The war in Ukraine is shaking up the world’s ability to fight climate change

Sara Adm2022-04-07
193
The war in Ukraine is shaking up the world's ability to fight climate change


The conflict has disrupted logistics, trade operations and trade routes around the world: sea, land and air freight use circuitous routes to avoid no-fly zones and war risks; multinationals abandon operations due to sanctions and pressure to sever ties; and countries are scrambling to meet near-term energy needs – in some cases doubling down on coal – in their efforts to reduce dependence on Russian exports.

“Everything is roosting,” said Alla Valente, senior analyst with Forrester Research’s security and risk team.

“It’s not just the logistics time, it’s not just the cost of oil or the amount of oil used, it’s not just waiting to receive our shipment of semiconductor chips, it’s is not just the labor shortage in transport,” she said. “It’s not one of those things, it’s all of those things.”

Dysfunction of supply chains and energy will lead same higher costs to consumers, businesses, governments and ultimately the environment, experts say.

“War is an energy-intensive activity,” said Nikos Tsafos, an energy and geopolitics expert at the Center for Strategic and International Studies. “It takes energy to move things, to move troops and equipment.”

Already, global oil prices have hit their highest levels in nearly a decade, driving up the costs of everything from food to fertilizer.

“Stronger increases in food and fuel prices could heighten the risk of unrest in some regions,” the International Monetary Fund warned last month. “Longer term, war could fundamentally alter the global economic and geopolitical order if energy trade shifts, supply chains reconfigure, payment networks fragment, and countries rethink the currency holdings of Reserve.”

A withdrawal of Russian oil and gas

These changes are already happening as countries around the world seek to reduce their dependence on Russian oil, gas and other raw materials.

The United States has banned all Russian imports of oil, natural gas and coal, and the United Kingdom has presented a plan to phase out Russian oil imports by the end of the year and ultimately to end natural gas imports as well.

The European Union, meanwhile, has said it will impose a fifth round of sanctions on Russia, including a ban on Russian coal imports, although it has refrained from banning Russian oil.

Europe imports about 40% of its natural gas from Russia and has developed a plan to reduce Russian imports of natural gas 66% this year.

“We must become independent from Russian oil, coal and gas,” European Commission President Ursula von der Leyen said in a statement last month. “We simply cannot rely on a supplier that explicitly threatens us.”

Russia’s actions “will have enormous economic repercussions for the world,” U.S. Treasury Secretary Janet Yellen said Wednesday in annual testimony before the House Financial Services Committee. In addition to creating global food insecurity and a debt burden, “we are seeing the vulnerability that comes from being dependent on a single source of fuel or a single trading partner, which is why it is imperative to diversify sources energy and suppliers,” she said.

Energy security vs climate strategy

In the immediate term, EU countries are forced to explore a variety of ways to keep energy flowing and their citizens warm during the winter, Tsafos said.

And that could very well include using more coal. Countries that previously looked to natural gas as a stepping stone in energy transition plans are now considering burning coal for longer than planned, said Frans Timmermans, who is leading the EU’s Green Deal efforts. However, Timmermans warned that such a move should only be used as a stopgap and a rapid acceleration towards renewable energy should follow.
To help fill the gaps, the United States has also shifted some of its liquefied natural gas exports to Europe, Tsafos said. And the Biden administration is reportedly weighing exemptions to a recent ban on funding fossil fuel projects overseas, Reuters reported.

“I think the overarching goal of the Europeans is to do things that don’t compromise their climate strategy, so they would like to not use more coal unless they have to,” Tsafos said, noting the objectives of the European Union to be climate neutral in 2050 and reduce greenhouse gas emissions by 55% by 2030.” But so far their strategy has been to try to buy all the gas they can find, and I think the risk is that could put a lot of pressure on the gas market.”

Short-term energy security efforts aside, the current crisis will likely prompt Europe and others to accelerate their climate plans, wean themselves off fossil fuels and invest more in renewable energy technologies, said Ryan Kellogg, professor at the Harris School of Public Policy at the University of Chicago. specialist in energy economics, environmental policy and industrial organization.

“It all takes time. It’s not really going to help with the high prices and the pain that consumers are feeling right now,” he said. “Where it helps is when the next crisis hits.”

Mark Thompson of CNN Business contributed to this report.


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Sara Adm2022-04-07
193
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