WEBVTT - Coronavirus Blew Up Your Forecast – Now What? 0:00:00.240 --> 0:00:02.599 Hi everyone. Over the past few days, I've been getting 0:00:02.600 --> 0:00:06.120 messages asking when the next episode is coming out, Listeners 0:00:06.160 --> 0:00:09.600 trying to switch on but couldn't. Well, truth is in 0:00:09.680 --> 0:00:11.719 our office. We've got a really nice studio that makes 0:00:11.720 --> 0:00:15.000 things pretty easy when you're in the office. So when 0:00:15.040 --> 0:00:17.279 I swapped the studio for the kitchen table, it took 0:00:17.280 --> 0:00:19.560 a minute to get set up. So here we are. 0:00:19.920 --> 0:00:22.439 We're back, and today's show it's going to be a 0:00:22.440 --> 0:00:24.840 bit different. You may or may not have noticed that 0:00:24.880 --> 0:00:27.000 we do every episode based on a specific piece of 0:00:27.000 --> 0:00:29.440 research that BENF users can then go dig into to 0:00:29.440 --> 0:00:32.839 get the details. Today, we won't be doing that, as 0:00:32.880 --> 0:00:34.839 you might expect. The bulk of our research right now 0:00:34.880 --> 0:00:37.400 is either about COVID nineteen or its impact on the 0:00:37.400 --> 0:00:39.960 industries we cover, So we figured it would be useful 0:00:39.960 --> 0:00:42.400 to do a show about process, about how we started 0:00:42.400 --> 0:00:44.480 to look at this monstrous thing that that's voided every 0:00:44.479 --> 0:00:48.120 forecast out there. Today, Dana and I talked with Albert Chung, 0:00:48.360 --> 0:00:50.919 head of research for BENF. He'll walk us through how 0:00:50.960 --> 0:00:52.960 we started to get our heads around the problem and 0:00:53.000 --> 0:00:56.440 frameworks BNF analysts developed to explain what's happening in to 0:00:56.480 --> 0:00:59.680 accommodate change. He also describes how all this will show 0:00:59.720 --> 0:01:01.800 up in our research, what to look out for, and 0:01:01.800 --> 0:01:03.560 what to make of it. If you'd like to follow 0:01:03.560 --> 0:01:07.120 our ongoing COVID coverage, including our popular COVID Indicators reports, 0:01:07.400 --> 0:01:10.280 head over to benf dot com slash series, where you 0:01:10.280 --> 0:01:12.880 can subscribe to any of our fifty plus recurring publications. 0:01:13.200 --> 0:01:15.240 When a new report is published, you'll get an alert 0:01:15.360 --> 0:01:17.960 the second it comes out as a reminder beif does 0:01:18.000 --> 0:01:20.320 not provide investment of strategy advice, and you can hear 0:01:20.319 --> 0:01:22.640 a full disclaimer at the end of the show. I'm 0:01:22.640 --> 0:01:24.920 Mark Taylor. You're with Aana Perkins and you're listening to 0:01:24.959 --> 0:01:35.920 Switch on the BENF podcast. Hi Albert, thanks for your 0:01:36.000 --> 0:01:38.720 joining us today. Hey Mark, thanks for having me. So 0:01:38.920 --> 0:01:41.679 when did it become apparent that COVID nineteen was going 0:01:41.720 --> 0:01:44.280 to become a dominant piece of the BIS research agenda. 0:01:44.800 --> 0:01:46.760 Like a lot of things, it was very gradual and 0:01:46.800 --> 0:01:49.800 then very sudden. I actually first regrete about this mystery 0:01:49.840 --> 0:01:53.720 illness in Juhan sometime in mid December, but at that 0:01:53.760 --> 0:01:56.120 stage it didn't seem that serious. It wasn't so connecting 0:01:56.160 --> 0:01:59.760 humans humans, so really it was probably late January, when 0:01:59.760 --> 0:02:02.240 our entire team in China was asked to work from 0:02:02.240 --> 0:02:05.200 home and parts of China went into lockdown. Our team 0:02:05.280 --> 0:02:08.040 started being infected. One person was actually placed into quarantine, 0:02:08.120 --> 0:02:11.240 so it became very real for us. And that's when 0:02:11.840 --> 0:02:14.400 our analysts in China actually really started thinking about what 0:02:14.440 --> 0:02:16.600 the impacts of the COVID nineteen was, and they put 0:02:16.600 --> 0:02:19.080 out this piece actually in mid February that said, assuming 0:02:19.080 --> 0:02:21.880 the outbreak it's contained in Q one, then GP growth 0:02:21.919 --> 0:02:24.360 will slow from six percent to about five percent this 0:02:24.440 --> 0:02:28.320 