Israel-Hamas war threatens actions against global warming – 10/26/2023 – Environment

Global efforts to tackle climate change are already clouded by bitterness and distrust between countries.

Now, a growing maelstrom of conflict in the Middle East threatens to fracture an already divided world, drive up oil and gas prices at a time of persistently high global inflation, and direct financial resources toward war rather than slowing climate change.

The fact that the clashes between Israel and Hamas are taking place in an energy-rich region amplifies the risk. Countries tend to want to secure their oil and gas supplies rather than transition to alternative energy sources, even after the hottest summer on record in the Northern Hemisphere.

So far, the winners are arms producers and, to a lesser extent, oil producers. Defense-related stocks increased. Oil prices rose slightly. The historical echoes are chilling, 50 years after the Arab oil embargo that rocked energy markets. This episode was provoked by the 1973 Arab-Israeli war.

All of this makes the next round of climate talks — scheduled for late November in the United Arab Emirates, a Persian Gulf oil state — even more complicated.

The next few weeks will be crucial. If the conflict spreads to the Middle East, it will likely destroy hopes of reaching a global agreement on anything else, including the shared climate crisis.

“This is a key test of whether nations can insulate climate diplomacy from immediate crises,” said Comfort Ero, president of the International Crisis Group, a research organization.

UAE leaders, who continue to expand oil and gas production, face a particularly difficult challenge. They are responsible for uniting countries in climate negotiations, while also being expected to champion the Palestinians’ cause on the UN Security Council, where they hold a rotating seat this year.

Risk: Fractures in cooperation grow

The conflict erupted at a time of many crises in a deeply divided world. It comes in the wake of a pandemic and amid a war in Ukraine that has battered economies, pushed countries into greater debt, increased food and fuel prices and worsened hunger among some of the world’s poorest people.

“Any increase in geopolitical tensions, any fragmentation of multilateralism, will potentially make meaningful progress on cooperation more difficult,” said Tim Benton, director of the Center for Environment and Society at Chatham House, a London-based research organization.

Tensions between the United States and China, the world’s two largest economies and also the two largest emitters of planet-warming greenhouse gases, have already been reflected in climate policy. Following Russia’s invasion of Ukraine, Moscow and Beijing strengthened their ties.

At the same time, India is buying discounted oil from Russia, and Russia is courting countries in Africa and the Middle East.

Among the world’s least wealthy nations, complaints are mounting over the West’s failure to share access to Covid-19 vaccines and provide enough financial aid to help poor countries deal with climate risks.

Risk: Inflation worsens

The global economy remains sluggish, and a rise in oil prices could further complicate central banks’ efforts to control inflation.

Biden administration officials are particularly nervous about oil. So far, a major supply shock has been avoided, but it is possible that one could occur if the conflict spreads to Iran or other major oil producers nearby.

Even a temporary loss of oil supplies could send gasoline prices soaring again in the United States, undermining voter support for President Joe Biden and leaving him more vulnerable to Republicans who have attacked his climate agenda.

American officials are worried that this erosion will outweigh any climate gains from a temporary period of high oil prices, such as gasoline at $5 a gallon, which could encourage more people to buy electric cars.

If an oil shock raises global interest rates further, it would make it more difficult to attract investment in renewable energy projects, especially in emerging markets and developing countries where the cost of capital is already much higher than in the United States. and in Europe.

Furthermore, even rich countries will find it more difficult to invest public money in transitioning their economies away from fossil fuels.

Risk: Money stops circulating

Rich countries had pledged to provide $100 billion a year by 2020 to help low-income countries adapt to climate risks and increase renewable energy. So far, they have not kept that promise. Anger and frustration are rising among potential beneficiaries.

Even $100 billion would be a drop in the ocean. If the world wants to achieve the goal of maintaining the increase in the global average temperature at 1.5°C by the end of the century, compared to the pre-industrial period, it is estimated that US$4.5 trillion will be needed per year in investments in renewable energy by 2030, according to the International Energy Agency.

For renewable energy advocates, this makes sense not only for slowing global warming but also for ensuring energy security.

The current conflict in the Middle East “should also be a stark reminder that the transition to faster clean energy solutions benefits not only the climate equation but also energy security,” said Jason Bordoff, who leads the Center for Global Energy Policy from Columbia University.