There is no technical or economic reason anyone should be forced to fund Vladimir Putin’s terror. The technology, policy tools, and finance, are available now to go green at the speed required by ongoing emergencies.
The illegal invasion of Ukraine, by a military force financed by revenues from international energy markets, raises the question about how best to rapidly reduce dependency on imported oil and gas. We look here at four forces driving the political, economic, and financial calculus of the moment:
- Energy prices and COVID driving inflation
- Embedded oil and gas costs
- Pervasive, escalating climate risk
- The weaponization of oil and gas dependency
Our conclusion is that we do in fact have the policy, technology, and finance tools we need to phase out fossil fuel dependency at wartime speed, and that doing so will help us to secure our best possible economic future.
1) Energy prices, and their interactions with COVID pandemic conditions, are driving inflation.
Even a cursory look at which products are seeing the highest rate of inflation shows that oil and gas are the culprits. The rise in energy prices is far above any other rise in costs, including wages. What we are experiencing is a fossil fuel price shock, not systematized or spiraling inflation.
The reasons for this price shock are many, but the simplest and most universally applicable is the complicated process of recovering from the forced depression of consumption that came with pandemic-related shutdowns. The massive cutback of everyday economic activity in 2020 sent a ripple of rethinking through energy markets, with production cut back according to reduced demand.
In 2021, we saw a complicated resurgence of demand.
- Fuel was still needed for shipping, home-heating, and power production;
- Petroleum byproducts were still very much in demand;
- Vaccines were making it somewhat safer for people to travel, to gather in public, work in offices, and so demand surged;
- But markets didn’t have clear signals, because temporary shutdowns were still happening, and delivery on futures contracts couldn’t be timed optimally.
In short, we were not yet back to pre-pandemic standards of operation, but demand was surging. That meant producers, refiners, distributors, and investors, had to build in a premium, to cover potential losses. Without sufficient supply to keep prices low, prices rose.
The fear of higher prices—and what that could do to people, communities, and economies, that are not able to absorb significant price spikes—is conditioning the global response to Putin’s invasion of Ukraine. While governments want to defund Putin, they don’t want to destabilize other societies in the process.
2) Embedded oil and gas costs create unwanted ripple effects.
Energy comprises a meaningful segment of the value chain behind prices of other goods and services. Speculative fuel price increases result in less cost-effective management scenarios for agricultural products, and other major internationally traded goods.
We can already see how the ongoing global energy price spike is affecting consumer goods, and interfering with inclusive and sustainable economic recovery from the COVID shutdowns. To reduce the likelihood of price spikes from shock events, we need to remove embedded fossil fuel costs from value chains.
During the years Donald Trump was in the White House, his administration used levers of federal government power to expand support for fossil fuel production. That increased US fossil fuel dependency, and ensured embedded oil and gas costs would be higher. That was the point.
If the fossil fuels industry only made money from fuel for motor vehicles with internal combustion engines, it wouldn’t be nearly as lucrative. Expanding the fossil fuel share of every consumer dollar spent, while not limiting fossil fuel profits, effectively guarantees free help to an industry whose business model and infrastructure are out of date and out of favor.
We can trace a direct line from efforts to delay American clean economy development to higher-than-needed fossil fuel dependency, to vulnerability to Putin regime supply and price manipulations. Had whole-economy energy transition moved ahead faster between 2017 and 2021, we would not be seeing the same energy price shocks we are seeing now.
3) Pervasive, escalating climate risk makes it necessary to move away from fossil fuels, now.
The latest report from the Intergovernmental Panel on Climate Change was produced by 270 authors from 67 countries, including 47 coordinating authors, 184 lead authors, and 39 review editors, drawing on the work of 675 contributing authors and over 34,000 cited references. Before reaching the final product, IPCC Working Group II received a total of 62,418 expert and government review comments.
That report finds that human-caused climate disruption is happening everywhere, that the window for successful mitigation, adaptation, and resilience-building is rapidly closing, and that some regions are already coming up against both hard and soft barriers to adaptation. Food and water supplies are at risk of collapse, threatening the stability of financial systems and nation states.