year in China, And clearly, with hindsight that now seems far, 0:02:28.400 --> 0:02:32.399 far too optimistic. And the story stayed at Asia specific 0:02:32.400 --> 0:02:35.280 story for quite a while. Even in early March, in 0:02:35.320 --> 0:02:38.720 the global team, we were talking about impact on wind 0:02:38.720 --> 0:02:40.679 and solar and we weren't really sure if there was 0:02:40.720 --> 0:02:43.040 going to be an impact. It was the middle of 0:02:43.120 --> 0:02:46.600 March when it became really sort of unavoidably obvious that 0:02:46.600 --> 0:02:48.960 we were going to have to rework our forecasts, rework 0:02:49.040 --> 0:02:52.160 our research agenda, because this thing was going to really 0:02:52.160 --> 0:02:55.560 dominate our work in the fores civil future. So you 0:02:55.600 --> 0:02:58.160 realized you had to change attack. Things are being quickly, 0:02:58.200 --> 0:03:00.800 perhaps quickly every seen before in our circuit at least, 0:03:00.960 --> 0:03:02.600 how did you start to get your head around situation? 0:03:02.600 --> 0:03:04.519 How did you get started? Well, I can't take any 0:03:04.560 --> 0:03:07.040 credit at all for this. Our analyst teams, particularly teams 0:03:07.040 --> 0:03:10.040 in Asia, jumped on this very quickly, and I think 0:03:10.160 --> 0:03:12.080 very rightly said Look, the first thing we need to 0:03:12.080 --> 0:03:14.000 do is to the best that we can track what's 0:03:14.040 --> 0:03:16.919 actually happening on the ground. We launched a series of 0:03:17.040 --> 0:03:21.120 indicator reports, so we call them are COVID nineteen indicators, 0:03:21.320 --> 0:03:23.560 and they cover a range of different useful data points 0:03:23.560 --> 0:03:26.480 that we've managed to gather from different markets to keep 0:03:26.480 --> 0:03:29.600 a near real time tab on how the pandemic is 0:03:29.600 --> 0:03:32.040 developing and the impact that it's having in different markets. 0:03:32.440 --> 0:03:35.000 These indication reports go out weekly. We have one that 0:03:35.040 --> 0:03:38.040 covers road transport. We're actually using live data from tom 0:03:38.080 --> 0:03:42.640 Tom The tracks road congestion, which is not exactly traffic. 0:03:42.680 --> 0:03:45.680 It's a measure of how slowly traffic is moving, which 0:03:45.680 --> 0:03:47.960 is a proxy for how much traffic there is. As 0:03:47.960 --> 0:03:50.040 of the latest report that we've put out, Beijing and 0:03:50.080 --> 0:03:53.560 Shanghai are actually seeing rising congestion levels in the last 0:03:53.560 --> 0:03:56.880 few weeks now seem to be approaching roughly normal levels 0:03:56.880 --> 0:04:00.120 of congestion, whereas places like Hong Kong and Guangzo are 0:04:00.160 --> 0:04:03.960 still below normal levels and places like New Dahi and 0:04:04.040 --> 0:04:07.120 Mumbai those numbers are eighty nine down on normal levels. 0:04:07.560 --> 0:04:11.080 We've got indicators in aviation indicators and the power sector. 0:04:11.840 --> 0:04:14.600 How do we decide which industries were going to make 0:04:14.600 --> 0:04:17.000 the cut as an indicator in which one weren't. From 0:04:17.000 --> 0:04:19.520 a sort of energy transition perspective and energy at large, 0:04:19.600 --> 0:04:23.160 clearly we're interested in demand for energy commodities first and foremost. 0:04:23.720 --> 0:04:26.360 And the first thing that happened was people stopped moving around. 0:04:26.640 --> 0:04:30.000 And when people start moving around, that's an oil story 0:04:30.040 --> 0:04:33.480 because liquid fields get used to transport. But over time, 0:04:33.760 --> 0:04:38.280 as we've seen the lockdowns in different countries proceed with 0:04:38.320 --> 0:04:41.520 people staying at home more and businesses shutting down as well, 0:04:41.960 --> 0:04:44.159 that started to leak into the power and gas center 0:04:44.200 --> 0:04:48.080 as well. As an example here in Great Britain, we're 0:04:48.160 --> 0:04:51.839 running at about fift below normal expectations in terms of 0:04:51.839 --> 0:04:57.800 power demand on the grid. In India it's down and 0:04:57.880 --> 0:05:01.520 as much as fifty down in places Punjaba and Rochester 0:05:01.600 --> 0:05:05.440 in particular states within India. So we're tracking really anything 0:05:05.440 --> 0:05:09.240 that's related to energy. But those indicators are having to 0:05:09.240 --> 0:05:12.599 do with the here and now, right, how do those 0:05:12.800 --> 0:05:16.560 intern impact our longer TAN forecast. Yeah, So the first 0:05:16.640 --> 0:05:19.760 revision we made was in our SOLO forecast. We've essentially 0:05:19.800 --> 0:05:25.280 deferred a chunk of the project pipeline from particularly in China, 0:05:25.320 --> 0:05:27.640 because there's been some policy changes which mean that projects 0:05:27.640 --> 0:05:30.839 are likely to blow over into the next year. That 0:05:30.880 --> 0:05:33.880 means that we've actually revised our SOLO forecast for this 0:05:34.000 --> 0:05:38.080 year down by eight percent, and that could mean that 0:05:38.120 --> 0:05:41.320 this year is the first time solar installations actually decline 0:05:41.880 --> 0:05:44.440 like SOLO has never not grown before. This could be 0:05:44.480 --> 0:05:47.279 the first year on the wind side. Actually, we thought 0:05:47.360 --> 0:05:49.400 this year was going to be an all time record 0:05:49.480 --> 0:05:53.200 for installations. Now we've cut that wind forecast by twelve 0:05:53.800 --> 0:05:58.720 again differring projects in We're still forecasting a record year 0:05:58.880 --> 0:06:02.280 at the moment, but quite obvious that there's downside risk 0:06:02.360 --> 0:06:05.679 to that. And just yesterday, I believe our US gas 0:06:05.720 --> 0:06:08.880 team put out a new forecast for US gas storage 0:06:09.440 --> 0:06:13.000 and they're now calling one billion q gas and storage 0:06:13.000 --> 0:06:16.280 by the end of next winter up compared to a 0:06:16.320 --> 0:06:19.280 sort of no COVID based case, which is effectively a 0:06:19.400 --> 0:06:22.400 much much loosener market than we have previously been expecting. 0:06:22.520 --> 0:06:25.080 So those are just sort of three things on the agenda. 0:06:25.120 --> 0:06:28.159 But we're updating all of our forecasts, and I don't 0:06:28.160 --> 0:06:29.480 think any of them are going to stay the same 0:06:29.520 --> 0:06:31.760 after the next few weeks. So you started with a 0:06:31.800 --> 0:06:35.360 delay in the most basic case, I guess, and then 0:06:35.560 --> 0:06:38.400 you move into how these things have impacked every part 0:06:38.440 --> 0:06:41.159 of our forecast, I guess, into the more structural changes, 0:06:41.200 --> 0:06:43.480 I guess you could say, so, not only does COVID 0:06:43.560 --> 0:06:49.479 nineteen really change everything for these industries and therefore all 0:06:49.520 --> 0:06:52.880 of our forecasts into the future, but to some extent, 0:06:52.880 --> 0:06:55.960 it may also change the way that we talk about everything, 0:06:56.000 --> 0:06:59.960 because from a time standpoint, it seems like things are 0:07:00.600 --> 0:07:05.560 changing so quickly that a usual quarterly, half yearly may 0:07:05.600 --> 0:07:08.600 not be enough. So how do you decide how quickly 0:07:08.640 --> 0:07:11.880 and how often you actually need to update on some 0:07:12.000 --> 0:07:15.160 of the industries that we're doing these indicators for. Yeah, 0:07:15.200 --> 0:07:17.760 I mean, historically we've served a few different audiences with 0:07:17.880 --> 0:07:21.760 different time horizons. In terms of the commodity markets, how 0:07:21.800 --> 0:07:24.600 a gas oil, we need to be really timely in 0:07:24.600 --> 0:07:27.360 our analysis, so we've been doing weeklies in many of 0:07:27.360 --> 0:07:30.400 those markets, for a long time, and clearly with COVID nineteen, 0:07:30.760 --> 0:07:33.960 that kind of real time analysis becomes even more important 0:07:34.000 --> 0:07:36.120 because new information comes to light that changes our view 0:07:36.200 --> 0:07:38.760 every day, and so we've got to do that really rapidly. 