The Day After: Sobriety, frugality

We continue with our ‘Words of the Day After’ series with an emphasis on: Frugality. Was 2019, the year of peak greenhouse gas emissions? #Sobriety and #frugality, two words used just a few weeks ago in debates on climate change between those who believe in declinism and those who support green growth. These terms apply very well today to the unprecedented global health crisis we are going through such as sobriety in our movements to limit transmission of the virus, and frugality to spare our resources until the end of the lockdown.

This pandemic dramatically highlights the strong dependence of environmental, health, social and economic issues. The disappearance of ecosystems is thus considered to be one of the causes of the development of coronavirus. And by forcing us to stop most of our industrial activities and travel, this pandemic could lead, in the short-term, to a reduction in global (carbon dioxide) CO2 emissions around 5 Gt, i.e. 10 times the reduction observed in 2009. China, responsible for nearly one-third of global CO₂ emissions, witnessed a decrease of at least one quarter between 3rd February and 1st March, compared to 2019, which is the equivalent to half of annual UK emissions. At this stage, it is difficult to predict whether emissions will increase again, as they did after the financial crisis of 2008, or whether their progress will remain slow, like the global economy, for which forecasters are not expecting a recovery until the fourth quarter of 2020 at best.

Reconciling recovery and “green pact”: mission impossible?

Health and climate risks are not only connected but similar in many aspects, notably their systemic aspects and their directly measurable physical consequences. We, therefore, must draw lessons from the pandemic and take advantage of the decade ahead to implement them and fight climate change. But will we have the resources?

While COP26 has been postponed to 2021, we might be tempted to take a rain check to focus instead on getting out of the crisis. Some voices are already calling to delay important investments linked to the energy and ecological transition. Thus, the development of renewable energies will undoubtedly be strongly impacted by two major challenges of the COVID-19 crisis: supply chain disturbances that might lead to delays in completing projects, and the likely decrease of investments due to pressure on public and private budgets combined with uncertainty concerning future electricity demand.

The question is therefore, will the pandemic be an accelerator of the structural transformations of our production model and our lifestyles to avoid global warming? It’s not certain yet: with the price of oil down 66% since early March, the temptation of recovery based on fossil fuels would be a dangerous quick-fix solution that would be tantamount to maintaining the status quo.

In the short-term, recovery plans being prepared by international institutions and governments will be focused on health, employment and support for businesses. The challenge is, therefore, to go further still: To encourage investments in low-carbon mobility, renewable energies and storage, green building and energy renovation, green infrastructure, efficient manufacturing and the circular economy.

A few avenues of thought to steer the debate of a green recovery

Logistics and on-line trade

On-line distribution and intra-urban delivery sectors should be required to accelerate the transition of their fleets to electric or hybrid vehicles, thus guaranteeing better air quality (some recent studies seem to demonstrate that COVID19 has spread faster in areas with the highest levels of air pollution) and support for the automotive industry. In the same vein, this could be the moment to launch or accelerate the replacement of buses and public vehicles with electric and hybrid vehicles.

Low-carbon energies

The costs of renewable energies are already low and should remain so. However, their integration into the network remains an economic, technical and regulatory challenge in many places. In particular, storage, smart charging of electric vehicles and smart demand adjustment management tools should benefit from capital to be scaled up and massively deployed. Likewise, emerging technologies such as graphene for storage, hydrogen from renewable sources or carbon capture and sequestration require further major investments to reduce costs and to develop them.

Sustainable territories

Towns and territories could systematize the implementation of digital solutions bringing about energy savings (smart lighting, smart public buildings, optimization of waste collection, etc.) in their development plans.

Energy efficiency

This is another key area that should be promoted. Since 2014, energy savings have been insufficient in Europe to offset the impact of economic growth, higher standards of heating and air conditioning comfort and lifestyle changes (on this point, you can read the “Climate” chapter of our latest global observatory of the energy markets (in french). And given the collapse in demand, petrol, gas, coal and carbon prices should remain low for a long period, thus reducing its economic justification. But, on the other hand, speed is of the essence, otherwise when demand bounces back, not only will emissions take off once again, but energy prices will increase too, thus contributing to slowing down the economic recovery.

