Vlad the Decarbonizer

Vladimir Putin’s invasion of Ukraine has been a humanitarian catastrophe. Perhaps 100,000 Ukrainian soldiers have been killed or wounded, along with 30,000 dead civilians, many cruelly tortured and murdered by the invaders. Vast regions of eastern Ukraine have been utterly laid to waste, and much of the rest badly damaged from the constant bombing of civilian infrastructure — a war crime. Russian forces, meanwhile, have suffered an estimated 180,000 casualties.

However, there is something of a silver lining here. The war has kicked off a crash decarbonization program across Europe, and added big pressure to turn away from fossil fuels across the world. It seems even over the short term the war’s effect on greenhouse gas emissions has been negligible, and will result in major cuts in coming years.

When Putin first ordered the invasion, many predicted that it would be a climate disaster, at least for the first year or so. Without cheap Russian gas, Europe would be forced to turn back to filthy coal to keep the lights on, and emissions would soar. “At least in the short and medium term, this is a disaster for the struggle against climate change … In the short and medium term, I think you’ll see a flight back to coal,” said foreign policy analyst Anatol Lieven when the invasion commenced, and I agreed.

Remarkably, this didn’t happen. As Will Mathis and Akshat Rathi write at Bloomberg, the EU energy strategy has been threefold: buying up as much possible imported liquid natural gas (LNG), mainly from the United States, piling investment into renewable energy, and replacing gas boilers and furnaces with heat pumps. In 2022, solar investment increased 35 percent compared to 2021, wind investment increased 62 percent, and battery storage increased 78 percent. Meanwhile, heat pump installations increased by about a third, which (along with other efficiency measures) enabled a 13 percent drop in gas consumption.

Now, coal use did increase modestly, which is why EU emissions only declined slightly over these two years. But as renewables keep coming online, that coal and some gas will be displaced. Electricity produced by carbon fuels in Europe is projected to drop by a whopping 43 percent in 2023.

This policy mix is quite close to what climate hawks have been demanding for decades now. The EU has proved it can work, and it can be done very quickly.

At any rate, the EU is probably conducting the most frantic decarbonization in the world, with the possible exception of China —though the U.S. did pass the largest climate bill in history last year, the effects of which are only just starting to be felt. But Europe’s panic buying of LNG has put sustained upward pressure on gas prices across most of the world. What’s more, given how it has cut itself off from Russian gas, and how it would take Russia years and billions in spending to replace its export infrastructure, that price pressure will persist for years.

This means that renewables are about to do to natural gas what natural gas did to coal. Back in 2007, coal accounted for half of American utility-scale electricity production. That production figure has since fallen by about 55 percent, mostly thanks to cheap fracked natural gas. But from 2009-2019, the price of wind and solar fell by 70 and 89 percent respectively, and the amount of electricity they produce in the U.S. has roughly tripled since 2015. There is every reason to think that those prices will continue to decline for at least the next decade. In locations with favorable conditions, renewables were already cheaper than gas by 2019 or 2020. Now thanks to Putin, they are much cheaper — 33 to 44 percent cheaper, as of last October. Soon utilities around the world will discover that running their existing natural gas fleets will be more expensive than replacing them with renewables, especially when one factors in the cost of climate change and illness caused by airborne pollution.

Finally, with the ongoing meteoric rise of electric vehicles, that zero-carbon power will start biting seriously into oil consumption. In countries like Norway, it’s already happening.

Again, this story is not all rosy. Price increases have created gas shortages in countries like Pakistan that can’t afford to compete. But even this is showing one of the enormous upsides of renewable power: relative price stability. Renewable power production is somewhat erratic depending on the weather, of course, but most of the expense of wind and solar is in the purchase and installation. Afterwards maintenance costs are predictable and production reasonably easy to forecast, particularly at utility scale.

Carbon power, by contrast, relies on a continual supply of mined commodities traded in a global market where prices can and do gyrate wildly based on the business cycle, discovery or depletion of deposits, movements in financial markets (if not speculator chicanery), and as we’ve learned this year, the lunatic depredations of the dictators who control most global supply.

A lot of American and European firms bet heavily on the belief that cheap gas coming from Russia and American fracking would last forever. That hard-learned lesson will incentivize nations to avoid carbon power to avoid price risk, even if it costs slightly more up-front or requires difficult grid reforms.

It is perhaps a very grim poetic justice that Putin’s monstrous war of aggression has knocked the global carbon fuel market that underpins his regime into rapid and terminal decline. It may be a decade or two before Russia, Saudi Arabia, the U.A.E., and other brutal dictatorships that prop themselves up with carbon profits start facing serious financial pressure. But it will happen, and few nations in history have deserved it more.