Five years ago, in April 2020, much of the world worked from home or had their job impacted in some way by the emergence of the global pandemic. Government spending was ramped up in almost every country to address the spread of the virus and borders were closed, preventing regular travel. At the time the situation seemed bewildering, confusing and for many people, very stressful. Questions were asked about where the world was headed and what the pandemic might mean for the global economy. Answering such questions is exactly why scenario planning is so valuable, even when the prevailing circumstances may be undesirable. So, amid the confusion, the Shell scenario team set about applying our skills to help our colleagues and stakeholders make some sense of the situation we were all confronted with. Five years on, it’s worth looking back to see how we did.
At the time, every line of business in Shell was looking at the immediate impact of the pandemic on product sales and supply, so we decided from the outset not to replicate their work. Instead, we took a step back and chose to look at the medium-term impact, and consequently named the study ‘Rethinking the 2020s’. The team recognised that the pandemic was consequential enough to affect the whole decade and perhaps even beyond, so there was plenty of scope in looking further out. We also recognised that economies wouldn’t fully open up for at least 18 months, in itself an invaluable piece of information.
In 2020, we wrote:
The world in the 2020s becomes even more complex. Disruptive forces – for example, populism and geopolitical tensions – that existed before COVID-19 continue, but with a new intensity. One way or another the world will be living with COVID-19 and its implications for a long time, as well as facing the longer-term effects of sociopolitical volatility and unprecedented economic uncertainty.
There will be three dramatic tensions at play in the 2020s – between wealth, security and health. People will be seeking all of these to some extent. But what they choose to prioritise may differ. These priorities, along with different societal capabilities such as public health, could shape this decade. We refer to wealth, security and health as drivers of possible pathways for the world ahead.
In fact, all three tensions continue to play out.
The reference to health, while obvious in the context of a pandemic, was designed to reflect a new appreciation for wellbeing that would permeate society because of the pandemic. We interpreted health in the broadest sense, from personal health through to the health of the planet, thinking of course about issues such as climate change, deforestation, and biodiversity loss.
In the 18 months after the start of the pandemic, a broader political appreciation of well-being had emerged. It brought vigour back to the international climate negotiations, culminating in the Glasgow Climate Pact at COP 26 in late 2021. The Pact set aggressive targets for steep reductions in CO2 emissions through the 2020s and then net-zero emissions by 2050, thereby delivering peak surface temperature warming of around 1.5°C. Alongside the Pact was a second landmark agreement, the Glasgow Leaders’ Declaration on Forests and Land Use, endorsed at COP26, committing countries to halt and reverse forest loss and land degradation by 2030.
Subsequent COPs, both on climate change and biodiversity, have seen similar enthusiasm, but the ability of nations to agree on aggressive action has waned, with COP29 in Baku struggling to find common ground on finance for developing countries. In the Horizon scenario, part of The 2025 Energy Security Scenarios, we have examined what needs to happen over the coming quarter century and beyond to reach the goals of the Glasgow Climate Pact, although the immediate need to see emissions fall substantially by 2030 is not achieved.
The security issue has loomed large in recent years. In 2020 we imagined a world where countries protect their own narrowly defined self-interests. They put local economic and physical security first and move away from international cooperation and trade. As a result, people have a greater sense of safety, but overall economic growth slows and tensions from inequality worsen, particularly between developed and developing economies.
As we move into the middle of the decade, much of the security narrative has come to pass. The Russian invasion of Ukraine and the Gaza-Israel conflict are both representative of the issue, but so too is the heightened resolve in many countries to address illegal immigration across borders and rebalance trade with key partners. A focus on national issues and self-interest are the defining drivers of the Archipelagos scenario, released as part of The Energy Security Scenarios, both in 2023 and more recently in 2025. But Archipelagos conflicts with the underlying desire of most countries, which is to accelerate economic growth.
A broad global desire for increased economic growth and the emergence of new digital technologies in the form of generative artificial intelligence (AI) has given rise to a new scenario, released just a few weeks ago and called Surge. It also forms part of The 2025 Energy Security Scenarios. Surge is built around the wealth narrative, identified in 2020 and expected to be an important future driver given the GDP loss seen during the pandemic. In a wealth focussed future the economic recovery from the global pandemic is relatively fast as economies successfully learn to adapt and live with COVID-19. Energy demand recovers with the economy. Despite strong growth in renewables, energy transitions initially stall globally as overall demand for energy strengthens. There is no fall in emissions in the 2020s as called for by the Glasgow Climate Pact. But even a post-pandemic economic growth spurt isn’t enough to maintain momentum and society seeks new solutions to bolster economies over the long term. AI presents itself as one such solution and in Surge it is embraced quickly and wholeheartedly. Doing so provides economic benefits, but AI also impacts up to 40% of global employment.
All the above raises a key question; are we still in the shadow of the pandemic? Five years on from the first ever global lock-down it may feel as if a new set of issues are shaping society, but these issues aren’t fundamentally different to those we identified in 2020. For fresh perspectives on wealth, security and health in 2025 please visit our new scenarios, The 2025 Energy Security Scenarios.
Note: Shell Scenarios are not predictions or expectations of what will happen, or what will probably happen. They are not expressions of Shell’s strategy, and they are not Shell’s business plan; they are one of the many inputs used by Shell to stretch thinking whilst making decisions. Read more in the Definitions and Cautionary note. Scenarios are informed by data, constructed using models and contain insights from leading experts in the relevant fields. Ultimately, for all readers, scenarios are intended as an aid to making better decisions. They stretch minds, broaden horizons and explore assumptions.
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