Much of the conventional wisdom about Europe’s current natural-gas crisis – triggered by reduced deliveries from Russia – rests on two assumptions: that the German economy depends on cheap Russian gas, and that this bet has gone spectacularly wrong. But while German industry is strong, and the country imports a lot of natural gas from Russia, a closer inspection of the numbers and economics involved does not support the prevailing narrative.
For starters, natural gas does not play a large enough role to drive an industrial economy. In 2019, gas imports via pipeline cost Germany $30 billion, representing only 0.75% of its GDP, and the overall value of the country’s gas consumption was below 2% of GDP. These modest ratios are similar across industrialised economies and suggest that cheap gas imports are highly unlikely to be a major growth factor. Moreover, even though gas consumption has stagnated in Germany and most of Western Europe over the past two decades, the economy grew, albeit slowly.
The argument that cheap Russian gas might have favoured Germany more than other countries also is not backed up by the numbers. In 2019, Germany accounted for only about 2.3% of global natural-gas consumption, but 4.5% of world GDP. Germany’s gas intensity per unit of GDP is thus about one-half of the global average, much lower than that of the United States and many other industrialised countries, including Japan and South Korea.
European economies tend to be thriftier in their energy use than the rest of the world. But even within Europe, Germany performs well, with lower gas consumption per unit of GDP than other large European economies, such as Italy and Spain. This is surprising since these two Mediterranean countries have much less need for heating in winter (and air conditioning in summer requires an order of magnitude less power than heating). Only France, with its large nuclear-power sector, is less dependent on gas.
A similar picture emerges from related metrics, such as the value of energy imports as a percentage of GDP, or gas usage for industrial purposes as a share of industrial value added. All these indicators show that the German economy uses energy less intensively than most others.
The idea that German industry gained an advantage from access to cheap Russian gas ignores the reality that there is a European gas market with, up to now, only small differences in wholesale prices across countries. One could of course argue that Russia sold its energy cheaply to Germany to make the country dependent. But the data challenge the common perception that Germany receives cheap gas.
Over the past decade, German industry has paid about 10% more for natural gas than its competitors in other major European economies. Supplies from North Sea fields have enabled British industrial firms to pay even less than their continental peers, but this does not appear to have helped them much.
The implication is that Russia obtained a non-economic benefit (German dependence on its gas supplies) for almost no cost. The inverse of this is that Germany experienced a loss of energy independence without gaining a noticeable economic advantage.
The one large economy that is both energy-intensive and has cheap natural gas is the United States. The average US citizen uses more than twice as much natural gas as a European – 25 megawatt-hours per year for the US, compared to about 10MWh for European countries. Moreover, US natural-gas prices have been somewhat lower than German or EU prices for most of the past two decades, and are now only a fraction of the European price, as European prices have increased by a factor of five, whereas US prices have changed little. Despite this cost advantage, however, the manufacturing industry of the US – and that of the United Kingdom – has not grown particularly strongly.
Adjusting to a world without Russian gas is of course a major problem for Europe. Yet, although Germany seems more vulnerable because it used to receive a large share of its gas from Russia, this can change quickly. Germany is building new regasification capacity in record time to allow the country to import the quantities of liquefied natural gas needed to fill the gap between lower Russian supplies and domestic demand, which is already falling because of high prices.
Once this import capacity has been constructed, Germany will be in the same situation as its European neighbours, which also have to bid for LNG. Prices are likely to stay high for some time. But with an energy intensity below the EU average, Germany should be able to bear the burden slightly better than Italy, Spain, and some Eastern European countries. France, of course, will be much less affected, at least if its nuclear reactors can resume full production.
We should also not forget the global picture. Bottling up a large percentage of Russian gas (which is what will happen if Europe no longer buys from Russia) increases the global gas price, which affects Asian countries as well, because they compete with Europe on LNG. South Korea and Japan have a higher energy intensity than Europe, and even China imports large quantities of LNG, at a price similar to what European countries pay.
Expensive energy, particularly natural gas, poses a difficult economic and political challenge for all energy-importing industrialised countries. Only the US and some other smaller energy producers such as Norway, Canada, and Australia benefit from this situation. But the data suggest that Germany is better placed to weather this crisis than most of its main competitors. — Project Syndicate

* Daniel Gros is a member of the board and a distinguished fellow at the Centre for European Policy Studies.

ثمّن الخبير الدّولي في مجال الطّاقة، ​رودي بارودي​، “الجهود الّتي تقوم بها ​الولايات المتحدة الأميركية​ ولا سيّما ​الخارجية الأميركية​، عبر الوسيط آموس هوكستين، من أجل تسوية النّزاع الحدودي البحري بين ​لبنان​ و​إسرائيل​”، لافتًا إلى أنّ “هذه الجهود بدأت تتّسم بالإيجابيّة، ما سيمكّن لبنان في خلال شهر على أبعد تقدير من الدّخول فعليًّا في عمليّة ​التنقيب​ عن ​النفط والغاز​، ولا سيّما في البلوكات الجنوبيّة، وتحديدًا البلوك رقم 9 حيث حقل ​قانا​”.