0:07:39.360 --> 0:07:41.320 And then in our other sectors, if you think about 0:07:41.360 --> 0:07:45.160 renewable energy, electric vehicles, and so on, we normally update 0:07:45.200 --> 0:07:48.280 these numbers quarterly. Some of the EV sales numbers we 0:07:48.280 --> 0:07:52.480 look at monthly. But the situation changing so quickly that 0:07:52.520 --> 0:07:54.480 we just had to respond more quickly. And I think 0:07:54.480 --> 0:07:56.880 that's the same challenge that all businesses are having right now. 0:07:56.920 --> 0:07:59.640 It's the flow of news that's coming through every single day. 0:08:00.120 --> 0:08:02.160 Just got to keep monstoring it and keep on all sides. 0:08:02.800 --> 0:08:07.120 Forecasts are tough in the best of times, and we 0:08:07.320 --> 0:08:11.560 like to do scenarios rather than forecast per se. But 0:08:11.640 --> 0:08:14.560 even that people misconstrue those is like, Okay, we're talking 0:08:14.600 --> 0:08:16.600 a bit about the future and what could happen there? 0:08:17.040 --> 0:08:19.960 What point do we have enough information to actually be 0:08:20.040 --> 0:08:22.720 able to reasonably talk about the future. And I think, 0:08:23.200 --> 0:08:25.640 you know, maybe just even rewinding, if we're looking at 0:08:25.720 --> 0:08:31.160 this January February March timeline from the point at which 0:08:31.560 --> 0:08:34.680 we started to see changes in human behavior and changes 0:08:34.800 --> 0:08:38.640 in company's behavior due to a lot more people being 0:08:38.679 --> 0:08:41.200 at home and government regulations. At what point were we 0:08:41.280 --> 0:08:44.920 able to start to say something meaningful in China, and 0:08:44.960 --> 0:08:48.480 then in Europe, and then maybe in the America's I 0:08:48.480 --> 0:08:50.960 think everybody has had to throw away that any forecast 0:08:51.000 --> 0:08:54.160 that was made before about February March this year, they're 0:08:54.160 --> 0:08:58.040 all wrong. And anyone who tells you that they've got 0:08:58.040 --> 0:09:02.680 a forecast that you can invest against or really believe in, 0:09:03.160 --> 0:09:06.600 it's just not really credible. And so that's a big 0:09:06.640 --> 0:09:09.280 part of the reason why we're incorporating a set of 0:09:09.320 --> 0:09:12.000 scenarios into our analysis right now. So you knew this 0:09:12.080 --> 0:09:14.760 situation would keep evolving and you need to say smart 0:09:14.760 --> 0:09:17.760 things about it. So you introduced this thing called scenarios 0:09:17.800 --> 0:09:19.880 to be able to accommodate different things that could happen. 0:09:20.160 --> 0:09:21.720 Could you tell us a bit more about those and 0:09:21.720 --> 0:09:23.560 how those came to be? Yeah, sure, So what was 0:09:23.600 --> 0:09:27.040 extremely obvious was that any forecast made over the last 0:09:27.040 --> 0:09:30.280 few months probably needs to be thrown away. And so 0:09:30.440 --> 0:09:33.400 when you're in that situation extreme uncertainty, which we all 0:09:33.440 --> 0:09:36.360 are in, it's better from my point of view, to 0:09:36.440 --> 0:09:38.760 embrace down certain, to acknowledge it, and actually try and 0:09:38.760 --> 0:09:42.000 incorporate into your thinking. Scenarios a great way of doing that. 0:09:42.360 --> 0:09:44.560 So essentially what we did was we said, we're gonna 0:09:44.760 --> 0:09:48.520 come up with three scenarios for how the pandemic might 0:09:48.600 --> 0:09:52.600 proceed globally and make sure that in all of our 0:09:52.640 --> 0:09:55.480 analysis across the n F we think about all these 0:09:55.520 --> 0:09:58.200 three scenarios and how they might impact the sectors that 0:09:58.240 --> 0:10:00.839 we cover. And that's really powerful, but that acknowledges the 0:10:00.880 --> 0:10:03.040 fact that we simply don't know. Nobody knows how the 0:10:03.040 --> 0:10:05.280 pannem is going to play out. But it also means 0:10:05.320 --> 0:10:07.720 that our forecasts will have a bit more resilience to 0:10:07.760 --> 0:10:11.520 the changing news. Every day we can monitor the news 0:10:11.559 --> 0:10:13.920 and talk about which of our scenarios looks like it's 0:10:13.960 --> 0:10:17.760 becoming more or less likely as the pandemic develops. So, 0:10:17.800 --> 0:10:19.840 in terms of how they're built, the main thing is 0:10:19.960 --> 0:10:22.600 scenarios all about what are the key unknowns that you 0:10:22.640 --> 0:10:26.120 want to explore, and so we wanted to explore really 0:10:26.120 --> 0:10:30.920 the sort of medical and epidemiological unknowns which are around 0:10:31.200 --> 0:10:34.000 how is the virus going to develop? Key things like 0:10:34.080 --> 0:10:36.040 will it fade in warm and weather? Will it come 0:10:36.040 --> 0:10:38.880 back for a second way next autumn or winter? Will 0:10:38.920 --> 0:10:42.320 treatments and vaccines be found? What are the real infection rates? 