A Shift In Thinking - COVID 19 and the Clean Economy 

Coronavirus has cut emissions faster than years of climate negotiations, but this raises questions about the positive effects of COVID-19 on climate change. But how long will these effects lastHow can we transfer these experiences to other crises like climate changeAnd how can we shift our thinking to use collaboration and innovation to pivot during the crisis?  

“Tough times spark innovationNow is as good a time as any to test new energy systems and processes, and it starts with a shift in thinking.” 
Dr. Jemma Green, Executive Chairperson & Cofounder Power Ledger in Forbes “COVID-19: The Wake-Up Call The Energy Sector Needed

In 2014, a bit more than five years ago, I did an exchange semester at NTU (Nanyang Technological University) in Singapore where I started focusing on energy and sustainability.  

To put this in perspective, 2014 was the year, Tesla started its expansion to Europe and Asia. By that time electric vehicles were still far from being seen as a serious alternative to combustion engine in Europe. During the same year, Bitcoin went through one of its first major rallieand crashes. Blockchain was mostly associated with the black market (e.g. silk road) and simply just not known to the broader public. Also, in 2014, the IPCC released their fifth synthesis report on climate change and most definitely no one associated the word “corona” with anything else but a beer brand and/or a celestial body.   

So, what do Tesla, Bitcoin, and the Intergovernmental Panel on Climate Change (IPCC) have in common and how do they relate to the current crisis? 

“Statisticallycartoon” on Instagram

The current crisis, stresses boundaries that for me were formerly hardly imaginable. Our freedom is restricted massively by quarantineMajor airlines such as Lufthansa are flying with a flight schedule which is “comparable to 1955” and the worldwide economy is slowed down massively by shutdowns and lockdowns. Even sport events are canceled. Unimaginable.  

When it comes to climate change, we currently see various posts, reports and articles about the positive aspects that these drastic measures have on our environment. We hear about better air quality, reduced greenhouse gas emission and also stories of wildlife returning to habitats from where they were thought to be gone foreverEven though this might be temporarily good for the environmentthese effects will not be long term and they came with the massive expense of economic development and of existential suffering of people. 

However, if we want to take something good out of the current crisis, the silver lining is that we can learn, and we can transfer the knowledge and experiences to other crises like climate change. 

Three of the most important learnings I see are: 

1. We learn a lot about exponential growth and development

From Andriy Burkov on LinkedIn

The development of COVID-19 shows us that we need to prepare for events that develop exponentiallyThis is why we need to listen to scientists who study such effects and understand these developments in detail. The big difference between COVID-19 and climate change is, that we saw the development of COVID-19 in days, not decadesWhen it comes to climate change, we do not see these effects in such short timeframe. Actions that we do today will be measurable in years or decades and not within two weeks. We have stick to facts and listen to reports like the AR5 from IPCC.  

“Without additional mitigation efforts beyond those in place today, and even with adaptation, warming by the end of the 21st century will lead to high to very high risk of severe, widespread and irreversible impacts globally (high confidence).”
– (IPCC AR5, 2014) 

In 2018, the IPCC released a special report about the impact that a change of temperature of 1.5°C compared to 2 °C. It is important to understand that such an increase is not linear. An increase of 0.25 more or less in temperature has a significant impact on the environment. We already are witnessing irreversible effects that we cannot solve them with a two-month shutdown. Luckily, we still have the chance and time to react and reserve our actions. Together, we can do something to help our planet and not wait until it is too late! 

 2. We are a globalized world and more connected than ever 

One thing that the development of COVID-19 showed us is how connected our world is nowWe see that environmental crises do not stop at a nation’s border. We need to work together with transparency on a local, domestic, and international level to create changeThis collaboration in times of COVID-19 did not always go 100-percent smoothly, but there are great examples of ways we tackled COVID-19. We see local support initiativesdonation campaigns and even hackathons. With the All In Challenge,” for example, actor Leonardo Di Caprio and Martin Scorsese are offering an opportunity to be an extra in his next movie. The pair hopes to attract donations to US food banks and raise $10million to help mitigate hunger caused by a rising unemployment rate. 

Globally, organizations, governments and foundations are collaborating to discover new vaccines and medication for world-wide distribution. 

We can take these learnings and apply them to climate change. We cannot shut down our borders if we want to stop climate change. These effects are not limited to regions in the world but are affected globally. We need to work together on climate change like we are in the current COVID-19 crisis. Doing so, we will be able to solve the challenges ahead 

 The key to success is through transparency, determination, and commitment from everyone, not only by a few. Currently, we are rethinking globalization to some extent when it comes to things like supply chains. I believe that the worldwide connection and collaboration is also our biggest opportunity in finding a solution for crises such as COVID-19 and climate change. 