وأشار، في تصريح، إلى أنّ “الطّرح الإسرائيلي للمرور بالبلوك اللّبناني رقم 8، هو مجرّد مناورة ذكيّة لهدف آخر، ذلك أنّ اتفاقيّة الغاز بين إسرائيل وقبرص واليونان، الّتي تمتدّ إلى إيطاليا وكانت قد وُقّعت في 3 كانون الثّاني من العام 2020، لن ترى النّور، باعتبار أنّ لا جدوى اقتصاديّة منها، لأنّه مهما كانت كميّة الغاز المنتَجة حاليًّا، فلن تكون مبرّرًا لإنفاق من 12 إلى 14 مليار يورو، لبناء خطّ أنابيب بقطر 48 إنشًا لمسافة 1125 ميلًا”.

وجدّد بارودي الإشادة بـ”إيجابيّة المفاوضات الجارية حاليًّا، وبالجهود المبذولة لحماية حقوق لبنان على الصّعيد الدّولي”، مركّزًا على أنّ “أكثر الأخبار إيجابيّةً، هي أنّ أركان ​الدولة اللبنانية​ متّفقون على التوجّه ذاته”. وأعرب عن تفاؤله بأنّ “الاتّفاق سيصل إلى خواتيم مشجّعة ترضي جميع الجهات”.

Russia delivered less gas to Europe yesterday in a further escalation of an energy stand-off between Moscow and the European Union that will make it harder, and costlier, for the bloc to fill up storage ahead of the winter heating season.
The cut in supplies, flagged by Gazprom earlier this week, has reduced the capacity of Nord Stream 1 pipeline — the major delivery route to Europe for Russian gas — to a mere fifth of its total capacity.
Nord Stream 1 accounts for around a third of all Russian gas exports to Europe.
On Tuesday, EU countries approved a weakened emergency plan to curb gas demand after striking compromise deals to limit cuts for some countries, hoping lower consumption will ease the impact in case Moscow stops supplies altogether.
The plan highlights fears that countries will be unable to meet goals to refill storage and keep their citizens warm during the winter months and that Europe’s fragile economic growth may take another hit if gas will have to be rationed.
Royal Bank of Canada analysts said the plan could help Europe get through the winter provided gas flows from Russia are at 20-50% capacity, but warned against “complacency in the market European politicians have now solved the issue of Russian gas dependence.”
While Moscow has blamed various technical problems for the supply cuts, Brussels has accused Russia of using energy as a weapon to blackmail the bloc and retaliate for Western sanctions over its invasion of Ukraine.
Kremlin spokesman Dmitry Peskov said Gazprom was supplying as much gas to Europe as possible, adding that sanctions-driven technical issues with equipment were preventing it from exporting more.
Yesterday, physical flows via Nord Stream 1 tumbled to 14.4mn kilowatt hours per hour (kWh/h) between 1000-1100 GMT from around 28mn kWh/h a day earlier, already just 40% of normal capacity.
The drop comes less than a week after the pipeline restarted following a scheduled 10-day maintenance period.
European politicians have repeatedly warned Russia could stop gas flows completely this winter, which would thrust Germany into recession and send prices for consumers and industry soaring even further.
The Dutch wholesale gas price for August, the European benchmark, jumped 9% to 205 euros per megawatt hour yesterday, up around 412% from a year ago.
German finance minister Christian Lindner said he was open to the use of nuclear power to avoid an electricity shortage.
Germany has said it could extend the life of its three remaining nuclear power plants, accounting for 6% of the country’s overall power mix, in the face of a possible cut-off of Russian gas.
Klaus Mueller, head of Germany’s network regulator, said the country could still avoid a gas shortage that would prompt its rationing. Germany, Europe’s top economy and its largest importer of Russian gas, has been particularly hit by supply cuts since mid-June, with its gas importer Uniper requiring a 15bn euro ($15.21bn) state bailout as a result. Uniper and Italy’s Eni both said they received less gas from Gazprom than in recent days.
Mueller issued another plea to households and industry to save gas and avoid rationing.
“The crucial thing is to save gas,” Mueller said. “I would like to hear less complaints but reports (from industries saying) we as a sector are contributing to this,” he told broadcaster Deutschlandfunk.
German industry groups, however, warned companies may have no choice but cut production to achieve bigger savings, pointing to slow approval for replacing natural gas with other, more polluting fuels.
Mercedes-Benz chief executive Ola Kaellenius said a mixture of efficiency measures, increased electricity consumption, lowering temperatures in production facilities and switching to oil could lower gas use by up to 50% within the year, if necessary.
Germany is currently at Phase 2 of a three-stage emergency gas plan, with the final phase to kick in once rationing can no longer be avoided.