0:10:42.320 --> 0:10:44.240 For example, are they really as low as we are 0:10:44.280 --> 0:10:46.640 being told or is it more of the population already 0:10:46.640 --> 0:10:48.680 has it, which would actually be good news in the 0:10:48.720 --> 0:10:51.840 long term. How quickly can countries ramp up their mass 0:10:51.920 --> 0:10:55.440 testing and contact tracing programs, which would then mean that 0:10:55.480 --> 0:10:57.800 we can ease some of the social distancing measures that 0:10:57.840 --> 0:11:01.040 are currently in place. All of those things are unknown 0:11:01.080 --> 0:11:04.160 and therefore make for really good variables in a scenario, 0:11:04.200 --> 0:11:08.760 So we package those into three scenarios that eventually lead 0:11:08.800 --> 0:11:12.200 to how long does the pandemic actually last? For where 0:11:12.240 --> 0:11:15.160 are we getting that sort of information from to put 0:11:15.240 --> 0:11:18.800 in as a variable. Because the team that you lead 0:11:18.920 --> 0:11:22.559 our energy analysts, So presumably they've not spent a lot 0:11:22.559 --> 0:11:27.480 of their career looking at different impacts of viruses and things. Yeah, 0:11:27.480 --> 0:11:30.480 that's a good question. So we're not medical experts at all. 0:11:30.600 --> 0:11:33.360 We don't have public health people on our staff, so 0:11:33.440 --> 0:11:37.000 we're operating off the same available information that other people have. 0:11:37.679 --> 0:11:40.760 We read, for example, the Imperial College paper that was 0:11:40.960 --> 0:11:44.800 widely distributed over the last couple of weeks, we read 0:11:44.800 --> 0:11:47.920 some papers about how the ninet team Spanish flu pandemic 0:11:47.920 --> 0:11:50.680 played out globally. We've talked to one or two people 0:11:50.679 --> 0:11:54.520 who have views as well, and we've deliberately kept our 0:11:54.559 --> 0:11:57.760 scenarios pretty open minded in terms of what you would 0:11:57.800 --> 0:12:00.160 have to believe feature them to come true, because we 0:12:00.200 --> 0:12:03.280 acknowledge that we have no real epidemiological expertise, so we 0:12:03.400 --> 0:12:06.160 just framed is sort of wide range of possibilities to 0:12:06.200 --> 0:12:09.560 make sure that we're covering enough basis. So scenario one 0:12:09.720 --> 0:12:14.839 is a single way pandemic, which basically assumes that most 0:12:14.840 --> 0:12:19.240 countries have three months of pretty heavy social distancing measures 0:12:19.280 --> 0:12:23.160 to control their outbreaks, but that after the roughly three months, 0:12:23.160 --> 0:12:26.360 then things can start to return to normal with a 0:12:26.559 --> 0:12:30.200 ramp up in mass testing, contact tracing, and so on. 0:12:30.760 --> 0:12:32.800 But if you believe that, then you know, if everybody 0:12:32.800 --> 0:12:35.839 has a three month outbreak, then probably by the second 0:12:35.880 --> 0:12:38.679 half of the year, most of the country's have been 0:12:38.720 --> 0:12:42.400 through that, and your economic recovery can probably start before 0:12:42.440 --> 0:12:45.400 the end of the year. So that scenario one, Scenario 0:12:45.440 --> 0:12:49.840 two is in a slightly less optimistic situation, you might 0:12:49.880 --> 0:12:53.240 have multiple waves of this pandemic, and that's what happened 0:12:53.280 --> 0:12:55.320 in nineteen eighteen. There were three waves over the course 0:12:55.360 --> 0:12:57.480 of a year, and so we've assumed it looks a 0:12:57.520 --> 0:12:59.679 little bit like that. Countries go through sort of one 0:12:59.760 --> 0:13:02.640 year a shock. It might not be exactly in two 0:13:02.760 --> 0:13:04.720 or three waves. It might be that there's sort of 0:13:05.040 --> 0:13:08.200 