Energy crisis:from industrial production to economic impacts, five issues we will have to address in 2023

The weekly round-up on the climate crisis and data on carbon dioxide levels in the atmosphere.

2022 was the year that saw the climate, energy and food crises combine.Energy markets have been on a roller coaster.In response to Russia's invasion of Ukraine, Western countries imposed financial sanctions on Russia and embargoed its oil exports.Russia has cut gas supplies to Europe and large importers, such as Germany, have had to reduce energy consumption and look elsewhere for supplies.Low- and middle-income countries have struggled to access affordable energy.Countries such as Pakistan, Bangladesh and Sri Lanka faced blackouts;rising fuel prices have spilled over into food markets.In 2023 (and in the years to follow), the energy crisis will change economic and energy balances and supply chains, and could have effects on the ecological transition. In an article on Nature, scholars Andrea Goldthau and Simone Tagliapietra have highlighted five issues that we will not be able to avoid next year.

What will the new global energy map be?

Until Russia's invasion of Ukraine, more than half of Russia's oil exports and nearly three-quarters of its gas sales went to Europe.The European Union has decided to diversify its gas suppliers by targeting countries such as Norway, Algeria and the United States, as well as liquefied natural gas producers in Africa and the Middle East.In 2023, EU member states will join together to buy enough gas to supply 15% of their storages.It will be important to observe to what extent the EU coordinates with other G7 partners, write Goldthau and Tagliapietra.

Meanwhile, Russia has started exporting its fuels eastward, especially to China and India.In 2023 we will understand how much influence Russia will still have in the energy market and international relations.

Finally, the energy crisis could lead to the search for alternative solutions to gas.In Europe, there could be a reduction in natural gas consumption through greater energy efficiency and the transition, especially in the sector of energy-intensive industries (such as steel and fertilizers), to clean energy sources.The US has just passed the Inflation Reduction Act and is developing its own domestic renewable and fossil energy resources to protect itself from gas price volatility and global energy tensions.In East Asian countries, coal seems to be the cheapest and fastest solution to get away from gas.Meanwhile, new synergies are emerging to develop green hydrogen technology, as in the case of the Hydrogen Alliance between Canada and Germany;The EU is establishing trade ties with Algeria, Nigeria and Namibia to produce synthetic natural gas, liquid fuels or zero-emission chemicals, the article says.

However, Goldthau and Tagliapietra explain, the feasibility of these projects will have to be assessed and it will be carefully observed how and if Russia will reroute oil and gas exports in order to be able to make assessments on the new international balances.

Will there be more renewables?

In recent years the European Union and the United States have accelerated the transition towards renewable sources.The EU has accelerated permits for the installation of renewable energy and simplified the rules on retrofitting buildings to make them more energy efficient.The United States, as mentioned, has approved the Inflation Reduction Act which provides subsidies for the national production of clean technologies.2023 will tell us whether these decisions will materialize in a difficult economic and political context and whether the national production of green technologies, towards which Western countries are moving, will be feasible considering that China is also in a dominant position after having invested to decades billions of dollars to become the leading processing center.“A smarter strategy for European countries and the United States might be to focus on developing the next generation of technologies, including sodium batteries or thin-film, non-silicon solar panels,” Goldthau and Tagliapietra note.The rush for critical metals and minerals in low-income countries will also need to be assessed and what the economic and social impacts will be.

Finally there is the question of climate finance.In 2021, emerging and developing economies received just 8% of all clean energy investments – most of the rest went to industrialized countries and China.It will be necessary to make more money available to them and also review the forms of financing.

How will the industrial landscape change?

Another impact of high costs and limited energy supplies will be on supply chains and industrial supply chains.In practice, he writes Nature, decarbonisation is being brought forward by years with the introduction of structural changes and the effects are already being felt.

Some energy-intensive manufacturing sectors, including aluminum, fertilizers and other chemicals, are starting to relocate to places that offer cheaper energy, such as the United States or the Middle East.Other industries are innovating.European steelmakers are investing in converting to green hydrogen and working with energy companies to build large hydrogen wind farms.Automakers are moving towards “green steel” frames, forged with renewable energy, and “green aluminum” wheels, produced using low-carbon methods.

In the long term, energy-intensive industry facilities will increasingly be located in areas rich in sunlight, wind, hydropower and biofuels.Regions such as North Africa, Western Australia, the North Sea or parts of the Middle East could become the new economic powerhouses.Established producers located at the end of a pipeline or near a coal mine will lose their competitive advantage, Goldthau and Tagliapietra write.

The pace and modalities of the green industrial transition will depend on how countries organize production, labor and government interventions (such as subsidies) in their economies.

What economic impacts will there be?

