As a global energy crisis returns, the UK push for a green economy makes even more sense
(The Guardian, 22 Oct 2023) Rishi Sunak’s decision to dilute net zero policies has become even more shortsighted.
Earlier this year, the world economy had a lucky escape. After a mild winter in Europe, energy prices were in retreat as the continent shifted away from Russian gas supplies. Inflation was cooling, while economic growth remained resilient.
“Hello lower gas prices, bye-bye recession,” analysts at the US investment bank JP Morgan wrote in January. Less than a year later, the Israel-Hamas war serves as a stark warning that the global energy crisis has far from vanished.
European gas prices have jumped by more than a third since the start of October, before a difficult winter to come, as the conflict in the Middle East threatens to escalate. Oil prices have risen sharply, with a leap of more than $20 a barrel since June, continuing a rise that began even before the war.
While not underestimating the human tragedy in Israel and Gaza, most experts reckon that a serious escalation engulfing the wider region remains unlikely – limiting the impact for the world economy.
Yet the outbreak of war in another of the world’s most important energy exporting regions, less than two years after the Russian invasion of Ukraine, is an all too painful reminder of economic vulnerabilities.