The war in Ukraine is fanning the flames of inflation across the world and may cause a famine in Africa and elsewhere. However, an eventual peace dividend may help reduce global warming. Let me explain.
The terrible death, suffering and destruction in Ukraine has many far-reaching local as well as global consequences. International sanctions have fueled energy cost inflation and will accelerate the transition to renewables particularly across Europe.
I also hope it will accelerate the small-scale nuclear fusion technology that is rapidly emerging as a remarkable energy possibility. Fusion does not have the scale and long-term waste challenges of fission. Many very well-funded projects are making remarkable progress, mimicking the sun and how it generates power.
Stresses on supply chains have increased as the world has begun to understand how much the West relies on key Russian exports from energy and food to metals. Many of these including nickel, lithium, palladium and platinum, are key for many green energy components including those for solar panels and electric vehicle batteries. The raw material cost of Tesla battery pack is estimated to have increased by $7,000 this year.
Europe, dependent on Russian energy, as well as the US will accelerate their push into renewables. The UK may well increase its domestic oil and gas output. Some activists will howl. The reality is that during this energy transition, it is environmentally better to use North Sea oil and gas rather than ship energy from the Middle East.
Fertilizer production relies on natural gas, UK costs have more than doubled to £1000 a tonne as the Northern Hemisphere enters its crucial planting season. Farmers may be reluctant or unable to commit the necessary capital to increased input costs when sales prices are so volatile.
The Ukraine is one of the worlds key grain exporters, particularly to Africa. Russia’s invasion is causing air, ground, and water pollution that will be long-lasting as well as massive infrastructure destruction that will likely prevent normal farming activity.
We are already seeing food price rises similar to those in 2007 that heralded the Arab spring as well as unrest across the Western World. If this season’s crop in Ukraine is not planted soon, then next year it will result in global grain shortages and famine in Africa.
Devastated by the human suffering of the Ukraine war, I am hopeful that eventual peace can help us change our relationship to the natural world on which we rely.
Let’s get busy repairing the future.
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