The duration of the lockdown caused by the coronavirus pandemic not only has a direct bearing on carbon emissions in the EU ETS but it also influences the degree of supply chain contagion that could hold back the recovery of the global economy. To get a sense of how long people think it will take for there to be a chance to get back to normal we asked attendees of last week’s Coronavirus and the EU ETS webinar: How long do you think it will take to get on top of the coronavirus pandemic? The results are graphed above.
- Only 15% respondents believe we will get on top COVID in Europe within 3 months (the time it has taken for Wuhan to get back to some kind of normality). Only 10% of respondents think it will take more than a year.
- A majority of 48% thinks that it will take 3-6 months. It seems to be accepted that most of the rest of the world can’t lockdown as efficiently as China but that it won’t be too much worse. This seems to be a reasonable assumption on the face of it, we ought to be able to get on top of the pandemic relatively quickly and that the effort to save lives and prevent greater economic damage will be successful. It also coincides with Energy Aspects’ view, expressed in the webinar, that things will more or less be back to normal by Q4 2020.
- However, nearly a third of respondents said getting on top of it will take 6-12 months. The expectation of such a lengthy recovery period is presumably based on the risk of a re-infection cycle one lockdown restrictions are released. This possibility wasn’t factored into the carbon price forecast provided by Energy Aspects’ Trevor Sikorski during our webinar but would undoubtedly lead to lower EUA price forecasts and louder calls for reform to the system.
If you are involved in the EU ETS and would like access to the webinar recording, please contact us at email@example.com.