MSCI warns that Ukraine crisis could threaten climate goal if coal is returned

The lignite power plant complex, a German energy supplier and utility RWE, is seen in a large pool in Neurath (northwest of Cologne), Germany, February 5, 2020. REUTERS/Wolfgang Rattay/File Photo

LONDON, May 17, 2017 (Reuters) – The world is facing a dangerous rise in greenhouse gasses due to the conflict in Ukraine, according to global equity index giant MSCI in a Tuesday report.

In the extreme scenario, 800,000,000 tonnes of carbon dioxide equivalent could leak in just one year if Europe replaces all Russian gas imports entirely with coal.

This could compromise efforts to limit global temperature rise to 2 degrees Celsius.

MSCI stated that “a ‘bump in emissions’ today means either exceeding this limit or having to reduce emissions more quickly and more sharply tomorrow,” in a report on green investing’s impact on Russia-Ukraine.

Russia is a major supplier for gas, oil, and coal to the European Union. Prices have risen sharply since Russia’s invasion of Ukraine and the sanctions imposed by the bloc on Moscow.

Some countries called for an extension of EU plans to phase-out coal use. However, Valdis Dombrovskis, Vice President of the European Commission, stated on Tuesday that the EU would not be diverted from its goal to move away from fossil fuels. L5N2X934X

MSCI warned that sticking to the EU’s climate friendly policies from before war would require commitment to political tricky measures such as more financing for renewables, cutting down on energy consumption, and restarting nuclear power plants.

MSCI stated that governments must intervene in the event that investors fail to influence a rapid transfer of energy profits to renewables.

“They can influence where windfall profits from energy companies are reinvested. Governments may tax windfall profits to fund renewables if there isn’t a plan.

Noah Browning reports
Mark Potter edits

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