Source: Google Earth, SkyTruth.org: global gas flaring on 30 June 2020

With the financial / economic strain caused by COVID-19, governments and companies are likely to delay investments and other measures that facilitate energy transition to lower carbon solutions. Carbon taxes, environmental regulations, infrastructure solutions are put off to avoid additional costs and reduction in global competitiveness during the longer recovery period.

Moreover, reduced emissions during the COVID period could be used as an excuse that much progress has been achieved in reducing emission targets. There are strong market signals that COVID-19 significantly reduced gas flaring in the US, as shut-in oil production primarily targeted remote areas with limited oil storage facilities and other (gas) infrastructure. Large oil production reductions have also been recorded in Russia, coinciding with a reduction in gas flaring, as OPEC+ production reduction agreement took effect. 

Sustained lower oil prices also increases oil competitiveness against other (low carbon) alternatives.  However, in the long run, financial investors may no longer be willing to cope with persistent oil price volatility and the consequent risks and divert their finance in more sustainable low carbon energy opportunities.

Access the full paper here: https://energycc.com/blogs/covid-19impact.html