BP said this week that this was a period with an “exceptional level of uncertainty”.
I am a millennial and when you’re in this generation your relationship with long-term security, in the form of things such as pension funds, is tenuous at the best of times. This, the Covid-19 pandemic — is the second economic depression of our short working lives.
The certainty of capital markets in the past — that if you invest over a lifetime you will have a nest egg — has been largely wiped out.
Those markets also rely on continuous growth, which doesn’t work on a planet with finite resources.
So things aren’t looking good. Which feels like the slogan of our generation. The market underpins our current version of civilisation.
And so much of the lucrative part of the market comes in the form of fossil fuel companies. Royal Dutch Shell has increased its dividend every year since World War II. This allowed people to profit from their investments and retire. Much of our growth in the past two centuries has been powered by burning fossil fuels — from cotton mills in England to the fuel in the warships that drive global American commercial dominance.
But this latest global economic shock has been, in part, driven by the collapse of oil.
The price of Brent crude has gone from more than $70 a barrel — which was already low — to about $20 in the past few months. On Wednesday it was $29.58. Shell has cut its dividend (payout to shareholders) by two-thirds. BP said this week that this was a period with an “exceptional level of uncertainty”.
This forces us to look at how the world works. To retire — to have a pension and investments — you used to have to be okay with your money going into industries that pollute natural resources and heat the planet.
The divestment movement, asking investors to put their money in less polluting industries, had started to change this. Covid-19 is dramatically driving this change.
The stock market has driven so much of the last two centuries. It decides winners and losers. For most of its time, it has chosen to not punish polluters and rather reward those that push dirty air into children’s lungs and drive the climate crisis.
Now that fossil fuels don’t give long-term security, or an absurd return on investment, there is a real chance to look at the world differently. Right now this is devastating. Losses on investments hurt people and hurt economies. But the unquestioned logic of return on investment, whatever the cost, has been upended. Chaos allows for change.