THE SUSTAINABILITY ROADMAP Annual Commemorative Bookazine Edition
MASTHEAD CEO & PUBLISHER ANA C. ROLD
SPECIAL SERIES EDITOR JEREMY FUGLEBERG
MULTIMEDIA MANAGER WHITNEY DEVRIES
MANAGING EDITOR SHANE SZARKOWSKI
ART DIRECTOR MARC GARFIELD
SPECIAL SERIES EDITOR WINONA ROYLANCE
SPECIAL SERIES EDITOR KELLY R. BAILEY
PODCAST DIRECTOR LYNZ FLOREN
BOOK REVIEWER JOSHUA HUMINSKI
EDITORIAL ADVISORY BOARD ASMAA AL-FADALA ANDREW M. BEATO FUMBI CHIMA DANTE A. DISPARTE
KERSTIN EWELT GHIDA FAKHRY SIR IAN FORBES LISA GABLE
GREG LEBEDEV ANITA MCBRIDE CLARE SHINE
CONTRIBUTING AUTHORS DARON ACEMOGLU ANDREA BONIME-BLANC LAUREN BOYES MILLIE BRIGAUD JOSEP BORRELL DANTE A. DISPARTE
JEFFREY FRANKEL ANDRES FRANZETTI JEREMY FUGLEBERG BLAIR GLENCORSE KEN HAIG WERNER HOYER
JOSHUA HUMINSKI NIKOLA MIKOVIC HUGO PAUL ANNE-MARIE SLAUGHTER MARK TEMNYCKY FAYYAZ YASEEN
Copyright © by Diplomatic Courier/Medauras Global Publishing 2022. All rights reserved under International and Pan-American Copyright Conventions. Published in the United States by Medauras Global and Diplomatic Courier. Mailing Address: 1660 L Street, NW, Suite 501, Washington, DC, 20036 | www.diplomaticourier.com. LEGAL NOTICE. No part of this publication may be reproduced in any form—except brief excerpts for the purpose of review—without written consent from the publisher and authors. Every effort has been made to ensure the accuracy of information in this publication; however, the authors, Diplomatic Courier, and Medauras Global make no warranties, express or implied, in regards to the information and disclaim all liability for any loss, damages, errors, or omissions. EDITORIAL. The content represents the views of their authors and do not reflect those of the editors and the publishers. Every effort has been made to ensure the accuracy of information in this publication, however, Medauras Global and the Diplomatic Courier make no warranties, express or implied in regards to the information, and disclaim all liability for any loss, damages, errors, or omissions. PERMISSIONS. This report cannot be reproduced without the permission of the authors and the publisher. For permissions please email: info@medauras.com with your written request. COVER ART & DESIGN. The cover design is a collaboration between our team and artificial intelligence. Our editors typed word prompts related to climate change, energy security, and future and Midjourney’s AI bot produced several variations that our team further defined. Our team is working with Midjourney to imagine a future where collaboration, transformation, sustainability, and peace are the next normal.
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Welcome
I
Shane Szarkowski Managing Editor
t’s an old saw. Every time we approach a major international summit, somebody talks about how we’re “at a crossroads.” As idioms go, this one is old and tired but—as we approach COP27—it feels more apt than usual. We aren’t just at one crossroads but oh, so very many. At times like this, it’s hard to prioritize what to concentrate on. So many of our democracies are already dealing with considerable internal turmoil. Then there’s open conflict in Europe that threatens to turn into more. There are several other smallerscale conflicts around the world that deserve more attention than they’re getting. Inflation is out of control. Supply chains are still fragmented by the fallout of COVID-19, which itself is still hanging around. There’s also the little matter of a climate crisis which isn’t just looming, it’s arrived. It will only get worse. For much of the world, the climate crisis is largely invisible or its impacts seemingly attributable to other things. Little wonder, then, that political will to make painful changes is so lacking. By and large, we have a pretty good idea of the kinds of things we need to be doing to fight climate change and its worst impacts—but doing the things is expensive, painful, and threatens to be very inequitable in its disruptiveness (much like the climate crisis itself.) COP26 got a lot of hype. It was our unique opportunity as we came out of the pandemic to recover sustainably and equitably, building in tenets
of sustainability as we did so. The outcomes were, for many, disappointing, and over the months that followed we all got distracted. Now COP27 is here, and it’s our opportunity to refocus. All of those other crossroads remain important, but the climate crisis is fundamentally different. Climate change is long-term, it builds momentum as we delay taking it seriously, and its threat is existential. The climate crisis is different in another way as well. Unlike most of the other crises we could name, this one isn’t about one state versus another, nor is it about governments looking inward to make their economies more resilient against global shocks. Combating climate change is about collaboration. There should be hope in that. This bookazine, Diplomatic Courier’s second annual COP edition, was produced in the spirit of that hope. We’ve curated content carefully, including some of the best articles we’ve published over the year on the climate crisis along with new, original content created with this theme in mind. Our topics are diverse—from geopolitics to agriculture, from mitigation to proactive policy to communications strategies. Yet each piece resonates with one theme that at Diplomatic Courier we hope everybody has at the top of their mind this month and going forward; the climate crisis is unique in its magnitude and long-term immediacy, but if we can embrace a spirit of equitable collaboration we know how to build a future where we thrive. COP27 | 3
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Contents
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03 I Welcome: The Sustainability Roadmap By: Shane Szarkowski
06 I Learning by Candlelight: Energy Resilience Lessons When the Lights Went Out By: Dante Disparte
12 I Save Gaia, Save Ourselves: Surviving and Flourishing Amid Climate Change By: Shane Szarkowski
16 I Ensuring Our Future Requires Insuring Today By: Andres Franzetti
20 I Environmental Tariffs Could Be a Game Changer By: Daron Acemoglu
24 I A New Toolkit for Communicating Climate Action By: Millie Brigaud, Jeremy Fugleberg, Hugo Paul, Shane Szarkowski, and Mark Temnycky
28 I Sustainable Relocation Is Climate Adaptation’s Next Frontier By: Lauren Boyes
32 I Planning for the Coming Climate Catastrophe By: Joshua Huminski
36 I Are European Climate Commitments the Next Russian Casualty? By: Nikola Mikovic
40 I Decarbonization Is Now a Strategic Imperative By: Josep Borrell and Werner Hoyer
44 I You Can’t Fight the Climate Emergency Without Enlightened, Responsible Leadership By: Andrea Bonime-Blanc
50 I The West’s Energy Policy Can Be Geopolitical and Green By: Jeffrey Frankel
54 I Towards an Asian Climate Neutral Data Centre Pact By: Ken Haig
58 I A Massive Agricultural Revolution Is Underway By: Millie Brigaud
62 I No Security Without Climate Security By: Anne-Marie Slaughter
66 I Pakistan is Flooded with Corruption By: Blair Glencorse and Fayyaz Yaseen
70 I Investing in Renewable Energy Can Ease EU Reliance on Russian Gas By: Mark Temnycky
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Skyline after a blackout. Photo via Adobe Stock.
Learning by Candlelight: Energy Resilience Lessons When the Lights Went Out By Dante Disparte 6 | D I PLOM AT I C CO URIE R
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s winter storm Uri spread across the U.S. fueled by a polar vortex, more than 100 million people faced the onslaught of record low temperatures and, in the case of more than 4 million people in Texas, a preventable blackout — 12 million people were under a boil water advisory showing the link between reliable energy and other public utilities. Hospitals had to be evacuated due to power failures in the middle of a pandemic, while images of frozen people and icicles forming inside homes were beamed around the world. Days later, power was gradually restored across the Lone Star State and many questions remain about how the electricity grid of the 10th largest economy in the world could fail so calamitously? How could energy regulations (or the lack thereof) allow for such wanton price gouging, where in some cases consumers were reporting 3,500% price increases in their electricity bills? Is the case of one state’s enfeebled power grid an isolated matter, or is the climate risk vulnerability we saw in Texas in the face of winter storm Uri part of a larger national pattern where the dearth of risk resilient energy and other critical infrastructure requires a national investment strategy? Arguably, what happened in Texas in 2021 may very well be a rule, rather than an exception.
What Winter Storm Uri Wrought in Texas… If low levels of risk-resilient energy infrastructure are a national pattern, then the cascading set of examples began in 2003 with the Northeast Blackout. On August 14, 2003, the Eastern Seaboard of the U.S., including iconic cities like New York, Philadelphia, and Washington, DC (along with parts of Canada) were all plunged into darkness. In all, more than 50 million energy consumers, businesses and local governments faced sweltering heat in darkness. By the end of the crisis, 100 people lost their lives and the hard reality that you cannot power an economy, hospital, and anything in between without reliable and resilient energy was laid bare.
This case was not triggered by climate change, but rather a cascading set of errors beginning with not pruning trees near hightension power lines in Ohio. Yet it nonetheless underscores how a single point of failure in the energy matrix was and remains a
While climate risk is the central antagonist outlined thus far, many of the same points of vulnerability in the energy matrix and with national critical infrastructure, suffer vulnerabilities to perennial and rapidly evolving cyber threats. national vulnerability. The failure of the Colonial gas pipeline due to a crippling ransomware attack, which caused fuel shortages across Southeastern and Northeastern states triggering states of emergency, is a more recent example of this very vulnerability. The onset of unchecked climate risk, natural and man-made hazards such as cyber-threats, means our vulnerable energy matrix puts the U.S. in the crosshairs, unless concerted efforts are undertaken to shore up grid resilience. Climate change is only one of the hazards we must guard against, but its effects may be the most serious on critical infrastructure. A nationwide upgrade is both necessary and urgent.
…Was a Rule Not an Exception The pattern that began in 2003 with the Northeast Blackout, continued throughout the last two decades with perhaps the most poignant example of how energy and economic viability are inextricably linked coming from post-Maria Puerto Rico. Even before Hurricane Maria, a record-breaking Atlantic Hurricane, decimated Puerto Rico, the local utility, PREPA, was hobbled by mismanagement, aging gas-powered turbines, and sclerotic infrastructure that already saw island-wide blackouts with blue skies. When COP27 | 7
Left unchanged, the energy matrix is not only vulnerable to climate threats, the reliance on carbon-heavy fuel sources is an economic double jeopardy. Hurricane Maria struck in 2017, PREPA, like many Puerto Rican households and businesses, broke with ease. The island’s healthcare system, already enfeebled before the storm by a record municipal debt crisis of more than $73 billion (or $12,000 per capita), faltered. This, along with the second longest blackout recorded in history, exceeded only by the blackout caused by Super Typhoon Haiyan in the Philippines in 2013, accelerated the death rate on the island. While initial mortality rates were recorded at 64 due to Hurricane Maria, those who suffered chronic diseases, required hospitalization or a reliable cold supply chain (the very requisite for COVID-19 vaccines) for simple life-saving treatments like insulin, were consigned to their deaths. The New England Journal of Medicine estimated that the total loss of life in Puerto Rico during and in the aftermath of Hurricane Maria — those who wallowed in six long months of darkness — was more than 4,645 people. This technique of calculating excess mortality is also in use to track the real human toll of the COVID-19 pandemic.
Hurricane Maria’s damage in Puerto Rico. Photo via Adobe Stock.
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Single Sources of Failure In the face of climate change, as goes the experience of island nations, so goes the world. A vulnerable, single source of failure energy matrix like Puerto Rico’s, presages what is an emerging national reality. Texas is only the latest place where the energy matrix is faltering, in this case due to the cold, but in California’s due to heat and fires. Long home to wildfires, dry spells, pacific storms, and other natural hazards, California’s infernal summers and fire seasons have become an unchecked annual threat. Each year for the last five years, California’s fire season breaks the prior year’s records in terms of physical damage, acreage of lost forest and, tragically, loss of life. Pointedly, Paradise Lost, where the town of Paradise, California was left an ashen waste land in 2018, has challenged the state’s risk and recovery plans. Similarly, how California’s electricity grid performed in the face of these fires exposes climate risk vulnerabilities of the attritional kind and the false choice between keeping the lights on or inadvertently sparking a fire — because, yet again, high-tension power lines come into contact with trees in increasingly arid forests with changing prospects of rain. This combustible mix of anthropogenic hazards and unseasonably dry periods, underscores how the lines between built up urban environments and nature’s boundary imperil our way of life. In California’s case, as a part of the state’s fire abatement strategy particularly during peak weather conditions for fires, the state’s electricity operators have the unpopular task of triggering targeted blackouts. Last year, millions of Californians lost power and eerie Martian skies descended on the West Coast’s iconic cities due to a record-breaking number of more than 10,000 fires, the most in the state’s modern history. These fires, like ones in past years, were exponentially more devastating and, as with Winter Storm Uri and the power failure in Texas, came amid a pandemic challenging emergency responders and social distancing norms as millions of people were under ordered evacuations.
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no economic growth, but you cannot have economic growth without power.
