LONDON (Reuters) – The world faces a dangerous increase in emissions that cause climate change due to the war in Ukraine if Russian gas is replaced with coal, global equity index giant MSCI warned in a report on Tuesday.
In the most extreme scenario, 800 million tonnes of carbon dioxide equivalent could be released in just a year if Europe were to replace all Russian gas imports with coal.
That could jeopardise efforts to limit global warming to within 2 degrees Celsius.
“A ‘bump’ in emissions today means either exceeding that limit or having to cut emissions faster and more sharply tomorrow,” MSCI wrote in a report on the impact of the Russia-Ukraine war on green investing.
Graphic: The costs of two future emissions pathways – https://fingfx.thomsonreuters.com/gfx/mkt/mopanznwgva/netzero1.PNG
Russia is a major supplier of gas, oil and coal to the European Union. Its invasion of Ukraine and the bloc’s sanctions on Moscow have caused a sharp spike in prices.
This prompted some countries to call for a relaxation of EU plans to phase out use of coal, but European Commission Vice President Valdis Dombrovskis said on Tuesday the EU would not be swayed from its goal of moving away from fossil fuels. [L5N2X934X]
Sticking to the EU’s climate-friendly policies from before the war, MSCI warned, would require commitment to politically tricky measures like more financing of renewables, cutting energy consumption and restarting nuclear plants.
If investors cannot influence a rapid diversion of energy profits toward renewables, governments must step in, MSCI added.
“They can influence where windfall profits of energy companies are reinvested … Without a purposeful plan for reinvestment, governments may step in to tax the windfall profits to finance renewables.”
(Reporting by Noah Browning; Editing by Mark Potter)
