Climate change, economy, retirement, risk management

Ukraine, the Global Framework and Climate

On February 24, 2022, Russia invaded Ukraine. A number of times today I heard the phrase, “this changes things fundamentally.” The question is what does it change and how do we move forward? In particular, what does this mean for the climate crisis?

The climate crisis requires a level of international cooperation that has never been seen. The breakdown of the framework that came out of Glasgow and COP26 is the latest example of the challenge we face.

Events in Ukraine underscore deeper systemic issues that we need to address in order to be effective on an international scale.

In his recent book, The World, A Brief Introduction, Dr. Richard Haass provided a rich tapestry of history and insight to help guide and expand our understanding. Tom Keene of Bloomberg called this his book of the year and required reading for everyone.

Dr. Haass is president of the nonpartisan Council of Foreign Relations, and experienced diplomat, policymaker and advisor.

Haass writes, “This liberal world order is now fraying, the result of a decline in America’s relative power and it’s growing unwillingness to play its traditional role in the world, a rising and increasingly assertive China, and a Russia determined to play the role of spoiler. Authoritarianism is on the rise…” (p297)

“Russia merits special mention… One the one hand, its belief in sovereignty is near absolute lest other ‘interfere’ with what goes on politically in Russia. At the same time, Russia has intervened militarily in Ukraine, seizing Crimea and undermining the governments authority in other parts of the country. What this reveals is that respect for even the most basic of international rules is far from universal.” 260

One of the issues confronting the west is the nature of our relationship with Ukraine. Dr. Haass discussed this saying, “Terms like ‘alliance’ or ‘ally’ are thrown around casually, often as synonyms for a friendly country. But these terms should be saved for those circumstances in which fundamental security obligations exist. Countries can be friends, even close partners, but allies have a solemn obligation to come to one another’s defense.” (p269) Deeper relationships globally are important for meaningful commitments to develop.

In his speech responding to the Russian invasion on February 24th, President Biden made it clear that the US and NATO partners will defend NATO countries, including Estonia, Latvia, Lithuania, Poland, and Romania. Ukraine is not a member of NATO. (2)

“War provides the most basic evidence that the order has broken down.” (p281) “Clausewitz described war as the continuation of politics by other means.”

Since the end of the Cold War, the international political landscape has been changing. In his book, The World, A Brief Introduction, Dr. Haass outlines how the global political system nations have understood and operated within has evolved over the past 200 years. The breakup of the Soviet Union and the rise of China over the past 20 years has led to a multipolar world where relationships are shifting.

Understanding the nature of this change is important as the world is increasingly stressed by climate change and environmental crises. How we act, and react, needs to be more original and creative. The challenge is that not all actors are on the same page. Some focus on a bipolar conflict, some see only colonial or capitalistic forces at play, some see chaos without any predictability…

In February of 2022 Russia positioned itself to invade Ukraine. In the build up the US government warned that the Russian threat was real. On February 24th, Russian forces invaded. This move rocked markets moving energy prices, wheat, stock markets and bonds. (2)

As energy prices rose in February, fears of an impact on the economy creating a slowdown or potential recession became more real. Europe is especially vulnerable to disruptions of Russian energy being highly dependent on natural gas. This economic vulnerability is yet another rational reason to pursue the development of renewable energy and storage projects.

In his book, Dr. Haass addresses the issue of climate change. “Climate change will likely become more severe and outpace international efforts to limit it or counteract it… Generating the required collective response, however, seems highly unlikely. As a result, climate change could conceivably be the defining issue of this century.” (p190)

“History teaches that order is not natural state of international affairs and does not just emerge or continue automatically; to the contrary, it requires commitment and concerted efforts by governments and others who are willing and able to put aside their differences in an effort to sustain it. The question is whether the governments and those who choose them in this era are prepared to make such a commitment.” (p303)

To learn more and discuss how this relates to your retirement investments please feel free to reach out to me at james.cox@glic.com

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To learn more contact:
James Cox
Cell: 267 323 6936
Email: james.cox@glic.com
PAS 150 South Warner Rd.  Suite 120 King of Prussia, PA 19406

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  1. The World, A Brief Introduction by Dr. Richard Haass
  2. https://www.bloomberg.com/news/articles/2022-02-24/biden-ratchets-up-russia-sanctions-to-pressure-putin-on-ukraine?srnd=premium&sref=qbSjPdvo