Decarbonization and Debt Forgiveness: A Path Forward

"The economic crisis resulting from our response to COVID-19 is hitting energy intensive industries particularly hard. Airlines, hospitality, restaurants, malls, mines, and factories are shut down across the country, as are oil and gas wells, pipelines, refineries and merchant power plants. Unlike the recession that followed the 2008 financial crisis, which was largely precipitated by the actions of private sector financial firms, this economic crisis is not the fault of any of those industries.

And the US fossil fuel production industry is being hit by a double whammy. It was already in the midst of a crisis—with coal in structural decline due to declining economics and oil and gas seeing a temporary shock due to a rapid decline in oil prices caused by Saudi Arabia’s decision to break with OPEC. These factors will not necessarily be resolved once COVID restrictions are lifted. Compensating its workers and keeping their companies open with financing alone—as the relief bill does—doesn’t make much sense on its own as a solution, because those jobs and activities are not likely to come back when the COVID crisis ends. This still risks leaving them nowhere when the immediate crisis lifts."

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