3. Science, innovation, and technology are crucial to overcoming the crisis 

We are currently re-evaluating the relevance of science, innovation and technology. I’m not saying that we did not think the three were relevant before the crisis, but now we understand more about how much we rely on thinkers when it comes to solving a crisis. We all can take measures currently and stay at home. This action helped us limit the effectsbut still the broader public relies on and waits for the development of vaccines to end COVID-19. In the meantime, we can see how technology and innovation are helping us to overcome challenges in other areas such as digitizationIn Germanydigitization is driven at a rapid pace. With the help of software like Microsoft Teams, Zoom and Webexwe are able to keep up the economy and social morale up to a certain extend.  

“Adaptation and mitigation responses are underpinned by common enabling factors. These include effective institutions and governance, innovation and investments in environmentally sound technologies and infrastructure, sustainable livelihoods and behavioural and lifestyle choices. (IPCC AR5, 2014) 

In addition to economic measures and lifestyle adjustments, we will rely heavily on innovation and technology improvements to combat climate change. Looking back at 2014, we see that over the past years we already have made great progress. Since that time, we have seen that the awareness for sustainability rise. Looking at success like Tesla, for example,  which today has a higher market cap than BMW, Volkswagen and Daimler combinedwe see that the CleanTech market is now a serious and attractive investment opportunity instead of being something for dreamers, liberals and world improvers.”  

Blockchain has made huge developments over the last years. The technology is no longer seen as a currency for drugs with an enormous energy consumption. Currentlywe are discussing bitcoin, Ethereum and co as an alternative to our current financial systemWe are looking at CleanTech as a great opportunity as well. With blockchain technology we can generate a new level of transparency and decentralization in relation to energy production and beyond 

To give an example, I found one slide from 2014 where my professor of Energy Resources Management at NTU: 

Lecture "EM9105 Energy Resources Management” 2014 - Special thanks to Prof. Tuti Mariana Lim!

At that time, we discussed Power Purchase Agreement (PPAs) and the opportunities of decentralized energy production. PPAs are contracts by that a power purchaser (e.g. utility companies) who agrees to buy electricity from energy producers (e.g. households with Photovoltaik (PV))Such a shift towards a decentralized energy system offers greater opportunities to lower costs for decentralized energy production. One challenge by driving PPAs and decentralization is to track and manage such a system efficiently. Blockchain in that constellation offers a technology that, if implemented correctly, would be perfect to drive the trend towards a more efficient, less expensive and, most importantly, more sustainable energy production based on decentralization. 

Since 2014 there have been some very good blockchain projects within the energy market. One of the most promising projects for me personally is Power Ledger which was founded in 2016 by Dr. Jemma Green. Power Ledger is the fastest growing tech startup that has developed a world-first blockchain enabled energy trading platform to make energy markets more efficient. They enable people to transact energy, trade environmental commodities and invest in renewables. Power Ledger is a great example of how new innovation and technologies can help us when it comes to climate change if we shift our thinking and take advantage of the great opportunities that we already have. 

Looking at the development over the last 5 years I am very positive about that we already have the technology that we can use to limit climate change at a massive scale, nevertheless, we need to further invest in new technologies and drive sustainability not only in the energy production but in all areas of our lives.  

What we need is action and a collaborative commitment to investing in sustainability. Similar to COVID-19, one of the most crucial factors with climate change is time and timing. With all the expenses that we currently are paying to fight COVID-19’s effect, lets learn from itLet’s work in collaboration toward solving the current crisis and transfer the learnings to solve crises such as climate change. 

So, what are your thoughts? Please write a comment or message and if you want to learn more about the topic,  I am happy to announce that Dr. Jemma Green, Co-Founder of Power Ledger, will join our webcast next Wednesday to talk in more depth about GreenTech, Blockchain and Innovation. 

Join our the conversation with Dr. Green and the TQ founders Dr. Thomas Funke and Dr. Sebastian Schäfer on Wednesday, 22 April at 9:15 am (CEST) to learn more about how we can shift our thinking in the current crisis and how we can leverage innovation and blockchain when it comes to climate change. 

In our interactive format you have the opportunity to take part in the conversation by directly asking questions to Dr. Green, and our founders. In case you will not be able to join at 9:15 am, we will upload the recording latest by 3 pm! 

– Lucas 

Resources and Readings: 

DW  Coronavirus and climate change: A tale of two crises, Ruby Russel (2020): 

Forbes  Covid-19: The wake up call the energy sector needed?, Dr. Jemma Green (2020)

IPCC – Synthesis Report AR5 (2014)

IPCC  Special Report – Global Warming of 1.5 ºC (2018) 

Medium  How the Corona Crisis Has Shown Us That we Need Bitcoin, Ether & Co.by Philipp Sandner (2020) 

MIT Sloan Review – Covid-19, Climate, and the Clean Economy: Gigatrends Changing the World by Andrew Winston (2020)