In April, for the first time in history, oil prices fell below zero.
This was due to two key reasons: the unprecedented fall in demand as a result of the Covid-19 pandemic, and a price war between Saudi Arabia and Russia. Closer to home, top oil trader Hin Leong has also recently been exposed for its multibillion-dollar debt.
Oil shocks are not new - we have witnessed the boom-and-bust nature of the industry over and over again.
And neither is this the first time that upheaval in the industry has resulted in financial losses to lenders and shareholders.
ENDING DEPENDENCE ON FOSSIL FUELS
Ever since our inaugural SG Climate Rally last September, we have argued for the need to eliminate our reliance on fossil fuels in the face of mounting geopolitical tensions, concerns over a global economic slowdown, and their inherent price volatility.
Most of all, the central role of the fossil fuel industry in causing the climate crisis is well documented, most incriminatingly by the fossil fuel industry itself.
No amount of 3Rs (reduce, reuse and recycle) will ever be enough to avoid the worst of the climate catastrophe if we do not tackle this elephant in the room.
The future of the industry rests on the decisions we make.
We can choose to reignite it and propel us even faster towards climate catastrophe. Or we can exercise wisdom at this critical juncture, and start the just, equitable transition away from fossil fuels to create a planet where all life can thrive.
The reduction in pollution and carbon emissions from the pandemic has come at a high human cost, particularly to vulnerable communities. The pandemic has demonstrated the need for us to urgently embrace climate policy that is attentive to existing social inequalities.
NATURE IS NOT BOUNCING BACK
The halting of carbon-intensive industries during this pandemic is, unfortunately, not news to celebrate.
After global emissions declined in the 2008 recession, they shot back up in the recovery. Without structural change, this decline in emissions will be short-lived and will have little impact on the climate.
The projected 5.5 per cent dip still falls short of the 7.6 per cent reduction target we need annually to limit warming to 1.5 deg C above pre-industrial temperatures.
This target is a shifting one, too. Every year we fail to hit it only drives the figure upwards.
Shocks like Covid-19 give polluters the opportunity to evade environmental obligations.
In March, China approved the construction of more coal-fired power generation capacity and the United States' administration has weakened its environmental regulation as a supposed response to the disruptions caused by Covid-19.
The current oil crisis also demonstrates the economic vulnerabilities of the industry.
Even before the pandemic, nearly half of coal power plants worldwide were running at a loss and renewable energy was becoming more cost-effective than fossil fuels.
The life-cycle emissions from renewable technology are lower and less variable than emissions from combustion-based natural gas and coal.
But investments in renewables could spur global gross domestic product gains of almost US$100 trillion (S$139 trillion) between now and 2050, proving that a green transition could be a viable economic recovery plan.
POLITICAL WILL NEEDED
Climate solutions already exist. What is needed is the political will to execute them.
As Singapore draws up solutions to facilitate our economic recovery, including creating more jobs in a range of different sectors, this is a chance to move away from fossil fuels, while restructuring our economy towards sustainable and regenerative work.
We call for Singapore's Emerging Stronger Task Force to include decisive steps away from the oil industry and towards a greener economy.
To ensure a just transition in the wake of Covid-19, we must centre those who are vulnerable. This means protecting the livelihood and future of workers currently in the oil and gas industry.
As greenhouse gas-emitting corporations are phased out, workers should be supported, reskilled and given a voice to express how they want to move forward with a green transition.
With a strong commitment to green finance and existing frameworks for restructuring industries, Singapore is well placed to accelerate this process while creating sustainable jobs for our citizens.
Let us come out of this crisis on the right side of history.
- Rebecca Loy and Jay Wong are from SG Climate Rally, a youth-led movement calling for systemic climate action in Singapore.