The energy crisis is exacerbating social inequalities within and between countries.Vulnerable families and low- and middle-income nations have been hit hardest by rising energy costs.The repercussions are profound:Vulnerable economies could see their industries contract.Governments have made huge financial interventions in energy markets this year, well beyond crisis management.Since last September, European governments have allocated more than 700 billion euros ($743 billion) in energy subsidies to help households and energy companies.But, explain the two researchers, "the growing state support for sectors in difficulty empties citizens' pockets and reduces foreign exchange reserves, with the risk of increasing the risk rating for financial loans".

Will the energy crisis affect climate action?

Responses to the energy crisis could slow and weaken climate action.The use of coal by some rich countries to replace gas could jeopardize the decarbonisation process even in the poorest countries and emerging economies, which are now called upon to do everything possible to abandon coal towards other energy sources.

Possible economic crises could drain funds from climate finance.Furthermore, initiatives that divide states into trading blocs, such as the climate clubs proposed by the G7, could create rifts between rich and poor nations if they are not inspired by the principle of common but differentiated responsibilities in global climate action.Closely linked to all this is the question of the "loss and damage fund" to compensate the countries most exposed to the climate crisis (and often least responsible for global warming), crushed by the debt spiral to rebuild after climate disasters.

The big risk is that vested interests will block multilateral strategies, climate talks and the common effort to promote climate finance, technology transfer and capacity building, as envisaged in the Paris climate agreement.

What is the polar vortex that is causing dozens of victims in the United States?

More than 60 people they are dead in the United States following the snowstorm that is affecting practically the entire country.Half in the city of Buffalo alone.Thousands of people are still without electricity.City officials said they moved from car to car to search for survivors, sometimes finding bodies in cars or in snowbanks.

An article from New York Times he explained the causes of the winter storm of recent days.A polar vortex has hit the central United States, bringing extremely cold arctic air and causing temperatures to drop rapidly in many areas.

Scientists are not yet sure whether the climate crisis is the cause of the frequency of these vortices.There are many clues, but there is still much to study, writes the New York Times.As global emissions of heat-trapping carbon dioxide continue to rise, the Arctic is warming nearly four times faster than other parts of the planet, according to the latest studies, and the region's sea ice cover is shrinking.But there are no certainties about the role of climate change, explains Steve Vavrus, a climate scientist at the University of Wisconsin, who together with Jennifer Francis, now at the Woodwell Climate Research Center in Massachusetts, was the author of a very important study in 2012 on how the warming Arctic is affecting the polar vortex.[Continue reading here]

Japan approves U-turn on nuclear energy after 2011 Fukushima accident in response to energy crisis

Japan he approved a plan to relaunch the use of nuclear energy, a real reversal of direction compared to the denuclearization plan prepared after the Fukushima accident in 2011, to deal with the serious electricity shortage that is affecting the country and to try to at the same time to respect commitments to reduce carbon dioxide emissions.

Under the new plan, presented last week by a government advisory group, the country will “maximize the use of existing nuclear reactors,” extending their lifespans beyond 60 years, and develop advanced reactors to replace those already decommissioned.However, he commented to the Financial Times Takeo Kikkawa, professor at the International University of Japan and member of the government's Energy Council, “prolonging the operation of existing reactors could in turn slow down the construction of advanced reactors.This is the last opportunity to finally get nuclear policy, currently stalled, moving again."

Meanwhile the government has allocated 6 billion yen (44 million dollars) for the development of pumps and the construction of pipes up to 6 thousand meters long to be able to extract rare earth metals, essential for electric and hybrid vehicles, from the seabed of an offshore area of Minami-Torishima Island, a coral atoll in the Pacific Ocean, about 1,900 kilometers southeast of Tokyo.Japan currently depends on imports for nearly all of its rare metal needs.60% comes from China, mainly neodymium, used in wind power generation, and dysprosium, used in electric vehicle motors.[Continue reading here]

The emperor penguin is at risk of extinction along with two-thirds of Antarctica's native species

Two-thirds of Antarctica's native species, including emperor penguins, they are at risk of extinction or a sharp reduction in the population by 2100, according to new research published in Plos Biology which outlines the priorities for protecting the continent's biodiversity.

“There are many threats to species in Antarctica, despite the fact that it is thought to be a wild, remote and pristine region,” said the study's lead author, Dr Jasmine Lee, from the British Antarctic Survey.[Continue reading here]

The signs of the climate crisis on the planet in AP photos

Landscapes and lives scarred by storms, floods, fires, heat waves, droughts.2022 will be remembered for the devastation caused by rising global temperatures.Associated Press photographers they told the signs of the climate crisis.We have selected some of them.[Here are all the photos]

 

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