Since the UK went into lockdown at the end of March, we have been living with restrictions to many parts of our lives. We have seen a change in our daily routine with 60% of the UK’s adult population currently working from home.What has been the environmental impact from COVID-19 and what will it mean once restrictions are relaxed? In this article, we look at what we have learnt from the financial impact of the pandemic and how the world around us has changed.
The Impact of People Spending Less
Due to people working from home, there have been somepositives in the amount of money being saved. It’s estimated that in London, workers are saving an average of £57.78 per week, with the UK average savings around £44.78 per week. This can be attributed to money saved from commuting costs such as public transport and fuel costs for drivers, as well as those who spend money on food and drink during the day. As many as 9 in 10 workers believe they are saving money because of working from home, according to research by Finder. However, although people are saving money from a change in their regular lifestyle habits, this has had a huge financial impact on the economy, with British retailers suffering their biggest fall in sales since 2008 in the first half of April, according to the Confederation of British Industry (CBI).
It has been estimated the retail industry will lose £253 million as their employees cannot work from home and many stores have had to close due to no footfall. Also, demand for certain products has reduced, such as milk where dairy farmers have suffered a reduction in prices. According to figures from the Agriculture and Horticulture Development Board (AHDB), the dairy industry is set to lose £20 million over a two month period, with £7 million in losses recorded for April alone. The trend of less spending has also impacted personal lending on credit cards and personal loans,with the Bank of England reporting new borrowing has plummeted by £5.4 Billion over the last month. Credit card spend is down by 0.3% compared to this time last year, the first time the Bank of England has recorded an annual drop.Further to this, many financial services including short term loans have been offering payment freezes to customers who are being impacted by the COVID-19.
One of the biggest lessons to come out of the pandemic and its impact on the economy is the way in which companies have helped put the health of safety of their staff first and have collaborated under a common goal of surviving the pandemic. Through supply chains and with their clients, private sector businesses have shown huge adaptability when it’s needed and some have even helped produce and donate medical supplies themselves, such as Burberry who repurposed their coat factory in Castleford to produce personal protection equipment (PPE) or Kingfisher who provided 5 trucks worth of eyewear and masks to the NHS.The full economic impact won’t be known for a long time, however, according to Reutuers, it is predicted that in 2020, the UK economy could shrink by the most in 300 years.
The Environmental Impact
Aside from how the global markets have been hit, there seems to be more positives with the environmental impacts from COVID-19. With fewer cars on the road around the world and factories closing their doors, air pollution has dramatically dropped. In China, for example, CO2 emissions dropped by 25% over a 4 week period, equivalent to 200 million tonnes of CO2 (MTCO2), and due to a reduction in demand, the country is stockpiling resources as they continue to produce steel, copper as well as gasoline and diesel.In human terms, it’s estimated the reduction in pollution has saved 77,00 lives in China alone.Elsewhere, the halt of the fishing industry with many boats still at the docks has meant the demand for fish has dropped. This means potentially fish populations will flourish and in Europe, stocks of whitefish, flatfish and herring could double their biomass within just 1 year of no fishing.In Venice, the lack of tourism and boat activity in the canals has meant the water has become clearer due to low traffic.
The lack of Nitrogen dioxide (NO2) in the air, normally produced from car engines, power plants and the industrial sector has provided proof of how a reduction of greenhouse gas emissions can quickly make a difference. Satellite imagery has shown compared to last year, how much less NO2 there has been over China. Paul Monks, a professor of air pollution at the University of Leicester has said: “We are now inadvertently conducting the largest-scale experiment ever seen.”
The Long Term Effects
The question is whether or not the changes we have seen with reduced global emissions is likely to last in the long term, as when social distancing and lockdown measures are reduced, the world will slowly return to a normal state. With the lack of driving globally, which normally contributes 72% of greenhouse gas emissions for the transport sector, 11% from aviation, won’t this level go back to what it was prior to COVID-19? This all depends on whether remote working becomes even more commonplace in future, as people get used to not having to commute or spend as much of their salary on transport. Depending on the future of the aviation industry, flight travel could continue to be significantly low for many months and even years, with aviation contributing 2.6% globally of all carbon dioxide emissions.
It’s been said we are currently living through an unrivalled drop in carbon output, as since the turn of the 20thCentury, CO2 emissions have dramatically increased. Now though the International Energy Agency (IEA) has said the world will use 6% less energy in total this year with demands for coal, oil and electricity all going down. In comparison, this is 7 times larger than the impact of the 2008 financial crisis on energy demand. How the world recovers from this pandemic in the next few months and years remains to be seen, what is certain is the economic and environmental impacts could be long-lasting.
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