Businesses, investors, and governments that are serious about fulfilling net-zero emissions pledges before 2050 should be rushing to protect, conserve, and regenerate the natural resources and ecosystems that support our economic growth, food security, health, and climate. Yet there appear to be worryingly few trailblazers out there.
Worse, we are quickly running out of time. The science makes clear that to avoid the most catastrophic effects of climate change and to build resilience against the effects that are already inevitable, we must end biodiversity loss before 2030. That means establishing lasting conservation for at least 30% of land and sea areas within eight years, and then charting a course toward living in harmony with nature by 2050.
Though the challenge is massive, ignoring it makes no sense from a business perspective. A World Economic Forum white paper estimates that nature-positive policies “could generate an estimated $10tn in new annual business value and create 395mn jobs by 2030.” Among other things, such policies would use precision-agriculture technologies to improve crop yields – diversifying diets with more fruit and vegetables in the process – and boost agroforestry and peatland restoration.
A nature-positive approach can also be more cost-effective. For example, the Dasgupta Review (the Final Report of the United Kingdom’s Independent Review on the Economics of Biodiversity) finds that green infrastructure like salt marshes and mangroves are 2-5 times cheaper than grey infrastructure such as breakwaters.
Nonetheless, private-sector action is lagging, including in economic sectors where the health of value chains is closely tied to that of nature. That is one key finding from an analysis just released by the UN Climate Change High-Level Champions, Global Canopy, Rainforest Alliance, and others.
Out of 148 major companies assessed, only nine – or 6% – are making strong progress to end deforestation. Among them are the Brazilian paper and pulp producer Suzano and five of the largest consumer goods companies: Nestlé, PepsiCo, Unilever, Mars, and Colgate-Palmolive.
Unilever, for example, is committed to a deforestation-free supply chain by 2023, and thus is focusing on palm oil, paper and board, tea, soy, and cocoa, as these contribute to more than 65% of its impact on land. Nestlé has now made over 97% of its primary meat, palm oil, pulp and paper, soy, and sugar supply chains deforestation-free. And PepsiCo aims to implement regenerative farming across the equivalent of its agricultural footprint by 2030, and to end deforestation and development on peat.
These are positive steps, but they represent exceptions, rather than any new normal. Moreover, the financial sector has also been slow to turn nature-positive. Since the COP26 climate-change conference in Glasgow last year, only 35 financial firms have committed to tackle agricultural commodity-driven deforestation by 2025. The hope now is that more firms will join the deforestation commitment by COP27 this November. Under the umbrella of the Glasgow Financial Alliance for Net Zero, 500 financial firms (representing $135tn in assets) have committed to halving their portfolios’ emissions by 2030 and reaching net zero by 2050. And now, the Alliance has issued new net-zero guidance that includes recommended policies for addressing deforestation.
Nature functions as a kind of global capital, and protecting it should be a no-brainer for businesses, investors, and governments. The World Economic Forum finds that “$44tn of economic value generation – over half the world’s total GDP – is moderately or highly dependent on nature and its services.” But this profound source of value is increasingly at risk, as demonstrated by the current food crisis, which is driven not just by the war in Ukraine but also by climate-related disasters such as drought and India’s extreme heatwave, locust swarms in East Africa, and floods in China.
Businesses increasingly have the tools to start addressing these kinds of problems. Recently, the Science Based Targets initiative released a methodology for targeting emissions related to food, land, and agriculture. Capital for Climate’s Nature-Based Solutions Investment platform helps financiers identify opportunities to invest in nature with competitive returns. And the Business for Nature coalition is exploring additional moves the private sector can make.
Governments have also taken steps in the right direction. At COP26, countries accounting for over 90% of the world’s forests endorsed a leaders’ declaration to halt forest loss and land degradation by 2030. And a dozen countries pledged to provide $12bn in public finance for forests by 2025, and to do more to leverage private finance for the same purpose. They can now start meeting those commitments ahead of COP27 in Sharm El-Sheikh, by enacting the necessary policies, establishing the right incentives, and delivering on their financial promises.
Meanwhile, the UN-backed Race to Zero and Race to Resilience campaigns will continue working in parallel, helping businesses, investors, cities, and regions put conservation of nature at the heart of their work to decarbonise and build resilience. The five strong corporate performers on deforestation are in the Race to Zero, and the campaign’s recently strengthened criteria will pressure other members to do more to use biodiversity sustainably and align their activities and financing with climate-resilient development.
The world is watching to see if the latest promises of climate action are robust and credible. By investing in nature now, governments and companies can show that they are offering more than words. – Project Syndicate

• Nigel Topping is the United Kingdom’s High-Level Climate Champion for COP26 in Glasgow. Mahmoud Mohieldin is Egypt’s High-Level Climate Champion for COP27 in Sharm El-Sheikh.

One morning in early June, a fire broke out at an obscure facility in Texas that takes natural gas from US shale basins, chills it into a liquid and ships it overseas. It was extinguished in 40 minutes or so. No one was injured.

It sounds like a story for the local press, at most — except that more than three weeks later, financial and political shockwaves are still reverberating across Europe, Asia and beyond.