Cars crossing Golden Gate Bridge from Lime point. Smoky orange sky covers the bridge and the city of San Francisco after the California fires in September 2020. Photo via Adobe Stock.
Risk Receivership: Who Pays Matters California’s energy risks like Puerto Rico’s, raise important questions about public utilities and bankruptcy rules in the face of climate change. PREPA, Puerto Rico’s electric utility, contributed $10 billion to the island’s debt burden largely due to the twin perils of mismanagement and underinvestment. Yet the reconstruction of the grid and improvements in energy resiliency post-Hurricane Maria, raise questions about whether a climate change receivership model is a better approach than letting such a necessary (essential) part of a modern economy falter. The same questions were raised about PG&E in California, which was found liable for causing the 2018 Camp Fire, which triggered Paradise Lost. PG&E’s case is ostensibly the world’s first and most prominent climate change bankruptcy and demonstrates the untenable nature of becoming climate resilient if there is an “us versus them” posture between the public sector and the private sector. The nation’s energy matrix stops being privatized the moment the lights go out. The reality, simply, is that in the face of societal risks and the prospects of running a modern, competitive economy with pockets of prolonged darkness is a false choice. The better option is to prioritize, invest in and outline a national strategy for improving climate and risk resilience in critical infrastructure. It bears highlighting, you can have power and
While energy is the principal form of infrastructure outlined thus far, it is certainly not alone in terms of a low resilience scorecard, not only in the face of climate threats, but also in the face of other man-made risks. New Orleans and the city’s levee system was a known vulnerability before Hurricane Katrina struck in 2005. The Oroville Dam nearly suffered a catastrophic failure in 2017, due in no small measure to localized excess rainfall (bombogenesis) that was not a part of the statistical weather sample when the dam was built 60 years ago. The flood prone idyllic town, Ellicott City, Maryland, has had more than 16 catastrophic floods in the last 200 years. All these cases raise nuanced questions about whether we should build back, build back better or, critically, build back at all, which may be the most unpopular option requiring political will and societal tradeoffs. At the crux of these cases is an asset base in critical infrastructure such as the energy grid, roadways, bridges, mass transit systems, among others, that were designed in the 40s, built in the 60s and 70s and now face the turbulent and risk-prone reality of a new century.
Guarding Against All Hazards While climate risk is the central antagonist outlined thus far, many of the same points of vulnerability in the energy matrix and with national critical infrastructure, suffer vulnerabilities to perennial and rapidly evolving cyber threats. Only recently, a water filtration plant in Oldsmar, Florida faced the specter of poisoning consumers due to a cyber-attack that seized control of internet-connected systems and industrial controls to increase volumes of sodium hydroxide in the water. In small amounts, sodium hydroxide helps fight naturally occurring contaminants and potentially harmful water-borne diseases. But in large enough quantities it could be harmful to humans and cut off a critical public good in the water supply. These same perils exist and are amplified in the nation’s electricity matrix, which is vulnerable to cyber threats — those that emerge between the proverbial keyboard and the chair, particularly as energy operators ride on legacy or un-patchable COP27 | 9
data systems and software — or those that arise via sophisticated nation-state backed or other malicious actors. Ironically, many of the solutions and approaches that would shore up cyber resilience in critical infrastructure, will also shore up vulnerabilities against climate threats and geo-physical hazards.
Shared Risk, Shared Resilience The first principle is to build resilience, redundancy, and diversification across the entire energy value chain. Enabling distributed systems, such as solar-powered microgrids, which California is onboarding for new home constructions, can help offset cascading outages and keep certain neighborhoods, hospitals, schools, governments, first responders and other critical sectors powered, even if there is a general outage. The key to enabling microgrids, is to enable peer-to-peer energy sales as an extension of the regulated market and as a way of recuperating the costs of solar-enabling homes, which can exacerbate affordable housing shortages. Companies in Australia are pioneering these use cases with technologypowered microgrids that are helping communities capture, recuperate and monetize renewable energy investments. While this alone may not scale up to the energy demands of the U.S. economy, especially not without storage capacity following suit, it can add crucial redundancy and energy localization. While there was some controversy about freezing wind turbines and their potential contribution to cascading failures in Texas during Winter Storm Uri, wind energy represents 47% of the energy production in Denmark, which is among the colder places in the world. Turbines are not prone to freezing and onboarding more renewable energy across the U.S. is not only in our long-range interests in accelerating decarbonization, it will also ensure grid modernization efforts activate abundant, clean, and resilient sources of energy — adapting to the geophysical hazards and energy sources from sea to shining sea. Left unchanged, the energy matrix is not only vulnerable to climate threats, the reliance on carbon-heavy fuel sources is an economic double jeopardy (a source of risk from two places). In this double jeopardy in the economy, taxpay10 | D I PLOM AT I C CO URIE R
Solar panels and wind turbines at sunset. Photo via Adobe Stock.
ers are bearing the acute costs of vulnerable infrastructure and frequent power outages, and the attritional costs of slow commitments to decarbonization, which in turn exacerbates climate change, thus creating a vicious and largely unfunded cycle of risk. The energy sector like the banking system is a space where the failure of any one constituent part erodes confidence in the system writ large or creates cascading systemic risk. Unlike the banking sector, which enjoys nationalized backstops and consumer protections in the form of the Federal Deposit Insurance Corporation (FDIC), critical infrastructure does not have a similar economic backstop. Strategic risk-sharing along with a climate change bankruptcy or risk receivership model should be implemented to begin prefunding the future costs of climate hazards, while creating a pathway for viable recovery and remediation of parts of the energy system that are systemically important. If systemic financial institutions (so called SIFIs) are required to create “living wills” following the 2008 financial crisis and DoddFrank reforms, perhaps a similar model can help audit the critical linkages in the nation’s energy matrix and which firms contribute the highest proportion of systemic risk or are too big to fail like the Colonial gas pipeline, PG&E and PREPA demonstrated. As with the COVID-19 response, addressing an energy vulnerability when the lights go out is not only cost prohibitive, but also foolhardy in an age with so many mathematically predictable risks. ***** About the author: Dante Disparte is Head of Policy at Circle.
ADVERTI S EM ENT
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Photo via Adobe Stock.
Save Gaia, Save Ourselves: Surviving and Flourishing Amid Climate Change By Shane C. Szarkowski
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here is no more questioning that climate change is real. The disruption to our lives, already evident, has begun and will get worse. The energy transition is critical and must be accelerated. At the same time, disagreement over the severity and pace of climate change remains. Governments the world over have adopted disjointed policies — at odds with one another and often with themselves. Economies still rely on more traditional fossil fuels to remain solvent or, in many cases in the Global South, to develop enough to provide their citizens with even what we would consider the most basic of necessities. We all continue to rely on legacy energy infrastructure, which was expensive to lay down, often has decades of viability left, and which needs to continue operating for those remaining decades for investments to be recouped. Investment in green infrastructure is uneven and being left largely to private enterprise, with a lack of public policy support and regulation lending uncertainty as to how and where investments can have the most impact. Amid all this uncertainty — and in the backdrop of the urgency of climate change and the energy transition — how can we help the future to arrive well?
•
•
Extreme flooding in southern India, killed dozens, left tens of thousands homeless, and destroyed wide swaths of cropland. Rain, for the first time ever, at the Greenland ice summit.
In 2020, global economic losses from natural disasters were $268 billion (only $97 billion of which was insured). Aon’s annual report (linked above) links these rising costs conclusively to climate change. The good news is that, in part because these effects are so immediately visible, there is now wide consensus — among populations, governments, and even leaders of polluting industries — that climate change is real, manmade, and an existential threat.
A coherent vision for the what the future will look like is necessary for investments to have their greatest impacts and for us to find ways to resettle and employ those who’ve lost their homes and livelihoods. We now have consensus that climate
Disruption From Climate Change, change is real, an imminent threat, and manmade — even from leaders of indusEnergy Transition Only Beginning Climate change isn’t a problem for tomorrow or next year. Climate change is our current reality. Considering this sampling of events in 2021 which studies show are directly linked to anthropogenic climate change: • •
•
Severe flooding in Western Europe that killed hundreds. Wildfires in the western United States and Canada — with damages estimated at $70-$90 billion in the U.S. alone. The “heat dome” in the U.S. Pacific Northwest and west part of Canada, which likely killed more than a thousand.
tries criticized for casting doubt on its severity. There are still some doubts about how genuine corporate and government strategies for fighting climate change are, but this is still progress. Incremental progress alone is not enough, however. Today’s climate disruptions are bad, but the latest projections from the IPCC tell us it’s going to get worse. Significantly worse. How much worse is up to us — how robustly can we address our emissions? But when we ask this question, we can’t neglect the follow on; how can we mitigate the painful disruptions brought about by our efforts to combat climate change? COP27 | 13
Climate change means more extreme weather, ecological damage, economic pain, and the loss of homes and livelihoods. The energy transition can disrupt our job markets, investment ecosystems, energy supplies, tax systems, and the development of poorer countries. These are the threats. What can we do?
How W2050 is Helping the Future Arrive Well Amid Climate Change Governments, corporations, and international institutions have laid out ambitious — if still somewhat undeveloped — strategies and targets for combating climate change. Saving Gaia—and ourselves—calls for more. Actions at a high level to increase investment and cooperation are wonderful – they should be applauded and accelerated. But we need something more. Something uncommon.
Investment in green infrastructure is uneven and being left largely to private enterprise, with a lack of public policy support and regulation lending uncertainty as to how and where investments can have the most impact. We know that we have to build better adaptation and resilience, and that to do so we need more and better cooperation among private and public stakeholders. A coherent vision for the what the future will look like is necessary for investments to have their greatest impacts and for us to find ways to resettle and employ those who’ve lost their homes and livelihoods. Those investments can fuel the innovation we need to not only meet the challenges of a changing climate and energy transition, but to thrive in a future which is fundamentally different from what we know today. 14 | D I PLOM AT I C CO URIE R
This is where World in 2050 comes in. For all its ten years of existence, W2050 has been focused on uncommon collaborations, convening experts and stakeholders from a variety of spaces — corporate executives, leaders of NGOs, policymakers, academics, and entrepreneurs — who would often otherwise never get a chance to compare perspectives and experiences on shared challenges. W2050 is also making it a priority to ensure our uncommon collaborations include experts and stakeholders from often overlooked regions and sectors. We believe that inclusiveness and a resolve to amplify often silenced perspectives is indispensable to mitigating disruptions from climate change and the energy transition — and it’s part of what makes our approach uncommon. For climate change and the energy transition, our approach include three initiatives. Convenings. In the past, W2050 hosted sideline events at major summits like the annual COP meetings and the World Economic Forum. COVID-19 disrupted this for us as much as you, but we spent 2020 and 2021 building new models for virtual and hybrid convenings that go beyond zoom. We’re very excited to be partnered with unleesh to host new series of iterative convenings, both virtual and in-person. Innovation Olympics. W2050 has for several years hosted an annual Innovation Olympics, where we identified social impact entrepreneurships that have a proven business model and are poised to make a real positive difference. In previous Innovation Olympics, we supported winners by giving the access to Diplomatic Courier’s and W2050’s wide network of experts and by helping them to raise their profile and thereby attract investment. Moving forward, we are taking a more hands-on and proactive approach — but more on that later. Research & Publications. In collaboration with our network of partners and experts, W2050 and Diplomatic Courier have promulgated an impressive body of publications — amplifying a broad spectrum of perspec-
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tives on pressing issues as well as novel blueprints for change. This will continue. Indeed, we are building up our capacity to get more publications in the pipeline than ever before and are exploring ways to get those publications to a still wider audience. In addition, we are working to identify exciting thinkers you probably wouldn’t usually hear from — like this report from DisinfoLab — to carry out research addressing gaps we’ve identified within each megatrend. We have a fourth initiative, Innovation Labs, which currently is focused on other megatrends but will expand over time. While we talk about and organize each of these separately, they operate synergistically. For example, Convenings (and our Innovation Labs) include not only our network of partners and experts, but winners of current and past Innovation Olympics. All three of these (Convenings, Innovation Labs, and Innovation Olympics) are informed and supported by our Research & Publications – but each of those three also provides source material for new Research & Publications. At World in 2050, we believe this uncommon approach is perhaps the most important element to ushering in a future that arrives well for all of us, and we’d love you to come along. ***** About the author: Shane Szarkowski is Managing Editor of Diplomatic Courier and Executive Director of World in 2050.
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Photo by Kelly Sikkema via Unsplash.
