Make Stuff Not War
Competition for resources is fuelling conflict as well as climate change, but we can do more about it …
Competition for energy, metals, minerals, and other critical resources lurks beneath two types of modern warfare – efforts to combat climate change and military conflict in Ukraine and other energy and resource hotspots. Both types involve tragic outcomes, but also have the potential for misunderstanding, unintended consequences, and inadvertent escalation beyond borders. We can be anxious about them, but by looking harder, we can also try to do more about them.
Conflict
During a massive attack on Ukraine’s energy system this week, Donald Tusk, the Prime Minister of Poland, proposed that Europe is in a ‘pre-war era’. He argues that Russia poses a threat and that European countries should follow Poland’s lead, which invests 4% of GDP in defence, and spend at least NATO’s target of 2%. NATO has been expanding eastwards. On 7 March, Sweden, which has a maritime border with Russia, became a full member of NATO and its 32nd Ally. NATO’s 31st Ally was Finland, which has a land border with Russia and more than doubled NATO’s border with Russia when it joined the alliance on 4 April 2023.
Last week, on 28 March, President Putin dismissed speculation that Russia could attack other countries in Eastern Europe or a NATO country, although he noted that NATO was ‘moving towards us’. Western media and politicians took no comfort from his statement. Top European politicians and military figures, including the German defence minister and the chief of the UK general staff (the latter swiftly contradicted by Downing Street) even raised the prospects, respectively, of conscription and training a ‘citizen army’.
Russia is pounding and seizing Ukraine’s energy and resource assets. Last weekend, Russia launched missile strikes on Ukraine’s Bilche-Volytsko-Uherske natural gas storage facility near Lviv, the largest in the country and capable of storing more than four times as much natural gas as the largest site in Germany. Before the war, Ukraine was the primary conduit of Russian gas to its then largest market, Europe. Russia’s attempts to bypass it with the US$11 billion Nord Stream 2 pipeline into Germany, a joint venture between Gazprom and a number of European energy companies, was opposed by the United States and from within the EU, and was finally thwarted when Germany mothballed it on 22 February 2022. Russia invaded Ukraine 2 days later.
Ukraine is not just a conduit for energy resources but is rich in resources of its own. Ukraine has the second-largest natural gas deposits in Europe, estimated at 1.2 trillion cubic meters of proven reserves, with the possibility of up to 5.4 trillion cubic meters, including the contested offshore Black Sea region. Russia has already occupied regions of Ukraine representing around 80% of Ukrainian coal deposits. It is also rich in metals and minerals. It hosts around 5% of the world’s mineral resources. Ukraine is thought to have the largest supply of recoverable rare earth resources in Europe, although much of it remains undeveloped. The total value of deposits in occupied Ukraine has been estimated at up to US$12 trillion. Deposits include iron ore (90% of which is produced in President Zelenskys’s birthplace Kryvyi Rih, currently under heavy attack by Russia), titanium, manganese, gold, nickel, oil, graphite, kaolinite, salt, gypsum, zirconium, and uranium. Russia’s motivations for invasion may have included an appetite for its resources. Parallels have been drawn to Russia’s efforts to secure (via Wagner mercenaries) resources such as gold, diamonds, and energy transition related materials such as lithium, rare earths, and cobalt in Africa. (Poland, incidentally, is rich in copper, an energy transition essential, and coal).
Whatever the original motivations for this war, as it takes its toll in the loss of human life and collateral damage, geopolitical tensions rise along with the rhetoric and evolving casus belli. And if Ukraine feels underfunded and cornered militarily, the risk of conflict escalating beyond borders increase, with potential for engagement via proxies, accidents, mistakes, misunderstandings, and unintended consequences.
Climate change
Things are also heating up in the war on climate change. This month, the World Meteorological Society released its latest State of the Global Climate report, which confirmed 2023 as the hottest year on record, but a long way. Almost all the records were broken – for greenhouse gas levels, surface temperatures, ocean heat and acidification, sea level rise, Antarctic ice loss, glacier retreat, and so on. The global average near-surface temperature was 1.45C above the pre-industrial baseline. Although the Paris agreement 1.5C target is measured over a 10-year period, we have just seen the warmest 10-year period on record. The report tracks ‘climate-related’ investment for the year to 2022 at almost US$1.3 trillion (or 1% of global GDP according to the Climate Policy Initiative), but notes that a 1.5C pathway would require investment at least 6 times that rate, some US$9 trillion per annum by 2030.
With some parallels to the case for increasing defence budgets, the report points to the risk of aggravating major socio-economic disruption (with 333 million hungry in 2023 with weather displacing populations) and estimates the cost of inaction at nearly $17 trillion per annum between 2025 and 2100. To illustrate the scale of investment needed just to European energy ministers have been meeting to discuss how to finance just one element - the upgrade of the grid needed to accommodate a potential 60% increase in electricity consumption by 2030, driven by decarbonisation efforts. By this time, Eurelectric says more than half of Europe’s 11 million kilometres of grids will be over 40 years old, which is close to the end of their lifespan. The European Commission’s Action Plan for Grids published in November 2023 estimated the cost at Euro 584 billion.
