The most significant impact of Coronavirus is on people and public health; however, the spreading pandemic is already having profound economic implications. The ripple effect will have short-term and long-term consequences for greenhouse gas emissions (GHG), utilities, and electric vehicles. China is both the largest GHG emitting nation and a bellwether for a Coronavirus driven reduction. There has already been a noticeable drop in air travel, automobile travel, manufacturing, and industrial production which has resulted in a significant drop in CO2 and Nitrogen Dioxide emissions in the first two months compared with 2019.

(Source: Washington Post analysis of Sentinel-5P satellite data via the European Space Agency)

This across the board drop in economic output has been a major contributing factor to the significant devaluation of oil. A price war between Saudi Arabia and Russia that flared overnight on March 8th into March 9th sent the price of crude oil down by 30% in international trading. However, this was just a continuation of where the Coronavirus driven slump was taking West Texas Intermediate crude (which is down nearly 50% in 2020). Analysts at Goldman Sachs are predicting oil will drop from $60 dollars at the start of the year to as low as $20 dollars by Q2.

This precipitous decline will have two contrasting short-term environmental impacts. First, there will be an unmistakable global drop in GHG emissions. While most of the global community is working to achieve this kind of reduction, the economic consequences could be extremely harmful if a prolonged Coronavirus induced recession is triggered. Displaced supply chains could invariably lead to displaced workers and displaced demand. Simultaneously the low cost of oil will act as a negative price signal for electric vehicles. With oil at $30-$40 dollars a barrel consumers will feel more comfortable purchasing SUVs and traditional internal combustion engines. Coupled with a broader slowdown, sales of new EVs in 2020 could shrink vs. 2019, which would be the first dip since 2015. While the short-term impact of a pandemic on EVs sales could be negative, the long-term trends for both GHG reduction and clean-tech should be significantly brighter.

It is true that global GHG emissions have come roaring back after every recession or crisis in the 20th and 21st centuries going all the way back to the Spanish Influenza in 1918-19. However, the shifting market acceptance of renewable energy and electricity vehicles in the past 12-36 months could be accelerated on the rebound of a recession. Even with low natural gas and oil prices a year from now consumers will have more options to purchase “clean power” from their utilities and EVs from automakers. GM’s recent announcement of 20 new electric models is an unmistakable signal to the marketplace and a recognition that customer sentiment is changing. Tesla created a coolness factor for the EV and now major OEMs are working to position themselves to take advantage of these changes.

Coronavirus is already having devastating human consequences, and disruptive economic ones. As communities, utilities, and businesses work to mitigate the damage the pandemic has, the growing resiliency and sustainability movement can lead to more holistic recovery. This recovery can be based on energy efficiency, renewables, and EVs.