The year is 2006. A junior senator for Illinois publishes a book with his vision for the United States, and presents his candidacy for president shortly thereafter. His name is Barack Hussein Obama. The rest is history.
In one of the chapters of his book, “The Audacity Of Hope”, Obama writes about the overarching importance that sourcing energy – and energy sources – have in the running of a country. And, to support his case, he talks about an official trip he made to Ukraine with a fellow senator in 2005, when Ukraine elected the non-pro-Russia Viktor Yushchenko as president of the nation following the “Orange Revolution”.
Obama also remembers that, despite the enthusiasm surrounding the country´s talks about progress, democratic liberalization and economic reform, he soon realized that Ukraine still had a major problem: it continued to be entirely dependent on Russia for all its oil and natural gas. And Russia had already indicated that, should the non-pro-Russia policies continue, it would end Ukraine´s ability to purchase this energy at below-world-market prices, a move that would lead to a tripling of home-heating oil prices during the winter months leading to parliamentary elections. Ukraine still found itself at the mercy of its former patron.
As we now know very well in the European Union, these constraints do not only apply to Ukraine. And as former president Obama puts it in his book: “A nation that can´t control its energy sources can´t control its future.”
16 years later, this old story unfortunately remains as relevant and as pressing as ever.
The European Union is now suffering from heavily relying on Russian energy and has recently announced a different set of measures to tackle the situation and reduce this dependency as much as possible and as quickly as possible.
These measures remind us of – because they most probably are in fact – Wartime Inflation Measures: (i) “a mandatory target for reducing electricity use” (i.e., rationing), (ii) a “cap on the revenues” of low-cost energy producers (i.e., price controls) and a “solidarity contribution” for fossil fuel producers (i.e., excess profits taxes).
And on top of these immediate measures, Europe continues to show leadership with its unparalleled support for transitioning to a greener and more sustainable economy that can tackle the negative effects of climate change. This will also provide Europe with a much higher degree of independence in the future when it comes to sources of energy – Europe will become less dependent on other countries for sourcing its energy needs.
But this move towards higher energy independence and less reliance on others will not only impact the way in which countries obtain their sources of energy, but globalization itself. Recent analyses show that international trade as a share of the world economy peaked at around 2008, has been slowly declining for the past 14 years and seems to be about to face a major overhaul.
One of the reasons supporting a sharper downward trend in globalization in the years ahead is the realisation that the way in which countries we trade with are governed matters. That while countries around the world are ruled differently, not all forms of government are suitable or advisable for long-standing relationships or partnerships. And that it is particularly dangerous to rely economically – or in any other way – on countries that do not share democratic values, respect human rights or abide by the rule of law.
It´s becoming increasingly dangerous – if this ever wasn´t the case – to depend on countries that are ruled by authoritarian regimes, which may suddenly cut you off either as a power play or simply because dictators tend to behave erratically.
Europe and the U.S. are enacting policies to reduce their dependence on strategically important materials – such as the European Chips Act, in Europe, and the CHIPS and Science Act, in the U.S., which aim for increased control over production of much-needed semiconductors.
While these policies set an example of some of the initiatives taken to right a wrong, we should expect more of this to come. The gap between the magnitude of our challenges and the smallness of our politics needs to close faster. It will require us to see the world on a split screen: to maintain in our sight the kind of Europe that we want while looking squarely at Europe as it is.
We need our dependencies and necessities as individuals, and as a community, not to be linked to the self-serving interests of tyrant-ruled-regimes, but instead to the ideals, values and dreams that define us as a Union.
And as much as I insist that things have gotten better, I am mindful of this truth as well: better isn´t good enough.