Ensuring Our Future Requires Insuring Today By Andres Franzetti
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urricane Ian’s devastation of the U.S. Gulf Coast brings a stark reminder of the need for insurers to rethink their approach to insuring against the risks posed by climate change. The storm’s aftermath is pushing already strained insurers in Florida to the brink of collapse, with losses estimated to reach as high as $50 billion. Even with the state’s $20 billion guaranty fund to help backstop these losses and property premium rates three times the national average, many Florida insurers are at risk of insolvency. Ian has demonstrated that rate increases and restricted coverage are not enough to protect insurer’s bottom line from this new climate reality. Since January 2020, at least a dozen insurance companies in Florida have gone out of business and almost thirty others are on the Florida Office of Insurance Regulation’s “Watch List” because of financial instability. Price increases and lack of coverage have caused more than 400,000 Florida consumers to go uninsured according to the Insurance Information Institute. Add to this unsavory mix that Florida has the highest litigation rate for insurance related claims and the result is an erosion of public trust in an already opaque industry. Unless insurers change their approach, the market is ripe for would-be disrupters to step in. If insurers want to stay in business, then they must make combatting climate change part of their business model. While the debate over how to build a climate resilient tomorrow rages across corporate and government halls of power, far less attention is paid to the need to build climate resiliency into contemporary governance. To do so, insurers must think beyond simply decarbonizing their portfolios and aim to revamp their coverage offerings for today’s climate realities—or risk irrelevance for key coverage lines. Insurers need to recognize that the threat of climate change is not in some distant future—it is here and now. A new approach is needed to address climate risks and protect insurer profitability. This needs to go beyond traditional approaches of rate increases and government subsidies to keep high risk territories and coverage lines accessible. Instead, insurers can leverage their position to limit losses
from extreme weather events and build climate resiliency. The dangers of not responding now would be catastrophic.
The Cost of Doing Nothing Inaction represents a greater cost than implementing new insurance underwriting requirements. Left to carry the expense on their own, insurers will continue retreating from these high-risk lines of business altogether and leave the most vulnerable to fend for themselves. The Intergovernmental Panel on Climate Change (IPCC) estimates that in the next decade alone, climate change will drive 32-132 million people globally into extreme poverty. This is due to the knock-on effect climate related risks have on displacement, financial ruin, and food insecurity. Creating greater insurance access can expedite recovery efforts to restore livelihoods and rebuild critical infrastructure—allowing people, communities, and economies to rebound more quickly.
While the debate over how to build a climate resilient tomorrow rages across corporate and government halls of power, far less attention is paid to the need to build climate resiliency into contemporary governance. Property and casualty business represents over $700 billion in premiums for the insurance industry in 2021. Yet this class of business was barely profitable with a combined ratio of 99.5%. While this cannot be solely attributed to climate change, given the large block of property and physical assets insurers hold it was certainly a factor.
Leveraging the Power of Insurance The insurance industry holds a great deal of sway on consumer behavior as coverage is often a prerequisite for investment. Given this role, insurers can dictate investment, operational, and structural parameters of projects through their willingness to underwrite differCOP27 | 17
ent types of risks or not. By pushing to align insurance requirements and regulations, like climate resilient building codes, insurers can influence consumer behaviors. Promoting the adoption climate resilient codes on a wider scale. This has been done before when insurers greatly influenced the creation of stricter fire codes at the turn of the 19th century via the National Board of Fire Underwriters. At a time when large cities used wood as the dominant construction material in their expanded and electrified, insurers started requiring standardized and stricter fire codes to limit losses. This ultimately led states and municipalities to follow suit as many buildings were uninsurable. This model shows how insurers can wield significant influence and behavior changes to help uphold public safety as well as loss containment. A similar framework must be adopted today.
Inaction represents a greater cost than implementing new insurance underwriting requirements. Left to carry the expense on their own, insurers will continue retreating from these high-risk lines of business altogether and leave the most vulnerable to fend for themselves. More frequent and severe extreme weather events continue to unfold with large economic losses. While the risks posed by climate change today remain insurable, they may not be for much longer. Without insurance, much of the economic system and social safety net that we rely on cannot function. Insurance access is key to a healthy economy, ensuring both businesses and governments can facilitate capital investments, maintain operations, and recover from costly disasters in timely fashion. If we do not rethink our collective approach to climate change, this insurance access could quickly dry up. Insurers must go beyond traditional pricing models and re-
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vamp their underwriting guidelines to meet today’s risk landscape.
Using Insurance to Build Back Better If carriers want to keep these lines of business profitable, they must engage with policy makers to develop new regulatory standards by which buildings, cities, and other developments are built. Insurers can require stronger guidelines for building codes and align them to their risk models in order to limit losses. Enacting these codes could motivate developers by reduced insurance premiums while concurrently reducing the burden on taxpayers for disaster recovery. Insurers must also rethink the risks they are willing to underwrite. This becomes even more critical in post-disaster reconstruction where questions of build back, build back better, or build back at all should be contemplated by insurers, policy makers, and citizens alike. If rebuilding, then building back better must be a priority—where regard for nature’s disaster defenses should be implemented to the highest degree, rather than sacrificed for aesthetics. One way to build back better is to support the development of natural defenses to reduce risk. For example, barrier reefs and mangroves offer clear advantages in abating storm surge and coastal flooding. Some innovative insurers have started creating incentives for developments and building projects that leverage these types of natural defensive systems to reduce flooding and property damage in extreme weather events. Developers who keep or implement these types of proactive natural defensive barriers are rewarded not only coverage access, but in some cases enhanced pricing as well. By reducing the risk profile, insurers can better manage expected losses and expand their underwriting appetites. Enforcing this type of “natural defense” inclusion into building codes and city planning will help yield more resilient communities and reduce losses. Environmentally focused underwriting is rare, but it should not be.
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Climate resilient investments could reap large economic rewards. In addition to job creation, an analysis from the National Institute of Building Sciences calculates that climate-resilient construction can lead to as much as $11 in savings for every $1 invested in reinforced building codes. Proactive mitigation steps in infrastructure and building construction reduces damage to property and recovery costs while minimizing productivity disruptions. Insurance companies can leverage their unique positions to encourage building improvements and strengthen regulations. Not only could this increase their profitability, but, more importantly, it saves lives. ***** About the author: Andres Franzetti is the Chief Executive Officer and cofounder of Risk Cooperative.
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Photo via Unsplash.
Environmental Tariffs Could Be a Game Changer By Daron Acemoglu
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nvironmental tariffs may be humanity’s last hope for mitigating climate change, which is on course to become increasingly devastating if we do not curb our greenhouse-gas (GHG) emissions. The most straightforward way to confront this unprecedented global threat is through a multilateral agreement that locks in a “green transition” in all (or most) countries. The key is to boost renewableenergy production while significantly reducing fossil-fuel consumption, a process that calls for coordinated policies on three fronts: regulation, subsidies for cleaner technologies (including renewables), and carbon taxes. Unfortunately, this type of global agreement seems out of reach, both because the fossil-fuel industry remains politically powerful, and because some of the world’s biggest emitters—including the United States, China, and India—are not adopting the necessary policies. Although regulation and subsidies are essential to achieve an effective energy transition, the carbon tax is the bedrock, because that is what will increase the costs of emitting carbon dioxide, methane, and other GHGs. Several countries have already adopted such taxes, including Sweden, which has the world’s highest carbon tax (approximately $117 per ton). But many others, including the U.S. and China, have not followed suit. This lack of consistency gives rise to “carbon leakage.” High-emissions activities tend to move away from countries with carbon taxes to those without. While a country that unilaterally adopts a higher carbon tax benefits everyone (by reducing its own GHG emissions), it also unwittingly encourages others to do less. Or, as an economist would put it, one should expect that unilateral climate-mitigation policies function as “strategic substitutes” across countries: The higher one country’s carbon tax, the less other countries will do for mitigation.
A high carbon tax creates an opportunity for “carbon arbitrage.” Since the steel industry emits 1.85 tons of carbon for every ton of steel produced, Sweden’s carbon tax increases the cost of its steel production by about $210 per ton, which in turn makes Chinese steel imports much more attractive for steel-users and their customers.
Although regulation and subsidies are essential to achieve an effective energy transition, the carbon tax is the bedrock, because that is what will increase the costs of emitting carbon dioxide, methane, and other GHGs. Worse, Chinese authorities have an incentive to maintain this arrangement. Without a Chinese carbon tax, Chinese steel exports will thrive, and that will help Chinese industry, workers, and politicians (who can claim credit for generating an economic boom). Even if they recognize the need to combat climate change, Chinese authorities may end up doing less than they might have done without Sweden’s carbon tax. Hence the need for environmental tariffs, which would reverse this logic by imposing a carbon tax on imports. Sweden would apply a border tax adjustment equivalent to the difference between its carbon tax and the carbon tax of the exporting country, multiplied by the tonnage of the CO2 emissions generated in the production of the imported products. An environmental tariff’s most obvious benefit is that it reduces carbon leakage. By nullifying the artificial cost advantage of imports from low-carbon-tax countries, it encourages steel consumption to shift toward cleaner domestic sources or lesspolluting exporters. But an environmental tariff’s indirect effects may be even more important. Most
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The fossil-fuel industry and major polluters, including China, are dead set against environmental tariffs and have been campaigning aggressively to block them. But this position is wholly selfish. importantly, a tariff makes climate-change mitigation policies “strategic complements” rather than strategic substitutes; this means that Swedish carbon taxes will encourage, rather than discourage, other countries to adopt similar policies of their own. The logic is simple. Without environmental tariffs, Sweden’s carbon tax gives Chinese steel producers an arbitrage opportunity. But once more countries have begun to apply border adjustments on imports, the Chinese authorities will want to help China’s steel exporters clean up their operations. Regardless of whether they do this through carbon taxes, regulations, or subsidies for clean energy, Chinese CO2 emissions will decline. And once Chinese producers start meaningfully reducing their emissions, China’s authorities will have an incentive to introduce environmental tariffs of their own. For the most part, what’s standing in the way of aggressive environmental tariffs are excuses and misleading arguments. The fossil-fuel industry and major polluters, including China, are dead set against environmental tariffs and have been campaigning aggressively to block them. But this position is wholly selfish and thus should be disregarded. A second argument is that environmental tariffs are protectionist measures, and that we should not “risk giving protectionists another opening,” as The Economist puts it. This claim does not hold water. Because carbon tariffs level the playing field, they do not function like traditional protectionist measures. Moreover, the classic theory of trade does not imply that arbitraging domestic policies produces welfare gains— 22 | D IPLOM AT I C CO URIE R
especially considering that such policies are essential for combating climate change. A third objection is that environmental tariffs may not be legal under World Trade Organization rules. In fact, a straightforward reading of the General Agreement on Tariffs and Trade (GATT) suggests that they are indeed legal. Article III allows for environmental taxes, stating that “[imported products] shall not be subject, directly or indirectly, to internal taxes or other internal charges of any kind in excess of those applied, directly or indirectly, to like domestic products.” It follows that if a country has a domestic carbon tax on “like domestic products,” it is permitted to apply the same tax to imports through border adjustments. This rule has long provided the basis for border adjustments on value-added taxes, and it was also the reasoning behind a GATT panel’s 1987 ruling (in United States – Taxes on Petroleum and Certain Important Substances) that border tax adjustments could be applied to chemicals. Furthermore, Article XX of the GATT provides additional exemptions for trade restrictions “necessary to protect human, animal or plant life or health,” and there is now a strong scientific case that carbon taxes meet that criteria. Finally, some commentators worry that in a “liberal international order,” important global policy decisions should be pursued primarily through multilateral cooperation. That may well be true. But the fact is that multilateral agreements are not going to work fast enough to keep the world anywhere close to the Paris climate agreement’s 1.5° Celsius warming pathway. We cannot allow faith in multilateralism to become an alibi for inaction. Environmental tariffs could create a positive cascade of climate-mitigation policies around the world. There should be no delay in implementing them. ***** About the author: Daron Acemoglu is a Professor of Economics at MIT. Copyright: Project Syndicate, 2022.
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A New Toolkit for Communicating Climate Action By Millie Brigaud, Jeremy Fugleberg, Hugo Paul, Shane Szarkowski, and Mark Temnycky
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n an environment where people find it increasingly uncomfortable to discuss anything they view as political with someone who disagrees–and where the presentation of facts is often felt as an attack–we need a new approach to communicating climate action that invites people in. Climate scientists agree that humans are causing climate change, but public agreement continues to lag to a troubling degree. Meanwhile, we know that we require the political will that comes only with broad consensus to take effective climate action. Clearly, leaving behind those who are skeptical of the need for strong climate action is a losing strategy. To win–to affect strong and sustained climate action–we need their support. At World in 2050’s inaugural Innovation Lab, launched earlier this year, a group of experts, scholars, practitioners, policy makers, and concerned students from six continents discussed this problem, among others. This article is an articulation of recommendations that arose from this collective intelligence lab. Climate advocates are already working to more effectively engage with those who don’t support robust climate action–and while there are some interesting ideas, results remain mixed. This is partly because those opposed to robust climate action come from a variety of backgrounds. Thus, no single angle on communicating climate action suits all audiences. Here, we propose a new approach–a toolkit–for more informed and empathetic (and hopefully effective) climate communication.