That’s because natural gas is the hottest commodity in the world right now. It’s a key driver of global inflation, posting price jumps that are extreme even by the standards of today’s turbulent markets — some 700% in Europe since the start of last year, pushing the continent to the brink of recession. It’s at the heart of a dawning era of confrontation between the great powers, one so intense that in capitals across the West, plans to fight climate change are getting relegated to the back-burner.

In short, natural gas now rivals oil as the fuel that shapes geopolitics. And there isn’t enough of it to go around.

It’s the war in Ukraine that catalyzed the gas crisis to a new level, by taking out a crucial chunk of supply. Russia is cutting back on pipeline deliveries to Europe — which says it wants to stop buying from Moscow anyway, if not quite yet. The scramble to fill that gap is turning into a worldwide stampede, as countries race to secure scarce cargoes of liquefied natural gas ahead of the northern-hemisphere winter.

The New Oil?

Germany says gas shortfalls could trigger a Lehman Brothers-like collapse, as Europe’s economic powerhouse faces the unprecedented prospect of businesses and consumers running out of power. The main Nord Stream pipeline that carries Russian gas to Germany is due to shut down on July 11 for ten days of maintenance, and there’s growing fear that Moscow may not reopen it. Group of Seven leaders are seeking ways to curb Russia’s gas earnings, which help finance the invasion of Ukraine — and backing new LNG investments. And poorer countries that built energy systems around cheap gas are now struggling to afford it.

“This is the 1970s for natural gas,” says Kevin Book, managing director at ClearView Energy Partners LLC, a Washington-based research firm. “The world is now thinking about gas as it once thought about oil, and the essential role that gas plays in modern economies and the need for secure and diverse supply have become very visible.”

Natural gas used to be a sleepy commodity that changed hands in fragmented regional markets. Now, even though globalization appears to be in retreat across much of the world economy, the gas trade is headed in the opposite direction. It’s globalizing fast — but maybe not fast enough.

Many countries have turned to natural gas as part of a transition to cleaner energy, as they seek to phase out use of dirtier fossil fuels like coal and in some cases nuclear power too. Major producers — like the US, which has quickly risen up the ranks of LNG exporters to rival Qatar as the world’s biggest — are seeing surging demand for their output. Forty-four countries imported LNG last year, almost twice as many as a decade ago. But the fuel is much harder to shift around the planet than oil, because it has to be liquefied at places like the Freeport plant in Texas.

And that’s why a minor explosion at a facility seen as nothing special by industry insiders — it’s not the biggest or most sophisticated of the seven terminals that send LNG from American shores – had such an outsized impact.

‘The Current Crisis’

Gas prices in Europe and Asia surged more than 60% in the weeks since Freeport was forced to temporarily shut down, a period that’s also seen further supply cuts by Russia. In the US, by contrast, prices for the fuel plunged almost 40% — because the outage means more of the gas will remain available for domestic use.

There were already plenty of signs of extreme tightness in the market. War and Covid may be roiling every commodity from wheat to aluminum and zinc, but little compares to the stomach-churning volatility of global gas prices. In Asia, the fuel is now about three times as expensive as a year ago. In Europe, it’s one of the main reasons why inflation just hit a fresh record.

Natural gas remains cheaper in the US — but even there, futures had more than doubled this year before the Freeport shutdown. With key political allies from Germany to Ukraine desperate to buy American gas, US manufacturers warn that more sales abroad will mean higher costs at home. The market reaction to the Freeport fire illustrates a “clear connection between LNG exports and the inflationary impacts to domestic prices for natural gas and electricity,” says Paul Cicio, president of the Industrial Energy Consumers of America.

To meet all the new demand will require a massive wave of investment in supply. That’s already under way, and it got a boost at last week’s meeting of the Western world’s biggest economies, where G-7 leaders vowed to back public investments in gas projects — saying they’re “necessary in response to the current crisis.”

Among the urgent infrastructure needs:

Export facilities: The rush for LNG is accelerating projects in North America and beyond. Last month, Cheniere Energy Inc. greenlighted a terminal expansion in Texas. In April, a Canadian LNG project backed by Indonesian tycoon Sukanto Tanoto got the go-ahead to begin construction. In Qatar, Exxon Mobil Corp. and Shell Plc are among energy giants with stakes in a $29 billion project to boost LNG exports.

“You have global gas prices so high that they incentivize the signing of new long-term contracts,” says Samantha Dart, head of natural gas research at Goldman Sachs. “We are seeing those announcements coming left and right, with a lot of US proposed liquefaction facilities.”

Import terminals: In Europe, plans for about 20 terminals have been announced or sped up since the Ukraine war began. Germany, which has no LNG terminals, has allocated about $3 billion to charter four floating ones and connect them to the country’s network. The first one is supposed to go online around the end of this year. Emphasizing the need for speed, Vice-Chancellor Robert Habeck pointed out that Tesla Inc. managed to build a factory near Berlin in just two years, and said it’s time to cut through German red tape. “First, dig the trench where the pipe is to go in,” he said. “Then, the permit comes.”

