Not Normal

Thoughts in the Time of Lockdown

Mankind is facing the deepest crisis in its recent memory. Whether we have seen the worst of this crisis and how long it will take the crisis to be over are not clear and there is little sign to have this clarity soon. Yes, I am talking about COVID-19 pandemic. In my lifetime, I haven't seen an emergency of such dimension and which has got so many “honours” already – worst health crisis since the outbreak of Spanish Flu, cause of the possible economic crisis which may equal the “Great Depression” and an international disaster that may overshadow the World War II. It is pretty clear that the Coronavirus outbreak has pervaded the entire realm of human life, not just health. It has brought almost the whole world to a standstill – something mankind never experienced before. And definitely, there have been quite a many "first" in my life, starting with “lockdown”. While I am in the 50th day of house-arrest, the time has made me look at life through a whole new prism. Some patterns are emerging amidst the current state of entropy. For some time, I was getting itching to not keeping these thoughts within me but to capture and see if they resonate with the outside world (not looking for approval). Interestingly, the past week marked the 75th anniversary of the end of WW-II and 40 years since the eradication of smallpox, considered one of the biggest achievements in international public health.

Nature springs to life

I am lucky to stay at a place where the gulmohar and neem trees caress the balcony. If these trees are around you, birds and squirrels become your close neighbours. Although I regard myself a nature conservationist, the pull and push of city-life never allowed me to audit the un-human life around. Interestingly, the time coincides with the courting and nesting time of many of the city-birds (I am lucky to find some quite rare species). The halting of human activity and the death of the maddening noise of India's cities are two big gains for the fauna. Noise pollution in cities is considered to be a major reason for the dwindling population of birds in cities as it interferes in their romancing. Ornithologists expect that 2020 could see an unprecedented rise in population of birds.

Nature is not just about birds. Air, water and soil are its three pillars. As we know, human habitats across the globe have not noticed just a remarkable decrease in pollution before. Cities in India never experienced such an extended period of days of "good" and "satisfactory" air quality in recent memory. The skyline never looked so prominent before. We have found an unknown, unseen facet of our habitat. Amidst the doom and the gloom of this time, we should not fail to take notice of a major positive – nature retaking its lost place. As we hashtag this on social media platforms, are we also taking some valuable lessons?

Today, policymakers, agencies and researchers should realise that the current lockdown has unlocked a trove of data. This would help find real scenarios for electricity demand and air-quality amongst others, which months back were considered hypothetical. Moreover, we can now understand what factors/ sectors contributed to the different demands or the impacts and by how much. However, analyses alone would not take us anywhere. We are at an important crossroads where we can change our course and move from words to actions -- not the business-as-usual, but that can bring the desired paradigm shift in our way of life. It is time to minimise anthropogenic negative impacts.

Zero-emission mobility – no more an alternative

There is no denying the fact that a key reason today we see blue sky in urban and peri-urban areas is the lack of vehicles on road, to be more precise, Internal Combustion Engine (ICE)-driven vehicles which spew clouds of exhaust comprising particulate matters (PM2.5), NOx, CO, HC and greenhouse gases. India has the ignominy of having the highest number of cities in the list of 30 most polluted cities in the world. The crisis has made everyone realise the impact of our mode of transport. It would be a lost opportunity if the policymakers, the industry, the investors and financial institutions and us, the common people do not commit to shifting to zero-emission mobility. Already different mechanisms are available to make this move. What it requires is a persistent pursuit to scale up electric mobility. The stake was never so high. Why? As maintaining social distancing becomes a way of life at least in the short-term, shared passenger mobility, particularly mass city transport, takes a huge blow. It is unfortunate that when shared mobility was picking up pace in Indian cities, this viral pandemic occurred derailing the way. Apart from mass passenger transport, shared cab-rides and car-pooling will go off the road. With a decrease in the number of riders, cab rides may become more expensive as the unit cost of service rises, and the loop goes on. The cost increase will also be contributed by the requirement to take hygiene-related measures (driver-partners may need to regularly sanitise the inside of the cars). Even if these changes are considered as transient, people will likely to opt for a personal mode of transport (private cars and two-wheelers) in the near future. Many of the Millennials who stayed away from private mobility, may also get behind the wheels. What do all these mean to us? As economies gradually open up and cities start moving (indefinite lockdown is not an option), the roads may see more cars and two-wheelers compared to the pre-lockdown situation leading to more congestion and higher emissions. The crux of the matter is: haze will make its comeback and the sky will lose its blue colour. We can avoid this fate if the city avoids vehicles with engines and drives electric vehicles instead. The nay-sayers may resort to the old argument that we are shifting emissions from vehicles in cities to power plants outside. The answer also remains the same. It is always effective to control emissions from a few stationary generators (thermal power plants) than managing emissions from millions of mobile sources. We have the means to curb pollutant emissions in power plants and decrease the GHG footprint of the country's power system by increasing renewable energy (RE) capacity. This is already underway as more and more solar parks are coming on line. The country just needs to step up its RE effort to peak its GHG emissions sooner. As a matter of fact, EVs in India are already delivering GHG reduction considering the mileage (km/ kWh) of current EV models vis-à-vis that of ICE vehicles (km/ litre) and the present grid emission factor.  

