THE EXPRESSION “Winter is Coming” was popularised first in George R. R. Martin’s book “A Song of Ice and Fire,” then by the television series “Game of Thrones” which is based on Martin’s work. It is an expression which means that one should always be prepared.
Beyond the figurative, we are also at a point in the year where as a matter of fact, winter is imminent and with it, perhaps unimaginable economic pain for countries and peoples the world over. As a headline in the Time’s read on 30th August: Europe’s Energy Crisis Is Going to Get Worse.
The World Will Bear the Cost.
At the end of August, Russia stopped delivering gas through the Nord Stream 1 pipeline that supplies much of western Europe. On a human level, Europeans have some rather stark choices to make this winter – some people will not have heating and others will have to choose between warmth and food. Already, European leaders are talking about rationing energy in the coming months and measures are already being rolled out to limit energy consumption.
Russia’s move will not only deepen Europe’s current energy crisis, but it will also place further pressure on Europe’s economies. According to energy expert Llewellyn King, the end of this year for Europe is likely to be its worst winter since the one at the end of World War II.The consequences will also be massive and even tragic for the rest of the global economy.
The Economist has taken a leaf from William Shakespeare’s Play “Richard III” and pre-emptively labelled the coming winter as a “winter of discontent” due to the looming “gasastrophe.” However, unlike in Shakespeare’s Play, there seems to no “sun of York” to make this winter a “glorious summer.”
The International Monetary Fund (IMF) has projected that global economic growth would drop by 2.6% in 2022 and another 2% in 2023.This is a signal that Europe’s pain will be shared across the world which is certainly not good news for people already suffering through high prices on just about all consumer goods and services.
Writing for the Time, Suriya Jayanti, an Eastern Europe energy policy expert, said that other than belt tightening, there are no short-term solutions to navigating the current crisis. In Europe, a number of renewable energy projects have been announced in an effort to replace Russian fuel.
New liquefied natural gas (LNG) terminals are also being constructed to allow for more imports from the United States (US). Some European countries are also installing new nuclear capacity.
However, notwithstanding Europe’s best efforts to replace Russian energy, there is no immediate solution in sight because the measures being pursued all require time to see results. In addition to its domestic efforts, major oil importers inside and outside of Europe are likely to engage in aggressive efforts to outbid each other for oil and gas supplies in the months ahead.This would have the effect of pushing up prices even further for the rest of us.
A bleak winter certainly lies ahead. This will require businesses, consumers and governments to take some difficult, but necessary decisions. Businesses will have to find ways to reduce energy consumption, including by encouraging employees who can work remotely to do so, limiting temperatures on air-conditioned units and turning off lights.
Governments may need to take certain actions to protect ordinary consumers and small businesses, including through tax adjustments and price caps – expensive, but necessary measures to ensure that those that need the most support can receive it.
The next few months are extremely uncertain and things may take several turns for the worst before energy markets, inflation and the wider global economy settle. However, the best way to survive winter is to be prepared for it.
Joel K Richards is a Vincentian national living and working in Europe in the field of international trade and development.
Email: joelkmrichards@ gmail.com