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An employee with Ipsun Solar installs solar panels on the roof of the Peace Lutheran Church in Alexandria, Virginia on May 17, 2021.

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Ramping up investment in policies and technologies to tackle climate change could play a significant role in the global economy’s recovery from the coronavirus pandemic.

In a recent note, Charles Dumas, chief economist at U.K.-based investment research firm TS Lombard, said that action on climate change is often criticized as moving too slowly. However, with governments increasing spending to aid their post-Covid economies, they may start catching up. 

A key tenet of this is the ever-decreasing cost of electricity per megawatt hour, according to figures from TS Lombard, with costs of solar, offshore and onshore wind dropping over the last 10 years, while gas and coal have remained largely the same.

“Effectively by 2030 the cost of renewable electricity is going to be half that of coal and gas sourced electricity,” Dumas told CNBC.

These trends will bring many of the various pledges to reach net zero more closely in sight.

The fatal floods in Germany in recent weeks have put the impacts of climate change firmly in the spotlight again but they are only the latest in a series of devastating extreme weather events of late, including the sprawling wildfires in Oregon.

COP26 priorities

Amid this backdrop, the United Nations Climate Change Conference, better known as COP26, will meet in Glasgow in November. It will mark one of the most significant multilateral meetings on climate since the Paris agreement.

Dumas said that as COP26 approaches, governments need to understand their key priorities, and among them should be infrastructure investments as numerous technological and engineering challenges continue to obstruct renewable energy.

“I think the intermittency problem is pretty serious and it’s not just that the sun goes down at night,” Dumas said.

In the case of solar power, output can be mixed depending on the location of infrastructure like solar farms.

“There’s huge variation with sunny days in winter and sunny days in the middle of summer so the intermittency takes on a very big seasonal aspect,” Dumas said.

“You can have vicious weather for a long time in the middle of December or January and lo and behold you wouldn’t want to be depending on solar power.”

Energy transmission could be another bottleneck, he said. While the developing world, including several African nations, has great potential in developing sites for generating solar power, that power needs to move easily.

“The issue of transmission technology is really major. If you want Chad to be the new Saudi Arabia, because of the Sahara Desert there’s a lot of sun there, but you want the electricity to be used in Europe then you’re talking about some expensive processes and processes needing a lot of research and a lot of further investment.”

Storage and carbon capture are all areas that require hefty investment, Dumas added, if governments are to reach their net-zero targets.

“What we need is a very clear public policy lead in order to get anywhere near these net zero promises and I suspect that actually what it’s going to be about is a carbon tax, which the Americans may resist but will be necessary,” he said.

Job creation

Paul Steele, chief economist at an independent policy research institute called the International Institute for Environment and Development, said that climate action and renewable energy investments will serve the dual purpose of tackling the climate crisis while creating jobs for the post-Covid economy.

“One of the priorities coming out of Covid is to create labor intensive employment. Both in developed and developing countries, you can provide labor intensive employment through renewable energy,” Steele said.

One example, he said, was the retrofitting of boilers in homes in the U.K., which would help push the country toward its climate targets and create new jobs while being relatively inexpensive in the grand scheme of things.

Read more about clean energy from CNBC Pro

Steele said that investments to drive a climate-friendly economy cannot be short term or have quick goals.

He pointed to the various government support schemes for the airline industry, which has been battered by the pandemic. Just this week, the European courts gave the nod to a $2.9 billion bailout for Air France-KLM’s Dutch business.

Bailout funds like these should be tied to sustainability commitments by the airline industry, he said, but that can be a dicey proposition to get over the line.

“Governments aren’t making the connections enough and traditionally treasuries and particularly the ministries of transport are still dominated by road building lobbies and people who like to build highways and increase transport rather than people who want to invest in sustainable alternatives.” 

 

 

A Ryanair Boeing 737-800 aircraft prepares for takeoff at Krakow Airport.

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LONDON – Low-cost airline Ryanair said Monday it is still facing a “challenging” environment and could end the fiscal year “somewhere between a small loss and breakeven” as Covid-19 restrictions persist.

The Irish company reported a loss of 273 million euros ($ 322 million) between April and June as lockdowns resulted in most flights being canceled over the Easter period and European nations wary of easing travel restrictions .

For comparison: Compared to the first quarter of the previous year, the airline recorded a loss of 185 million euros.

“Covid-19 has continued to devastate our business,” Ryanair CEO Michael O’Leary said in a statement on Monday.

At the same time, operating costs rose, which worsened the company’s bottom line. Over the course of the year through June, costs increased 116%, mainly driven by fuel, airport and route charges.

However, O’Leary expects traffic to pick up in the coming weeks.

“We expect traffic to grow from over 5 million in June to nearly 9 million in July and to over 10 million in August as long as there are no more Covid setbacks in Europe,” he said.

However, the outlook depends heavily on the pandemic and successful vaccination campaigns. According to Our World in Data, 46% of the adult population in the European Union are fully vaccinated against Covid-19. In the UK it is 54.4%.

Ryanair shares are up 42% year over year.

May 2021 at a mall in Singapore before restrictions tighten over concerns over spike in Covid-19 coronavirus cases.

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SINGAPORE – Singapore’s brick and mortar stores have been hit hard by Covid-19 and retailers have seen a sharp drop in sales due to Covid restrictions, according to a retail organization in the country.

According to Rose Tong, executive director of the Singapore Retailers Association (SRA), a nonprofit with 420 members from areas such as fashion, electronics, beauty and wellness, as well as food retail and supermarkets.

