Marcella Chow

Macroscope | How Ukraine conflict is forcing the world towards greater food and energy sustainability

Soaring commodity prices have set countries on a path to increased self-sufficiency which, beyond the present geopolitical conflict, will help them meet the challenges of life on a warming planet

Reading Time:3 minutes

Why you can trust SCMP

Wind turbines are seen in front of a coal-fired power plant in Germany in December 2018. The country has committed to increasing its wind power production. Photo: AP

Marcella Chow

Published: 1:30pm, 22 Apr 2022

As communities took the opportunity this Earth Day, April 22, to reflect on the impact of climate change and raise awareness of the importance of sustainability, many are also re-evaluating the dynamics driving the stark changes in global energy and commodity markets.

The Russia-Ukraine conflict has fuelled an unprecedented rise in commodity prices. As a result, governments are putting greater emphasis on improving food and energy self-sufficiency, and reducing their dependency on Russia’s oil, gas, fertiliser, industrial metals and food.

Europe, in particular, has made significant commitments to bolstering energy production, which includes accelerating the roll-out of green energy sources. Last year, the EU lifted its 2030 renewable energy target from 32 per cent to 40 per cent, while the European Commission has more recently proposed targeting a two-thirds reduction in Russian gas imports by the end of this year.

While some countries may switch to nuclear power, others are expected to start increasing their solar, hydro and wind power generation capacity. Germany, for example, is planning to significantly increase its onshore and offshore wind power production. The UK has followed suit, aiming to produce 95 per cent of the country’s electricity from low-carbon sources by 2030.

All these initiatives suggest that the Russia-Ukraine conflict has pressured policymakers to reduce their energy dependency on Russia, accelerating the shift towards green energy and countries’ commitments to net zero emissions.

While energy market distortions have been the primary driver of inflation in Europe and the US, the conflict has also resulted in tighter agricultural exports, putting pressure on food prices, which play a more material role in inflation in Asia.