many on and off cycles of social distancing that are 0:13:08.240 --> 0:13:12.360 required to keep healthcare systems running. But essentially the outcome 0:13:12.400 --> 0:13:14.960 of all of that is that this massive economic shock 0:13:15.000 --> 0:13:18.920 actually lasts into the beginning and it's only the middle 0:13:19.840 --> 0:13:23.440 where recovery begins. And this is a bit bleaker because 0:13:24.240 --> 0:13:26.839 government stimulus can keep businesses running for three months, and 0:13:26.840 --> 0:13:28.960 there's a three month shock, you can keep people in 0:13:29.000 --> 0:13:31.800 their jobs. But if it's a one year shock, that 0:13:31.880 --> 0:13:35.160 starts to look much harder, and so you're looking at 0:13:35.240 --> 0:13:38.240 more businesses going bankrupt, workers being displaced, and so on. 0:13:39.120 --> 0:13:42.080 And then scenario three years even worse. We call it 0:13:42.240 --> 0:13:46.040 enduring pandemic scenario. And in that scenario, this thing drags 0:13:46.040 --> 0:13:50.160 on for eighteen months and the end comes when a 0:13:50.240 --> 0:13:52.760 treatment is scaled up or a vaccine is scaled up. 0:13:53.240 --> 0:13:56.000 In this scenario, nothing else works until one of those 0:13:56.000 --> 0:13:59.960 two things arrives, and that happens sometime around eighteen none 0:14:00.120 --> 0:14:03.160 from now, which pushes out the economic recovery out towards 0:14:03.160 --> 0:14:07.199 the latter half of probably the end we're really talking 0:14:07.200 --> 0:14:09.240 about the depression at that point, you know, really not 0:14:09.320 --> 0:14:12.320 a happy place from an economic standpoint. I mean, I 0:14:12.360 --> 0:14:14.800 know this isn't a question maybe we should answer, but 0:14:14.880 --> 0:14:17.400 there's been effort. Do you have a view on which 0:14:17.400 --> 0:14:20.800 scenario could be which seems most realistic? Yeah, that's a 0:14:20.800 --> 0:14:24.560 really tough question. A couple of observations. One is, I 0:14:24.600 --> 0:14:27.760 think scenario one, which is currently our most optimistic one, 0:14:29.200 --> 0:14:33.800 was probably the most pessimistic scenario that most economists would 0:14:33.840 --> 0:14:36.840 have even entertained a month ago or two months ago. 0:14:37.440 --> 0:14:39.960 And so I think where we are in terms of 0:14:40.000 --> 0:14:43.240 like the consensus view, if you talk to forecasters out there, 0:14:43.760 --> 0:14:45.800 I would probably guess that most people think we're in 0:14:45.800 --> 0:14:50.280 scenario one already, and the signposts are pointing towards scenario 0:14:50.360 --> 0:14:53.720 to I'll give you a couple of examples. Both Singapore 0:14:53.880 --> 0:14:56.640 and Hong Kong, which had early outbreaks and got them 0:14:56.720 --> 0:15:01.640 under control, have both increased their intervention measures in the 0:15:01.720 --> 0:15:04.240 last week or two, which to me is a signpost 0:15:04.360 --> 0:15:06.800 that says even if you control it at first, it 0:15:06.840 --> 0:15:08.800 doesn't mean you're out of the words. It seems like 0:15:09.120 --> 0:15:11.800 through other things, like they're having important cases from other countries, 0:15:12.280 --> 0:15:14.680 it seems like they have to reintroduce measures. So that 0:15:14.760 --> 0:15:17.360 to me is a signpost towards scenario too. And how 0:15:17.360 --> 0:15:19.240 will you show up in our work? Like so, if 0:15:19.280 --> 0:15:21.480 I'm a user looking at BINGF researcher, I mean you 0:15:21.520 --> 0:15:24.320 said it's going to prevate like all of a report 0:15:24.360 --> 0:15:27.400 in the coming months. Plus should I be looking for 0:15:27.440 --> 0:15:29.960 three lines you each chart? Or how should I be 0:15:30.000 --> 0:15:32.440 looking out for this? Wherever we have a forecast, I'm 0:15:32.480 --> 0:15:36.400 encouraging our teams to use these three scenarios. Now, the 0:15:36.440 --> 0:15:39.840 forecast revisions I mentioned earlier on solo wind and US casts, 0:15:40.280 --> 0:15:43.880 those are all scenario one forecast, single way pandemic, three 0:15:43.880 --> 0:15:47.000 month shock, end of your recovery. What you'll see as 0:15:47.000 --> 0:15:48.880 a client in the coming month or so is that 0:15:48.960 --> 0:15:51.680 more of our research will explore all three of the possibilities. 