Between the coronavirus and the oil price war, the disruption to our daily lives means unprecedented changes are afoot. Usually, when there’s a 60 percent drop in oil prices—a recent Wall Street Journal article was headlined “US Crude Posts Largest Decline in Nearly Three Decades”—there’s an increase in travel, because consumers take advantage of low prices at the gas pump and cheaper airfares. But that’s not happening this time around, and for good reason: People are staying home as quarantines and social distancing gain momentum around the world.
But what about afterward? Will the coronavirus outbreak permanently alter people’s work habits and global supply chains, as companies get more comfortable with remote work and videoconferencing and 3D printing, reducing oil demand over time and causing a permanent reduction in carbon emissions?
It may be too soon to tell for sure, but if nothing else, COVID-19 has the potential to accelerate pre-existing trends about the way we live and work.
Even before a global pandemic closed down normal economic activity across the globe, advances in on-demand travel services, automation, logistics, artificial intelligence, and 3-D printing were poised to reshape the global energy landscape. While rekindling global cooperation on climate mitigation might become more difficult as we move forward, academic research reveals that some of the technologies now being widely deployed to help the world shelter in place hold promise in building a future global economy with lower fossil fuel use.
Among the changes that have come in the wake of COVID-19 that could stick around are increased remote working, expanding e-commerce, and shrinking supply chains. Each of them, if they become permanent, could make a substantial contribution to the reduction of global carbon emissions. Let’s look at each one in turn.
Greater use of online shopping. As you may be aware from your own daily driving, use of global positioning systems (GPS) can make you more efficient in your travel planning.
The same is true of the big trucking firms that bring us the physical goods we purchase on-line. A combination of artificial intelligence, big data analytics, GPS, and computerized logistics planning is allowing big delivery firms to minimize the miles traveled to bring goods to our doorsteps. In 2017 alone, United Parcel Service reported that by upgrading its computerized logistics system with more reliance on artificial intelligence and big data, it was able to eliminate 100 million miles of travel in the first year of this so-called algorithm enhancement.
Similarly, the consulting firm of McKinsey & Company predicts that logistics firms will be able to shave off 20-to-25 percent of the fuel used for on-road freight via such computer-assisted logistics efficiency. Researchers from MIT found that there is a possibility that as online shopping replaces trips to the store, fuel consumption could fall, because trucking firms’ travel is more fuel-saving than hundreds of individual drivers. Of course, higher demand for one-day deliveries gives delivery firms less flexibility to take advantage of potential logistics optimization programs, denting e-commerce’s ability to lower our carbon footprint. And there’s also the problem of returns, also known as the phenomenon of “buy three sizes, return two.”
Consequently, our choices for how we engage in e-commerce can matter a lot for environmental sustainability. For urbanites, this same kind of big data analytics could reduce oil consumption by increasing the number of seasonal pop-up stores that are walkable to city consumers.
Ending wasted fuel by reducing congestion. Americans spend up to an extra 8.8 billion hours sitting in traffic congestion at rush hour, causing the waste of roughly 3.3 billion gallons of fuel, according to Texas A&M’s Urban Mobility program. The average US commuter spends 54 extra hours in traffic jams and wastes 21 gallons of fuel at a cost of over $1,000 per person in lost work time and higher gasoline bills.
By now, it’s well-known that key economic sectors such as financial services and the tech industry are shifting to remote-working in light of the coronavirus. This is borne out by the data from satellites and other sensing devices, which have recorded that carbon dioxide emissions, air pollution, congestion, and related transport emissions have all but disappeared in major urban centers during the pandemic—essentially acting as a huge natural experiment that allows us to see just how much of these ills were due to transportation.
As a result, there is a strong possibility that the longer companies have to adjust to remote-working, the more willing they might be to work with other area businesses to designate different days of the week—or parts of the morning and afternoon—to favor remote working, in an effort to bring rush hour traffic under control. Not only would such practices favor sustainability, they could increase productivity, according to a Stanford University study which found that working from home could greatly boost worker productivity and reduce worker attrition and sick days.
Shrinking global supply chains. Prior to the COVID-19 pandemic, ongoing international trade wars were prompting countries and corporations alike to reconsider their heavy reliance on complex, extended supply chains. There are risks to relying too much on other countries for manufacturing components, electronics, vital processed metals and minerals, and other inputs to manufactured goods, as evidenced by the major disruptions to global supply chains caused by closures due to COVID-19.
Already, that is forcing a re-evaluation of national vulnerabilities and prompting a re-think on how to shrink national supply chains for vital products. When the United States began to search for solutions to a shortage of medical equipment such as ventilators, it quickly became apparent that the use of advanced manufacturing techniques such as three-dimensional (3D) printing could offer a possible solution. Another bonus to switching to 3D printing or keeping more manufacturing at home: Global oil use for shipping could fall significantly.
Academic research on the wider use of 3D printing suggests that the practice could lead to reduced use of oil in global freight and in operations of heavy machinery like engines and construction equipment. A Delft University of Technology study found that the widespread use of such so-called additive manufacturing in heavy industries like aerospace and construction could lower energy demand by as much as 25-to-40 percent, both by lowering the required transportation of components and reducing the weight of materials. Jet engines built via 3D printing, for example, would be lighter in weight—consequently offering 20 percent more fuel efficiency. However, creating the raw materials for additive manufacturing can take more electricity than traditional processes, once the source of that electric power material is factored into the overall life cycle assessment of the carbon footprint of goods.
Another fallout of shrinking supply chains and reduced trade could be reduced business travel—i.e., less travel by plane—because business executives will have less reason to travel to see global suppliers or visit their foreign factories. As COVID-19 causes more businesses to substitute video conferencing for face-to-face meetings, they might feel less compelled to return to the high use of plane travel for business meetings. Already, businesses in Europe are reconsidering business travel in light of the emissions consequences of frequent air travel.
There is, of course, a chance that travel practices will go right back to business-as-usual, as the aftereffects of the pandemic wear away in people’s memories. Large commercial interests have a stake in the status quo and the massive stock of existing energy infrastructure. Still, the world experiment with remote working and e-commerce, embraced almost instantaneously as the crisis was unfolding, highlights the opportunity we have to lower the oil intensity of economic activity, should governments and businesses decide to embrace that goal.
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