‘The current crisis has highlighted the interconnection between the economy and CO2 emissions. Limiting global warming to 1.5 degrees Celsius depends largely on which direction is taken by the stimulus policies implemented by governments to address the economic consequences caused by the Covid-19 pandemic and prepare the ground for recovery,’ said Marie Vandendriessche, senior researcher at the Esade Center for Global Economy and Geopolitics (EsadeGeo), at an event organised by Esade entitled: ‘Global governance in times of pandemic.’ Similarly, Ángel Saz-Carranza, director of EsadeGeo and lecturer at Esade’s Department of General Management and Strategy, observed that: ‘efforts by states to revive their economies, and the manner and time-span in which measures are developed to support the market will define the patterns and dynamics of global trade over the next two or three years. For countries with traditionally liberal economies, this crisis could be just a temporary episode, or it could be a turning point in how we understand globalisation.’

Scenarios for world trade

Ángel Saz-Carranza described four scenarios, based on variables of evolution in the control of the virus and the economic recovery, for analysing the roads that world trade could take after the pandemic. He firstly explained the two scenarios farthest apart from each other. Forward coalition – a quick economic recovery and greater control of the virus is obtained – ‘would mean a new impetus for integration and decentralisation, a scenario where trade barriers would be reduced and, for example, progress could be made in agreements on digital taxation.’ At the other extreme, the scenario of defensive disarray means deep economic recession and prolongation of the crisis. This would imply ‘a turn towards autarky and protectionism with an increase in tariffs and trade barriers.’ Between these two scenarios, fortuitous isolation involves a difficult economic recovery, despite having controlled the virus, which would lead to: ‘a world of regional blocks; a return to industrial policy, and regional supply and value chains.’ Finally, the onerous strait scenario would reflect a willingness to integrate, and a limited economic recovery that would encounter difficulties because effective control of the pandemic would have not been achieved.’ According to his projections: ‘in 2023, the percentage share of trade in world GDP could range from 52% in the defensive disarray scenario to 62% in the forward coalition scenario.’

Pandemic and climate change

Marie Vandendriessche spoke about the impact of Covid-19 in the fight against climate change: ‘according to data from the International Energy Agency, there will be a historic drop in demand for energy this year. The drop will be seven times greater than the impact of the 2008 financial crisis, while CO2 emissions this year may drop by 8%.’ She explained that these figures are worrisome because the exceptional circumstances in which these drops occur indicate the size of the effort needed to meet the most ambitious goal of the Paris Agreement: namely, limiting global warming below 1.5°C.’ She added that: ‘according to a 2019 report by the United Nations Environment Programme, unless greenhouse gas emissions drop 7.6% each year until 2030, the world will not meet this goal.’

‘The year 2020 was presented as decisive for climate diplomacy: to stop temperatures rising above 3°C, countries had to deliver new and much more ambitious plans for cutting greenhouse gas emissions at the UN Climate Change Conference in Glasgow, which has now been postponed,’ said the researcher. ‘Preparation for the conference continues online, but the postponement has implications for the development of climate diplomacy, especially in matters of confidence-building,’ she added. According to Marie Vandendriessche, two possible advantages of the postponement may be that: ‘by the time the conference, scheduled for 2021, is held, we will know which direction the United States is taking after the presidential elections; and, similarly, the EU should have confirmed if it intends to increase its cut in emissions by 2030 from 40% to 50%, or even up to 55%.’

Marie Vandendriessche compares the fights against the pandemic and climate change: ‘they are both global problems; both show non-linear growth; science plays a key role in developing mitigation strategies to contain viral expansion and adapt to its effects; both present challenges for collective action; the solutions to both are expensive and involve profound changes in production models. International cooperation, political leadership, and public support are essential for both fights,’ she explained. However, she noted that are also differences: ‘it is not possible to close the borders to climate change, and the impacts of individual actions on our environment are not evident; it is more difficult to assume the cost of a problem whose effects we will only see in the long term, although the consequences for our planet may be irreversible.’