The geophysical math is clear: Rapidly reducing the proportion of all energy that comes from polluting fuels is a global financial and economic imperative. Achieving economic development and future finance that reliably produce benefits and build stable, functioning, prosperous societies will require us to stop the degradation of natural systems that is currently taking place, and getting worse, due to worsening global heating.
The International Monetary Fund, the Financial Stability Oversight Council, the Commodity Futures Trading Commission, a global network of central banks, a working coalition of ministries of finance, and other mainstream financial institutions, recognize that to secure future value, spending and investment must foster climate resilient development.
We need economies that actively build resilience and generate positive externalities. Fossil fuels generate far more negative externalities than they do positive. Alternative energy sources are able to greatly eclipse the co-benefits of fossil energy, while avoiding the pervasive devastation that comes from air pollution, water pollution, and climate destabilization.
Both domestic and foreign policy in Russia affect our overall global prospects for building a climate resilient future. One of the greatest emerging threats to long-term climate stability is thought to be the “methane bomb” of thawing permafrost, which makes up the majority of Russia’s vast land area.
- As global average temperatures rise and permafrost thaws, ancient methane is released into the atmosphere, accelerating global heating.
- Because the Siberian tundra is so vast, covering more land area than any nation other than Canada, the potential for methane release is extreme.
- Russian domestic policy includes no serious strategy for ending global heating or preventing the methane bomb effect.
In other words, for Russia to remain a petro-state, run by a brutal authoritarian who refuses to allow any dissent or alternative policy discussion, let alone alternative development strategies, directly threatens the world’s ability to secure a livable future.
4) Oil and gas dependency is being weaponized to limit the international response to war crimes.
The dependency of European energy markets on Russian oil and gas is being weaponized by Vladimir Putin, who has repeatedly used oil and gas exports to take lives, maximize political pressure, and extort concessions. Putin leverages global markets, where a reduction in supply can send prices soaring, to neutralize opposition from countries unfriendly to his corrupt authoritarian aims.
Putin has described coercive or punitive economic actions (sanctions against his regime) as “akin to declaring war”. This also amounts to a confession that his regime is actively at war with the entire world. His regime routinely uses fossil fuel exports as a tool to make room for his corrupt use of power.
Putin’s decision to invade Ukraine made clear that dangerous tool needed to be taken away. Germany’s government rightly recognized the very real threat posed by the Nord Stream 2 natural gas pipeline linking Russia to Germany under the Baltic Sea. Nord Stream 2 would give Putin the ability to directly control the flow of gas to Germany; the pipeline has been suspended, and the company that would manage it has filed for bankruptcy.
But that pipeline hadn’t been turned on yet. Forerunning market dependency is still a concern. Russia and Saudi Arabia and their pact to drive prices up by limiting production are responsible for soaring fuel prices. Some believe they are colluding to sabotage western efforts to decarbonize; others say the OPEC Plus pact is intended to give rogue states leverage to extract concessions.
It is clear that such a situation should reinforce political will to accelerate decarbonization efforts and liberate economies from hostage-taking by rogue regimes.
- There is still a frequently repeated trope of conventional wisdom that only by increasing domestic production of currently dominant fuels can a country become “energy independent”.
- This is a dangerous myth and risks subjecting otherwise more innovative economies to the “oil curse”, where dependency becomes so endemic there is no economically viable way to break the habit.
- Adding supply doesn’t mean oil exporting adversaries must comply; it doesn’t automatically change market dynamics.
- A coordinated effort is needed to achieve this, and in the long run, the “energy independence” effect of expanded fossil fuel production is neutralized by the way energy markets are shaped by cartels and speculation.
Neither Putin nor MBS can dictate to any country when the Sun will shine or when the wind will blow; nor can they dictate how the resulting energy is stored, managed, delivered, or priced. A transition away from polluting fuels is the best way to remove this particular barrier to upholding the rule of law internationally.
The most rational way forward is to rapidly move away from fossil fuels.
For years, the US, the EU, and allies, have been planning a comprehensive transition away from carbon pollution. As we noted above, this is clearly necessary, given our geophysical situation and the impact on financial and economic prospects. Even the oil and gas industry describes natural gas as a “bridge fuel”, meaning a bridge to the low-carbon future.