China, the world’s top LNG buyer last year, is in the midst of one of the largest buildouts the industry has ever witnessed. Ten new import terminals are slated to come online in 2023 alone, and capacity will roughly double in the five years through 2025, according to BloombergNEF.

Pipelines: Even with more capacity to receive shipments of LNG and turn it back into gas form — a process known as regasification — Europe lacks infrastructure to move it where it might be needed. Spain, for example, has Europe’s biggest regasification facilities — but it only has two pipeline connections to France via the Pyrenees, capable of carrying little more than one-tenth of those volumes, according to Bloomberg Intelligence.

Tankers: Shipyards in South Korea, where most of the world’s LNG tankers are built, are seeing a surge in orders that’s leaving them short of skilled labor. They’ve been forced to look outside the country to places like Thailand for welders, electricians and painters, raising their quotas for migrant workers.

In some cases all of this means a U-turn away from policies aimed at combating climate change -– especially in Europe. Government-backed lenders like the European Investment Bank and the European Bank for Reconstruction and Development, which had been focused on financing renewable energy, have signaled a shift and said they’re now more willing to back gas projects.

But Europe’s breakneck efforts won’t be enough, according to Bloomberg Intelligence, which calculates that LNG imports could meet 40% of the region’s gas needs by 2026 — double last year’s figure, but still far short of the volumes that Russia has been supplying.

‘Never More Evident’

That’s why warnings of a gas-driven slump in Europe’s economies are escalating.

Last week, Germany’s government said it’s in talks to bail out utility Uniper SE, which is losing some 30 million euros ($31 million) a day because it has to cover the missing Russian gas at soaring spot-market prices. Companies like chemicals giant BASF SE say they may have to cut output. Deutsche Bank cited growing risks of an “imminent German recession on the back of energy rationing,” and pointed to soaring power prices in Italy and France too. Morgan Stanley predicted the whole euro area will be in a downturn by year-end.

For some emerging economies — which increasingly have to compete with rich countries like Germany in bidding for LNG cargoes, as gas goes global — the consequences have already been disastrous.

In Pakistan, which built its energy system on cheap LNG, planned blackouts are plunging regions into darkness during the sweltering summer months. Shopping malls and factories in major cities have been ordered to shut early, and government officials are working shorter hours.

Thailand is curbing LNG imports due to surging prices, potentially putting the country at risk of fuel shortages. Myanmar, which is grappling with political instability, stopped all LNG purchases late last year when prices started to rally. India and China have also cut back imports.

“Where once natural gas markets were largely regionally siloed, we now have a globalized spot market that has connected the world’s exposure to the fuel that has become critical to many economies,” said James Whistler, Singapore-based managing director at Vanir Global Markets, an energy and environmental brokerage. “This has never been more evident than in the past few months.”

Instead, he has seen his legislative ambitions defeated by Congress, the Supreme Court has delivered a hammer blow to the federal government’s ability to regulate greenhouse gasses, and the Ukraine crisis has been a boon for fossil fuels.

As the Democrat is poised to announce a series of new executive measures, including additional funding to help protect communities from extreme heat and boosting wind production, here is an overview of his term so far.

– What’s at stake –

Shortly after taking office, Biden announced he was targeting a 50-52 percent reduction from 2005 levels in US economy-wide net greenhouse gas pollution in 2030, before achieving net zero in 2050, as part of the country’s Paris Agreement goals.

“Biden has said he thinks that climate change is the existential issue of our time,” and has been more emphatic than any of his predecessors including Barack Obama, Paul Bledsoe of the Progressive Policy Institute told AFP.

The president has framed the issue as key to the economic and national security of the United States, as well as public safety — and climate scientists are sounding the alarm now more than ever.

“I think that more and more people are realizing that we’re living through what could eventually cause us to lose everything in terms of habitability and everything that we value in life,” climate scientist Peter Kalmus told AFP.

Europe’s punishing heatwave serves as a timely reminder that warming won’t be an issue confined to the Global South, but instead threatens civilization as we know it, he added.

– Congress, the Supreme Court, and Ukraine –

The main legislative plank of Biden’s agenda was to have been the Build Back Better bill, which would have plowed $550 billion into the clean energy and climate businesses — much coming from tax credits and incentives.

That effort is now in tatters after Democratic Senator Joe Manchin, a fossil fuel booster who wields outsized power in the evenly split Senate, walked away last week from the bill that he’d promised to back.

At the end of June, the conservative supermajority Supreme Court found that the federal Environmental Protection Agency cannot issue broad limits on greenhouse gasses, such as cap-and-trade schemes, without Congressional approval.

“So we’re on two strikes,” said Bledsoe, who served as a climate aide to former president Bill Clinton.

What’s more, the oil industry has pushed for more drilling in the wake of Russia’s invasion of Ukraine, casting the issue as one of energy security.

A recent analysis by the Institute for Energy Research said that Biden’s government picked up the pace of drilling permits on public land from March onward “to mollify the political pressure rising along with pump prices.”

Biden had vowed to end new drilling on public lands, but his “pause” was overturned by a Trump-appointed judge in 2021.

