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Energy transformation can strengthen democracy and help fight climate change

Posted on 6 April 2022 by Guest Author

This is a re-post from Yale Climate Connections by Gary Yohe

It is impossible to forecast how the war in Ukraine is going to end: current events are fast-moving. Given the inhumanity of it all, it is important to consider the resulting uncertainty and implications for the entire world.

Uncertainty about the global ramifications of the war clearly has driven world prices of liquified natural gas (LNG) dramatically higher over the past several months. These price increases have not hurt Russia: In fact, they have helped to finance its war effort. Rapidly climbing LNG and oil prices, however, have, hurt much of the rest of the world, as supplies of LNG have been gobbled up swiftly by the highest bidders with the largest appetites. Those most hurt by all this live in other developed and developing nations all around the world. And even in many European countries and the United States, those with limited means already are suffering. 

So what can be done?  Any first-year student of economics knows that increasing supplies from all non-Russian sources of energy could work over time, especially in concert with efforts to reduce demand. These are good ideas, of course, but the devil is in the details.  There are at least two distinct options:

Option 1: Invest in opening untapped supplies of petroleum and natural gas, drill for more of both, operate existing distribution infrastructure at its fullest capacity, and build more as quickly as possible; or

Option 2: Two complementary parts, here: (a) invest in expanding diverse and decentralized non-fossil energy systems; and (b) invest in R&D on new technologies that can smooth the demand-side transition to using electricity, technologies such as electric vehicles.

The European Union recognizes that the choice is not binary. The EU’s announced plan is designed to reduce dependence on Russian LNG as quickly as possible by expanding access to reserves from the United States. a component of option 1. It seeks to do so while making simultaneous longer-term investments in “frontloading renewable energy and improving energy efficiency” (the very spirit of the dual supply and demand approach of Option 2).

Poland and Belgium already are expanding their LNG terminals, and Greece and Germany have each recently approved construction of three new terminals.  Germany has committed to independence from Russian LNG by the middle of 2024. The U.S. has agreed to supply an additional 15 billion metric tons of LNG this year, and the EU will work to promote substitution to LNG to the tune of 50 billion metric tons per year – an effort that will require increased supplies from many places.

But what about the longer term?  Details matter there, too.  Should the developed world expand the status quo as described in parts of option 1, or should it accelerate its movement toward the environment-friendly structure of option 2? Future investment should favor the latter, and not simply because it would promote a less hazardous climate future.  Given the events of the past several decades, it is important to note that doing so would strengthen democracy’s place as a fundamental principle of modern government.

Mr. Putin has successfully invaded sovereign nations whenever his hope of resurrecting the old Russian Empire has been threatened by independence movements within former Soviet satellite states. This time, however, he has encountered a country and population not easily subdued. Ukrainians are fiercely and effectively using weapons and training from the West to defend their way of life. Ukrainians have reminded the planet’s population that democracy is worth fighting for – to the last breath, if necessary. 

Putin’s war has pushed world energy markets to inflection points. It has created a perhaps once in a generation opportunity to reorganize and transform global markets toward renewables and thereby reduce the world’s dependence on fossil energy from countries with leadership antithetical to democracy (not just Russia). Investing aggressively in energy option 2 would reduce the political power of major fossil fuel exporting nations with authoritarian leaders. Why? Because rapid transition to Option 2 undermines the ability of autocrats to maintain their extraordinary market clench over supplies of scarce and essential commodities. Such a transition would undermine their access to money from the rest of the world – money they use to fund inhumane oppression at home and unlawful and immoral extracurricular aggression abroad. 

Shrinking such gains derived from formidable market power would strengthen the hand of democracy – not by making democracy work better (it will always be messy), but by diminishing the use of fossil fuel energy to bankroll wars and hold energy-needy countries hostage. Constraining dictators’ and autocrats’ power over energy issues can help both to forward democratic principles and to help propel progress toward a cleaner and more healthy global environment. 

Gary Yohe is the Huffington Foundation Professor of Economics and Environmental Studies, Emeritus, at Wesleyan University in Connecticut. He served as convening lead author for multiple chapters and the Synthesis Report for the IPCC from 1990 through 2014 and was vice-chair of the Third US National Climate Assessment.