Like the conflict above, the war on climate change involves battles over energy and resources. In the case of climate change, energy is behind 80% of human made excess greenhouse gas emissions and around 80% of energy remains generated by fossil fuels, ln which the world, for now at least, depends. And metal and mineral resources will be key to the renewable energy generation and storage needed to displace fossil fuels over time. As I described in book, ‘The Edge’ and in my Substack earlier this month, ‘Reality Strikes Back’, decarbonisation will, for example, involve around 5 billion tonnes of steel, a billion tons of aluminium, and more than 600 million tonnes of copper. Demand for lithium (which needs 500,000 gallons of water to produce a single tonne, competing with local farmers) has been predicted to increase by as much as 2,700–4,300% and cobalt and nickel by as much as 2,500%. Global annual extraction of neodymium and dysprosium (used in magnets) is projected to rise by 70% and copper by well over 200%.
As I describe in ‘The Edge’:
‘Beyond the immediate physical and governance challenges of extraction, there are other limits in terms of time, supply chains and impact on the environment. It can take 16 years from initial discovery to first production in mines. Given the challenges of sourcing and the time needed for extraction, the International Energy Agency warns of large shortfalls. But this is against a backdrop of a pre-existing over-extraction crisis. Mining has been identified as one of the largest drivers of deforestation, ecosystem collapse and biodiversity loss. According to analysis of the UN International Resource Panel Global Material Flows Database, even at current rates of global consumption, we are overshooting sustainable levels by over 80 per cent.
… And then there is competition and the risk that it tips over the edge into conflict. Most of the key minerals needed for the energy transition are in the Global South. Parts of Latin America, Africa and Asia are at risk of becoming the target of a ‘scramble for resources’. History echoes with precedents – gold and silver in Latin America in the seventeenth and eighteenth centuries, cotton and sugar in the Caribbean in the nineteenth century, diamonds from South Africa, cobalt from Congo and oil from the Middle East in the twentieth century’.
With parallels to the responses to the geopolitical challenges above, responses to climate change can have implications beyond borders, with potential for accidents, mistakes, misunderstandings, and unintended consequences.
While ‘The Edge’ highlights competition for resources in other arena and geopolitical hotspots such as the Arctic, the Eastern Mediterranean and the South China Sea, the competition even reached the shores of the United States in March when China and Russia objected to a claim by the United States to an extended area of seabed, twice the size of California and spanning regions including the Pacific, the Atlantic, and the Gulf of Mexico. These regions contain trillions of dollars’ worth of seabed-minerals, such as copper, nickel, cobalt, manganese and rare earths, the mining of which The International Seabed Authority is preparing to regulate. The United States’ claims have faced objections because it has failed to ratify the 1982 United Nations Convention on the Law of the Sea (UNCLOS). There is now considerable political pressure for it to do so.
… and what more we can do about it
This week, UK politicians preparing for elections later in the year clashed over energy and resources. A hopeful Labour government hopes to decarbonise by 2030 and an incumbent Conservative one insists that this would push the country into a dependency on China, which controls the resources needed for the energy transition, just as efforts are made to reduce dependency on Russia.
The argument illustrates the degree to which energy and resources are intertwined in domestic as well as geopolitics. But it also illustrates the continued focus on doing more with more, rather than more with less. While the world scrambles for resources to supply its energy needs, it is wasting so much of them. Our biggest opportunity is to do more with less. Less energy, less natural resources, less time.
For example, in the UK, some 58% of primary energy used to generate electricity is lost in the generation (through waste heat), transmission and distribution processes. In the United States, the overall loss from primary energy to final energy demand (or useful energy / energy services) is around 70%. While the instinct is to address the problem with hundreds of billions of centralised grid-related infrastructures, at least as much money, effort and time should be spent on decentralising energy – cutting out the generation, transmission, and distribution losses by bringing energy generation itself to point of use - and reducing loss or waste at the point of use. The opportunity abounds. It’s not just in better energy use, but in food (half of which is wasted, in water (a third of which is wasted), in industrial manufacturing, in transport and in increasing rates of recycling. We can and should be making more stuff, just more of the stuff we need and using less resource to make less of the stuff that we don’t need or waste. My book and my previous Substacks discuss how.
By doing so, we wouldn’t need as much of the resource we are competing for and that in turn is fuelling conflict as well as climate change. This is efficiency and productivity, and to the contrary of ‘de-growth’, is the key to sustainable growth.
Picture: Off the Pacific Coast of the United States, the migration of whales and other marine life thrive above trillions of dollars of metals, minerals and rare earths beneath the seabed.
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