Two birds with one stone: EU’s chance for net zero emissions
Russia is the largest supplier of energy to the EU. 47% of coal, 41% of natural gas and 27% of crude oil imports to the EU come from Russia. Energy imports have been the Achilles heal of Europe for decades. When the EU stepped up its sanctions on Russia, they cut off seven Russian banks from the SWIFT messaging system. The list includes Bank Otkritie, Novikombank, Promsvyazbank, Bank Rossiya, Sovcombank, Vnesheconombank (VEB), and VTB Bank. These banks account for only 50% of all Russian banks by assets.
Who was spared the sanctions? Biggest lender Sberbank PJSC and a bank part-owned by Gazprom PJSC, Russia’s state-owned energy supplier. Both are banks that process EU payments for the Russian gas. Those payments are substantial and represent a giant loophole in Europe’s sanctions regime. In 2020, the EU paid Russia €95.3 billion in total for imports (most of them raw materials like oil, gas, solid fuels and metals). On March 3, 2022, the EU pledged to reduce its reliance on Russian gas imports by over a third within a year.
If Europe stops buying Russian energy, that would achieve two things: (i) significantly undermine Putin’s ability to keep Europe hostage over energy supplies, and (ii) cause a Balance of Payments crisis in Russia, potentially triggering the inside-Russia effort to oust the Putin regime.
But the real blow to the Russian economy would only come with falling energy prices. For that, the accelerated switch to renewables is critical. The renewables weapon means reduced demand for oil, gas, and coal, and therefore lower prices of those commodities. History shows what brought about Collapse of an Empire last time: it was the price of oil, not political maneuvers. If the catastrophe of warming climate seems too remote for some, the imminent danger from Russian army bombing Ukrainian nuclear stations should be vivid enough to take action.