Putin’s Invasion of Ukraine Will Accelerate Climate, Energy, and Deep Technologies — Part 1: Overview

Vladimir Putin, accidental climate champion. Source: Wikimedia Commons

By invading Ukraine, Vladimir Putin is accelerating the deployment of the very technologies that the world needs to wean itself off of fossil fuels and address the challenge of climate change. He’s also set off a chain reaction that will accelerate innovation and deployment of all sorts of deep science and deep technologies involved in clean energy, transportation, manufacturing, mining, and processing of critical materials, aviation, and space.

This is the first in a multi-part series that will explore these implications.

We at Prime Movers Lab are purpose-driven investors. We invest in companies using breakthroughs in science and engineering to address some of humanity’s greatest challenges, improve the lives of billions of people, and elevate humanity to a new level of material wealth, while improving the health of the planet.

Putin’s invasion of Ukraine has set off a chain reaction of innovations across these deep technologies. We classify our investment areas into six sectors, and in virtually all of them, Putin’s war has or will set off tremendous efforts to develop new technological solutions:

1. Energy. Europe imports tremendous amounts of natural gas, oil, coal, and uranium from Russia. Now, more than ever, Europe and the rest of the world are motivated to eliminate this dependence. This war will drive an incredible surge in the deployment of new clean energy technologies, across solar, wind (onshore and offshore), energy storage, batteries, and electric vehicles; green hydrogen for use in industrial energy applications such as making steel, cement, and fertilizer; electrification of all other parts of the energy system; and more. This is perhaps the most substantial of all of the impacts of Putin’s war and is the topic we’ll explore in depth in our next post.
2. Manufacturing. Covid had already laid bare the challenges of global supply chains. Now Putin’s war has disrupted the flow of nickel, cobalt, titanium, and other metals from Russia. And it will leave the world more skeptical of dependence on supply chains of both raw materials and high-tech goods which flow through or are owned by Chinese companies. The result will be a shift to onshoring or near-shoring of manufacturing of critical technologies such as semiconductors, batteries, electric vehicles, and energy infrastructure. And it will kickstart a race to develop technologies to produce and process critical minerals such as lithium, nickel, cobalt, and “rare earth” elements from locations not controlled by Russia or China.
3. Food and Agriculture. Russia’s invasion has disrupted the exports of wheat from both Russia and Ukraine. It’s also sent fertilizer prices spiking, both because of the spike in natural gas prices, and a surge in the prices of materials such as potash that are used in fertilizer and mined in Russia. Expect to see a surge of activity in alternative ways to produce food and to fertilize fields. More and more nations will see a national security interest in achieving food security and even food sovereignty. “Local” food production may become an issue of security rather than pure consumer choice.
4. Infrastructure. Infrastructure encompasses the technologies of the power grid, water and power utilities, bandwidth, satellite communications networks, and more. All of these sectors, and particularly power and the electric grid, will be pressed for faster innovation, as Europe in particular pivots away from dependency on Russian natural gas and towards a grid more dominated by variable renewables like solar and wind.
5. Transportation. The world’s transportation system runs on oil, and oil is what fills Putin’s coffers. In response to this crisis, Europe in particular, and the United States secondly, will even further accelerate the deployment of electrified transportation. We also categorize aviation, aerospace, and space within our transportation sector. Above the ground, increased military budgets will lead to a wave of new investment in aerospace and aviation, including autonomous aircraft and hypersonic technologies. And the prospect of potentially frostier relations between the US and China has the potential to ignite a new space race as well.
6. Human Augmentation. Our last category, human augmentation, subsumes cognitive enhancement, biological enhancement, health, longevity, and transformation of the mind. A sad fact of war is that the toll on human lives is devastating. This suffering will spur new innovations in health care, in assisting those who’ve been injured or maimed, and new spending in R&D to augment the abilities of soldiers.

There will be other impacts that are more difficult to categorize. We expect to see a rise in export controls on technologies such as AI, computing technology, cryptography, sensors, advanced materials, biotechnology, and others that are used to improve our everyday lives but also have military applications. We expect companies and nations to seek solutions in each of these sectors that don’t depend on potentially hostile foreign states, including China. That, in turn, will spur innovation within the US and Europe in all of these sectors.