With each round of tightened restrictions, sales fell between 50 and 80%, she told CNBC’s Squawk Box Asia on Thursday.

Singapore again imposed stricter Covid-19 restrictions on Thursday as the number of Covid cases has risen due to multiple clusters in karaoke bars as well as wet markets. The tightened measures – which include banning food services and limiting public gatherings to two – will last through August 18.

According to the Ministry of Health, there have been 170 new cases of Covid-19, including 162 locally transmitted infections. The number of new cases in the community has grown rapidly, rising from 127 cases the week before to 883 cases in the past week, the ministry report said.

As a result of the ongoing restrictions, buyer traffic has decreased significantly – but retailers are still paying the full rental cost, she said.

“We hope landlords are more proactive and take on a fair share of the burden,” she said, adding that some business owners are asking their landlords for assistance in offering rental discounts.

Switch to online sales

On Friday, the government announced a $ 1.1 billion Singapore dollar ($ 808 million) relief package to help businesses and workers affected by recent restrictions.

This included an employment promotion program for affected sectors such as restaurants and gyms, as well as for retail and entertainment sectors.

Other measures include helping local retailers to bring local online trading platforms on board.

During the June-July Great Singapore Sale shopping festival, SRA partnered with e-commerce website Lazada to increase online sales. This helped increase sales and there was a high level of acceptance for home delivery, Tong said.

While companies have started adopting digital strategies to improve sales, there are still many challenges ahead, she added.

“We are facing very intense global market competition from markets around the world. The cost of supplies and goods is high,” she said.

Online retail accounts for less than 20% of brick and mortar store sales, Tong said.

The members of the SRA collectively hire more than 80,000 workers and have annual sales of more than 32 billion Singapore dollars ($ 23.5 billion), according to the website.

The race to reduce carbon emissions is increasing, much like the planet itself. But reducing emissions alone will not be enough to stop what is happening.

It is not even enough to achieve the goal of the Paris Climate Agreement of limiting this globally to 1.5 degrees Celsius above pre-industrial levels this century.

However, there is technology that is being touted as a way to get us there faster – sucking carbon out of the atmosphere – and now big investors are piling up.

In front of the gates of Zurich, more than a dozen huge fans are in operation and clean the air of carbon dioxide. So-called direct air capture is at the forefront of what is possibly the largest environmental industry aimed at saving the planet.

The company behind it, Climeworks, is one of the few that offers the technology to basically suck up the atmosphere of carbon. According to Chris Beuttler, head of politics at Climeworks, the plant in Switzerland removes around 900 tons of carbon dioxide per year. For comparison: we are emitting 40 billion tons worldwide.

Beuttler calls the facility a “drop in the ocean,” but the bucket is growing fast as new companies like Climeworks and governments try to monumentally expand what is known as direct carbon capture.

“That has to be several gigatons in the order of magnitude and not just technologies such as direct air separation, but all solutions for carbon removal together. We need everything, ”said Beuttler.

Carbon Engineering, based in Canada, has been working on direct air separation since 2015. Arizona State University and Silicon Kingdom Holdings use a proprietary carbon capture technology that acts like a tree. “[It’s] a thousand times more efficient in removing CO2 from the air, “says the ASU website.

Climeworks’ system is a box with a huge fan on one end and a filter inside that only attracts carbon dioxide. The fan sucks the air through the filter and as soon as the filter is saturated, the box is closed. It is then heated to 100 degrees Celsius and the pure carbon dioxide is released and collected. The captured carbon can either be buried deep underground or sold for other uses.

Climeworks installed the Zurich system in 2017 and had raised $ 100 million from Microsoft, Audi, Shopify and Stripe by 2020. It is now building a much larger plant in Iceland.

“It has to be a trillion dollar market. And I think those are the types of investors who see it pay off in the long run,” Beuttler said.

He compares it to the rapid rise of electric vehicles, solar panels and wind farms. Now the state of California is working on plans to use carbon capture to meet its aggressive goal of carbon neutrality.

“We have to try to keep going. There is no other choice. We have to sequester carbon to a high degree,” said Ken Alex, director of project climate at the Center for Law, Energy and Environment at the University of California, Berkeley.

Carbon capture technology has been around for some time, but was considered too expensive.

“The price has already come down dramatically, and while it is rising, I don’t think it’s unrealistic to see this as a viable opportunity,” he said.

Alex estimates the world will need about 50,000 carbon capture systems by 2050, which would cost about $ 10 trillion. It’s a whopping investment without a doubt, but with plenty of potential returns – beyond saving the planet, of course.

The trapped carbon dioxide can be used to make fuel, plastics, and even bubbles. Climeworks sells some of its captured carbon to Coca-Cola. Ironically, oil producers like Exxon and Chevron invest heavily in carbon capture, as the carbon can be used to release trapped oil underground.

“These opportunities are part of the investment momentum,” said Alex. “It’s a new industry that is just getting wet feet, but I think the possibilities are pretty big.”

The removal of CO2 also presents a new opportunity for the emission allowance market. Currently, companies can get credits for avoided or lower emissions, but in a net-zero world they need to not only cut carbon but also remove it.

Now they can buy these credits from moving companies like Climeworks. Because of this, big names like Microsoft, which has announced plans to cut its emissions by 2030, are buying into it.

“In order to stay in the safe range of global warming, we have to expand it,” said Beuttler. “It’s not a question of can? It’s a question of must.”