Connection, not Condemnation When climate advocates talk about those opposed to robust action, we typically refer to them as “skeptics” or “deniers.” We often consider them to be set in their ways, part of a greater problem and unable or unwilling to be part of future solutions. While these descriptors may be rhetorically satisfying and not wholly inaccurate,
they contribute to an increasingly us-versus-them atmosphere. This dysfunction has been recognized elsewhere, and efforts have been made by some climate advocates to broaden the scope of how we think about and talk to those opposed to robust climate action. Yet negative assumptions informing the current climate communication standard prevail, meaning these new models often adopt negative taxonomies. Not only is this unhelpful, but it reinforces trends we’re observing across social spaces where engaging with those you disagree with is uncomfortable and often feels like you are under attack.
Those who don’t support climate action also play an active role in influencing their governments and business cultures and cannot be ignored. They vote. They advocate. They influence their colleagues and loved ones. We must find ways to engage empathetically with those who reject climate actions despite these chasms in understanding, because the only successful climate action solutions will be co-created across all segments of society. Those who don’t support climate action also play an active role in influencing their governments and business cultures and cannot be ignored. They vote. They advocate. They influence their colleagues and loved ones. One concept which can help us do better is “meeting them where they are,” an approach used across fields from social work to medicine to marketing. This approach requires research, patience, and above all empathy. When engaging with somebody who might be skeptical of our aims, we would do well to work out what beliefs or preferences inform their disagreement and acknowledge the validity of those beliefs or preferences to those we are engaging with. COP27 | 25
There are many reasons individuals may not support climate action. Indeed, for many, climate change is solely viewed through a political lens, making it impossible to weigh the import and urgency of what is taking place. Engaging more effectively requires climate advocates to acknowledge that most of those resistant to robust climate action are acting from perspectives that have compelling internal logics, motivated by interests and allegiances they see as virtuous. Meeting them where they are means we acknowledge and respect these internal logics and look for more limited points of agreement from which we can begin to build common understanding, as opposed to the more common practice of articulating their stances as villainous or naive. As a climate action advocate, how do you engage with someone who is more reticent about action and meet them where they are without alienating them? A taxonomy can be very useful as a model of understanding, in a general way, different logics that can underpin reticence about climate action. We propose a new framework–a new taxonomy–below to help categorize, and thus better understand, those opposed to climate action.
A Better Taxonomy of Climate Action Reticence We see this taxonomy as one potentially powerful tool in a toolkit for better discourse, but it is not authoritative. Alternate taxonomies may be useful as well, though we would emphasize the need to avoid negative taxonomies. Also, no taxonomy perfectly explains each person–a taxonomy is best thought of as delineating tropes, not defining individuals. Here is our proposal for a more healthy, empathetic taxonomy. Skeptics: Skeptics are the climate change “doubters.” They feel as though they have done their research and engaged with the broader literature and debate. However,
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they have been swayed by misinformation or disinformation. Agnostics: Agnostics are those who are disengaged. They may believe climate change won’t have a major impact on them. They may have become overwhelmed by overly politicized debate and withdrawn out of confusion or frustration. They may simply remain unconvinced. Rejectors: Rejectors are those who are convinced that taking robust, immediate climate action is the wrong call. They are firm in their reasons for rejecting this action. Reasons for rejection include (and people can embody multiple types): 1.
The Distrustful: They believe the scientific community is often biased and overly political. They likely also believe misinformation /disinformation they’ve gleaned from alternative sources they trust.
2. The Rankers: They believe that climate change is real, is a problem, and something should be done about it. However, they believe that other problems are more pressing and immediate. Their rankings could be based on several factors including (but not limited to): the perceived economic cost of action, technological optimism, and personal interest or investment in another priority. 3. The Party-Liners: They are less interested in debates about the science of climate change and are more interested in affiliating themselves with what they perceive as the positions of their political tribe, however they define what that tribe is. Notice we did not once describe someone who rejects climate action as being inauthentic or acting out of malice or spite. We acknowledge that realistically there are those who do. But we wager they are the
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minority, and that a positive approach to communication on climate action–the modus of the tool kit we propose below–must be built upon a foundation of optimism.
A New Communications Tool Kit While no communication tool kit will address every situation or interaction, we strive here to present a positive and empathetic approach to engaging in dialogue with those opposed to climate change. Our suggested approach speaks to both the message communicated, and the manner in which it is communicated. Note that we don’t advocate compromising on your values, only recognizing that we can’t expect the climate action reticent to do so, either. 1.
The approach to dialogue is critical. When engaging with someone who does not support climate action, this must be a two-way discussion rather than a lecture. Act with humility and respect, aiming for a productive discussion. Productive in this case means “meeting them where they are,” finding areas where your interests and concerns intersect and seeking limited, mutual gains. It does not mean “winning” a debate or converting them to your view.
2. Acknowledge the backgrounds of those you are speaking with. Our taxonomy helps with this, but also consider religious, cultural, education, economic, and political backgrounds. Knowing something about their values and interests ahead of time helps you act with empathy, avoiding terminology that feels adversarial or patronizing. 3. Talk about things that matter. At this point, climate change impacts the great majority of us–directly or indirectly. Identify real and discernible impacts of climate change that will matter to who you’re speaking with, and speak in focused terms
of impact mitigation. This is a small step, but in a politicized climate where all the steps currently are backward even a small step forward feels like a leap. Discussing climate action is hard on both sides of the conversation. Climate change has become so politicized, with groups on all sides fearing their “opponents” seek the destruction (through malice or ignorance) of their legitimate interests. To date, this means that discussions about climate change are an engagement to be fought and won. For all parties, it feels as though a lot is on the line in each of these engagements. It’s stressful. It’s adversarial. It isn’t working. Our approach is different. Rather than seeking zero-sum victories over a debate opponent, we advocate seeking small, shared victories based on limited common interests that we can identify with a less adversarial and more empathetic mindset. These nearterm small victories can mean real climate impact mitigation that is sorely needed, today. In the longer term, this building of understanding means a less fraught environment for discourse and the possibility for more robust climate action–so long as the core interests and values of all parties continue to be observed. The current approach to communicating climate action isn’t working. It’s time to rethink the process. We hope this helps. ***** About the authors: Millie Brigaud is a Diplomatic Courier correspondent. Jeremy Fugleberg is a Diplomatic Courier editor. Hugo Paul is a member of the Youth Council of the Learning Planet. Shane Szarkowski is Managing Editor of Diplomatic Courier and Executive Director of World in 2050. Mark Temnycky is a nonresident fellow at the Atlantic Council’s Eurasia Center. COP27 | 27
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Sustainable Relocation is Climate Adaptation’s Next Frontier By Lauren Boyes
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limate displacement and migration tends to be viewed as a future problem – one that can be dealt with once climate change becomes extreme. However, climate change is already displacing millions and even surpassed conflict as the leading driver of internal displacement, with three times as many people displaced by natural disasters than by conflict in 2020. A changing climate will shift the areas around the world suitable for human life: the human “climate niche.” This will likely be caused by an increased frequency and severity of storms, sea level rises, and desertification. While much of Earth’s surface is currently habitable, over the next 50 years habitability will significantly decrease across South America, Sub-Saharan Africa, the Middle East, and South and Southeast Asia. The countries at the greatest risk from climate change are also among the world’s poorest and most unstable. A drop in habitability, compounded with issues of overwhelming poverty and political and social instability, has the potential to create crises of massive proportions. This is already beginning to play out in the cities of many low- and middle-income countries, as rural communities look to cities for economic and physical stability. Rather than finding stability, however, climate displaced persons are finding themselves in slums. Over the next 10 years, climate displacement is expected to increase slum populations by 700 million. Development economists tend to view urbanization as a good thing – a sign that the economy is growing and industrializing. However, current migration is due to crisis rather than opportunity. By expanding slum populations, climate displacement entrenches poverty and increases the likelihood of violence within slums as migrated communities compete for increasingly scarce resources. Failing to address climate displacement, therefore, will make already difficult international problems more challenging to solve. In fact, the International Union for Conservation of Nature has called West Africa one of the most vulnerable regions to climate change. Almost half of West Africa’s population lives within 200 kilometers of the coastline, mean-
ing that 24 million people may be at risk of climate displacement due to sea level rise and natural disasters. Climate-driven migration is already being recorded within Ghana, and both Ghana and Côte d’Ivoire are currently receiving climate migrants from surrounding West African countries.
Development economists tend to view urbanization as a good thing –a sign that the economy is growing and industrializing. However, current migration is due to crisis rather than opportunity. With climate change expected to displace between 150 and 300 million people by 2050, realistic, sustainable solutions are needed now. Current conceptions of climate adaptation deny the inevitability of climate displacement due to changes in land habitability. Rather, it is assumed that uninhabitable areas can be made livable through infrastructure and other resilience measures. While this type of adaptation is helpful in certain circumstances, these interventions cannot save those areas with imminent and extreme climate risks. The planned relocation of vulnerable communities, supported by geospatial analysis and local partnerships, consequently deserves greater consideration. The UNHCR defines planned relocation as an organized process through which groups are resettled in a new location and provided with the resources needed to rebuild and continue their lives. Although international guidance on this process does exist, international organizations have failed to identify methods for determining where these communities should relocate to. The less the lives of climate displaced communities can be disturbed, the more sustainable their relocation will be. For instance, for planned relocation to be successful, rural communities must move to a place where they can continue their livelihoods: rural, agricultural areas rather than cities. COP27 | 29
The suitability of a location, based on factors such as agricultural and sociocultural similarities, can be found using a suitability analysis: the synthesizing of different spatial variables to identify a preferred location based on a set of criteria. The Relocation Analysis Project, an undergraduate research team based at William & Mary’s Global Research Institute, developed two spatial models as part of a suitability analysis. One was a threat index, to show areas with a high likelihood of displacement, and the other was an opportunity index which highlights areas most suitable for relocation. The indices combine climate vulnerability, poverty, and violence as indicators of potential displacement with measures of infrastructure, ethnic relations, and agricultural productivity in an attempt to identify the most suitable areas for the relocation. Due to the existing prevalence of climate displacement and migration as well as the quality of data available to measure their vulnerability and suitability, this analysis was done for coastal communities in Ghana and Côte d’Ivoire. The Displacement Threat Index focuses primarily on coastal Côte d’Ivoire and Ghana, as these areas are subject to the greatest number of compounding climate threats. This index shows that displacement is most likely to occur in southern and eastern Ghana, and in western Côte d’Ivoire. Given this map, officials worried about internal displacement can focus their efforts on the specific towns and regions that are most likely to be affected.
The Opportunity Index demonstrates that the areas most suitable for relocating climate vulnerable communities can be found in the northern and central Côte d’Ivoire and central and eastern Ghana. While the index does point to cities and certain spaces also prone to displacement, this is likely because of the inclusion of infrastructure variables (schools, roads, and health sites) in the model. Given the importance of agricultural livelihoods to climate vulnerable communities, highly suitable areas outside of cities should be prioritized over cities even if they are considered highly suitable.
Maps like these can be an important tool for visualizing and combating climate displacement. The ease of interpretation and analysis can increase planning efficiency and effectiveness, allowing resources to be directed toward regions with the greatest potential for a climate-safe and socially-sustainable future. Preventing climate displacement is in everyone’s interest, from Accra to New Orleans. It is time to look at our climate future realistically and develop mechanisms to protect the most vulnerable communities worldwide. A better future is possible, and geospatial analysis may be key to achieving it. ***** About the author: Lauren Boyes is the founder of the Relocation Analysis Project at at the College of William and Mary’s Global Research Institute.
