Putin could save us from global warming

Russian President Vladimir Putin just did something extraordinary: take action that will maximize the global transition to clean, renewable energy. Indeed, it alone can save us from global warming.

Putin, of course, has no idea of ​​his future as a preeminent eco-warrior. No matter. His decision to starve Europe of natural gas this winter probably accelerated the European Union’s avoidance of fossil fuels. If that’s not enough to prevent planetary disaster, his invasion of Ukraine will finish the job by unleashing widespread “green” snowballs.

Economic crises stimulate nations, their citizens and their national businesses. From July to December 1940, for example, the United States produced only 3,611 military aircraft. Production in 1944 increased at least sevenfold to nearly a hundred thousand planes. The increase came in response to Japan’s attack on Pearl Harbor and Germany’s declaration of war against us. During the Second World War, Ford Motor Co. produced nearly 90,000 aircraftalmost 9,000 of them at his new Willow Run factory, originally designed to build cars, on its own.

The dramatic shift to a war stance by American manufacturers happened in less than 48 months. No one, and certainly not the Germans or the Japanese, imagined that we could achieve this industrial and economic transformation so quickly.

The battle to stop global warming requires a similar effort. Indeed, it may be a greater challenge than any previous collective effort to confront a universal existential threat.

The public mobilization needed to fight climate change, however, failed for decades. We have had no equivalent of Pearl Harbor, D-Day or the Battle of the Bulge to galvanize public opinion – until now.

Before Russia invaded Ukraine last week, European citizens, especially those in Germany, were ready to accept Russian-supplied natural gas as “somehow green.” In recent weeks, the European Union environment ministers have even proposed exempting natural gas of any aggressive emission reduction measures. Gerhard Schröder, former German Chancellor and chair of the Nord Stream shareholders’ committee, vehemently supported Nord Stream 2the pipeline that would double Russian gas exports to the region.

The brutal invasion of Ukraine changed everything.

Olaf Scholz, the new German Chancellor, has put the Nord Stream 2 on ice. Robert Habeck, the country’s vice chancellor and minister for economic affairs and climate action, has warned Russia that Germany will permanently turn away from Russian oil and gas if those supplies are cut off.

Meanwhile, EU officials in Brussels are finalizing the details of their “carbon border adjustment mechanism.” The CBAM is the economic nuclear bomb of the union. Once enacted, it will impose tariffs on imports of carbon-intensive goods such as steel and cement. In the EU’s own words, “the CBAM will equalize the price of carbon between domestic products and imports and ensure that EU climate objectives are not undermined by the relocation of production to countries with less ambitious”. Putin and his advisers have been pushing back against the CBAM for months because under its restrictions Russia would be the biggest loser. Indeed, as the CBAM gained momentum last spring, Russia’s stance toward the EU and Ukraine grew more strident.

Igor Sechin, CEO of Russian oil company Rosneft and one of the few people in whom Putin seems increasingly isolated, acknowledged the threat. As stated, hetells the Kremlin that carbon taxes at borders such as those of the European Union could inflict far greater damage on the Russian economy than sanctions.

Bloomberg’s John Ainger wrote in August 2021 that the Russians would face a CBAM impact of around €600 million by 2035, falling mainly on its iron and steel exports. His calculations are dated. CBAM taxes and other economic measures taken will now be much more dramatic, as will the actions of those working to accelerate the green revolution.

We can expect, for example, that Europeans will mobilize in the coming years to modernize old and inefficient houses, buildings and offices, thus reducing their heating needs by half. EU and European countries, following the example of Norway, will probably be adopt economic incentives and regulations aimed at removing diesel and gasoline-powered cars and trucks from the road.

Actions in Europe should draw other countries in its wake. Europe is China’s largest trading partner. To preserve its market, China will probably act quickly to reduce the use of fossil fuels, especially since Russia no longer offers it any economic opportunity. The United States will also be drawn in despite protests from Republicans and Democratic Senator Joe Manchin of West Virginia. In this country, the effort will probably be be championed by 21st century tech titans googleAmazon, Microsoftand Tesla because these companies understand the seriousness of the climate crisis and have rushed to lead the response through their actions.

Winston Churchill once said, “Never let a good crisis go to waste. Unknowingly, Vladimir Putin has created a crisis that, despite its terrible immediate consequences, could ultimately prepare the world to solve a different kind of universal existential threat.

Philip K. Verleger Jr. is the founder of the economic consulting company PK Verleger LLC.

Teresa H. Sadler