At the beginning of September, approximately 70,000 people took to the streets of the Czech Republic’s capital city of Prague calling for the government to do more about spiraling energy prices.
During that same time in Germany, the far-left and the far-right put aside their differences to threaten weekly protests against the rising cost of food, gas, and energy.
In Naples, Italy, citizens set fire to the expensive energy bills in the streets. And in Sweden, Norway, and the United Kingdom, unrest reached a fever pitch.
The citizens of these countries were far from alone in their discontent.
On Sep. 1, risk consultancy Verisk Maplecroft released a report that found over the past quarter, civil unrest rose in 101 out of 198 countries.
“The data, covering seven years, shows that the last quarter saw more countries witness an increase in risks from civil unrest than at any time since the index was released.”
It added, “the worst is undoubtedly yet to come,” as more than 80 percent of countries around the world experience inflation above six percent.
On Sep. 13, despite the recent passage of the Inflation Reduction Act, the United States government admitted that inflation increased from July to August and was up 8.3 percent from a year ago.
Verisk Maplecroft’s report distills the above into one poignant sentence, “Over the coming months, governments across the world are about to get an answer to a burning question: will protests sparked by socioeconomic pressure transform into broader and more disruptive anti-government action?”
Energy Crisis in the Making
The last time the world experienced an energy crisis was in the 1970s, when OPEC first imposed an oil embargo over the United States’ decision to resupply the Israeli military.
OPEC then extended the ban to other countries that supported Israel.
The embargo strained the U.S. economy and prompted then-President Richard Nixon to announce Project Independence, promoting domestic energy independence.
It also led to the creation of the Strategic Petroleum Reserves, fuel economy standards, and the creation of the International Energy Agency (IEA).
The IEA consists of 31 member countries and eight association countries.
Upon creation, the IEA’s mission was to help coordinate a “collective response to major disruptions in the supply of oil.” But since its inception, the IEA has evolved, and now its mission includes tracking the clean energy transition “on the pathway to net-zero emissions.”
In March 2021, IEA and the European Commission joined together to advance “net-zero by 2050,” with executive vice president Frans Timmermans stating, “The European Union is determined to reach net zero by 2050 and we urge others to join us in this effort.
“Europe is anchoring its course with the EU Climate Law and the upcoming package of measures to deliver our -55 percent reduction target for 2030.”
In May 2021, IEA released the “world’s first comprehensive energy roadmap” that stated the road to “net-zero emissions in 2050” was “narrow and requires an unprecedented transformation of how energy is produced, transported, and used globally.”
As part of the roadmap, the IEA specified 400 specific milestones, including “from today, no investment in new fossil fuel supply projects, and no further final investment decisions for new unabated coal plants.
“By 2035, there are no sales of new internal combustion engine passenger cars, and by 2040, the global electricity sector has already reached net-zero emissions.”
Of note, the IEA admitted that the pathway to net-zero involves technologies that aren’t readily available, “in 2050, almost half the reductions come from technologies that are currently only at the demonstration or prototype phase.”
As such, IEA encouraged governments to reprioritize their spending on research and development and adopt policies that put “clean energy technologies” at the core of “energy and climate policy.”
The IEA concludes, “By 2050, the energy world looks completely different.
“Almost 90 percent of electricity generation comes from renewable sources, with wind and solar together accounting for almost 70 percent.”
If the above policy sounds familiar, it’s because President Joe Biden signed an Executive Order a week after assuming office, which, among other things, banned new oil and natural gas leasing on federal lands and waters.
It also ordered the federal government to only use “clean and zero-emission vehicles” for its fleet by 2035, and eliminated fossil fuel subsidies.
Additionally, it put the “climate crisis” at the center of the United States’ foreign policy and national security and committed to making a “positive contribution” to the 26th United Nations Climate Change Conference of the Parties (COP26).
According to the IEA, its net-zero transition report was “designed to inform the high-level negotiations that will take place at the 26th Conference of the Parties (COP26) of the United Nations Climate Change Framework Convention in Glasgow in November.”
