A silver lining to current geopolitical conflict?

This post is slightly off topic for this blog, but relevant from a big picture perspective. By avocation I am a fisheries and water geek. By vocation I am a financial advisor. In that role, I have found myself in the somewhat strange position of telling clients that I think there is an interesting silver lining in the ugliness that defines current geopolitics. Clearly, we must rapidly wean ourselves from petro-dictators both for our national security as well as to combat global warming. It has been apparent to me for some time that current conflicts will most likely hasten our transition to a new energy economy. Today, a report came out from our research department stating exactly that. Here’s a paragraph from the executive summary:

The new geopolitical world order emerging could be the net zero missing link, in our view. Environmental goals are now aligned with political interests to achieve energy security. The economics of renewables and clean technologies continue to be favorable, decreasing by as much as 90% since 2010, becoming the most economical choice, or with a clear pathway to get there with greater scale. Moreover, the incentive to reshore supply chains even faster and secure resource independency has grown. Europe aspires to replace 40% of its gas formerly imported from Russia; the US aims to balance China’s dominance of Cleantech and critical minerals, such as 60% of rare earth production.

Of course, as detailed in the report, there’s a difficult and expensive transition from where we are today to where we need to be to avoid even the moderate risk scenarios scientists anticipate if our planet continues on its current warming trajectory. Further, painful compromises will have to be made. To successfully transition to alternative energy sources we will have to dramatically increase our domestic mining of rare earth minerals used in products like electric vehicles. This will entail loss of habitat for some species. We will have to build next generation nuclear power plants. Compromises will be required and many of us will be hard pressed to accept them. The alternative, however, is even more grim.

I have written about this a little in the past. I continue to believe that innovation is the single best solution to the potentially existential threat of global warming. Human nature is not going to change, most people will continue to reject pleas to live at a lower standard of living. Only by offering attractive replacement products do we have a chance to address the problems that are now apparent to most of us. Capitalism has a bad name in some quarters, but combined with effective regulation I believe it is our only hope.