0:15:51.920 --> 0:15:53.480 Some of it will be qualitated, so it might not 0:15:53.520 --> 0:15:56.080 be aligned on a chart. It might be a commentary 0:15:56.160 --> 0:15:59.160 on the impacts of these three possible scenarios. Some of 0:15:59.160 --> 0:16:01.080 it will be quantity too, And you'll see minds on 0:16:01.120 --> 0:16:02.960 tcharts and so on. And at the same time we'll 0:16:03.000 --> 0:16:06.320 be working closely with our colleagues in bluemog Economics. They 0:16:06.360 --> 0:16:09.160 are also updating their scenarios and we'll be working very 0:16:09.160 --> 0:16:11.440 clessly with them and try to understand how we can 0:16:11.440 --> 0:16:12.960 make the best use of their work in our b 0:16:13.080 --> 0:16:15.840 network as well. I've already started to see some of 0:16:15.880 --> 0:16:20.000 the initial data that leads to some changes also in emissions, 0:16:20.560 --> 0:16:24.200 which is in many ways linked to the sectors that 0:16:24.240 --> 0:16:27.520 we cover as well. Is there anything you have initially 0:16:27.560 --> 0:16:31.600 started to see there and how does it change in 0:16:31.840 --> 0:16:35.640 emissions play out along these three scenarios, because there is 0:16:35.640 --> 0:16:39.640 a big difference between a blip and something that may 0:16:39.680 --> 0:16:43.480 be a bit longer term. Yeah, I mean emissions are 0:16:43.480 --> 0:16:47.000 definitely going to be down this year essentially, pretty substantially. Clearly, 0:16:47.000 --> 0:16:50.640 that's nothing to celebrate. Stopping the economy and everybody's staying 0:16:50.640 --> 0:16:52.600 at home forever. It is not the solution to climbachation. 0:16:52.640 --> 0:16:56.840 So let's there's a school of thought that says we've 0:16:56.880 --> 0:17:00.000 now already seen the absolute peak of man made emissions, 0:17:02.240 --> 0:17:05.160 will now have been the peak of emissions, and we'll 0:17:05.160 --> 0:17:07.880 never get back to that level. If that's true, we'll 0:17:07.920 --> 0:17:09.800 have probably have brought the peak forward by six or 0:17:09.800 --> 0:17:12.359 eight years. Like I think people were sort of thinking 0:17:12.480 --> 0:17:14.840 emissions would be later in this decade, so so that 0:17:14.840 --> 0:17:18.080 would be bring it forward a long way. I think 0:17:18.119 --> 0:17:20.200 to believe that, you'd had to believe that the shock 0:17:20.400 --> 0:17:22.200 lasts for more than a few months. I think you're 0:17:22.200 --> 0:17:25.080 talking about our second or third scenarios, because if you 0:17:25.119 --> 0:17:28.359 have a rapid economic recovery, I think emissions would be 0:17:28.359 --> 0:17:30.399 back to previous trajectory. I think you'd be back onto 0:17:30.440 --> 0:17:33.800 this growth curve. If, on the other hand, we're looking 0:17:33.800 --> 0:17:37.720 at a more prolonged pandemic and longer recession, I think 0:17:37.760 --> 0:17:41.800 we might find that the low carbon transition might have 0:17:41.920 --> 0:17:45.080 proceeded further before the recovery really starts to take hold. So, 0:17:45.160 --> 0:17:49.800 for example, if a load of high carbon infrastructure gets 0:17:49.840 --> 0:17:53.359 retired or mothballs during a recession or a depression, and 0:17:53.359 --> 0:17:57.560 in the meantime the costs of clean alternatives continue to decline, 0:17:58.040 --> 0:18:01.000 then you might not see some of that legacy high 0:18:01.000 --> 0:18:05.480 carbon infrastructure come back online when the recovery begins. The 0:18:05.520 --> 0:18:08.880 shot onneswers nobody knows, but it's a really valid question. 0:18:09.000 --> 0:18:11.440 I think we're going to think more about that. Well, 0:18:11.440 --> 0:18:14.240 COVID nineteen is nothing to celebrate if we look at 0:18:14.280 --> 0:18:16.600 emissions in isolation. The fact that we might have reached 0:18:16.600 --> 0:18:19.440 our peak is something that could potentially be a very 0:18:19.440 --> 0:18:22.480 good thing. As we're headed into a period where there's 0:18:22.520 --> 0:18:26.199 going to need to be stimulus in economies around the world. 