Ukraine and the Geopolitics of the Renewable Transition

Russia has caused a sudden upheaval in Europe’s natural gas supply. When the dust settles, how will the shakeup affect global decarbonization plans?

No comments

Angus Soderberg

Energy is a central component of nearly all parts of the economy. Everything from expansive global supply chains down to taking a bus to school in the morning relies on energy predominantly provided by fossil fuels. Traditionally, the global energy market is a delicate geopolitical balance between supply from nations rich in oil and natural gas and unremitting demand from industrial powerhouses and developing nations alike. Russia is a centerpiece in this carbon economy, supplying about 40% of the EU’s natural gas consumption and nearly 100% for Eastern European countries such as Finland, Estonia, and Bulgaria. Russia also supplies a large quantity of Europe’s oil and coal.

Putin’s invasion of Ukraine has not only highlighted the problem of relying heavily on one country for energy, but also the importance of energy diversification for a country’s security. The war in Ukraine has the potential to expedite Europe’s transition to renewable energy by elevating the EU’s concerns about the source of its energy to the security arena. However, the reverberations of such an energy transition are anything but straightforward and will reach beyond Europe’s borders.

A transition to renewable energy has been underway in Europe, with the EU pledging in 2021 to increase the share of renewables in their energy portfolio to 40% by 2030. After the Russian invasion of Ukraine began on February 24th, 2022, the renewable energy transition’s momentum has accelerated. Germany, a country which relies heavily on Russian gas, is at the forefront. Recently appointed Chancellor Olaf Scholz has halted construction of the Nord Stream 2 natural gas pipeline in favor of solar, wind, and nuclear energy. This move is complemented by an ambitious plan to receive 100% of the country’s energy from renewable sources by 2035. However, to meet immediate energy demands, Germany is also recommissioning coal plants scheduled to be shut down this year.

More broadly, the EU has hurried plans to wean Europe off Russian coal and oil before 2030. The plan seeks not only to decouple the EU’s energy sector from Russia, but to synchronize non-EU states like Moldova, Georgia, and Ukraine with the rest of Europe’s electric power grid. Such a move will facilitate each country’s clean energy transition and reduce their reliance on Russia. In more ways than one, Russia’s war with Ukraine is uniting Europe.  

Even with Europe rallying to diversify energy sources, the continent’s shift towards renewable energy is not entirely secure. Efforts to do away with Russian gas could increase reliance on local coal mines and resurrect the search for new oil and gas. Indeed, the war in Ukraine provides an excuse for proponents of coal to keep existing coal mines running.

Further, regulatory structures have not caught up to Europe’s renewable ambitions; it still takes nearly seven years to get approved to build a wind farm. However, it is unlikely that these barriers would force a pivot away from a longer-term transition to renewable energy because both investment and infrastructure for renewables are quickly becoming cheaper than their fossil fuel counterparts.

From a strategic standpoint, a European renewable energy transition is the greatest threat to Russian market power. Folding on the Nord Stream 2 pipeline only puts a small dent in Russia’s market power. However, a swift transition away from fossil fuels would force Putin to scramble for new buyers outside of Europe. In other words, renewable energy acts as political leverage for the EU.

The effects of both a clean energy transition and the war in Ukraine will reverberate around the globe, altering the global distribution of market power. A renewable transition will reshape geopolitics most broadly through the creation of new supply chains and dependence on new resources. The clean energy transition is situated in the current context of competing autarkic and globalist forces. Autarky is linked with economic protectionism and closed economies, but economic self-sufficiency is highly dependent on energy self-sufficiency. Wind, solar, and nuclear energy are often characterized as autarkic forces because they produce energy locally and do not require major inputs of raw materials from abroad.

However, the global distribution of materials needed to store energy and build renewable infrastructure means true autarkies are unlikely to emerge in our world. Further, in most cases, an autarky would decrease the diversity of a nation’s energy sources, leaving it more vulnerable. Therefore, a future clean energy transition may increase autarkic forces, but will not eliminate the global economy we depend on. 

Competition between autarkic and globalist forces will be influenced by the weakening of supply chains upon which petro-states built their economies. As the value of coal and oil drops,  the value of lithium, cobalt, indium, and other rare earth minerals needed for battery storage will rise. As Europe rushes to transition to renewables, supply shortages may occur as demand ratchets up. Currently, China has the largest share of the world’s rare earth minerals processing exports, and with greater movement toward renewables, the country may see a significant increase in market power. Countries like Russia may lower prices to entice other countries to continue to consume fossil fuels.

Interestingly, Russia also has significant deposits of rare earth minerals and may be able to weather a renewable transition in the long term. On the other hand, renewable technology supply chains may provide an avenue for countries to collaborate. For example, renewable energy has serious diplomatic potential to foster shared connection between the U.S. and China.

Dependence on a new set of raw materials will shift costs and benefits from where they were previously allocated by the carbon economy. In fact, we may not even escape some of the most destructive elements of a fossil fuel economy. New mining projects accompanying the quest for energy security will have their own environmental consequences and fragile global supply chains. Issues similar to those raised by cobalt mining practices in the Congo designated for Chinese and U.S. energy are likely to become more frequent. However, it is still up for debate whether or not we will see a new “resource curse” in countries with an abundance of rare earth minerals. While important for limiting carbon emissions, which lies at the heart of our climate crisis, those looking to renewables to solve all our environmental problems will be disappointed. 

Ultimately, continued reliance on harmful mining and export practices illustrates the limits of technological solutions to environmental problems. In a perfect world, we would be able to step outside of extractive practices that result in pollution and environmental degradation and into a new relationship with the Earth. However, as in politics more broadly compromise will stand-in for justice, and a reduction in emissions might be the best we can get.⬩

Share a comment

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s