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Planning for the Coming Climate Catastrophe By Joshua Huminski
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t the end of the film “The Day After Tomorrow,” the new American president announces that Washington had reached an economic accord with the Mexican government allowing American refugees into the country after an apocalyptic series of storms ravage North America, freezing much of the country. The film, as the Financial Times recently pointed out, struck a nerve—its depiction that the climate crisis finally happened, that the worst had come to pass, and now the world needed to move on to recovery and survival. The proverbial frog was no longer in the slowly boiling pot, but instead the frog was cooked and humanity must move on. What was more interesting though was the very suggestion that the power relationship and migratory flows between Washington and Mexico City could reverse. While one can quibble with the science and meteorology underpinning the film, it nonetheless highlights the reality that climate change will—and indeed already is—resulting in dramatic changes not just to the climate, but to global populations. Gaia Vince’s “Nomad Century” explores this thread, arguing that the world will be dramatically shaped not only by the changes to the climate, but by the resulting flows of people from affected areas. Unlike “The Day After Tomorrow,” “Nomad Century” does not require the willful suspension of disbelief, but placing oneself in a different mental frame. If one approaches it from an entrenched perspective of the here and now, there will be much with which one disagrees. If, however, one places their frame of reference in the slowly evolving climate catastrophe and examines preparation options, there is a very thought-provoking argument to be found. There is much to be said from getting beyond the present as Vince does. Rather than litigate the causes of climate change, she focuses on preparing for the increasingly inevitable. Ironically, though perhaps unintentionally, she shares a perspective with the Department of Defense. The Pentagon
is preparing for the inevitability of climate change rather than its politics—from future proofing military bases to developing equipment that can handle higher temperatures. The challenge that Vince lands on is that those persnickety politics hamstring her proposed solutions. She rightly points out the economic and cultural benefits of migration. Migrants contribute more to the communities they join than they cost, serve to fill jobs that most citizens are disinclined to do, and become even more important as populations age. This, despite data to the contrary, is disputed as migration is increasingly a politically expedient issue in Western countries for nationalist and nativist parties.
climate crisis finally happened, that the worst had come to pass, and now the world needed to move on to recovery and survival. The proverbial frog was no longer in the slowly boiling pot, but instead the frog was cooked and humanity must move on. Her arguments that nation-state boundaries are artificial are perhaps off the mark, not just from its historical grounding, but also because the law of the land remains. “Nation states, then, are an unnatural, artificial social structure that emerged out of the complexity of the industrial revolution” she writes. The 1648 Peace of Westphalia and all that followed (and arguably much of what preceded it) defined national sovereignty as the monopoly of the legitimate use of force within a given territorial boundary—however that is defined. The nation-state, then, remains the dominant structure of international politics and that is not changing. It is interesting that she attacks the concept of the nation-state and advocates for COP27 | 33
Migrants contribute more to the communities they join than they cost, serve to fill jobs that most citizens are disinclined to do, and become even more important as populations age. This, despite data to the contrary, is disputed as migration is increasingly a politically expedient issue in Western countries for nationalist and nativist parties.
Book Details: Nomad Century | Gaia Vince | Flatiron Books.
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the removal of borders, yet trumpets the successes of nation-states like Spain and Germany in managing migration. While she may wish for a supra-national global identity or international citizenship, these are not viable political concepts. This is unlikely to change even with the emergence of climate-driven global migration. Individual nation-states may succumb to pressures resulting from climate change, but arguably the desires to protect one’s own citizenry will increase, not decrease. For its part, the European Union, a supra-national body of partial authority, is already finding it hard to manage national pressures resulting from migration. Its performance does not bode well for the ability of other multilateral and supra-national bodies to manage this emerging development. Her suggestion that if these bodies can manage the flow of goods and services, they should be able to better manage the flow of people is a touch off the mark, too. The economic value of trade is not in dispute. What is often in dispute is how different nation-states compete on the uneven trade playing field. Goods and services do not add numbers to a population and do not result in perceived dislocation or the erosion of cultural identity the same way that migrants do—again this is political perception more than reality. Vince asserts that “removing borders would improve humanity’s resilience to the stresses and shocks of global climate change,” but perhaps underplays the second and third order effects that will inevitably result in recipient communities. She does rightly, if understatedly, note that “it would also result in losers among some sectors of society, particularly in the host nations, so strong dynamic social policy with a welfare contingency would be required to help the transition.” Here again, the challenge of politics intervenes. Even if the first part of her sentiment—removing borders—is a non-starter, the social welfare and political systems of the Western world are already under increasing post-COVID economic pressures and unable to cope with the influx of mi-
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grants—and this is without having to deal with the environmental crisis. One need only look at America’s southern border or Southern Europe’s Middle East and North Africa-related migrant crisis for evidence. Regardless of one’s politics, the U.S. response migration is a searing indictment of successive administrations failing to set and manage a sensible immigration policy. Political opportunism and bureaucratic sclerosis have created a broken system that satisfies neither party, nor security or economic necessities. If Washington cannot fix this system now, what hope does it have of responding to a true climate emergency? Similar challenges face the European Union and its current (and former) constituent countries. It was not that long ago that Hungary was erected its own fences and the United Kingdom was considering deporting migrants to Rwanda. While, Vince makes a persuasive case for the value of migration (climate or otherwise), it is the other parts that make this book truly stand out. Her exploration of how climate change will redraw the map of habitable spaces is utterly fascinating. She writes how higher latitudes will become increasing desirable, how parts of the tropics and Middle East will be practically unlivable, and how these changes will reshape human activity. For example, Canada’s and Russia’s northern latitudes will become destinations of choice, necessitating the retrofitting of their limited existing infrastructure. Equally as fascinating is her exploration of how that human ecosystem of food, energy, and habitation will need to change. Her exploration of these topics offers a range of near- and long-term solutions to adapt to the coming climate change related effects. Regardless of your position on climate change, there are demonstrable effects and changes that need to happen if humanity is to adapt to the range of its effects.
Political opportunism and bureaucratic sclerosis have created a broken system that satisfies neither party, nor security or economic necessities. If Washington cannot fix this system now, what hope does it have of responding to a true climate emergency? role of nation-states as well as the omission of a deeper engagement with both the political and security challenges of climate-related migration, do undermine the central theme of the book. Putting that to the side and focusing on what her book contributes to the overall understanding of how society will feel the effects of climate change and how it will reshape the map of humanity is a far richer and more fruitful engagement with the book. Humanity is already feeling the effects of climate change—we are that frog in the pot. Yet, the question remains whether we jump to safety today, turn into soup, or manage to build ourselves sustainable bouillon cubes on which we can float for a little longer. ***** About the author: Joshua C. Huminski is Director of the Mike Rogers Center for Intelligence & Global Affairs at the Center for the Study of the Presidency & Congress.
Vince’s book is a compelling read, but one that requires a measure of disengagement from the present moment. However, the somewhat inconsistent approach to the COP27 | 35
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Are European Climate Commitments the Next Russian Casualty? By Nikola Mikovic 36 | D I PLOM AT I C CO URIE R
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espite Russia’s apocalyptic announcements, the European Union will unlikely “freeze to death” without Russian natural gas this winter. Gas storage across Europe are nearly full, and liquefied natural gas (LNG) imports are on track to hit record levels. The EU continues reaching long-term deals with other natural gas producers—aiming to replace Russia as Europe’s major gas supplier while simultaneously achieving the EU’s climate goals. This is not to say that the coming winter will be easy. European gas storage systems are only designed to last a few months— meaning that if Russia, for whatever reason, halts gas supplies to Europe, many countries could face gas shortages and even blackouts. In such a case, EU member states may find themselves turning to less climate-friendly energy alternatives, endangering long-term climate goals to stave off an immediate energy crisis. The European Union was hoping to avoid power outages by importing electricity from Ukraine. Ukrainian President Volodymyr Zelensky announced in July that Ukraine had begun exporting electricity to the EU through Romania. Yet on August 31, European Commission President Ursula von der Leyen said that the electricity market in Europe was no longer functioning “because there is one actor, Russian President Vladimir Putin, who is systematically trying to destroy it and manipulate it.” Indeed, following recent Russian missile strikes on Ukraine’s critical energy infrastructure, Kyiv announced that it was forced to halt electricity exports to the European Union. Unless consumption is reduced, blackouts in some European countries could soon become reality. As Daniel Yergin, S&P Global Vice Chairman, pointed out, the effects of a potential energy crisis could be more severe than the oil shock of the 1970s because the crisis encompasses more than just oil. Several EU members are still importing nuclear fuel from Russia as no EU embargo on the Russian nuclear industry has been enacted. In other ways, the EU is seeking
to end its dependence on Russian energy products, having already banned Russian coal imports while a complete import ban on all Russian seaborne crude oil and petroleum products will go into effect on December 5. The EU also plans to gradually end its dependence on Russian natural gas, but recent explosions on the Nord Stream pipelines—a tragic event that could be considered a climate disaster—could speed up the process of Europe’s gas decoupling from Moscow. While there are arguments to be made this is good energy security policy in the long run, it puts the EU in a precarious energy situation now, with potentially disastrous effects for the bloc’s climate agenda.
climate crisis finally happened, that the worst had come to pass, and now the world needed to move on to recovery and survival. The proverbial frog was no longer in the slowly boiling pot, but instead the frog was cooked and humanity must move on. Russian natural gas supply into Europe is at short-term danger in other ways as well. The TurkStream pipeline—which brings Russian natural gas into the EU via Turkey—is the only relatively stable gas transit route linking Russia and Europe. The future of that pipeline is also in doubt. Dutch authorities in September decided to withdraw pipeline operator South Stream Transport B.V.’s license, as it is a subsidiary of Russia’s Gazprom. While South Stream is appealing the decision, maintenance and repair work on the pipeline is being hindered by EU sanctions. It will take time for the EU to build energy diversity. Ambitions to increase the share of renewable energy in the EU’s electricity mix to 45% are under threat—along with measures that would help renewables COP27 | 37
projects face up to legal challenges. This not only endangers EU climate ambitions but makes natural gas supply even more vital. Experts in Russia, meanwhile, warn it will likely take the EU at least five years to build enough infrastructure to replace Russian natural gas supplies with other suppliers. Such efforts by the EU include Baltic Pipe—which could supply about half of Poland’s annual natural gas consumption— expanded trade with Algeria and Azerbaijan, and more LNG import terminals. In the short-term, all of these measures to replace are unlikely to help Europe to find an alternative to 155 billion cubic meters of natural gas that it purchased from Russia in 2021. As such, the coming winter will undoubtedly be a good test for European energy solidarity. It will also show if Europe, in the long-term, can live without Russian energy, particularly gas. Whatever the future looks like, there is a real fear that European energy supplies won’t be enough right now. Some EU members are already considering reviving their old coal-fired power plants, regardless of the implications for the European Union’s environmental commitments. Europe’s long-term energy and climate action future, it is increasingly clear, will depend not only on decarbonization strategy but on the outcome of the Ukraine war. ***** About the author: Nikola Mikovic is a Diplomatic Courier correspondent, researcher and analyst based in Serbia covering foreign policy in Russia, Belarus, and Ukraine.
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Decarbonization Is Now a Strategic Imperative By Josep Borrell and Werner Hoyer
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ussia’s invasion of Ukraine has forced the European Union to accelerate the pace of our energy and climate policy. Since the Kremlin has increasingly used energy as a tool for political influence, we must deprive it of its leverage by radically reducing our dependence on fossil-fuel imports from Russia. The geopolitical rationale for doing so overlaps with the imperative to tackle climate change. The Intergovernmental Panel on Climate Change’s latest report on mitigation underscores the urgency of that task. Total greenhouse-gas emissions must peak by 2025 if we are to avoid a catastrophic increase in global temperatures. Moreover, the economy-wide shift to clean energy must be managed carefully to account for the inevitable social and economic consequences; it must be a “just transition.” The EU and the European Investment Bank have a vital role to play in this transition. Investments in renewables, energy efficiency, and innovative technologies such as green hydrogen are important tools for dealing with Russia’s aggression and helping to save the planet from dependence on fossil fuels. Every euro we spend on the energy transition at home is a euro we keep out of the hands of an authoritarian power that wages aggressive war. Every euro we spend on clean energy enhances our freedom to make our own decisions. Every euro we spend helping our international partners accelerate their own decarbonization strategies is an investment in resilience and in the fight against climate change. Since Russia’s invasion on February 24, the EU has been accelerating its energy transition plans to help end Europe’s reliance on Russian fossil-fuel imports as soon as possible. Although this will not happen overnight, the incentives to do so are now greater than ever. We can achieve energy independence by improving efficiency, diversifying supplies, and ramping up renewables. This process requires a mobilization at all levels — from supranational bodies down to households and individuals.
There are two important caveats to consider. First, the search for alternative suppliers of natural gas — critical as it is in the short term — must not lock us into a new long-term dependence that requires heavy investments in fossil-fuel infrastructure. That would be costly, catastrophic for the planet, and ultimately unnecessary, given the more climate-conscious options that are available.
Investments in renewables, energy efficiency, and innovative technologies such as green hydrogen are important tools for dealing with Russia’s aggression and helping to save the planet from dependence on fossil fuels. Second, we must not trade one bottleneck for another by swapping our over-dependence on fossil fuels for over-dependency on raw materials needed for the green transition. These resources are heavily concentrated in just a handful of countries, not all of which hold the same values and interests as the EU. Strengthening the EU’s strategic autonomy and resilience must remain a key objective of the transition. Europe cannot do this alone. Winning the battle against climate change and standing up to Russian aggression are global challenges that demand a global response. Russian President Vladimir Putin’s war has strengthened the strategic rationale for all countries to reduce their fossil-fuel imports and invest more in climate-friendly energy solutions. That is why the EU is actively engaged in climate diplomacy. We want to encourage others to raise their climate ambitions, and we have committed considerable resources to working with partner countries so that they, too, can move to a resilient net-zero-emissions economy. Through the COP27 | 41
Europe cannot do this alone. Winning the battle against climate change and standing up to Russian aggression are global challenges that demand a global response. Russian President Vladimir Putin’s war has strengthened the strategic rationale for all countries to reduce their fossil-fuel imports and invest more in climate-friendly energy solutions. European Green Deal and the EU’s new Global Gateway initiative, EU institutions and member states are mobilizing up to €300 billion ($325 billion) of investment in green and digital infrastructure to address the climate, biodiversity, and energy crises. Moreover, the EIB has pledged to support €1 trillion of investment in climate action and environmental sustainability by 2030. Through its new development arm, EIB Global, the bank is working with partners around the world to mobilize finance for energy efficiency, renewables, and electricity grid projects. Working as part of the EU’s joint effort under Team Europe, the EIB’s support for a clean-energy future ranges from investing in solar power in Senegal to financing more energy-efficient kindergartens in Armenia. The bank has also helped forge a Just Energy Transition Partnership with South Africa; provided backing for the Indiabased International Solar Alliance, which supports solar power development across 105 tropical countries; and signed on to an integrated water management and flood prevention scheme in Argentina.