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Comments 1 to 6:

  1. What about Option 3: follow France and dispatch more Nuclear ?

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  2. I'm glad someone finally brought this topic up.  Every time I listen to a story in the media about "sanctions" I think about the BBC hard talk interview with the Prime Minister of Norway last month. They asked him why Europe was sending a billion dollars a day to Russia.  The PM tried to make the case outlined above, but he was constrained by the hard talk interview "gotcha question" format.

    The amount is less than a billion a day now, and I don't have a figure.  Some omissions from the article above: Putin attacked in winter at the time of peak demand.  Russia had a debt to GDP ratio of just 19% last year up from 18% the year before, an extremely strong financial position compared to most countries.

    One question that needs an answer, therefore, is how to deal with the increased demand for fossil in winter, in Europe and elsewhere.  It's hard to say no to fossil when you need it for heat.

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  3. This is a timely presentation of Options for Helpful Leadership action by global leadership.

    It would have been beneficial for helpful global leadership (those claiming to defend democracy) to have pushed harder for Option 2 starting 30 years ago. That would have reduced the harmful pursuits of control, and the related acceptance of harmful regional leadership, in the Middle East and parts of Africa (and Russia). And it may have avoided the harmful power play by Putin today.

    There is an important supplementary action that everyone can be helpful with right now (it is never too late to learn to change to be less harmful and more helpful).

    Everyone who is consuming more than their basic needs can help by reducing their consumption, especially their direct use of fossil fuels. That would reduce the need for Option 1 and maximize the rate of achievement of Option 2.

    There can be very rapid benefits realized if everyone transitions quickly (immediately) to cooler indoor spaces in winter and warmer indoor spaces in summer. People can also have shorter showers and fewer baths starting immediately. And people can also help fight the harmful likes of Putin by stopping unnecessary power consuming trips (Walk and bike more. Use public transit more. Enjoy 'getting away to somewhere close' rather than going far away for a change).

    There is growing evidence that consumers who attempt to be Greener while maintaining or increasing their consumption are far more harmful and less helpful than consumers who simply reduce their consumption without pursuing 'greener options' (of course reducing consumption is improved by pursuing genuinely less harmful options for the remaining reduced consumption).

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  4. Eric the sceptic:

    "Russia had a debt to GDP ratio of just 19% last year up from 18% the year before"

    This is not much of an advantage when 1) The world wont loan you any more money, 2) the ruble is crashing in value 3) Inflation in Russia is now rampant 4) The western world has frozen many oligarchs accounts 5) Markets are closing to Russias exports 6) Russias have been denied access to various international financial systems 7) Russia is having trouble importiung enough goods.

    I guess Russia might print its own money. That creates a further raft of problems.

    "One question that needs an answer, therefore, is how to deal with the increased demand for fossil in winter, in Europe and elsewhere."

    Scary scenario for places like Germany. They are very reliant on Russian gas. Apparently America is supplying lpg gas but ships can only transport so much.

    I have read that Germany has commited to a big acceleration of its renewables programme. Building nuclear would probably be too slow.

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    Moderator Response:

    [PS] Just a little prompt to would-be responders, that while energy and climate implications of Ukraine war are on topic, this is not a forum for general discussions of the war and it's politics.

  5. Just to correct nigelj, the value of the Ruble is basically back where it was before the war.  This is due to Russia pegging the Ruble to the price of gold and demanding payment for oil and gas in Rubles. It is unfortune though for Germany that they are moving away from Nuclear as they have essentially snookered themselves.

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  6. Three issues should be on topic: energy, climate and money.  The PM of Norway was unfortunately constrained in the interview: by the interviewer.  But he claims cutting off the money would have no effect (implying sanctions are binary when they have not been binary in reality).

    Also I read up after my comment above on seasonal alternatives to natual gas.  Something like this would take years of planning.  But ramping up such a capability quickly may have a deterrent effect which was what we hoped the threat of sanctions would do.  And it uses the same pipes as Russian natural gas.

    European leadership should look for ways to apply their wealth quickly on Russian-funding harm reduction.  I would note they have done that recently to achieve greater CO2 harm reduction by phasing out Russian coal starting April 4th.

    In short, all harm reduction must be considered, holistically.

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