0:18:27.000 --> 0:18:29.240 There are rumors flying about that some of this could 0:18:29.240 --> 0:18:34.480 be tied to different green incentives. What have you heard 0:18:34.520 --> 0:18:37.600 about green stimulus to date? Surprisingly, there's been a lot 0:18:37.640 --> 0:18:40.040 of talk about green students. And I'd say that surprising 0:18:40.160 --> 0:18:43.720 because the focus right now is rightly on trying to 0:18:44.600 --> 0:18:47.920 keep businesses from going bankrupt, try to keep people employed, 0:18:47.920 --> 0:18:49.879 and keep the house and fair, and deal with the 0:18:49.880 --> 0:18:53.760 healthcare situation. And if this turns out to be a 0:18:53.800 --> 0:18:56.080 deep but short recession and recovery will be a lot 0:18:56.119 --> 0:18:59.159 easier business stay afloat. And that's the right focus, and 0:18:59.200 --> 0:19:00.879 that's what we're seeing here in the UK, for example, 0:19:00.880 --> 0:19:03.440 there's this three billion pound Learned Guarantee program and the 0:19:03.480 --> 0:19:06.960 government's committing to cover employees wages if they're furloughed, etcetera. 0:19:07.440 --> 0:19:11.199 And the US has two trillion dollar stimulus package, and 0:19:11.280 --> 0:19:13.720 all of that is rightly focused on the short term. 0:19:13.760 --> 0:19:15.720 Having said that, clearly there's a lot of people now 0:19:15.760 --> 0:19:19.359 talking about what recovery packages could look like when the 0:19:19.400 --> 0:19:23.280 time comes to start stimulating the economy again, and how 0:19:23.359 --> 0:19:24.840 much of that should be green. So I think there 0:19:24.880 --> 0:19:28.480 are some opportunities to push a sort of climate agenda 0:19:28.640 --> 0:19:31.840 in any recovery package. So the things that lend themselves 0:19:31.840 --> 0:19:35.240 really well to stimulus are projects that are quote unquote 0:19:35.240 --> 0:19:37.639 shovel ready, they're ready to go, ready to ramp up, 0:19:37.800 --> 0:19:40.760 and projects that create jobs. So I think things like 0:19:40.800 --> 0:19:46.199 renewable power, energy storage, EV charging infrastructure, those are supply 0:19:46.280 --> 0:19:47.960 chains that are ready to ramp up if they have 0:19:48.040 --> 0:19:50.879 project developers that are ready to move forward with sites 0:19:51.080 --> 0:19:54.120 in some cases that are already identified. So in terms 0:19:54.119 --> 0:19:56.160 of job creation, there will be quick wins, and there'll 0:19:56.160 --> 0:19:59.280 be quick wins for the climate as well, energy efficiency 0:19:59.280 --> 0:20:01.360 as well as a few one we could make huge 0:20:01.400 --> 0:20:04.280 improvements to our building stock. I would bake in huge 0:20:04.280 --> 0:20:06.880 carbon reductions for the coming decade, and that would create 0:20:06.880 --> 0:20:09.679 a lot of jobs in local communities as well. And 0:20:09.680 --> 0:20:12.080 I'd also love to see some capital going into circular 0:20:12.119 --> 0:20:14.880 economy for example, I mean, I could see increase investment 0:20:14.920 --> 0:20:17.560 into recycling capacity. So I think there are a lot 0:20:17.600 --> 0:20:20.679 of things that people can see aren't doable, and I 0:20:20.680 --> 0:20:24.040 think that the early conversations we're seeing now are about 0:20:24.400 --> 0:20:27.280 positioning some of those conversations so that they're ready to 0:20:27.359 --> 0:20:31.520 go when we're ready to really talk about recovery. So 0:20:32.400 --> 0:20:33.960 a lot of our clients use our research as a 0:20:34.040 --> 0:20:37.239 guide or a data point or an input, but then 0:20:37.280 --> 0:20:38.760 they have to still go and do their own to 0:20:38.800 --> 0:20:40.919 figure out how things are going to impact their company 0:20:40.920 --> 0:20:43.800 and their strategy going forward. Is there anything that you 0:20:43.920 --> 0:20:47.560 found in doing your researchers setting the agenda for BNS 0:20:47.640 --> 0:20:49.679 research that you'd recommend as they try to get their 0:20:49.680 --> 0:20:51.680 head around the impact of COVID nineteen and the impact 0:20:51.720 --> 0:20:54.000