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The EU stands ready to support the global community in ending its dependency on fossil fuels. Russia’s war on Ukraine is not a reason to delay investments in climate action. On the contrary, more green investment will give us more strategic autonomy. Decarbonization has become a geopolitical imperative. We call on our global partners in government and across international financial institutions to join us in accelerating finance for clean energy. By pursuing climate neutrality, we can also achieve energy security. ***** About the authors: Josep Borrell, High Representative of the European Union for Foreign Affairs and Security Policy, is Vice President of the European Commission for a Stronger Europe in the World. Werner Hoyer is President of the European Investment Bank. Copyright: Project Syndicate, 2022.
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You Can’t Fight the Climate Emergency Without Enlightened, Responsible Leadership By Andrea Bonime-Blanc 44 | D I PLOM AT I C CO URIE R
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he world is facing a daunting time, as evidenced by these megatrends. At the forefront of crises we must grapple with is a bevy of worsening climate emergencies. To meet the moment, we are in dire need of more responsible and enlightened leaders at every level (international, national, and local), in every sector (business, government, and social), and from all areas of expertise. Those leaders, acting in an enlightened and responsible way, can better act to adopt coordinated, thoughtful, and systemic governance practices to achieve real climate progress at COP27 and beyond— thereby averting climate Armageddon. To help make that happen, in this piece I will discuss my typology of Responsible and Enlightened Leaders, with examples based on great data from Just Capital. To convert talk into action, this piece also offers a checklist of questions you should ask yourself about your leaders (as well as yourself) so that we can all do a better job in both finding and becoming such leaders. This way we can best deploy an effective and urgent resilience-forward approach to climate action and planetary survival.
Responsible and Enlightened Leadership in a Turbulent World I have previously explored what makes for a good leader when it comes to environmental, social, governance, and technology (ESGT) risks and opportunities. I developed an ESGT Leadership Typology (summarized in Figure 1) in my book Gloom to Boom (further teased out in the ESGT Megatrends annual series) which asks the question: How do the top leader, management team, and board of any type of entity address the array of ESGT risks and opportunities that are relevant to their entity’s purpose, strategy, offerings, and stakeholders? Do they do their work in an Enlightened, Responsible, Superficial, or Irresponsible way? The difference between the top two leadership types has to do with creativity, innova-
Figure 1: A Typology of ESGT Leadership. Source: A. Bonime-Blanc. Gloom to Boom: How Leaders Transform Risk into Resilience and Value. Routledge 2020.
tion, and new value creation (the Enlightened Leader does more of that). However, both Enlightened and Responsible Leaders are focused on setting a good-to-great tone from the top on all things ESGT (including a culture of integrity and ethics). They also both provide sufficient resources for their entity to properly manage among other exigencies, environmental risks and opportunities. The difference between the two bottom categories of ESGT leadership is that while the Superficial Leader is the prototypical “greenwasher,” whereas the Irresponsible Leader goes a step further. They are intentionally ignorant or negligent about ESGT issues and are the most likely to commit legal violations and even crimes. Examples from the Vale environmental disaster in Brazil and the compounded BP Deepwater Horizon disaster in the Mexican Gulf to the Fukushima Nuclear Plant disaster in Japan all come to mind. In each of these cases leadership (management and the board) were either negligent or intentional in not providing basic environmental, health, and safety risk management in advance of the horrific environmental and human tragedies that ensued.
The Stakeholder Lens on Leadership I recently analyzed the results of the Just Capital 2022 Rankings for a set of leading technology companies which provides a nice illustration of the ESGT leadership typology. Just Capital, a nonprofit think tank, COP27 | 45
leaders, acting in an enlightened and responsible way, can better act to adopt coordinated, thoughtful, and systemic governance practices to achieve real climate progress at COP27 and beyond, thereby averting climate Armageddon. annually studies and ranks almost 1,000 publicly traded US based companies around five stakeholder groups (workers, communities, customers, environment, shareholders/governance) and their key 19 “stakeholder issues”. See Figure 2 below for this list of issues for 2022, per stakeholder group, which covers some of the most salient ESG issues most businesses need to tackle.
Figure 2: Just Capital 2022 Stakeholder Issues.
For my analysis of these results, I considered six leading U.S. technology companies: Alphabet, Amazon, Apple, Meta, Microsoft, and Tesla. Of these, Alphabet, Microsoft, and Apple scored well across all metrics—#1, #3, and #7 respectively—with Apple and Microsoft both scoring notably well in environment. Amazon, Tesla, and Meta rank #105, #608, and #712, respectively. 46 | D I PLOM AT I C CO URIE R
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Figure 3: Just Capital 2022 – Three Leading U.S. Technology Companies.
Figure 4: Just Capital 2022 – Three Lagging U.S. Technology Companies.
The top Just Capital companies for 2022 from the standpoint of the environmental stakeholder are:
Is there a Relationship Between the Type of Leader and the Overall and Environmental Stakeholder View?
1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
VMWare Microsoft Intuit Apple Moody’s Mastercard PayPal Etsy HP Inc. PVH Corp.
If we turn to matching the Just Capital 2022 ranking performance to the actual leader/ founder of each of these companies, a picture emerges which begs an interesting question: Is there a relationship between the type of ESGT leader and the corresponding stakeholder view and impact?
Looking at the six tech companies’ rankings on the environment stakeholder dimension alone, an interesting fact is that all but Alphabet rank higher than across all five stakeholder dimensions cumulatively: Just Capital 2022: Six Tech Companies’ Environment Stakeholder Rankings
Figure 5: The Tech Companies Examined and Their Leaders.
If we take the view that there is a relationship (not necessarily causation but perhaps correlation) between the type of ESGT leader and the overall stakeholder view of the company, something dramatic seems to emerge. Companies whose leaders have been the least controversial and most admired for their leadership on ESG and tech issues (from Alpha-
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bet, Microsoft, and Apple) clearly contrast to those tech company leaders who have been more controversial, less consistent, and sometimes outright problematic on ESGT issues – namely, the founders of Amazon, Tesla and, especially, Facebook/Meta.
The more inclusive of key stakeholders the better. This means incorporating key environmental stakeholders into strategic and tactical considerations. However, an interesting difference seems to emerge regarding Meta – while they are the most poorly ranked overall by stakeholders, on the environmental stakeholder dimension they do very well. An interpretation of this might be that while on most ESGT issues Meta fairs very poorly on the environment they do better, perhaps because (a) their environmental footprint may be more limited than say that of a Tesla, Amazon or Apple –
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and (b) they may just be doing better generally on their environmental impact.
Futureproofing: A Checklist for Identifying Better Leadership Each of us has a role to play in this difficult and challenging world – whether as individuals, professionals, or leaders. Amongst some of the key questions we should be asking about ourselves and our leaders and how committed we/they are to the climate emergency and other important ESGT issues (especially environmental when it comes to COP27 and future COP meetings) are the following: 1. Focus: Is it big picture or little picture? Short term or medium/long term? The bigger picture and longer term the better for ESGT issues, and especially environmental which take often longer to unfold. 2. Decision-making: Is it purely economic or broader, including relevant ESGT issues? The more holistic and situationally aware, the more insightful and strategic. Leaders who don’t
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factor climate impacts into their decision-making are burying their heads in the sand. 3. Constituents: How inclusive or exclusive are we about key stakeholders? The more inclusive of key stakeholders the better—as the Just Capital results underscore. This means incorporating key environmental stakeholders into strategic and tactical considerations. 4. Social license to operate: Do you worry about it? Do you even know what it is? If you don’t, you are flying blind without a net.
In an age of deep and complex turbulence – including multiple climate storms - emotionally informed and inclusive governance is necessary. 5. Risk: Are you risk-blind or risk-savvy? Flying risk-blind is completely irresponsible to stakeholders as well as leaves money on the table – knowing risk affords new opportunities. Look at the climate tech explosion – where do you think that’s coming from? Exploding environmental opportunity. 6. The future of Capitalism: Shareholder, Stakeholder, Regenerative, other? The more one understands what is and what will be, the better strategy and preparedness can be built especially as we move to greater circularity and regeneration as core market components. 7. Governance: Inclusive? Exclusive? Command and control? Emotionally intelligent? In an age of deep and complex turbulence – including multiple climate storms - emotionally informed and inclusive governance is necessary.
8. Values and ethical principles: Are they core to your strategy, performance, cultural ethos? If not, go back to the books and start again. 9. Sustainability: Are you wasteful or utilitarian or are you circular or regenerative in your approach? This one speaks for itself. 10. Resilience: Nice to have or must have? Must have. I would suggest that asking these questions of our leaders will help provide a roadmap to understanding who an Enlightened or Responsible Leader is and who isn’t. And, likewise, such answers may help us separate the leadership wheat from the chaff and help us become less susceptible to choosing/settling for the Superficial or Irresponsible type of ESGT Leader – the greenwashing marketeer and the grossly negligent polluter. Why? Because the future of the planet depends on it.
Our Unique, Fragile, and Gorgeous Blue Planet Needs Our Help If we don’t want to commit planetary suicide, we need to up our game dramatically on how we choose and empower leaders in all institutions to bend toward the Enlightened and Responsible Leaders over the Superficial and Irresponsible. While this sounds easier said than done, most of us have at least some power to influence where we work, who we vote for (politically and as shareholders), and what/how we do at work and in our leisure time. I humbly suggest self-examination and proceeding accordingly if we think our fragile but beautiful ecosystem and its inhabitants deserve a chance to correct course for a better future. ***** About the author: Andrea BonimeBlanc is the founder and CEO of GEC Risk Advisory.
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The West’s Energy Policy Can Be Geopolitical and Green By Jeffrey Frankel
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ussia’s invasion of Ukraine has amplified the importance of nationalsecurity considerations in Western countries’ energy policies. At the same time, governments must continue to focus on reducing environmental damage – in particular, on cutting greenhouse-gas emissions. Both goals, geopolitical and environmental, are urgent and should be evaluated together. These two objectives are not necessarily in conflict, as some believe. There are plenty of energy measures the West can adopt that would benefit the environment and further its geopolitical aims. The most obvious steps, especially for the European Union, are sanctions that reduce demand for imports of fossil fuels from Russia. A review of different areas of energy policy reveals further options. Here, I emphasize the dos and don’ts that seem to be clear win-win choices, as opposed to policy decisions where tradeoffs are acute and reasonable observers may disagree. The first policy choice is a blunt one: Governments should not prolong the life of coal and should withdraw coal subsidies. The International Monetary Fund has estimated that global energy subsidies (including for oil and natural gas, as well as coal), at either the producer or consumer end, exceed $5 trillion per year. Direct US fossil-fuel subsidies alone have been conservatively estimated at $20 billion annually. Next, policymakers should regulate natural gas. Continental Europe has made itself dependent on Russian gas, and US shipments of liquefied natural gas can help substitute for it. But if there is to be a renewal of the fracking boom, which actually reduced total US carbon dioxide emissions from 2007 to 2012, careful regulation should drastically reduce the amount of methane released into the atmosphere as part of the process. Fortunately, this regulation need not be expensive. Not subsidizing oil also is key. Global petroleum subsidies amount to an estimated
$1.5 trillion per year. If the United States must open more federal lands to drilling, it should no longer offer leases to drillers at below-market rates.