Combustible fuels necessitate and benefit from dedicated hard infrastructure. They also benefit from business models that use finance, fuel, and markets, in specific ways. Business models, policy incentives, financing strategies, and distribution systems, will all be radically different in a zero emissions economy.
That transition is now underway.
- One of the most valuable companies in world history produces electric vehicles, solar energy, and batteries to power homes and buildings and back up the grid.
- More than 450 major financial institutions last year committed to realign one-third of all wealth on Earth with science-based zero emissions targets that would remove half of all global emissions over the next 9 years.
The idea that it will be more cost effective to produce massive new amounts of oil and gas, to fill the gap created when it becomes illegal to buy Russian oil or gas, is based in outdated thinking. Cost and benefit need to be considered in terms of the overall benefit to society, to financial and economic stability, and to neutralizing the possibility of any future repeat of this menace.
The most significant short-term financial and economic benefit of massive new spending on oil and gas extraction is in the direct payments, indirect incentives, new financing, and dedicated new infrastructure, delivered to oil and gas companies. Prices are set by global markets, so price benefits from such major investments will be time-limited and marginal at best, while the major assistance given to industry risks locking in dependency across the whole economy.
The alternative—a shift to low-cost, distributed-generation clean energy systems—is already proven to:
- narrow the energy segment of overall value chain costs, reducing embedded oil and gas costs;
- create opportunities for low to zero marginal energy cost business models;
- foster fast-paced high tech innovation and the diversification of local and regional economies;
- unlock greater investment in new job creation, across a wider range of industries.
The best way to turn the rust belt into a reinvestment engine is by manufacturing the clean economy. $130 trillion is now looking for precisely this kind of opportunity. A short list of some of high-value clean economy manufacturing opportunities includes:
- Wind turbines;
- Solar photovoltaic systems;
- Micro grid hardware;
- Battery storage;
- Electric vehicles;
- EV infrastructure;
- Mass electric transport;
- Hybrid drive systems for cargo ships;
- Net zero emissions aircraft;
- Low-carbon smelting technologies;
- Biodegradable biopolymers;
- New ultra lightweight and/or smart materials.
Faced with an actual threat of war against the entire world, by a lunatic dictator obsessed with terror and subjugation, who is actively committing war crimes and slaughtering civilians… with western populations wanting to rev up participation in a major rescue effort to stop that terror… it makes sense to mobilize at wartime speed to accelerate the energy transition.
Europe remains heavily dependent on Russian oil and gas, but other trading partners could make up the oil supply with increased production. Natural gas is the tricker challenge, but natural gas goes primarily to end uses that could be delivered by electrification.
If the pace of electrification is quick enough to devalue future fossil fuel production, the effect of reduced supply on prices would be dampened. What we are essentially facing is the need for fast-moving sustainable development pathways for some of the world’s major industrial economies. That is investable, highly valuable, generates benefits across society, and would reduce future cost and risk from climate disruption.
The key is to do it big—make the comprehensive transition clear, and strengthen that signal with robust incentive shifting.
- Many discrete, focused actions need to be taken to prevent temporary price shocks.
- The tools are already available to make these interventions, to shift incentives, limit predatory speculation, and accelerate the depreciation of stranded assets. The EU’s Energy Prices Toolbox provides a helpful example.
- Market regulators need to look more closely at whether predatory speculation is generating profits linked to Putin’s atrocities.
Recognizing these cost and benefit considerations, and the imperative of halting the flow of funds to Putin’s war, the European Union is announcing today a new energy policy that will see its reliance on Russian gas imports decline by 67-80% this year. Such an integrated strategy can also help the US enforce its new comprehensive import ban on Russian oil, gas, and coal.
By facilitating the defunding of Putin’s regime, such fast-moving sustainable development pathways would also help to create conditions in which (1) Putin is less likely to stay in power or aggress anyone if he does, and (2) Russia will be better positioned to follow suit, and to help defuse the Siberian methane bomb.
We must not give evil an open zone of operation.
In 2014, the Geoversiv team joined with others in arguing that instead of prolonging Europe’s addiction to natural gas, it was necessary to accelerate the transition to zero emissions clean energy systems. The concern was how to punish Vladimir Putin for his illegal military invasion of Ukraine and his illegal occupation of the Crimean peninsula.
