EIU: Russia-Ukraine war to derail climate change response

MANILA, Philippines — The continuing global tension is expected to make the transition to clean energy more expensive and may likely derail an important move toward addressing worsening climate change.

In a briefing late Wednesday, UK-based The Economist Intelligence Unit (EIU) said the implications of the Russia-Ukraine war to the world’s fight against climate change are leaning to the negative in the short term.

EIU industry operations director Ana Nicholls said that challenges to clean energy transition are on the rise amid rising costs of commodities, such as energy prices.

Unfortunately, net importing countries such as the Philippines are bearing the brunt of continued escalation of the war.

About 50 percent of the country’s energy needs are still being imported, such as coal and oil, making the Philippines among the most vulnerable to price shocks.

“In theory, net energy importers should speed up their investment into renewables to try and reduce their dependence on oil and gas reserves. While they are trying to do that, there may be some backpedaling on some of these decarbonization goals in the short term,” Nicholls said.

The government said there is a need to bring down the country’s dependence on energy imports by developing renewable energy and indigenous sources.

However, only 29 percent of the country’s current energy mix comes from renewables. The Department of Energy wants to bring it up to 35 percent by 2030 or to 50 percent by 2040, as outlined in the Renewable Energy Roadmap.

But Nicholls argued that even with the best will in the world, governments would face difficulties in accelerating the rollout of renewable power.

Nicholls said higher energy prices, combined with the need to invest in liquefied natural gas capacity or fossil fuel production, would reduce the investment available for renewables.

Further, monetary policy tightening will not help, as pending higher interest rates in many economies may hamper investments in nascent technologies toward clean energy.

“There will also be quite a lot of supply chain blockages that actually impact the renewable sector. The war has pushed up prices for lots of base metals,” Nicholls said.

For one, prices of copper and zinc used for solar and wind farms have increased, while costs of nickel and lithium, which are crucial for electric vehicle batteries, have also climbed since the invasion.

“If these prices remain high for a long time, it will make the transition quite costly and make it harder to reduce the use of dirty fossil fuels,” Nicholls said.

The Intergovernmental Panel on Climate Change has warned that even if countries keep all of their emissions goals at the moment, these will not stop global temperatures from rising.

This will only mean that if the war becomes a reason for backtracking on climate goals, the world will face dire consequences, Nicholls said.

“It is really clear how dangerous it is for the world to rely on fossil fuels,” she said.