And inform it, it did. At COP26, 153 countries committed to new 2030 net zero commitments, “The Glasgow Climate Pact accelerates the drumbeat and puts in place the underpinning rules and systems.”
Further, “developed countries” committed to delivering a $100 billion climate finance goal by 2035, and “five public finance institutions will stop international support for the unabated fossil fuel energy sector next year. Private financial institutions and central banks are moving to realign trillions towards global net zero.”
According to the Glasgow Climate Pact, 90 percent of the world’s collective money and 90 percent of global emissions now fall under net zero commitments.
Changing Energy Winds
For some countries, the above commitments reaffirmed policies they’d already implemented.
In 2000, Germany enacted the Renewable Energy Sources Act (EEG), which required six percent of energy to come from “renewable resources.”
In 2017, the legislation was revised, requiring 40 to 45 percent of energy to come from “renewables” in 2025, and up to 65 percent in 2030, according to the Federal Ministry for Economic Affairs and Climate Action.
In 2018, the Czech Republic committed to at least 13 percent consumed energy from “renewable sources” by 2020.
It also committed itself to 18 to 25 percent of its electricity production from “renewables” by 2040 and said it “generally supported” the EU targets for decreasing greenhouse gas emissions (GHG).
Just before the Glasgow Climate Pact, Prague adopted a policy to “transform the city of Prague into a climate responsible and environmentally friendly metropolis, attractive for living,” which included reducing carbon dioxide (CO2) emissions by 45 percent.
In 2013, Italy developed the National Energy Strategy to help it exceed the EU’s GHG emission reduction goals, which included reducing emissions by 21 percent by 2020 compared to 2005.
As a result of the above policies, countries have phased out things like domestically produced coal and nuclear energy and moved toward increasing their reliance on wind and solar.
But, according to Sarah Lohmann, a non-resident fellow with the American Institute for Contemporary German Studies at Johns Hopkins University, there’s a gap between ambition and reality.
“Unfortunately, in its passion to lead the pack, Germany didn’t quite do its math. It has not created nearly enough renewable energy to replace the nuclear and coal that it is determined to phase out.
“When the last of the nuclear reactors is turned off next year, there will likely be a shortage of 4.5 gigawatts, or the equivalent of what 10 large coal-fired power plants would provide.”
Thus, countries like Italy, Germany, the Czech Republic, the EU, and others, turned to Russia for help. According to the International Monetary Fund (IMF), Russian gas imports account for 15 to 40 percent of annual energy consumption in countries in Central and Eastern Europe.
As countries phased out domestic investments in oil and natural gas, and increased their reliance on renewable energy—generally understood as energy derived from sources like the sun or wind that replenish faster than they’re used—and the EU flexed its muscles by increasing carbon prices (a tax the government imposes on countries based on gas emissions), energy prices increased.
“Electricity produced from renewable sources grew by 6 percent in 2021, but it was not enough to keep up with galloping demand,” the IEA states.
Then, in early 2022, the reliance on Russia to bridge the gap between energy needs and production came to a head when Russia invaded Ukraine.
History Repeats With Russian Oil and Gas
Much like the 1970s when the United States supported Israel over the 15 Arab countries that make up OPEC, the United States and Europe’s support for Ukraine over Russia has spiraled into an energy crisis by exacerbating already increasing energy prices.
On Feb. 24, Russia invaded Ukraine, intensifying a conflict that’s been ongoing since 2014.
In response, and in an attempt to rein in Russia’s aggression, the United States, in coordination with the G-7 nations, and the European Union, instituted a series of escalating sanctions.
Initially, the sanctions were financial, but they didn’t deter Russia’s incursion into Ukraine, and on March 8, Biden signed an executive order banning Russian oil imports. Before the ban, the United States imported about 700,000 barrels daily.
Germany and Poland joined the United States and pledged to ban Russian oil by winding down pipeline imports by the end of the year.
