Deck 9: Energy, the Environment, and Climate Change

Question 1

Explain how a pandemic leads to a decline in economic activity. A production process demonstrates how economic resource inputs (factors of production) are transformed into output. How does a pandemic alter the demand for economic resource inputs?

Answer 1

A pandemic forces countries to implement interventions that both reduce human contact and shutter non-essential forms of economic activity. During the process of economic shutdown, recessionary forces emerge. Because of a decrease in global transportation, global supply chains sever, altering the demand for economic resource inputs.

Question 2

During the coronavirus pandemic of 2020, the oil market experienced a decline in price. Why did this outcome occur?

Answer 2

During the coronavirus pandemic, an unprecedented event occurred. In April 2020, because of a substantial decrease in the global demand for oil, the price per barrel plunged. In fact, for a few days, the price of a contract to supply West Texas Intermediate crude fell below zero. The price of oil is determined in the futures market, in which futures contracts establish agreements to buy and sell oil at a future date. Normally, the futures contract is bought and sold many times before the date of delivery. During April 2020, traders were caught in a market to sell their contracts before they received the oil. The economic shutdown that decreased economic activity led to a reduction in global consumption by over 20 million barrels per day. With a surplus of oil on land and in tankers at sea and no buyers in the market, storage capacity filled. Oil prices fell below zero, meaning suppliers had to pay customers to take the oil off of their hands.

Question 3

Do you believe that a pandemic accelerates the transition from fossil fuels to renewable energy resources? What factors influence the process of energy transition?

Answer 3

Energy transition is the "complex socio-technical processes of decarbonization within energy systems, and involve both bringing in low, or zero, carbon energy and phasing out old, high carbon energy" (Kuzemko et al., 2020). It signifies the period between the introduction of a new resource or technology and growth into a significant share of the market. Accelerating the transition to clean energy requires innovation in the buildings, industry, transportation, and electricity sectors. But forecasting the timeframe for energy transition is challenging. On one hand, a pandemic stifles the transition, as countries focus on health and economic crises. On the other hand, a pandemic galvanizes a country to investigate renewable alternatives, especially wind and solar, in order to decrease the dependence on cross-border energy markets.

Question 4

Is a pandemic likely to create long-term effects with respect to energy supply and demand? In your answer, is there a difference between fossil fuels (coal, natural gas, oil) and renewables (geothermal, hydropower, solar, wind)?

Question 5

Explain the economy/environmental relationship with respect to the flow of raw materials, energy, and ecosystem goods and services from the environment into the economy, and the flow of air and water pollution, solid waste, and waste heat back into the environment. In this model, how does a pandemic fit?

Question 6

Suppose in an urban area a pandemic leads to lower levels of air pollution. The residents decide they value clean air. To ensure a sustained and high level of air quality after the pandemic, what should happen? What is the role of public policy and incentives?

Question 7

Explain the model of the economy and the environment. What forms of pollution flow from the economy to the environment? In your answer, distinguish between local, regional, and global pollutants. Does a pandemic impact these pollutants the same way? Do lower pollution levels provide justification for cities to promote post-pandemic initiatives for walking, cycling, and public transportation?

Question 8

A pandemic leads to disease-related deaths (effect number one). But lower pollution levels lead to fewer pollution-related deaths, especially with cleaner air (effect number two). On a global scale, which effect is larger? What factors impact the result?

Question 9

Why is it easier for researchers to determine the impact of a pandemic on the level of greenhouse gas emissions than changes in atmospheric concentrations of greenhouse gases?

Question 10

Following a pandemic, which strategies for environmental sustainability are most relevant?