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Markus Appenzeller

I really like the German term ‘Zeitenwende’ that can be translated as turning point but with the connotation that radical, fundamental changes are happening. On Thursday this Zeitenwende took place with the attack of Russia on Ukraine. We do not know how this conflict will be resolved but we can say for sure, that it will completely change the global landscape.

With the end of the cold war and the rise and opening up of China, we entered into a phase of increased globalization and collaboration. Complex supply chains that span the whole globe and mutual dependency were the result. We didn’t care so much where things came from and in what political system they were made as long as the quality, the price and the speed of delivery were acceptable. For a long time, this collaboration showed positive results. People got to know each other better. Decision makers learned from each other and started cherishing difference. We lived the dream of a uniting world. First cracks appeared – we did not see them. First events showed, that the dependency can also be exploited by one party if it considers the risk low that the other party is willing to pay the price for cutting the supply, especially with goods that are hard to get elsewhere.

Not anymore. Large parts of the world have been quick in imposing sanctions that in effect will cut Russia largely out of any supply chain and in the years to come, this effort will even be increased. And while the war is bad news – horrible news, the measures could have a positive effect on our own economies but above all on the environment. The whole of Western and Central Europe will want to become independent from Russian fossil fuels. Only to some extent this demand can be covered by imports from elsewhere. Now we have no choice. We have to speed up our energy transition away from gas and oil to renewables and synthetic fuels. Now we have no choice but to reduce our consumption since any Kilowatt-hour saved requires less new infrastructure to be built.

But it is not only the energy sector that will be affected. We will revisit other supply chains and review them against possible dependency on countries that do not share our values. Dictatorships will find it harder for their local industries to stay in business. The likely outcome is, that more will be made closer to home with a positive impact on carbon emissions and most likely less exploiting technologies.  

Some of the products or natural resources like rare earths will be hard to source from countries that share our values. This will trigger a less wasteful way of using them. We will see more reuse, circular economic activities and overall a replacement of natural resources by synthetically made resources.

All of this will not remain limited to Europe. Other parts of the world will ask themselves the same questions and – unless they have some natural resources themselves – will embark on similar changes to the way they operate.  

It therefore is not only a political ‘Zeitenwende’ but also one that might help us to get things done better. It remains a horrible thought that a war was necessary to make this happen.

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