On the other hand, there have been some partial wins: the administration has promulgated tighter emissions standards for vehicles, and toughened regulations on super-polluting methane emissions, said Bledsoe.

The bipartisan infrastructure law, passed last November, also contained some climate provisions, including $7.5 billion for a nationwide network of electric vehicle chargers and investments in carbon capture and hydrogen technologies.

– What’s next? –

But without the big ticket items, the United States is falling far short of its goals.

The Rhodium Group, an independent research firm, finds that “as of June 2022, we find that the US is on track to reduce emissions 24 percent to 35 percent below 2005 levels by 2030 absent any additional policy action.”

The White House has not ruled out declaring a “climate emergency,” which would grant Biden additional policy powers, but given a hostile judiciary, this would likely be subject to legal challenge.

Bledsoe said to achieve real change, Biden should instead push for broad public backing.

“Democrats should make popular consumer clean energy tax br

The challenge for politicians is to devise fair policies that protect people from the inevitable shocks

Russia’s war on Ukraine has sent shockwaves around the world. Oil prices have skyrocketed and food prices have soared, causing political instability. The last time food prices were this volatile, riots erupted across the Arab world and from Burkina Faso to Bangladesh. This time, the energy and food shock is happening against the backdrop of the Covid-19 pandemic. When will the shocks end?

They won’t. So, we can choose either resignation and despair, or a policy agenda to build social and political resilience against future shocks. Those are our options, and we had better start taking them seriously, because the shocks are likely to get worse. On top of geopolitical crises, the climate emergency will bring even greater disruptions, including ferocious floods, mega-droughts, and possibly even a simultaneous crop failure in key grain-producing regions worldwide. It is worth noting that India, the world’s second-largest wheat producer, recently banned exports as part of its response to a devastating heatwave this spring.
But here’s the thing: reducing vulnerability to shocks, for example, by embarking on energy and food revolutions, will also be disruptive. The energy system is the foundation of industrialised economies, and it needs to be overhauled to phase out fossil fuels within a few decades. Huge industries like coal and oil will have to contract, and then disappear. And agriculture, transportation, and other sectors will need to change radically to become more sustainable and resilient.
The challenge for politicians, then, is clear: to devise fair policies that protect people from the inevitable shocks.
One idea with significant potential is a Citizen’s Fund, which would follow a straightforward fee-and-dividend equation. Companies that emit greenhouse-gas emissions or extract natural resources would pay fees into the fund, which would then distribute equal payments to all citizens, creating an economic cushion during a period of transformation and beyond.
This is not just an idea. In 1976, the Republican governor of Alaska, Jay Hammond, established the Alaska Permanent Fund, which charges companies a fee to extract oil and then disburses the proceeds equally to all the state’s citizens. In 2021, each eligible Alaskan received $1,114 – not as a “welfare payment” but as a dividend from a state commons (in this case, a finite supply of oil). The largest dividend ever paid was during Republican Sarah Palin’s governorship in 2008, when every Alaskan enjoyed a windfall of $3,269.
In 2017, James Baker and George Shultz, two former Republican secretaries of state, proposed a similar plan for the whole United States, estimating that fees on carbon emissions would yield a dividend of $2,000 per year to every US household. With backing from 3,500 economists, their scheme has broad appeal not just among companies and environmental-advocacy groups but also (and more incredibly) across the political aisle.
The economics is simple. A fee on carbon drives down emissions by driving up the price of polluting. And though companies would pass on these costs to consumers, the wealthiest would be the hardest hit, because they are by far the biggest, fastest-growing source of emissions. The poorest, meanwhile, would gain the most from the dividend, because $2,000 means a lot more to a low-income household than it does to a high-income household. In the end, most people would come out ahead.
But given that food- and energy-price shocks tend to hit low-income cohorts the hardest, why make the dividend universal? The reason is that a policy of this scale needs both broad-based and lasting support, and people are far more likely to support a programme or policy if there is at least something in it for them.
Moreover, a Citizen’s Fund is not just a way to drive down emissions and provide an economic safety net for the clean-energy transition. It would also foster innovation and creativity, by providing a floor of support for the entrepreneurs and risk-takers we will need to transform our energy and food systems.
A Citizen’s Fund could also be expanded to include other global commons, including mining and other extractive industries, plastics, the ocean’s resources, and even knowledge, data, and networks. All involve shared commons – owned by all – that are exploited by businesses that should be required to pay for the negative externalities they create.
Of course, a universal basic dividend is not a panacea. It must be part of larger plan to build societies that are more resilient to shocks, including through greater efforts to redistribute wealth by means of progressive taxation and empowerment of workers. To that end, Earth4All, an initiative I co-lead, is developing a suite of novel proposals that we see as the most promising pathways to build cohesive societies that are better able to make long-term decisions for the benefit of the majority.
Our most important finding is perhaps the most obvious, but it is also easy to overlook. Whether we do the bare minimum to address the grand challenges or everything we can to build resilient societies, disruption and shocks are part of our future. Embracing disruption is thus the only option and a Citizen’s Fund becomes an obvious shock absorber. — Project Syndicate

• Owen Gaffney is an analyst at the Stockholm Resilience Centre and the Potsdam Institute for Climate Impact Research.

