The prevailing narrative is that big bad oil and the fossil fuel industry will prevail no matter how bad a business model it might be. A Guardian article weakens that assumption, by addressing: Will the coronavirus kill the oil industry and help save the climate?
Here is a key paragraph:
After the 2008 global financial crisis, there were high hopes that the trillions of dollars delivered at that time would green the economy, but fossil fuels and their emissions powered on, ever upwards. Kingsmill Bond, Energy Strategist for Carbon Tracker think tank, said: ‘The big difference to 2008 is that the cost of renewables is now below that of fossil fuels. There is no point trying to sustain the unsustainable high-cost fossil assets in any event’
Here is more:
Prof Bernard Haykel, at Princeton University, US, said it also reflects a more fundamental strategic shift led by Saudi Arabia’s crown prince, Mohammed bin Salman: “With a global clean-energy transition inevitable, he is desperate to cash out while the Kingdom still can.”
However, the transition from fossil fuel to clean renewables may need help:
Not all experts think the oil industry’s loss is necessarily a gain for green energy and the climate. “If anything it may hold up the share of oil for longer, because it’s cheaper. It could be bad news from a climate point of view,” said Dieter Helm, professor of energy policy at the University of Oxford.He said securing a green economic recovery from the coronavirus crisis will require deliberate policy measures from governments: “This is where the carbon tax comes in. Now is the moment.”
As we change the narrative not just about fossil fuels, there could also see changes in the way investors see the world:
The oil industry was already under pressure from investors concerned about the climate crisis and increasing regulation from governments to cut emissions. Colin Melvin, at Arkadiko Partners, a consultancy advising some of the world’s biggest investment management and pension funds, said that after the crisis he expects investment to flow increasingly towards companies perceived to offer wider social benefits.
“The purpose of the investment of capital in business is to create wellbeing, to create wealth in the true sense, and I think that is going to become more and more relevant to investors,” he said.