Then, the European Union joined the sanctions and imposed a partial embargo on Russian oil—starting with seaborne imports of crude in December and petroleum product imports in February 2023, according to the Center for Strategic and International Studies.
At the start of the energy sanctions, Biden admitted it would cause energy prices to increase.
“This is a step that we’re taking to inflict further pain on Putin. But there will be costs as well here in the United States.
“Defending freedom is going to cost—it’s going to cost us as well in the United States.”
In his remarks, Biden celebrated that the United States produced “far more oil domestically than all of the European countries combined,” acknowledging that Europe was in a far more precarious position because of energy imports.
Russia, the largest natural gas supplier to the 27-nation bloc and the second largest oil exporter after Saudi Arabia, retaliated by cutting natural gas imports.
Then, at the beginning of September, Russia’s energy giant, Gazprom, indefinitely shut down Nord Stream 1 pipeline deliveries.
Speaking at an economic forum in Russia on Sep. 7, President Putin stated, “We will not supply gas, oil, coal, heating oil—we will not supply anything,” when asked about the West’s continued attempts to rein-in Russia.
The sanctions and Russia’s response have resulted in sky-high energy prices in Europe, escalating inflation, and building socioeconomic pressure.
According to the IMF, food, and energy prices are the most significant contributors to inflation.
And USA Facts reports that since March 2021, gasoline “has been the largest single-category driver of inflation” in the United States, accounting for nearly 25 percent of inflation.
Considering gas only makes up 4.8 percent of Consumer Price Index spending, gas’s impact on inflation is particularly notable and regarded as “outsized.”
The IMF reports that major social unrest events—defined as protests, riots, and other forms of civil disorder and conflict—are rare and, unlike some claims, are not caused by inequality.
“Although inequality has crept up slowly in recent decades, it has not significantly worsened over the past decade in a way that would explain the recent surge of discontent.”
Instead, socioeconomic factors like the price of food and fuel “seem to be particularly important” along with access to social media—suggesting coordination and communication plays a role.
In its September report, Verisk Maplecroft states, “The world is facing an unprecedented rise in civil unrest as governments of all stripes grapple with the impacts of inflation on the price of staple foods and energy, according to the latest edition of our Civil Unrest Index (CUI).”
In Europe, the unrest comes from the fallout of Russia invading Ukraine, the report states. But, unrest isn’t limited to Europe, as energy prices worldwide are increasing due to countries’ policies.
“The impact is evident across the globe, with popular discontent over rising living costs emerging on the streets of developed and emerging markets alike, stretching from the EU, Sri Lanka and Peru to Kenya, Ecuador and Iran.”
The report predicts unrest will worsen over the next six months and into 2023.
“Only a significant reduction in global food and energy prices can arrest the negative global trend in civil unrest risk. Recession fears are mounting and inflation is expected to be worse in 2023 than in 2022.
“Weather will be another crucial factor. A cold autumn and winter in Europe would worsen an already serious energy and cost of living crisis. Although socioeconomic pressure has already given rise to protests across the world, the next six months are likely to be even more disruptive.”
On Aug. 16, Biden signed the partisan Inflation Reduction Act (IRA) into law, which “modernized” the Clean Air Act and established the EPA’s authority “to protect American families from climate and air pollution.”
Additionally, via the IRA, Congress reaffirmed that greenhouse gasses are “air pollutants” and further specified that the term “greenhouse gas” includes the pollutants “carbon dioxide, hydrofluorocarbons, methane, nitrous oxide, perfluorocarbons, and sulfur hexafluoride.”
“These new Clean Air Act sections and the new provisions that rely on the Clean Air Act reinvigorate EPA’s responsibilities under the law addressing the climate crisis and long-standing inequities with new tools, new solutions, unprecedented investments, additional policies, and with great urgency,” the Environmental Defense Fund states.
In other words, thanks to the passage of the IRA, the United States now has a law requiring it to transition away from fossil fuels and to renewable energy—much like Europe.