Not subsidizing oil is key. Global petroleum subsidies amount to an estimated $1.5 trillion per year. If the United States must open more federal lands to drilling, it should no longer offer leases to drillers at below-market rates. Western governments should also tap existing stockpiles, as US President Joe Biden did recently by announcing an unprecedented release of 180 million barrels of oil from the country’s Strategic Petroleum Reserve. While presidents have in the past sometimes used the SPR for political purposes, Biden’s decision has a genuine national-security justification, because the release can help to offset some of the current temporary supply shortfall. Some argue that the SPR is not big enough to put a dent in global oil prices. But the US move has been accompanied by releases of similar emergency reserves by the United Kingdom, Germany, and many other countries, totaling 240 million barrels over the next six months. Some economists also argue that the US does not need an SPR, now that the country is no longer a net importer of oil. Even if one agrees, this would not be an argument against releasing reserves now, but rather against restocking the SPR when the crisis has passed. In addition, governments should raise, not lower, taxes on retail petroleum products. Several US states have recently declared “gas tax holidays” to cushion consumers from the effects of high global oil prices. Other countries also are trying to shield their citizens from energy-price increases. COP27 | 51
Cutting demand for hydrocarbons hurts the earnings of all oil exporters, not just Russia. But while some of these producers are innocent bystanders, some are petrostates that are not entirely worthy of support from the US and its allies. But these measures, while understandable politically, are terrible economics: They undermine drivers’ incentive to economize on their fuel consumption, thus benefiting Russia and hurting the environment. As they stop promoting coal and oil, governments must keep up the momentum behind renewables. Continuing the recent trend toward wind and solar power is important for both geopolitical and environmental reasons. Government subsidies for renewables, including to support research into storage technology, can play a role. But the US and the EU should also take the less popular step of lowering, not raising, their tariffs and other protectionist barriers affecting imports of solar panels and wind turbines – imports that have helped bring down renewable-energy costs. At the same time, governments need to steel themselves to extend the life of nuclear power plants. One of the most misguided current energy policies is Germany’s surprising choice to proceed with plans to close its three remaining nuclear plants later this year, rather than trying to reopen the three that it closed in December. The country’s decision in 2011, in response to the Fukushima disaster, to shut down all of its nuclear power over the course of the subsequent decade has led to increased dependence on coal and Russian fossil-fuel imports, and to higher CO2 emissions. Other countries assess the pros and cons of nuclear power differently. Fewer deaths resulted from the Japanese nuclear accident 52 | D IPLOM AT I C CO URIE R
than occur every day from mining or burning coal. The UK now plans to build eight new nuclear reactors this decade, partly to reduce its dependence on oil imports in the wake of Russia’s invasion of Ukraine. The best way to reduce demand for fossil fuels is through a carbon tax or auctions of tradeable permits (with the revenue used to reduce distortionary taxes, for example). For now, introducing such price mechanisms in the US is politically impossible. But, 20 years ago, we said the same about the EU, and today it has the Emissions Trading System. Cutting demand for hydrocarbons hurts the earnings of all oil exporters, not just Russia. But while some of these producers are innocent bystanders, some are petrostates that are not entirely worthy of support from the US and its allies. It is not coincidental that so many oil-exporting countries are autocracies. Many studies of the naturalresource curse have concluded that societies built on the wealth of commodities in general, and oil in particular, are prone to authoritarianism. In the long run, it might be better all around if the fossil-fuel sector were to shrink worldwide. As Western governments seek to devise energy policies that are both environmentally and geopolitically robust, that thought should help to concentrate minds. ***** About the author: Jeffrey Frankel is Professor of Capital Formation and Growth at Harvard University. Copyright: Project Syndicate, 2022.
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Towards an Asian Climate Neutral Data Centre Pact By Ken Haig
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igitalization of society and the economy is key to sustainable development, and a clean cloud and green data centers will need to underpin this transformation, according to Alban Schmutz, chairman of Cloud Infrastructure Services Providers in Europe (CISPE). The European Climate Neutral Data Centre Pact—which unified industry and trade associations for cloud infrastructure services and data centers under the common goal of achieving climate neutrality by 2030—represents one of many positive steps in this direction. The pact now represents 90% of Europe’s cloud and data center industries, with 54 members and 22 trade associations, and has set clear industry-wide targets for energy efficiency, clean energy, water efficiency, circular energy, and the circular economy. Appropriately, leaders in the Asia Pacific region (APAC) are also paying close attention to what unified, scalable, and standardized commitments to sustainability for data centers in this region could achieve. APAC is home to nearly 60% of the global population. However, it is also home to some of the world’s worst air pollution and other markers of environmental degradation—not to mention challenging markets for renewable energy investment. Yet, growing regional demand for data- and technology-driven innovation and sustainable development is undeniable and will be crucial to solving climate challenges across the region. In Singapore, the data center industry already contributes $2 billion to its economy annually, creating 1.6 million jobs. However, the climate impact of data centers remains a concern. Singapore recently moved towards lifting its ongoing moratorium on new data center construction with a stricter focus on sustainability. Already home to more than 1,000MW of data center capacity, Singapore has strong international and regional network connectivity ensuring further growth. It is also well positioned to lead the way in promoting innovative and sustainable data center design and development regionally.
Japan, too, is leading through domestic policies supporting clean energy adoption and other innovative incentives, including a $7.1 billion initiative launched in 2020, which included 50% subsidies for construction of zero emissions buildings. In China, the National Development and Reform Commission recently announced its intention to construct four data center “mega clusters” to support Beijing and other major coastal centers, acknowledging the energy and cost efficiencies from cloud data centers’ economies of scale.
Already home to more than 1,000MW of data center capacity, Singapore has strong international and regional network connectivity ensuring further growth. It is also well positioned to lead the way in promoting innovative and sustainable data center design and development regionally. While the perception in some corners is that data centers’ energy use is on an unchecked trajectory, the reality is that despite exponential growth in Internet and cloudenabled services, global data center energy consumption has remained essentially flat since 2010. This is a remarkable achievement and is in large part due to massive energy efficiency investments and higher resource utilization in cloud data centers. Moving computing workloads from onpremise data centers to cloud facilities is a critical area to continue to focus on in APAC. A survey of over 500 enterprises and public sector organizations in the region by 451 Research, found that such a move led to an immediate reduction in energy use and associated emissions by over 78% on average. Another key consideration for sustainable data centers is access to renewable energy, which remains COP27 | 55
As APAC governments announce increasingly ambitious net zero carbon goals, cloud computing could help drive greater synergies between decarbonizing technologies. challenging in APAC due to limited availability, undue regulatory complexities, and high costs. 451 Research finds that, when combined with cloud data centers’ already high levels of efficiency, enabling cloud operators in APAC to source 100% renewable energy would reduce IT-workload emissions even further—by up to 93% on average—across the region. Government and industry will need to work together to enable greater availability and affordability of renewable energy resources, whether produced domestically or imported from neighboring countries. They will also need to work together in accelerating R&D and leverage other promising technologies, such as in shifting to liquid cooling, and/or use of hydrogen fuel cells and other low-carbon energy/storage solutions. As APAC governments announce increasingly ambitious net zero carbon goals, cloud computing could help drive greater synergies between decarbonizing technologies, clean energy, and a move towards greater energy efficiency in the data center industry. For all of these reasons and more, APAC governments should prioritize the role of cloud computing and sustainable data centers in facilitating the mutually-reinforcing “twin transitions” of digitalization and decarbonization for the region. ***** About the author: Ken Haig is the Head of Energy and Environment Policy for Amazon Web Services (AWS) in the Asia-Pacific region and Japan.
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A Massive Agricultural Revolution is Underway By Millie Brigaud
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austine Bas-Defossez, an expert on sustainable agriculture at the Institute for European Environmental Policy (IEEP), has spoken to farmers at the French agronomic university AgroParisTech for years. Recently, she’s noticed a shift—and she agreed to speak to Diplomatic Courier about it. “I used to face an obstinate audience of farmers. Nearly everyone was in denial about climate change, soil depletion, and losses to biodiversity. Now it’s different. I see younger faces, and my audience acknowledges that we have an emergency. Many see climate change on their farms— they are looking for solutions.”
The Agriculture Timebomb The trouble for the agriculture sector is that it’s a victim, but also a perpetrator, of climate change. It is a major source of greenhouse gas emissions. While the energy sector’s emissions have decreased by 47% since 2005, agriculture’s have barely fallen. Because of climate change, the value of farmland in southern Europe is expected to fall over 80% before 2100. Crop yields will fall by 12% to 50%, which could cost countries up to 120 billion euros. Growing seasons may lengthen in northern and eastern Europe, but extreme weather events will spare no one. Cutting back on fertilizers, pesticides, and animal consumption is essential but excruciating in the short-term. An estimated 11,200 Dutch farms must shut down to meet the Netherlands’ ammonia and nitrogen emissions reduction targets.
Europe’s Green New Deal The EU is instituting a collection of policies called the Green New Deal to make Europe carbon-neutral by 2050. Farm to Fork, a complete overhaul of the European food system, is central to the project. “You cannot solve the unsustainability of farming without looking at the whole food sector,” Bas-Defossez explained. “You
need to look at consumption, marketing, and food labeling. Retailers have a lot of power, and they’re the ones driving prices down at the expense of the environment.” For Farm to Fork, IEEP is helping to revise the Common Agricultural Policy (CAP), a long-standing subsidy system for farmers. Right now, farmers must comply with certain environmental standards to access EU funds. These include crop diversification and pollinator habitat creation, but no specific emissions reduction targets. With no embedded climate standards to meet, CAP has led to increased livestock emissions. Funds intended to support livestock farmers have led to expanded output rather than sustainability.
The trouble for the agriculture sector is that it’s a victim, but also a perpetrator, of climate change. It is a major source of greenhouse gas emissions. While the energy sector’s emissions have decreased by 47% since 2005, agriculture’s have barely fallen. In the revised CAP, which is expected to go into effect in 2023, the agriculture sector will need to reduce emissions. Some EU member states are pushing back.
What’s War Got to Do with It? Certain agriculture unions and politicians hope to suspend or relax climate policies while Russia’s invasion of Ukraine fuels global food insecurity. Bas-Defossez has a problem with this argument. “They say we need to produce more and use land designated for biodiversity to grow crops to tackle food insecurity. But this argument isn’t very true. Most of the COP27 | 59
grain produced in Ukraine feeds animals. Many of the plants grown in Europe turn into biofuel, which is unsustainable. If we were to reduce our consumption and production of these products, food security would increase substantially.” Enrico Somaglia at the European Federation of Food, Agriculture, and Tourism Unions (EFFAT)—an organization which advocates for unions on the national and European levels—is a strong supporter of the EU climate agenda. “The agriculture sector is undergoing a massive revolution. There’s no alternative,” Somaglia explained. Many farmers are progressive. They just need the resources. He cautioned against suspending climate policies. “The current scenario exposes the vulnerabilities of our food system, including our dependence on imported gas, oil, synthetic fertilizers, antibiotics, and animal feed. Farm to Fork shows the path to a sustainable agro-food sector. Moreover, it sets goals for the medium term. We need to act now to reach them.”
Fighting for a Just Revolution EFFAT’s mission is to ensure a just revolution. They want socio-economic impact assessments to understand how employment will be affected by EU climate policy, and resources and oversight to ease any growing pains. EFFAT has negotiated bans on working in high temperatures and compensation for days lost during extreme weather events in a handful of countries. Somaglia cited a study which found an increase in accidents
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To make the food system sustainable by 2050, we will need to drastically reduce meat and dairy production. There will be job losses in slaughterhouses, processing plants, and farms. when temperatures exceed 30 °C (86 °F). EFFAT also pushes for clothing to protect workers from UV exposure and skin cancer. Tragically, Somaglia added, it’s often places that have witnessed worker fatalities that implement these policies. Bas-Defossez acknowledged the shortterm challenges of Farm to Fork. “To make the food system sustainable by 2050, we will need to drastically reduce meat and dairy production. There will be job losses in slaughterhouses, processing plants, and farms.” She also noted that Europe has the money to help workers adjust. European countries heavily invested in the hospitality industry during the pandemic, and over 55 billion euros are spent annually under the Common Agricultural Policy, she explained. Beyond money, the EU needs a global perspective. The Green New Deal cannot depend on extracting materials from other countries, preventing their own ecological transitions. Bas-Defossez wants to see Europe export the Green New Deal. Diplomacy is necessary to keep the EU economy sustainable and competitive. ***** About the author: Millie Brigaud is a Diplomatic Courier correspondent.
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No Security Without Climate Security By Anne-Marie Slaughter
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n July, CIA Director William Burns gave a 45-minute interview at the Aspen Security Forum. Only at the very end, following questions about the RussiaUkraine war, China, Taiwan, Iran, and Afghanistan, was Burns asked what the CIA can do to identify where climate change is most likely to cause conflicts to erupt. Burns’s answer was unequivocal. First, he noted that climate change is “an important priority for the CIA and the U.S. intelligence community.” He then said that while he considers China “the biggest geopolitical challenge that our country faces in the twenty-first century,” he also views climate change as the “biggest existential threat” to the United States. Existential risk, as the Stanford Existential Risks Initiative defines it, is a risk that “could cause the collapse of human civilization or even the extinction of the human species.” Burns probably had something less extreme in mind—perhaps a catastrophic event that would wreak irreparable harm and change life as we know it. But still, in this weeklong forum dedicated to national and international security discussions, no panel focused specifically and entirely on climate change. That’s not unusual. As Burns pointed out, climate change does not fit the traditional definition of a national-security threat. As such, it falls within the jurisdiction of other government departments. Yet if climate change poses an existential threat to the U.S., then the U.S. defense apparatus must participate in the fight against it. Under Burns’s leadership, the CIA has established a mission focused on helping “policymakers in the U.S. government understand the consequences of climate change in already fragile societies.” The National Security Council, the State Department, and the Pentagon all have units that focus on climate-change-related conflicts abroad. Still, what about the direct impact of climate change on the U.S.? Generals, after all, do not stop fighting wars when the fighting spreads from foreign to American soil.
