November 4, 2022
As the United Nations COP27 approaches, global leaders confront a new energy reality that’s been heavily influenced by the Russia-Ukraine war. Since the onset of the war last February, the issue of energy security has become a top priority for almost every nation. For some Russian allies like China and India, the sudden availability of Russian energy supplies at a discounted rate has been welcomed, while EU nations and allies have scrambled to secure alternate supplies due to sanctions. Other nations, like Lebanon and Israel, have forged unlikely deals to exploit fossil fuel resources and get in on the action. OPEC+ members are trying to capitalize on the high demand and uncertain future while simultaneously managing political expectations. And all of this has been happening in the backdrop of an increased global awareness to reduce fossil fuel usage and emissions.
The Russia-Ukraine war has temporarily pushed both the emissions and climate financing commitments that were made last November at COP26 to the backburner. Understandably, national leaders have prioritized keeping the heat on and the industry going, regardless of the desire to curb emissions, and we’ve seen a lot of stop-gap measures put into place. Coal has reemerged as an energy source in places where it was being phased out. Nuclear energy is also being reassessed as a viable option, as are a myriad of alternative energy options like solar and wind. Indeed, the war has made a real case for renewables and is accelerating their development. But greener options aren’t yet affordable, cost-effective, or robust enough, and at the upcoming COP27 in Egypt next week, leaders will be challenged to commit to lowering emissions given the geopolitical and economic constraints.
For more than two decades, the UN COPs have been the forum for international negotiations on climate change. In 2015, the gathering led to the Paris Agreement that is still viewed as a fundamental benchmark by most nations today. But more recently, discussion about which nations should be responsible for funding the energy transition has taken center stage.
Notably, the upcoming COP is being held in Africa – a region with low emissions contributions but highly vulnerable to the impact of climate change. Leaders of developed nations will come face-to-face with their failure to live up to the climate financing promises they made at COP26. Measures to curb inflation will further complicate the discussion. African leaders sitting on fossil fuel resources might also try to reconcile climate commitments with their right to, and need for, economic development, particularly as food supply chains and access remain threatened.
In addition to fossil fuels, the emerging resource battle is with the global south and developing economies that are rich in minerals and rare earth elements that will likely power the next phase of economic and technological development. Russia and China have already made significant investments and inroads in parts of Africa, and national policies are likely to be dictated by these economic relationships. Indeed, COP27 arrives at a time when energy, economics, and politics frequently have opposing needs, and it’s looking increasingly difficult to satisfy them all.
