Throughout the centuries, humanity has gained vast knowledge of various natural phenomena. From distant galaxies and black holes, through rare animal species and climate occurrences, to microscopic viruses and microbes, the sense of human control over life and nature has never been stronger.
Maybe that is why nothing prepared us for a mysterious virus entering our lives, remaining undeciphered and very threatening even though months have passed. And while the scientists and researchers have been working around the clock to study Covid-19, we are still months and maybe years away from understanding the virus.
While the physiological effects remain hazy, one thing is becoming increasingly clear: The spread of the virus around the world has led almost every country to deal with a severe economic crisis. Just like the physiological ones, the financial implications of Covid-19 are still not fully understood, and it seems that it will take a long time for us to realise the seriousness of the situation.
As with every crisis, there are those who are more severely hit. While in developed economies, governments are faced with difficult challenges such as high unemployment rates and businesses losing value, the challenges in developing economies are much more severe.
The seriousness of the situation can be seen in a recent World Bank report, estimating that by the end of 2020, between 70 and 100 million people will deteriorate into absolute poverty (with a daily income of less than $1.9) due to the spread of the virus and the lockdown. The report states that in the event of the infection rate not stopped, and lockdown policy returns, numbers may go well beyond the 100 million threshold.
It is difficult to underrate the importance of this menacing figure. Over the past few years, organizations such as the World Bank and many governments have invested tremendous resources to promote national projects, encourage employment, and exclude as many people as possible from absolute poverty. Now, those efforts could lose all meaning. 100 million could join the extreme poverty circle, meaning an added 100 million who can’t afford clean water, proper education, medical care and home electricity. While the implications at the micro level are heartbreaking, the macro level portrays a disaster on a historical scale.
Generating local employment
A problem in such magnitude does not, and will not, be solved with magic solutions. Any real solution will require huge budgets and investments over time, in order to redevelop economies and create jobs. Such an investment must be smart and calculated, in order to maximize the impact on the lives of as many people as possible.
One of the sectors that will surely gain attention is the energy sector. By investing in large-scale energy projects, governments and organizations can achieve several goals at the same time: first, providing a solution to one of the most significant needs of people, even before the Covid-19 crisis, allowing millions to enjoy electricity at home for the first time. Second, lowering prices, allowing more people to enjoy electricity in an affordable manner, even at a time of severe economic crisis. Finally, such projects create local employment; These jobs will allow people to work and earn a living, leaving the “absolute poverty” circle.
Focusing on the energy sector, some investments will have a greater and more significant impact than others. Investing in a renewable energy project, such as connecting hundreds of thousands of citizens to off-grid solar systems, will have a huge environmental impact and significant savings of greenhouse gas emissions.
These factors were significant before the Covid-19 crisis started, and are still important today. But in the new reality, we can’t ignore the financial implications of a project, which must be a leading decision-making factor while considering a large-scale investment.
A special report recently published by international consulting firm McKinsey compared the fields of fossil fuel and renewable energy, examining how many new jobs would be created as a result of a $10 million investment in each. The results were unequivocal: According to the report, a $10 million investment in a fossil fuel project will create 27 new jobs. At the same time, the same investment in a renewable energy project is expected to create no less than 75 jobs – almost three times more.
The nature of jobs is also significant. While fossil fuel projects require a high degree of involvement by highly experienced (and expensive) professionals (engineers, chemists, etc.), renewable energy projects are more “democratic” by their nature, and create a higher number of jobs, which are staffed by young professionals, who can be trained easily and quickly, and earn decent salaries. This is good news especially for populations in need, who may find a variety of relevant jobs thanks to renewable energy projects.
Renewable energy investment provides an unprecedented opportunity for a win-win-win situation: Every dollar invested in a renewable project will create massive environmental impact and save hundreds of thousands of tons of GHG emission; it will provide a sustainable and affordable solution to one of the greatest needs, allowing millions of people to enjoy home electricity for the first time; and it will create many local employment opportunities, supporting both the economy and those who need it the most.