The Geopolitical Domino Effect

The Geopolitical Domino Effect

As the global economy becomes more intertwined, conflicts disrupt producer supply chains and consumer energy prices.

Germany forced to burn coal as Russia Ukraine consequences spread

As if the world did not have enough issues, complex geopolitics now threaten sustainability efforts and energy supplies. The conflict between Russia and Ukraine instigated a domino effect with no clear end in sight. The geopolitical consequences of Russia's aggression have spread in a COVID-like fashion, spiking gas costs for consumers all over the world. Moreover, Germany has decided to enact emergency clauses within environmentally-focused legislation, demonstrating that the environment is the most recent domino to fall.

As Russia's aggression persists, its actions reflect a growing impatience and frustration. In mid-June, Russia effectively reduced their supply of natural gas to Germany by 60%. According to Russia, essential pipeline materials are being held up by Canada's recent trade sanctions. While it is true that Canada has imposed sanctions that limit affiliating and doing business with Russia, Germany claims that alternative pipelines are available for use, through which Russia could continue to supply natural gas to Germany. Regardless of perspective, the bigger issue is clear: increasingly interdependent economies pose a serious threat to national governments and domestic consumers alike.

The environment finds itself on the receiving end of the Russia-Ukraine war

Finding long term solutions to short term environmental problems is essential. Everyone can agree that sustainable solutions are necessary to protect our posterity. However, protecting existing solutions has proven far more difficult than originally anticipated.

Put simply, the German government was forced to choose between a range of undesirable options because of their dependence on Russia's natural resources, namely natural gas. As winter approaches, the German government and its citizens face skyrocketing fuel prices and a withering supply. The natural gas supply has gradually dwindled since the start of Russia's attack on Ukraine. What is more, this trend shows no definitive end.

Understanding the bigger picture

 

While clickbait headlines ostracize Germany's decision to burn coal for energy, the informed global citizen will understand that their decision is one that is not only a choice between the lesser of two evils but also a reflection of an increasingly interdependent global economy. Which begs the question: how can governmental regimes prepare to protect their population from the subsequent impact of foreign conflict?

Natural resources provide intrinsic value to nations across the world. As the global population surges towards 11-digit figures, nations will face additional natural resource constraints that limit the value they possess. They combat this trend through mutually beneficial trade deals, creating a more globalised economy. To account for geopolitical disagreements, nations should look to become self-sufficient, especially in the energy and food sectors.

Case in hand, Germany’s utilisation of emergency coal supplies to provide energy to its citizens. Geopolitical disputes are becoming increasingly relevant. Thus, nations should look to become less dependent on other nations moving forward as to provide an additional layer of security from conflict.