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The world is struggling to combat climate change because of the war in Ukraine
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The world is struggling to combat climate change because of the war in Ukraine

by
April 7, 2022

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The conflict has disrupted business operations, logistics, and trade pipelines all over the world, including sea, land, and air freight.Roundabout routes to avoid no-fly zones and hazards of war; multinational companies are abandoning operations because of 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 dependency on Russian exports.

Alla Valente (senior analyst, Forrester Research security and risk team) stated, “Everything’s coming to roost.”

She stated that logistics time is not only about logistics, nor the cost of oil. It’s also not about how much oil is being used. She added that it’s more than waiting for our shipment of semiconductor chips to arrive. And it’s not all about the labor shortage in transportation. “It’s not just one of those things. It’s all of them.”

Dysfunctions in supply chains Energy This will be the beginning. to even Experts state that higher costs are a problem for consumers, businesses and governments, as well as the environment.

Nikos Tsafos (Center for Strategic and International Studies), a geopolitics and energy expert, said that war is an energy-intensive industry. “It takes energy just to move things, to move troops or equipment.

Gascade Gastransport's natural gas compressor station, seen here on March 29, 2022, in Mallnow, Germany, near the Polish border, mainly receives Russian natural gas. From its source to its point of use, the natural gas travels several thousand kilometers in the "Jagal" pipeline.

Already, oil prices around the world have risen to their highest level in nearly a decade, driving up prices for everything from food and fertilizer.

The International Monetary Fund says that higher fuel and food prices could increase the risk of unrest in certain regions. Last month, the warning was issued.“Longer term, war could fundamentally alter the world’s economic and geopolitical order if energy trade shifts, supply chains reconfigure, payment network fragments, and countries rethink their reserve currency holdings.”

Russian oil and natural gas: A retreat

These shifts are already taking place as countries around the globe seek to reduce their dependence on Russian oil, gas, and other commodities.

The US has banned all Russian oil and natural gas imports and the United Kingdom has set out a plan for phasing out Russian oil imports before the end of the year. Eventually Put an end to Imports of natural gas are also possible.

The European Union has meanwhile stated it will impose a fifth set of sanctions on Russia. This includes an import ban on Russian coal. However, it has not banned Russian oil.

Europe Russia imports approximately 40% of its natural gas, and it has A plan was drawn up To reduce Russian natural gas imports This year, 66%.

Ursula von der Leyen, President of the European Commission, stated in a statement last month that “we must become independent from Russian oil and coal and gas.” “We cannot rely upon a supplier who explicitly threatens to harm us.

According to the US Treasury Secretary, Russia’s actions will have “imminent economic repercussions on the world,” Janet Yellen spoke in annual testimonyWednesday, the House Financial Services Committee. She said that global food insecurity and debt burdens are not the only consequences of relying on one source of fuel or one trade partner. “It is imperative to diversify our energy sources and suppliers,” she added.

Climate strategy vs. energy security

Tsafos indicated that EU countries will have to explore all possible options to keep their citizens warm during winter, and energy flowing in the near future.

That could include more coal. Countries that used natural gas as a stepstone in their energy transition plans previously consider burning coal longer than planned. said Frans Timmermans,Who is leading the EU’s Green Deal efforts. Timmermans cautioned however that such a move should be seen as a temporary measure and that there should be an acceleration in the transition to renewable energy.
Tsafos stated that the US has also moved some of its liquid natural gas exports from the US to Europe to help fill in the gaps. The Biden Administration is said to have considered exemptions from a ban on funding fossil fuel projects abroad. Reuters reported.

“I think that the overarching goal of Europeans is not to undermine their climate strategy. So they would like not to use more coal unless it was necessary,” Tsafos stated, referring to the European Union’s goal of being climate-neutral by 2050. Reduce By 2030, greenhouse gas emissions will be 55% “But, so far, their strategy boils down into trying to buy any gas they can find. I think this could put a lot more stress on the gas market.

The current crisis will not only increase energy security, but it will also encourage Europe and other nations to accelerate their climate plans, abandon fossil fuels, and invest more in renewable energy technologies. Ryan Kellogg is a University of Chicago Harris School of Public Policy professor specializing in energy economics, industrial organization, and environmental policy.

“All of this takes time. He stated that it is not going to alleviate the pain and high prices consumers are experiencing right now. “Where it does help, is when the next crisis strikes.”

CNN Business’ Mark Thompson contributed the following report.

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