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Sunday, May 22, 2022

Net-zero Transition in the Wake of the War in Ukraine

 Ultimate meaning in how much time and integrated level of risks?

The net-zero transition in the wake of the war in Ukraine: A detour, a derailment, or a different path?

May 19, 2022 | Article  McKinsey   By Hamid Samandari, Dickon Pinner, Harry Bowcott, and Olivia White

The Russian invasion of Ukraine1 has ushered in a humanitarian crisis of a scale not seen on European soil since the Second World War, a level of geopolitical tension not experienced since the Cuban Missile Crisis, and a set of rapidly evolving political, economic, and societal responses and counterresponses whose ramifications can scarcely be estimated at this point. Nor are there signs of an imminent resolution on the horizon.

As Russia is one of the world’s largest producers of oil, gas, and commodities, one can naturally expect that the massive and universal effort required to address the world’s looming climate crisis would also be swept up in the maelstrom. This raises the question of whether the war and its aftermath will prove to be a limited detour from the previous path of net-zero transition, or a true fork in the road and a far more consequential redirection.

It seems clear at this point the war will complicate the transition’s path in the short term. In the longer term, however, the logic of energy security and economics could converge to kick net-zero transition efforts into higher gear. Bold moves would be needed at unprecedented speed to boost energy-efficiency measures and adopt renewable-energy alternatives to fossil fuels. If adopted, such actions could drive net-zero technologies down their respective cost curves and build a pathway to faster decarbonization in other regions.

Such outcomes would not be surprising in light of history; conflict has often accelerated energy transitions. The 19th century’s naval wars accelerated a shift from wind- to coal-powered vessels. World War I brought about a shift from coal to oil. World War II introduced nuclear energy as a major power source. In each of these cases, wartime innovations flowed directly to the civilian economy and ushered in a new era.2 The war in Ukraine is different in that it is not prompting the energy innovation itself but making the need for it clearer. Still, the potential impact could be equally transformative.  ... ' 

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