Oil price – a twist in the tale

There are, however, some serious challenges to speed up EV adoption. I always believe that favourable economics is a prerequisite for scalability of an option. There is uncertainty on this front concerning EV. The oil price has not also plunged on the back of the looming economic crisis, the crude oil price is hovering around zero for the first time in history. This is an ominous sign for the EV market as low running cost of EV is considered to be its main competitive advantage over ICE vehicles. However, it seems, EV may lose its edge. There is good news though. Retail prices of diesel and petrol in India are yet to follow international trends. At a time when both the federal and state governments in India would be looking to maintain their exchequers amidst the low tax collections, oil could be their saviour. Centre has already raised the excise duty on petrol by ?10 per litre and diesel by ?13. Also, the profit of the Oil Marketing Companies augurs well for the central government as it may translate to a higher dividend payment to the government.

On the other hand, as petrol and diesel are out of GST regime, states can make up their loss in tax collection by raising VAT on their sales. This is already happening. Many states like Delhi has increased VAT on diesel and petrol. It is regarded that taxes on fuel in India are the highest in the world currently. This means that EV may remain cost-competitive[1] with respect to ICE-vehicle in India and the margin may rather increase.     

However, are the mainstream automakers convinced that it is time to make the switch? This is not about e-mobility alone. The larger question is: Will the industry just focus on near-term survival or will they strategise how they should position themselves in the backdrop of “New Normal”?

Industry 4.C             

All of us knows about Industry 4.0, a notional 4th industrial revolution effected by smart and autonomous systems based on data and machine learning. We consider ourselves in the midst of this revolution. However, that notion is going to change. Dealing with the COVID-19 crisis and its aftermath will require the industry to go back to the drawing board and look at the business from a very different perspective. They have to include a new set of factors in their strategy which possibly never featured so prominently in their decision-making, and put some existing ones on the backburner. What could be these new elements?

First on my list is an economic paradigm with zero-touch. As people get habituated with social distancing norms, can a contactless economy be far behind? Already, every step of our life is touched by e-commerce. E-commerce not only has made many of our activities smooth, time-efficient and convenient, digitalisation has reduced the physical interactions, both B2C and B2B. In other words, many functions and services became contact-free before the Coronavirus crisis. Post-COVID will see this trend becoming more explicit and extensive. And this time, the contactless business will not be a result but a reason. Brick-and-mortar stores which were already facing serious challenges are now looking at a more uncertain future.

However, the impact of contact-free economy would be more vast. Sectors which were having shares of benefits from digital economy may undergo some major transformations. Let’s consider healthcare which is at the forefront in the fight against Coronavirus outbreak. This sector too will not remain insulated from the profound impact of the crisis. With fear in people’s minds of getting infected by COVID-19 when they visit a hospital or a clinic, OPD[2] may give place to telemedicine. As I am writing this piece, the change is already happening. More startling disruptions are on the horizon as the economy takes a contact-free avatar. Next time, when we receive pizza through home-delivery, we may be greeted by a drone and not by a fellow being. This means the sector which is helping us stay indoor during the current lockdown may go further to minimise human contact. Such means of delivery were already available and tested in advanced economies. Consumer behaviour post-COVID will accelerate these changes across the globe. Be prepared!

There will be other factors which companies will need to consider in their strategy, such as making their core supply-chains more resilient and this may do away with the much-fancied just-in-time inventory model. Sourcing strategy may focus on localisation.

A leg-up for Lithium economy?

In this time of lockdown and social distancing, a substantial share of the service-based economy, from office-work to classes, has moved to virtual platforms. Desktops are replaced by laptops and tablets. With increasing risk perception towards dependence on domestic helps, households in India will likely to prefer becoming self-reliant in attending daily chores and they would opt for more appliances which can ease their work-for-home. What do all these mean?

The demand for gadgets will rise further which will drive the growth of the Lithium-ion battery market. According to market assessments, the electrical & electronics sector contributed to almost half of the revenue of the global Lithium-ion battery market in 2019. As battery-driven EVs become more mainstream, the Lithium economy does not have to look back.    

New Normal that shouldn’t be

In my view, “New Normal” is a strong contender to win the honour of Oxford Word of the Year 2020[3]. As governments, industries, services, start-ups, influencers, citizens and netizens try to figure out what the New Normal will look like, I have few cautionary words to share here. Working remotely, e-meetings and webinars, contactless delivery – part of emerging social distancing protocol -- are some of the constituents of the New Normal. This notion is only partly true and it only accounts the white-collar life. It leaves out the majority of the population in the country to whom staying at home is not even a luxury; it is a jobless uncertain future. Mobility is the dynamo of their life. Then, are they not vulnerable to the pandemic?

Jaan hain toh jahaan hain (the world exists only when we live)! We live when we have the means to earn. To earn, we have to work. To work, we have to go out. In the time of a pandemic, coupling these blocks may sound theoretical. But, it is still the reality. At an hour when medicines and vaccines are still far to protect us from COVID-19, mankind has to find ways to live with the virus and not wait for a virus-free world.   

As we take time to process our situation and plan our future, we should not forget to take note of the important lessons from the crisis and act on them. A major takeaway for the country, I believe, should be imperative to invest heavily on public healthcare and research & development – areas which have seen neglect for years. It is time the home of a billion people endeavours to make them its strengths.

My mind hasn't run out of thoughts of the aftermath of the crisis. The impacts could be as big as potential exacerbation of water shortage due to manifold rise in household water demand to attend sanitising needs coupled with the summer months. It could be as niche as a change in the design trend of garments to allow easy carry of hand-sanitisers. The list may go on and on. But, let me put a pause here. Just to point out, consciously I have stayed away from loading my thoughts with numbers because, at moments like this, the story is more interesting and significant than stats.

[1] based on running cost

[2] Out Patient Department

[3] The Oxford Word of the Year 2019 is climate emergency.