We recently sketched the outlines of the future global energy landscape (in french). The extent of global progress towards a carbon-free future will depend on the intensity of the key factors combined, which are energy demand, the evolution of the energy mix, regulatory conditions, development of fundamental energy and digital technologies, and other factors related to the profound change in consumer behaviour.

Sustainable transformation of our behaviour and the necessary reinvention of our models

In addition to economic stimulus, it is likely that our behaviour will be profoundly changed by this pandemic, leading to a reduction of associated greenhouse gas emissions.

Solutions for remote collaboration or education

For those who can, working from home is becoming the norm. When lockdown ends, some businesses, out of precaution, will probably want to implement, for at least a buffer period, remote working to maintain barrier gestures. Some employees may demand it, at least partially, once lockdown is over and their employers will probably allow it more readily (on this subject, you can read our latest study on how to manage, motivate and collaborate in a virtual environment (in french).

Trips & travel

Business trips will be reduced in the months to come, and probably beyond that. We will probably be far less willing to take an aeroplane for a day’s travel and for meetings that could take place remotely. In recent weeks, we have seen the emergence of new, entirely on-line conference formats instead of events that should have taken place physically. Suppliers of video conferencing equipment and even holographic video conferencing equipment have a bright future. We need to go further still and envisage solutions that are compatible with environmental requirements (Green IT, for example), to ensure that the cure is not worse than the disease in terms of CO2 emissions.

Mobility

The growth of low-carbon mobility solutions, highlighted in large urban areas in France during the public transport strikes, will undoubtedly intensify. Multi-modal solutions, such as the personal mobility account (the solution being co-developed by La Fabrique des mobilités and Capgemini(in french) and the extension of the existing cycle path network will probably gain popularity among the masses that want to avoid the crowded environment of public transport which encourages the spread of such viruses.

Supply chain

In industry, relocation trends, already under consideration in recent years, will undoubtedly accelerate, even if they will not happen at once. International movements of goods will thus reduce. To shorten supply chains and thus reduce imported emissions – scope 3, it is likely that solutions such as 3D printing experience new growth. Likewise, the debate on the need to relocate the battery value-chain in Europe will probably be more topical than ever, as the current crisis emphasizes the issues of security of supply in the field of electric vehicles (we mentioned this subject in a recent point of view on the European battery strategy (in french).

Food & Waste

Food safety will be a priority more than ever for states and citizens. We can, therefore hope, in the retail and food sectors, to see an acceleration of circular models reducing waste and promoting the reuse of waste (waste to energy) as well as local consumption. In our latest study on the circular economy, we present an approach to help organizations understand and assess their current impact to help them identify opportunities linked to this model.

All sectors are therefore impacted by this review and these changes. More than ever before, the question is whether we, as individuals, businesses, investors and public authorities, will seize the opportunity to sustainably transform our models towards more energy sobriety and frugality in the use of natural resources. It is already interesting to note that ESG funds are generally resisting better to falling stock prices. The pressure from investors to take better account of societal and environmental issues in corporate strategies is not likely to slow down. Management committees will undoubtedly have to review their business models and strategies to align them to the 17 UN Sustainable Development Goals. In Sustainable Business Revolution 2030 , we underlined that the only way to have a substantial impact on climate change is to cooperate in broad-ranging ecosystems with a single focus on achieving ne- zero carbon emissions. This will demand a radical reinvention of business models, open collaboration and sustainability-driven technology choices.

This article is an English adaptation of a post initially created in French.

Florent Andrillon

Expert in Oil & Gas, Renewable energy, Utilities Transformation

Florent started his career at Oil and Energy Firm before joining Capgemini Invent in 2005. He has worked in France and abroad with players in the Energy and Utilities sector: large companies, players wishing to enter this market or parapublic organizations. He has supported these organizations for 18 years with their strategic projects of energy transition, acceleration, and global transformation.
More recently, Florent has worked with clients willing to leverage digital technology to accelerate their energy transition projects, especially in the area of smart building, e-mobility and smart energy.
Florent graduated from EM Lyon in 2001.