Perspectives on the Duration of the Coronavirus Pandemic and its Implications
The duration of the lockdown imposed due to the coronavirus pandemic not only affects carbon emissions in the EU ETS but also influences the extent of supply chain disruptions that could impede the global economic recovery. To gauge the expectations regarding the timeline for a chance to return to normalcy, we asked attendees of last week's Coronavirus and the EU ETS webinar the question: "How long do you think it will take to get on top of the coronavirus pandemic?" The results are displayed above.
Only 15% of respondents believe that Europe will be able to effectively control the COVID-19 situation within three months, similar to the time it took for Wuhan to achieve a semblance of normality. Meanwhile, merely 10% of participants anticipate a timeline of over a year.
A majority, comprising 48% of respondents, predict that it will take 3-6 months to gain control. This view suggests a general acceptance that most parts of the world cannot implement lockdown measures as efficiently as China, but the expectation is that the situation will not significantly worsen. This assumption appears reasonable, considering the collective efforts to save lives and mitigate economic damage. It aligns with Energy Aspects' perspective, as expressed in the webinar, that things will largely return to normal by Q4 2020.
However, nearly a third of respondents (32%) believe that it will take 6-12 months to regain control. The expectation of such an extended recovery period likely stems from the risk of a reinfection cycle once lockdown restrictions are eased. Although this possibility was not factored into Energy Aspects' carbon price forecast provided during the webinar, it would undoubtedly lead to lower EUA price forecasts and stronger calls for reform in the system.
