TINOS, Greece, Sept 26 (Reuters Breakingviews) - There are lots of reasons to worry about Russia’s invasion of Ukraine, but its impact on the fight against climate change is not one of them. Indeed, one of the silver linings of the terrible war is that it should make it easier to combat rising temperatures by spurring the global economy to emit less carbon.
Recent depressing headlines give a different impression. As gas prices have soared across the world, many countries have switched to using more coal, which emits twice as much carbon dioxide for each unit of energy as gas. Demand for the black rock, which had been falling, is set to return to its all-time high this year, led by China and India, according to the International Energy Agency (IEA).
Meanwhile the developed world is desperately searching for alternative gas supplies. African countries are keen to exploit their reserves, while European countries are building liquefied natural gas terminals and exploring pipeline projects. This new “dash for gas” could lock in irreversible global warming or create a mass of stranded assets, according to Climate Action Tracker.
As if this is not enough, climate diplomacy has broken down. World leaders are preoccupied with the war, the energy crisis and high food prices. Few expect big achievements at COP27, the next United Nations climate conference, which will take place in Egypt in November.
Particularly worrying is how Russia’s invasion of Ukraine has exacerbated tension between China, Moscow’s most important friend, and the United States, Kyiv’s top weapons supplier. After Nancy Pelosi, the speaker of the U.S. House of Representatives, visited Taiwan last month, the People’s Republic froze climate discussions with America.
Collaboration between the world’s two largest emitters of carbon dioxide paved the way for the vital Paris Agreement in 2015. Dialogue between Xie Zhenhua and John Kerry, the two countries’ top climate diplomats, created momentum around last year’s COP26 talks. But relations have now reached “zombie status”, according to Isabel Hilton, the founder of China Dialogue.
What’s more, the invasion of Ukraine means both rich and poor countries are paying more for energy, food and in some cases arms, leaving less money for climate projects. Debt levels have risen almost everywhere. So has inflation, which central banks are attempting to bring down by hiking interest rates – in turn adding to debt burdens.
SECURITY AND CLIMATE ALIGNED
The good news more than drowns out the doom and gloom, though. Governments and their populations may now care more about securing energy supplies and making ends meet than saving the planet. But what they want for geopolitical and economic reasons will help in the fight against climate change.
Think of a Venn diagram with three circles – one for security, another for prosperity and the third for climate. The war in Ukraine has created a bigger overlap between them.
Look first at security. Many governments want to build up secure sources of energy, in part by increasing domestic supplies. In many cases, the only options are zero-carbon technologies, led by renewable energy sources like solar and wind power.
Europe has lost its top energy supplier, Russia, more or less overnight. China and India, which produce little domestic fossil fuel apart from coal, have also seen the dangers of being overdependent on other countries. Even as they buy Russian oil at discounted prices, the two countries are ramping up production of renewable energy.
Meanwhile, the tension between America and China helped shape Joe Biden’s so-called Inflation Reduction Act, which will provide $369 billion for clean energy. Part of bill’s motivation is to build a domestic clean tech manufacturing sector to avoid America depending on Chinese kit for batteries, solar panels and wind farms.
Economic forces unleashed by the war are also driving changes that are good for the planet. Gas prices are five times higher than they were a year ago, and markets are betting they will stay high for many years.
This would normally spur more investment in gas projects and the infrastructure to get it to customers. But these are incredibly capital-intensive investments which, with the exception of shale gas, take a long time to develop and then an even longer time to pay back their upfront costs. Many investors are sceptical about the long-term demand for gas. As a result, new investment is being constrained, according to Michele Della Vigna, author of Goldman Sachs’ Carbonomics research.
Many gas infrastructure projects will stay on the drawing board, except for those configured to switch to green hydrogen – made with renewable energy – when it becomes economically feasible. Moreover, much of Russia’s gas may stay permanently in the ground, as it will be expensive to build new pipelines to China, and Beijing won’t want to be too dependent on Moscow’s gas.
Consumers, meanwhile, aren’t just switching to renewable energy because it is cheaper. The Ukraine war has also made people around the world more aware of the damage caused by volatile fossil fuel prices, says Adair Turner, chair of the Energy Transitions Commission. Renewable power is set to break another global record this year, according to the IEA. The agency now expects global gas demand between 2021 and 2025 to rise by less than half the amount it previously forecast.
GOOD AND BAD TIPPING POINTS
The accelerated rollout of clean technologies is creating economies of scale, pushing down costs more rapidly than previously expected. This will make solar and wind power even more economically viable, once supply chains are expanded. It will also accelerate the point when infant technologies become financially attractive and take off rapidly, says Nigel Topping, the High Level Climate Action Champion at COP26. There is particular excitement about green hydrogen which can store electricity, be used to make steel, and power ships.
None of this is a reason to relax about climate change. Governments can do more to mitigate the damage the war is doing to the climate. It is in western countries’ long-term interests to help poor countries accelerate their green transitions. It is also in China’s and America’s interests to revive their climate diplomacy.
Meanwhile, the world is way off the Paris Agreement’s commitment to limit global warming to well below 2 degrees Celsius above pre-industrial levels. The world is heading to at least 2.4 degrees of warming, if not more, according to Climate Action Tracker.
What’s more, the planet may be closer to tipping into catastrophic climate change than expected. This year’s massive floods in Pakistan and heatwaves throughout Europe suggest the effects of global warming have already arrived. The invasion of Ukraine may have spurred the world to emit less carbon. But it may also have less time to act.
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(The author is a Reuters Breakingviews columnist. The opinions expressed are his own.)
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