Russia’s invasion of Ukraine is sending shockwaves through global systems for natural resources like food, oil and natural gas, and critical minerals. But a recent Wilson Center event assessing the fallout of the conflict also looked to the deeper implications and lessons from the crisis.

“We’re living in one of those times when it has become startlingly obvious that past choices were not durable, were not sustainable, and were not stable,” said Jonathan Elkind, a Senior Research Scholar for the Center on Global Energy Policy at Columbia University and a former Assistant Secretary for International Affairs at the U.S. Department of Energy. 

Beyond Business as Usual

Elkind observed that in certain aspects, Russian energy trade relationships and implications look remarkably like business as usual today. Current estimates place Russia’s daily revenue of oil, gas, and coal exports to Europe at between $800 million to $1 billion per day, with projected revenues for 2022 at $321 billion dollars, according to current trendlines. Changes to these funding relationships pose a risk of recession for Europe, but Elkind also questioned what the conflict means for the continent’s ambitious climate goals.

“We do not have the luxury of failing to act on climate in a timely manner,” he said. 

In the short term, continued Elkind, the United States’ oil and gas industry will play an important role in stabilizing markets as global energy systems shift from a reliance on Russian oil and gas. Yet he added that oil and gas is not a panacea for energy security, neither in the United States nor anywhere else: “Where are most of the refineries and import-export facilities for oil and gas located? They are exactly in places that will be dealing with and trying to manage sea-level rise.” 

A balance is crucial amidst the tumult. “As we are changing our energy sector in fundamental ways,” said Elkind, “we need to ensure we continue providing benefits and stability for our economies going forward.”

Sharon Burke, a Global Fellow with ECSP and the Founder and President of Ecospherics, agreed about the urgency of climate action—especially as conflict brings energy issues to even greater prominence. Climate change is not optional; we have to start with the premise that we have to deal with it, she said. She also reaffirmed Elkind’s point that energy security and climate security are two sides of the same coin—and that long-term restructuring of the energy sector for energy security requires diversifying energy sources and addressing climate change. For the United States, as part of a global oil market and as an increasing player in the global gas market, “the investments we need to make in order to cut our greenhouse gas emissions are investments that help us mitigate our energy insecurity,” said Burke. “There’s a very strong mutual benefit to investing in other forms of energy generation.”

Rule of Law and Mining

The growing conflict is also underscoring how the mineral supply chain has implications for energy and climate security. “If you want more electric vehicles on the road, if you want solar power, wind power…all of these wonderful things, they are all made out of metal,” said Emily King, Founder of Prospector and the Chief Innovation Officer for Analog Gold. 

King noted that estimates for investments in Ukraine’s mining sector prior to the conflict were projected at $10 billion for 24 projects. But war can and has disrupted mining, which is an industry where investments depend upon the rule of law. “The biggest concern for mining companies when making an investment in an emerging or frontier market or post-conflict [context] is not actually physical security,” said King. “It’s the right to continue owning the asset.”

The current crisis has placed investment at a standstill, creating a reluctance to reinvest capital and uncertainty about who will have authority over the resources when the conflict ends.

Because mining investments take up to fifteen years before a profit or revenue is realized, King continued, “you have to know that you’ll still own that project and who you’re doing business with from a government perspective.”

Ukraine is a hot spot for several key resources. It holds 20 percent of the world’s reserves of titanium (an important resource for U.S. aerospace and national security industries) and has the largest uranium deposit in Europe. Russia and China are major global holders of critical and rare earth minerals, but they don’t play by the same rules when it comes to investing in these sectors, King observed. China controls the vast majority of rare earths and strategically thinks in the long-term across 10-20-50-year time horizons.

 “What China does next and how China reacts to this war will be the most important security outcome of this century,” added Burke. 

Resilience Thinking in the Food System

War has also spotlighted Russia and Ukraine’s role as major players in global agriculture. Together, these two nations account for 28 percent of wheat exports. Moreover, Russia is a top supplier of fertilizers and their raw ingredients, like potash and nitrogen. And while the near-term impacts of agricultural disruptions on availability and price will be felt most acutely in places that rely on Black Sea grain (countries like Libya, Pakistan, as well as the nations of sub-Saharan Africa), Burke remarked that there will also be devastating global ripple effects.

Increasing fuel costs and limited fertilizer will reduce yields and drive up prices around the world, disproportionately affecting those with the least purchasing power. Bram Govaerts, the Director General of the International Maize and Wheat Improvement Center, said that these trends have implications for security, since food prices can trigger unrest.

Improving short-term grain production outside of Russia and Ukraine by leveraging existing technologies that increase fertilizer efficiency is one possible response. But Govaerts added that with accelerating climate change, the war’s destabilizing effect on global food systems “is just an example of what’s about to come.” To address long-term threats, he observed, we need a “shift in our mentality from efficiency to resilience. We need to take a step back and ask how we can redesign [our food system].” Such a move would not only make the global food supply more resilient to climate shocks but also reduce the contribution of agriculture to climate change. A resilience paradigm might emphasize local cereal production, for instance, focusing on drought-resistant varieties and efficient water use.

Window of Opportunity

The Russia-Ukraine conflict has revealed a landscape of interdependent sectors and compounding risk. Recognizing these links is a critical step toward building solutions.

Burke said that nation-states tend to address connections between issues in an ad-hoc way, “which isn’t good enough when you’re talking about a crisis, but also isn’t good enough when you’re talking about a long-term challenge like climate change.” A wider view is necessary, she proposed: “We cannot address this energy crisis without addressing food and water and minerals and vice versa.”

Policymakers must recognize that there are solutions available, the panelists agreed—And these solutions urgently need to be deployed to take advantage of a window of opportunity to avoid the worst outcomes. Govaerts urged that farmers be given the tools to quickly boost production to buffer against future food shocks, while also ensuring that investments are made to create more resilient food systems. In the U.S., laws in the climate and security space could be more effectively rolled out (Elkind suggested a need to provide clear statutory guidance on climate change and the America Competes Act).

Making informed decisions about these interrelated challenges, observed King, will require governments to have access to the “full picture of the options that are available and the impact of all of those options.” In the mining sector, this means using existing data on extractive projects to help inform the energy transition.

Peace will bring immediate dividends, but avoiding the worst of the longer-term system shocks will require a global effort. “Ultimately the number one solution is that we need Russia to agree to a ceasefire and stop its attack on its neighbor,” Burke said. “There are ways that we can avert this system shock globally and this catastrophe, but it’s going to require all of us to act like everything is on the line, because it is.”