.3 ‘Almost’, because although the outlook over the short term has changed in tandem with the spread of the virus, the challenges of the energy transition and the fight against climate change remain. In line with the overlapping stages of the response to the COVID-19 crisis (immediate response to the health crisis, contention of the twin supply and demand economic shocks, economic recovery and transformation of the economic model), this paper analyses the possible impact of the coronavirus crisis on the following issue-areas and time horizons: in the short-term, on oil and gas geopolitics and geo-economics; in the short to medium-term, on energy transition and the European Green Deal; and in the short- to long-term, on climate governance and climate policies. The paper concludes with some tentative reflections on energy and climate policy.
Gonzalo Escribano
Director of the Energy and Climate Programme, Elcano Royal Institute | @g_escribano
Lara Lázaro-Touza
Senior Analyst at the Elcano Royal Institute. Lecturer, Cardenal Cisneros University College (affiliated to Madrid’s Complutense University) and IE School of Global and Public Affairs | @lazarotouza
1 Escribano & Lázaro Touza (2020).
2 Federico Steinberg (2020), ‘Liderazgo y cooperación ante la incertidumbre radical’, 19/III/2020.
3 Escribano (2020); Lázaro Touza (2020).
