The coronavirus brings the pain of job loss and cut salaries, but also relief for our overheating planet
- To understand the economic impact of Covid-19 on regular people, consider the travel and tourism industry. Amid travel restrictions and flight cancellations, the coronavirus pandemic is threatening 50 million jobs around the world
Real life has bitten back with a vengeance. CLSA estimated that US$13 trillion had been stripped from equity market values worldwide, noting that this was more or less equal to US$3 billion for each coronavirus death so far. Since the world’s financial markets are valued at around four times the size of the global economy, and with further equity market falls expected in the weeks ahead, there could be an awful lot of pain still to come.
But as central banks and hastily assembled government task forces talk about high-level monetary and fiscal relief measures, the challenge for most of us mere mortals is to get our heads around the real-life implications of what has happened, and where things go from here.
World’s wealthiest lose nearly US$1 trillion in stock market rout
According to the International Civil Aviation Organisation, travel and tourism generated US$8.3 trillion in 2017, supporting 313 million jobs. That’s one in 10 jobs worldwide. Hotels and resorts generated US$878 billion. Airlines carried more than 4 billion passengers and supported more than 60 million jobs.
That a group of Cathay Pacific’s substance needs to give such assurances is a measure of the gravity of the crisis we face. Look at Air France-KLM, Lufthansa, British Airways, Delta, United or Southwest, and you see similar measures. You see share prices gutted by up to 25 per cent since the onset of the Covid-19 crisis.
Life after Covid-19: we must rethink our travel and global supply chains
International Air Travel Association’s chief economist Brian Pearce estimated even before last Friday’s downward lurch that the aviation industry would likely lose between US$63 billion and US$113 billion this year. The World Travel & Tourism Council says 50 million jobs are in danger.
As a Financial Times editorial noted last week, “the virus should not obscure what is by far the largest threat to the [airline] industry: climate change.”
This was echoed by Cambridge engineering professor Julian Allwood, one of the authors of the report, “Absolute Zero”, who said: “The only way the UK can get to net zero emission aviation by 2050 is by having a substantial period of no aviation at all.”
For the authors of “Absolute Zero”, Covid-19 seems to be doing their job for them, and is exactly what the planet needs. But those wringing their hands over the harm being done to millions of livelihoods worldwide may take a different view.
David Dodwell researches and writes about global, regional and Hong Kong challenges from a Hong Kong point of view