Russia dealt a new blow to European countries over their support for Ukraine yesterday, saying it would further cut gas supplies through its single biggest gas link to Germany. The move came as the fi rst ships to export grain from Ukraine’s Black Sea ports under a deal agreed last week could set sail within days, bringing a measure of hope to countries reliant on such food supplies even though the situation is still clouded by mistrust and potential danger. Both developments showed how the confl ict — now in its sixth month and with no resolution in sight — is having an economic impact way beyond the battlefi elds of Ukraine.

On the frontlines, the Ukrainian military reported widespread Russian artillery barrages in the east overnight and said Moscow’s troops were preparing for a new assault on Bakhmut, a city in the industrial Donbas region. Russian President Vladimir Putin warned the West earlier this month that sanctions imposed on his country for its invasion of Ukraine risked triggering huge energy price rises for consumers around the world. Yesterday, Russian energy giant Gazprom, saying it was acting under the instructions of an industry watchdog, said fl ows through the Nord Stream 1 pipeline would fall to 33mn cubic metres per day from yesterday.

That is half of the current fl ows, which are already only 40% of normal capacity. Prior to the war Europe imported about 40% of its gas and 30% of its oil from Russia. The Kremlin says the gas disruption is the result of maintenance issues and Western sanctions, while the European Union has accused Russia of resorting to energy blackmail. Germany said it saw no technical reason for the latest reduction. Politicians in Europe have repeatedly said Russia could cut off gas this winter, a step that would thrust Germany into recession and lead to soaring prices for consumers already faced with painfully high energy costs. The Kremlin has said Moscow is not interested in a complete stoppage of gas supplies to Europe. Rising energy prices and a global wheat shortage are among the most far-reaching eff ects of Russia’s invasion of Ukraine. They threaten millions in poorer countries, especially in Africa and the Middle East, with hunger. Ukraine said on Monday it hoped a UN-brokered deal to try to ease the food shortages by resuming grain exports from Black Sea ports would start to be implemented this week. Offi cials from Russia, Turkey, Ukraine and the United Nations agreed on Friday there would be no attacks on merchant ships moving through the Black Sea to Turkey’s Bosphorus Strait and on to markets. Moscow brushed aside concerns the deal could be derailed by a Russian missile strike on Ukraine’s port of Odesa on Saturday, saying it targeted only military infrastructure.

Russia’s Black Sea fl eet has blocked grain exports from Ukraine since Moscow’s February 24 invasion. Moscow denies responsibility for the food crisis, blaming Western sanctions for slowing its food and fertiliser exports and Ukraine for mining the approaches to its ports. Under Friday’s deal, pilots will guide ships along safe channels. A Ukrainian government offi cial said he hoped the fi rst grain shipment from Ukraine could be made from Chornomorsk this week, with shipments from other ports within two weeks. “We believe that over the next 24 hours, we will be ready to work to resume exports from our ports,” deputy infrastructure minister Yuriy Vaskov told a news conference. A United Nations spokesperson, speaking in New York, said the fi rst ships may move within a few days.

A Joint Coordination Center will liaise with the shipping industry and publish detailed procedures for ships in the near future, he said. Russian Foreign Minister Sergei Lavrov, speaking during a tour of African countries, said there were no barriers to the export of grain and nothing in the deal prevented Moscow from attacking military infrastructure in Ukraine. The Kremlin also said the United Nations must ensure curbs on Russian fertiliser and other exports were lifted for the grain deal to work. Before the invasion and subsequent sanctions, Russia and Ukraine accounted for nearly a third of global wheat exports.