We knew then what needed to be done, but we have advantages now that we didn’t have then, in terms of technology, finance, and political will, to fully commit to decarbonization. We now have:
- A global agreement to cooperatively decarbonize the global economy, backed up by a global commitment to phase out pollution subsidies;
- Commitment by international financial institutions and major investors to invest tens of trillions of dollars in that rapid decarbonization;
- Proven manufacturing and technologies that can be ramped up, replicated, and diversified, by a coordinated effort moving at wartime-speed;
- More advanced, lightweight systems for distributed manufacturing and modular grid management;
- Digital information and payments systems that can integrate across sectors and priorities to maximize efficiency.
We also have agreement from last year’s climate negotiations that Special Drawing Rights—fiscal rescue funds now worth more than $650 billion—should be used to catalyze climate-smart flows of capital across the world. And, major polluting industries know their business models need to evolve to align with society-wide transformation and refinancing.
Oil and gas that are already produced and circulating could be used, so long as no further revenues are delivered to Vladimir Putin. Each of these levers can help lighten the heavy lift:
- Wartime-speed production and deployment of clean energy systems;
- Cooperative refinancing of energy and transport infrastructure and long-term contracts;
- Coordinated interim management of existing supplies, to avoid price shocks;
- Climate income policies to ensure households don’t see a net rise in costs from the higher risk, lower reward business environment for polluting fuels;
- Complementary efforts to limit the shock value of embedded oil and gas costs.
Clear accelerated timelines for decarbonization—utilities moving to 80% by 2030; nations moving to 55% by 2027, or net zero by 2040, for instance—could provide clear and actionable signals to investors, markets, and to productive industries. A strong enough directional signal will counteract the short-term signal sent by erasing Russian exports from markets.
We cannot afford to give evil an open zone of operation. If we aren’t going to organize the whole of society to go to war, as in the 1940s, we must organize the whole of society to shore up the defense of human freedom by eliminating the tool Putin—and others—use to undermine and menace humanity itself.
As Molly McKew says, in closing Part I of her essay “There is no way back”:
“imagine the world if we save Ukraine. Imagine the century that we might have then.“
The courageous people of Ukraine are reminding us all that you don’t build a better future by clinging to what can no longer work. You build a better future by refusing to accept the unacceptable and then using every talent and every tool to make that future a reality.

UPDATE—Tuesday, March 9, 2022, 18:30 EST
US bans Russian fossil fuels; EU announces plans to phase out 2/3 of Russian energy imports this year
With pressure mounting across the world to stop all funding of Vladimir Putin’s war machine, the United States announced Tuesday it would ban the import of oil, liquefied natural gas, and coal from Russia. The US announcement says the move is intended to deprive Putin “of the economic resources he uses to continue his needles war of choice”, and adds:
“As a result of our historic, multilateral coordination, Russia has become a global economic and financial pariah. Over 30 countries representing well over half the world’s economy have announced sanctions that impose immediate and severe economic costs on Russia, cut off access to high-tech technology, sap its growth potential, and weaken its military for years to come.”
The European Union announced a new long-term plan that would phase out two-thirds of its gas imports from Russia this year. In announcing the REPowerEU plan, European Commission President Ursula Von der Leyen said:
“We must become independent from Russian oil, coal and gas. We simply cannot rely on a supplier who explicitly threatens us. We need to act now to mitigate the impact of rising energy prices, diversify our gas supply for next winter and accelerate the clean energy transition. The quicker we switch to renewables and hydrogen, combined with more energy efficiency, the quicker we will be truly independent and master our energy system.”
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Joseph Robertson
Joseph is Executive Director of Citizens' Climate International. He is the lead strategist supporting the Acceleration Dialogues (diplomatic climate-solutions roundtables) and Resilience Intel—an effort to move the world to 100% climate-smart finance. Joseph represents Citizens’ Climate in the Carbon Pricing Leadership Coalition, the UNFCCC negotiations, and other UN processes, and is founder of Geoversiv. His articles appear from time to time in the Guardian. He served as Interim Director for the Food System Economics Commission from April through November 2020, and is a senior advisor to EAT for sustainable finance. He is a lead contributor to the Earth Intelligence podcast.