We write these words gravely. War is not to be wished for. There are other ways to spur innovation. Nor do we wish to profiteer from warfare. Yet what we see is that the very sorts of technologies and breakthrough science companies we are already investing in are the same as those required to address the challenges and market demand that will arise from this war and from the resulting geo-political re-alignment that follows.

Wars are never certain. Outcomes are unknown. We deal in probabilities. And we perceive that this war and the new world order to follow will likely be shaped by two realities.

1. This is unlikely to be over soon. While the active phase of this war could end at any time, the overall conflict is likely to continue, with tensions remaining high for years or even decades to come. To be clear, the violent “hot” war in Europe could last for weeks, months, or years. Yet even if it is ended by a peace deal soon, the true conflict will not be over. Until Russia is perceived by Europe and the US to be a friendly democracy, even a cessation of combat will mean little. Absent the rise of democracy, even “peace” will be perceived as merely a pause in the hostilities. We are now in Cold War II, at a minimum, a multi-polar Great Power competition between democracies and autocracies. European and US efforts to increase defense readiness, and Europe’s dash to wean itself off of Russian fossil gas and oil, will not end simply because of an armistice. The memory of this war will linger, and Russia’s neighbors — and the US, and other free and highly developed nations around the world — will be preparing for the next.
2. This will affect China and relations between China and the world. This war has already damaged relations between the US and China, and between China and the EU. China’s unwillingness to denounce Putin’s invasion, and its apparent flirtation with direct support for his army has raised suspicions of and wariness towards China in the West, and in other Asia-Pacific nations such as Japan, Australia, South Korea, and the nations of SE Asia. In addition, Putin’s invasion of Ukraine, combined with China’s recent actions towards Hong Kong, have brought to the fore fears of a Chinese military invasion of Taiwan. While China may be deterred for the moment by Putin’s fumbled invasion of Ukraine and the price he has paid, the issue is now more salient and more real for Western and allied Asian leaders than ever before. A Chinese invasion of Taiwan may be more distant than before, but it is also easier to vividly imagine than before Putin’s invasion of Ukraine. Western policymakers, corporations, and investors will be more motivated than ever to reduce their dependency on Chinese suppliers for critical technologies and critical minerals. As BlackRock CEO Larry Fink has said, the new geopolitical reality may go so far as to be an “end to globalization”. Whether the changes go that far or not, it is extremely likely that there will be massive new government and private sector initiatives to onshore manufacturing of and supply chains for key technologies. In these sectors, we expect a boom of development and innovation across Europe, the US, and much of the world ex-Russia and ex-China.

There will be countervailing effects. While there will be much new innovation, this innovation will be driven by necessity and suffering. In the short term, spikes in the price of food and commodities will harm human beings around the world, especially the poorest, and damage the global economy. Fossil fuel producers outside of Russia may see a windfall as demand for non-Russian supplies of fossil fuels grow. Policymakers will make short-term choices to increase domestic supplies of oil, gas, and even coal in Europe and the US. Some things will move backward.

Yet in the long run, we believe that this conflict will lead Europe and the US to drive faster toward new clean technologies that can reduce dependence on fossil fuels from potentially hostile states; that can address the need to decarbonize the global economy to solve climate change; along with innovation and onshoring of other technologies that can improve human wellbeing.

War is never to be wished for. Yet we believe this one will move the free world faster towards more physical abundance and a cleaner, richer, safer world for all.

In the coming posts in this series, we’ll dive into the details of a number of these sectors. The next post will deal specifically with clean energy and climate technologies, and how Europe’s dash to free itself of dependence on Russian gas and oil will unlock innovation in these sectors, and speed up the world’s transition to clean energy, transportation, and industry, and away from the fossil fuels that cause climate change.

Stay tuned.

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Ramez Naam is a Partner and the Chief Futurist at Prime Movers Lab, where he invests in climate tech, clean energy, and other deep technologies that can improve the lives of billions. Follow him on twitter at @ramez.

Prime Movers Lab invests in breakthrough scientific startups founded by Prime Movers, the inventors who transform billions of lives. We invest in companies reinventing energy, transportation, infrastructure, manufacturing, human augmentation, and agriculture.

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