Before the tiny Greek island of Tilos became a big name in recycling, taverna owner Aristoteles Chatzifountas knew that whenever he threw his restaurant’s trash into a municipal bin down the street it would end up in the local landfill.
The garbage site had become a growing blight on the island of now 500 inhabitants, off Greece’s south coast, since ships started bringing over packaged goods from neighbouring islands in 1960.
Six decades later, in December last year, the island launched a major campaign to fix its pollution problem. Now it recycles up to 86% of its rubbish, a record high in Greece, according to authorities, and the landfill is shut.
Chatzifountas said it took only a month to get used to separating his trash into three bins — one for organic matter; the other for paper, plastic, aluminium and glass; and the third for everything else.
“The closing of the landfill was the right solution,” he told the Thomson Reuters Foundation. “We need a permanent and more ecological answer.”
Tilos’ triumph over trash puts it ahead in an inter-island race of sorts, as Greece plays catch-up to meet stringent recycling goals set by the European Union (EU) and as institutions, companies and governments around the world adopt zero-waste policies in efforts to curb greenhouse gas emissions.
“We know how to win races,” said Tilos’ deputy mayor Spyros Aliferis. “But it’s not a sprint. This is the first step (and) it’s not easy.”
The island’s performance contrasts with that of Greece at large. In 2019, the country recycled and composted only a fifth of its municipal waste, placing it 24th among 27 countries ranked by the EU’s statistics office.
That’s a far cry from EU targets to recycle or prepare for reuse 55% of municipal waste by weight by 2025 and 65% by 2035.
Greece has taken some steps against throwaway culture, such as making stores charge customers for single-use plastic bags.
Still, “we are quite backward when it comes to recycling and reusing here,” said Dimitrios Komilis, a professor of solid waste management at the Democritus University of Thrace, in northern Greece.
Recycling can lower planet-warming emissions by reducing the need to manufacture new products with raw materials, whose extraction is carbon-heavy, Komilis added.
Getting rid of landfills can also slow the release of methane, another potent greenhouse gas produced when organic materials like food and vegetation are buried in landfills and rot in low-oxygen conditions.
And green groups note that zero-waste schemes can generate more jobs than landfill disposal or incineration as collecting, sorting and recycling trash is more labour-intensive.
But reaching zero waste isn’t as simple as following Tilos’ lead — each region or city generates and handles rubbish differently, said researcher Dominik Noll, who works on sustainable island transitions at Vienna’s Institute of Social Ecology.
“Technical solutions can be up-scaled, but socioeconomic and sociocultural contexts are always different,” he said.
“Every project or programme needs to pay attention to these contexts in order to implement solutions for waste reduction and treatment.”
Tilos has built a reputation as a testing ground for Greece’s green ambitions, becoming the first Greek island to ban hunting in 1993 and, in 2018, becoming one of the first islands in the Mediterranean to run mainly on wind and solar power.
For its “Just Go Zero” project, the island teamed up with Polygreen, a Piraeus-based network of companies promoting a circular economy, which aims to design waste and pollution out of supply chains.
Several times a week, Polygreen sends a dozen or so local workers door-to-door collecting household and business waste, which they then sort manually.
Antonis Mavropoulos, a consultant who designed Polygreen’s operation, said the “secret” to successful recycling is to maximise the waste’s market value.
“The more you separate, the more valuable the materials are,” he said, explaining that waste collected in Tilos is sold to recycling companies in Athens.
On a June morning, workers bustled around the floor of Polygreen’s recycling facility, perched next to the defunct landfill in Tilos’ arid mountains.
They swiftly separated a colourful assortment of garbage into 25 streams — from used vegetable oil, destined to become biodiesel, to cigarette butts, which are taken apart to be composted or turned into materials like sound insulation.
Organic waste is composted. But some trash, like medical masks or used napkins, cannot be recycled, so Polygreen shreds it, to be turned into solid recovered fuel for the cement industry on the mainland.
More than 100 tonnes of municipal solid waste — the equivalent weight of nearly 15 large African elephants — have been sorted so far, said project manager Daphne Mantziou.
Setting up the project cost less than € 250,000 ($254,550) — and, according to Polygreen figures, running it does not exceed the combined cost of a regular municipal waste-management operation and the new tax of €20 per tonne of landfilled waste that Greece introduced in January.
More than ten Greek municipalities and some small countries have expressed interest in duplicating the project, said company spokesperson Elli Panagiotopoulou, who declined to give details.
Replicating Tilos’ success on a larger scale could prove tricky, said Noll, the sustainability researcher.
Big cities may have the money and infrastructure to efficiently handle their waste, but enlisting key officials and millions of households is a tougher undertaking, he said.
“It’s simply easier to engage with people on a more personal level in a smaller-sized municipality,” said Noll.
When the island of Paros, about 200km northwest of Tilos, decided to clean up its act, it took on a city-sized challenge, said Zana Kontomanoli, who leads the Clean Blue Paros initiative run by Common Seas, a UK-based social enterprise.
The island’s population of about 12,000 swells during the tourist season when hundreds of thousands of visitors drive a 5,000% spike in waste, including 4.5mn plastic bottles annually, said Kontomanoli.
In response, Common Seas launched an island-wide campaign in 2019 to curb the consumption of bottled water, one of a number of its anti-plastic pollution projects.
Using street banners and on-screen messages on ferries, the idea was to dispel the common but mistaken belief that the local water is non-potable.
The share of visitors who think they can’t drink the island’s tap water has since dropped from 100% to 33%, said Kontomanoli.
“If we can avoid those plastic bottles coming to the island altogether, we feel it’s a better solution” than recycling them, she said.
Another anti-waste group thinking big is the nonprofit DAFNI Network of Sustainable Greek Islands, which has been sending workers in electric vehicles to collect trash for recycling and reuse on Kythnos island since last summer.
Project manager Despina Bakogianni said this was once billed as “the largest technological innovation project ever implemented on a Greek island” — but the race to zero waste is now heating up, and already there are more ambitious plans in the works.
Those include CircularGreece, a new €16mn initiative DAFNI joined along with five Greek islands and several mainland areas, such as Athens, all aiming to reuse and recycle more and boost renewable energy use.
“That will be the biggest circular economy project in Greece,” said Bakogianni. — Thomson Reuters Foundation