Science-fiction writers have no trouble bringing the future home to the present. For example, Omar El Akkad’s 2017 novel American War opens with a map of the U.S. in 2075: Florida, New Orleans, New York City, Long Island, and Los Angeles are all underwater. Kim Stanley Robinson’s 2020 novel The Ministry for the Future begins with a heatwave in India that overwhelms the power grid and kills 20 million people. In the scenario Robinson imagines, temperatures in Uttar Pradesh reach a “wet bulb temperature of 42 degrees centigrade.” An extreme scenario? Consider that in California’s recent heatwave, temperatures in the Bay area and Sacramento Valley reached 46.6° Celsius (115.9°F) and that California prepared for brownouts and blackouts. As the thermometer breaks records, the prospect of hundreds of thousands of Americans dying in a heatwave does not seem far-fetched.
Climate change does not fit the traditional definition of a nationalsecurity threat. However, climate change is an existential threat, and the Biden administration and the U.S. national-security establishment must treat it like one. Perhaps the problem is that an existential “risk” is not yet an existential “threat,” whereas the war in Ukraine, Chinese militarism, and Iranian nuclear aspirations demand immediate attention. But tell that to the hurricane, fire, and flood victims who have suffered the consequences of catastrophic weather over the past decade. The Colorado River, Lake Mead, and the Great Salt Lake are disappearing now. Sea-level rise is already making itself felt in Norfolk and Miami. The future, as scientists keep telling us, is already here. To be fair, Congress and President Joe Biden have done more than any previous COP27 | 63
administration. With the Inflation Reduction Act, Biden has secured a historic legislative victory that will enable the U.S. to meet its international obligations to reduce carbon dioxide emissions. At the most recent United Nations climate change conference, Special Presidential Envoy John Kerry negotiated a crucial deal with the Chinese to allow the world to move forward with its climate commitments. Moreover, U.S. national-security officials have their hands full. The risk that Russia will use a nuclear weapon in Ukraine is real and rising, and violating the nuclear taboo could draw NATO countries into a nuclear great-power war that could wipe out all of humanity. A nuclear conflict with China would be equally deadly, and Iran’s acquisition of nuclear weapons would also lead to nuclear proliferation across the Middle East, effectively gutting the Nuclear Non-Proliferation Treaty and significantly increasing the risk of nuclear war and nuclear terrorism. Still, the real measure of how much importance the American government attaches to a particular threat is the amount of time and money it invests in addressing it, and I doubt that Biden and his advisers spend more than 10% of their time on preparing for the impact of climate change. The issue is one of perspective: national-security officials operate in a world of geopolitics, competition, and cooperation among countries. They are trained to deter, prevent, and fight wars or to negotiate peace with other governments, not to deal with global threats that transcend national borders. As the adage goes, when all you have is a hammer, every problem looks like a nail.
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Perhaps the problem is that an existential “risk” is not yet an existential “threat,” whereas the war in Ukraine, Chinese militarism, and Iranian nuclear aspirations demand immediate attention. Bill Burns got it right. Climate change is an existential threat, and the Biden administration and the U.S. national-security establishment must treat it like one. Doing so would require reallocating substantial funds from the military to government agencies that focus on building domestic resilience and civil protection. It would also require creating new security agencies whose mandate would be to address global threats. Minimizing the risk of climate change will not be easy, but we have no choice. To paraphrase Game of Thrones, a long and deadly summer is coming. If we do not rise to the challenge, many Americans will not survive. ***** About the author: Anne-Marie Slaughter, a former director of policy planning in the U.S. State Department, is CEO New America. Copyright: Project Syndicate, 2022.
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Flooding in Pakistan. Photo via Adobe Stock.
Pakistan is Flooded with Corruption By Blair Glencorse and Fayyaz Yaseen
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he scenes of the ongoing floods in Pakistan are devastating. Thousands have died, the livelihoods and lives of many other Pakistanis have been ruined, and millions of homes have been destroyed. An area the size of Colorado is under water and the relief and recovery effort could cost more than $10 billion. This is a climate-related disaster—of that there is no doubt—but the real problem at the heart of this devastation is corruption, not rainwater. As Mansoor Raza recently pointed out: “hazards are natural, disasters are not.” The Pakistani government has demonstrated time and again that it is unable to prepare for or handle its response to climate change with integrity, despite repeated opportunities to learn lessons. After the devastating earthquakes in northern Pakistan in 2005, the reconstruction authority mishandled billions of dollars meant for rebuilding schools. Likewise, after previous cataclysmic floods in 2010, the National Disaster Response Authority issued a long report about lessons to be learned on everything from capacity development to planning to response- very few of which have been translated into practice. Unauthorized construction, illegal changes in land use, and deforestation in floodprone areas have exacerbated risks of flooding in the country. Additionally, largescale exploitation of natural resources and rapacious capitalism by a small elite have undermined environmental sustainability. Uncontrolled population growth means more and more people live in flood-prone areas. Provincial irrigation departments have misused and misdirected funds meant for flood protection. More prosaic issues— like the lack of maintenance of canals and waterways by local governments—have further hampered water flows. All of these issues are at some level caused by corruption and a lack of accountability of those in power. Pakistan’s social contract has been torn apart to the point that, despite the fact that the country has faced more than 20 floods in its 75-year
history, there is still very little political will or incentive for decision-makers to be responsible to citizens for disaster management efforts. Pakistan is an old-boys club dominated by men. This perpetuates patronage and inequality. The fact that none of the senior management of the Federal Flood Commission are female, for example, bodes poorly for Pakistani women that are inevitably the most impacted by disasters.
The scenes of the ongoing floods in Pakistan are devastating. It is a climate-related disaster, but the real problem at the heart of this devastation is corruption, not rainwater. As has been in the case after past disasters, the country is now turning to the military to provide relief as it is the only institution that has the capacity to meaningfully organize and deliver services—something that only entrenches the role of the army in political life. While necessary in the shortterm, in the long-run this will perpetuate Pakistan’s political dysfunction and undermines Pakistani democracy. It is an open secret that the military top brass remain the arbiters of political power, which has been a key driver of political dysfunction since independence. Effective structures for coordination between federal, provincial, and community disaster management bodies are essential as are clear rules and procedures for aligning international aid. Countries like Costa Rica have done this well. Provisions to ensure the transparency of procurement and contracting of goods and services are paramount to avoid price gouging and corruption. Transparency of data related to budgets and spending so that Pakistani citizens can “follow the money” is also critical—billions of dollars are now flowing into systems that suffers from a lack of
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checks and balances. Mexico City and the Philippines have succeeded in this in the past. Additionally, all government and aid agencies in Pakistan should commit now to full and complete audits of all flood related funding. Planning with local civil society groups that truly understand the contexts, languages, and dynamics in communities that can cocreate solutions to problems quickly is also essential. Groups like Alkhidmat Foundation, Akhuwat and The Citizens Foundation are doing incredible work in badly affected areas of Sindh, South Punjab, and Balochistan—highlighting how these kinds of organizations should provide the backbone of any response. Citizens should also be brought into the monitoring and oversight of relief efforts in meaningful ways. In the longer-run, work with community and local organizations to better design, plan, and implement infrastructure projects and improve local health and education services can also improve resilience for future disasters. The impacts of corruption on climate disasters are not unique to South Asia. We have seen this time and again—from the earthquake in Haiti to the more than $2 billion in fraud after Hurricane Katrina. There are many incredible organizations and individuals working with integrity to respond to the floods in Pakistan. However, with climate change accelerating, these tragedies are only going to become more frequent. It is essential that countries build accountability systems now to prevent the worst effects. While it is ordinary Pakistanis suffering now, corruption exacerbates disasters everywhere. ***** About the authors: Blair Glencorse is Director of Accountability Lab. Fayyaz Yaseen is Director of Accountability Lab Pakistan.
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Investing in Renewable Energy Can Ease EU Reliance on Russian Gas By Mark Temnycky
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lthough first apparent in the late 2000s, as gas prices continue to rise across the European continent, Europeans are finally recognizing their dependence on Russian gas. To counter rising prices and the dependence on Russia for its energy sources, the European Union should pursue renewable energy options. This is critical not only to promoting green energy solutions in Europe, but to ensuring the geopolitical position of the EU vis-à-vis Russian aggression—particularly in light of Russia’s invasion of Ukraine. How significant is Europe’s reliance on Russia for gas, and what are the benefits of investing in and using renewable energy alternatives? In the late 2000s, Russian gas flowed into the heart of Europe through pipelines in Belarus, Poland, and Ukraine. These countries, however, entered a series of gas disputes. When the Belarusians and Ukrainians looked to alter their deals, the Russians often refused to cooperate with these countries—leading to a reduced flow of Russian gas and impacting the lives of millions of Europeans, especially in the winter months. Given the history of these gas disputes, Europe opted to construct new pipelines from Russia into Europe that would bypass Belarus and Ukraine—notably the Nord Stream 1, TurkStream, and Nord Stream 2 projects. As a result, gas consumption increased across the European continent, but as Western and Central Europe began to reduce their dependence on Eastern Europe, and as the Europeans received an abundance of Russian gas, the European continent became more reliant than ever on the Russian Federation. Today, this reliance has become a liability. In 2021, the European Union imported 45% of its natural gas from Russia. Then, when Russia invaded Ukraine, the Russians toyed with European gas supplies to try and force the Europeans to abandon their support for Ukraine. Numerous European countries are now implementing sanctions on Russian companies, organizations, and officials that support the war. In response, Russia has reduced its gas output to the
European continent. Due to this reduction in Russian gas, the Europeans have acknowledged that they will not be ready for the upcoming winter. According to Bloomberg, several countries are stockpiling gas as they prepare for a brutal winter. Meanwhile, other states are preparing for potential gas shortages that could lead to millions of households without power during the cold winter months and families not able to afford skyrocketing gas prices. There is, however, still time to ease these effects. This could be the perfect time for Europe to start transitioning to renewable and clean energy—leading to a reduction in overreliance on Russian gas and new energy alternatives for millions of Europeans that would be better for the environment.
To counter the dependence on Russia for its energy sources, the European Union should pursue renewable energy options. This is critical not only to promoting green energy solutions in Europe, but to ensuring the geopolitical position of the EU vis-à-vis Russian aggression. In the short term, Europe could diversify its energy consumption by purchasing natural gas from other countries. This would lead to an expanded energy market and the Europeans would not be held hostage to reduce gas flows and dramatic energy prices—as shown by Russia’s recent antics. It would also prevent Russia from establishing a monopoly over the European continent. The Europeans could then begin their transition to renewable and clean energy. Investing in clean energy technologies would make Europe a global leader in this area. It would also lead to numerous opportunities across the continent. This would create jobs as workers would COP27 | 71
build and maintain these energy sources. It would also stimulate various European economies—leading to economic growth when many countries are still recovering from the socio-economic impacts of the coronavirus pandemic. There are additional reasons why Europeans should switch to these alternatives. According to reports, electricity is becoming cheaper in countries that have renewable energy sources rather than those that rely on gas. This could reduce energy bills and allow Europe to create energy more efficiently and effectively. Pursuing clean energy alternatives also aligns with Europe’s mission to create a greener and more stable planet. The European Union recently announced its commitment to reducing carbon emissions by 55% by 2030. While this may be an ambitious goal, the dramatic increase in gas prices may be the incentive required to take this goal seriously. Aggressively pursuing a transition to renewable energy will allow Europe to reach this goal. This transition is already under way. According to a list of findings published by Forbes, renewable energy generated 40% of electricity across Europe in the first half of 2020. In comparison, fossil fuels only generated 34%. Completing this transition, however, will not be easy. European countries such as Germany and Italy rely heavily on Russian gas. They will require time to construct the necessary infrastructure for clean energy alternatives. Other countries will be able to replace gas more easily. For example, Spain and Portugal buy limited
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Investing in clean energy technologies would make Europe a global leader in this area. It would also lead to numerous opportunities across the continent . quantities of Russian gas. The wide ranging energy situation across Europe has made it difficult for the EU to determine how it will proceed with its energy policy. Nonetheless, the Europeans should collaborate on how to make this transition. Overall, Europe is in for a rude awakening as it prepares for a cold winter and underserviced amount of gas. Millions of families are struggling to pay for the dramatic increase in Russian gas prices and many more will suffer during the dead of winter. If the Europeans collaborated to construct reliable energy alternatives, they could alleviate the socio-economic damages that are expected this winter. This, in turn, will lead to greater financial stability and greater energy security as European countries regain control over their clean energy sources rather than relying on fossil fuels provided by foreign powers. ***** About the author: Mark Temnycky is a nonresident fellow at the Atlantic Council’s Eurasia Center.
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