The war in Ukraine may have a powerful effect in accelerating global responses to climate change.
By Daniel Litvin, Founder and Senior Partner of Critical Resource. He writes here in a personal capacity
This piece was published on 15th March 2022
Amid the unfolding humanitarian tragedy of Russia’s brutal invasion of Ukraine and the global economic shock beginning to be felt as oil and other commodity prices spike as a result, it is very hard to see any positives coming out of events of the last few weeks. Nonetheless future historians, just possibly, might look back and pinpoint Vladimir Putin’s invasion as the unintended trigger of new beginnings for global climate action – the point at which governments and societies of other major powers belatedly began to accelerate moves to tackle one of the great existential threats of our era (another of course being the risk of a third world war).
In the months and years leading up to the conflict, it was widely acknowledged that the pace of climate action was failing to match the scale of the challenge. For all the talking at the 26 UN Climate Change ‘Conference of the Parties’ over three decades, as well as the flurry of initiatives announced at the latest (COP26 in Glasgow), fossil fuels still account for some 80% of global energy consumption. Unless governments and societies now take more radical action, global greenhouse gas emissions are set to overshoot significantly the limits needed to keep warming within 1.5 degrees in the coming decades.
Yet within weeks, the war has begun to unlock some of the political momentum needed, even as it has unleashed misery on millions. Already, the EU – seeking to dramatically reduce imports of Russian gas – has proposed a significant ramping up of its energy reforms, including faster deployment of renewables, and stronger measures to tackle energy demand. Beyond the immediate Western divestments and boycotts of Russian fossil fuels in recent days, the promise here is a set of accelerated structural changes in domestic European energy systems which could cut greenhouse gas emissions significantly.
Fuel for action
This is likely to just be the beginning in terms of the policy response. The Ukraine invasion and the resulting oil and gas price shock has reawakened long-held, but partly-buried anxieties among major oil and gas importing countries, including the US and China, about the sharp and immediate domestic economic pain that can be inflicted when foreign fossil fuel supplies are disrupted. The International Energy Agency, an influential body with governments, last week issued a 10-point plan to reduce EU’s reliance on Russian gas, dominated by strongly climate–friendly policy measures. In some form, its recommendations are likely to be taken up across the OECD.
Part of the West’s energy policy response to the war will undoubtedly be to push in the short term for accelerated development and production of non-Russian oil and gas reserves (Saudi oil and Qatari gas, for example). However, in general such moves will be pursued with caution. Following Russia’s actions, arrangements which lock in reliance on fossil fuels from other potentially unfriendly or unstable foreign suppliers will be viewed by many countries as a short term fix or last resort. Meanwhile, local environmental opposition will limit OECD countries’ abilities to significantly to ramp up exploitation of their own oil and gas deposits. Governments’ focus instead will likely be on boosting domestic renewables and other non-fossil fuel sources of supply, alongside curbing energy demand – seemingly more permanent solutions to today’s energy-security crisis.
Alongside the unfolding changes in policy, the war’s triggering of dramatically higher oil and gas prices will have its own powerful effect in accelerating the world’s shift away from fossil fuels. Though economically painful, high prices will exert significant downward pressure on oil and gas demand, as consumers economize and seek alternatives, and as clean energy investments become more competitive in comparison.
The oil shocks of the 1970s – oil price hikes triggered that time by Middle East fossil-fuel exporting countries seeking to assert their power on the international stage – provide instructive parallels here. Then soaring oil prices plunged the West into economic recession, but also drove many countries to ramp up energy efficiency measures (tighter fuel economy standards in the US for example). Oil demand duly dropped.
Some countries were so unsettled by the 70s oil shocks that they sought to fundamentally remodel their energy systems. France launched a major nuclear power program, building scores of new reactors, while Brazil developed a huge initiative to fuel the nation’s cars partly from ethanol made from sugar cane. The search for domestic supplies of oil and gas was also ramped up (resulting in the discovery and exploitation of North Sea oil and gas, for example). But as noted that route seems less plausible today given the intensity of domestic anti-fossil fuel activism.
From Putin’s perspective, triggering new global momentum behind climate action was presumably the last thing he intended. Fossil fuel exports have long been a mainstay of the Russian economy, supporting its projection of power abroad, as well as lubricating Putin’s patronage networks in Moscow, helping him tighten his grip on power. In that respect, accelerating the global shift from fossil fuels perhaps will turn out to be another of the self-defeating outcomes of his war.
Of course with the war still raging, this prediction of reinvigorated global climate action is far from certain. The fraught domestic politics of a rapid energy transition could blow it off course in many countries. China’s evolving position with regard to Russia is a major wild card. Even so, Putin’s invasion is clearly now providing a major psychological jolt to many governments and societies about the need to reform energy systems.