The Corona outbreak considerably changed consumer, work and travel habits all around the world. Oil consumption decreased by 25 percent in April 2020, while demand for renewable energy experienced a smaller decrease.

‘Much of the oil is used for transport, while many states and companies prioritize renewable energy. Hence, Covid-19 contributes to the acceleration the change in balance between fossil and renewable energy that was already taking place’, says research Professor Indra Øverland, who heads NUPI’s Centre for Energy Research.

Together with eight prominent colleagues he has written the article «Covid-19 and the politics of sustainable energy transitions», which was published in the journal Energy Research and Social Science earlier this year.

A pivot to green

The researchers have analysed how Covid-19 may affect the transition to more sustainable energy, known as the energy transition.

One of the main conclusions is that the form and direction of state support for post-pandemic recovery will be key to how influential Covid-19 will be for energy transitions.

‘The tendency in the EU is that the support is skewed towards the green and sustainable measures. In Norway support to the oil industry is stronger in order to facilitate a quick return to the normality we know from the past after the pandemic’, explains Øverland.

Nevertheless, there is little doubt that the aftermath of the pandemic will hit some energy producing states harder than others.

‘This will mainly strike oil producers, because a large proportion of oi is used for transport, while coal and gas are used mainly for electricity. Therefore, it’s likely that large oil-producing countries with little gas exports and few other resources will take the hardest hit, like Nigeria, Saudi Arabia and Venezuela.’

Permanent change depends on policy

Covid-19 brought with it a dramatic decrease for the oil industry, airlines and car producers. But will the environmental benefits of the pandemic last?

‘More than a hundred years of oil price fluctuation shows that it’s possible to reach former peaks after a decline,’ says Øverland

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If this will happen after the current crisis as well, depends on policy choices, according to him.

‘The temptation to travel by air is very big for business and pleasure alike. This means that unless taxation on flying is increased, it’s very likely that we will revert to former levels of air travel. By contrast, the changes in habits when it comes to commuting to work and working from home are more likely to become permanent.’'

These changes are probably here to stay.

‘Some of the changing patterns that may last concern biking to work and the home office. Working from home is nothing new in most Norwegian workplaces, although it has grown with Covid-19. But in some other countries, employers trusting their employees to work from home is something new. It is especially in such countries that the pandemic may lead to more structural changes globally in the long run.'

Trump vs Biden will be decisive

However, not only Covid-19 will affect the energy landscape during the coming years. Taking office in 2017, President Donald Trump has taken the US in a less climate friendly direction, among other things by promising to withdraw the country from the Paris agreement, which aims for all countries to cut climate gas emissions.

‘The presidential election is decisive. A Biden and Harris victory may lead the US back on track. The effect of their victory on international cooperation to put a stop to climate change will be just as important as the effect on American greenhouse gas emissions. If Biden is elected, the EU and the US can implement border carbon tax simultaneously, this being the most efficient way to cut global emissions. If the EU must do this alone, it will be much harder. Thus in the long run, the American presidential election may be more important for the development of the energy sector than Covid-19’, Øverland concludes.

Want to know more about NUPI's research on these topics? Visit our Centre for Energy research, and our resource pages on energy and climate. Se mer på vårt Senter for energiforskning og våre temasider for energi og klima.