A silver lining to the Ukraine-Russian conflict is that it highlighted the shortcomings of Europe’s dependence on Russia for oil and gas and the need to move towards more sustainable energies, according to a European economist.
“The European economy is trying hard now to move away from their previous dependence on Russian oil so this is a fundamental picture, which is here to stay, and that will take probably years really to be put in place,” said Marcelo Carvalho, global head of economics with BNP Paribas bank.
The European Union has historically relied on Russia for a large portion of its natural gas supply, but the dynamics have changed since February.
“It’s reasonable to say that the Ukraine war ... builds further the case for an accelerated pace in that five-to-10-year horizon relative to what probably would have happened without the war,” Carvalho told the Epoch Times.
“Ironically, perhaps, because of course we don’t want the war.”
Carvalho shared his views over breakfast at Michael’s restaurant on West 55 Street in Manhattan this week during a BNP Paribas bank press conference.
“For the energy transition towards a greener globe, the war is actually probably bad news in the short term, but good news in the longer term,” he said.
A greener globe refers to a world more dependent on wind and solar energy, which sidelines the demand for oil.
“This greener globe takes years to build in scale and that’s why the transition here is going to be a gradual one,” Carvalho added.
“They’re trying to move as fast as they can, but given the constraints, given the starting point, given so much has been dependent on oil and gas, the transition must be as speedy as possible but inevitably more gradual than we would wish for.”
Carvalho stopped short of discussing politics except to say that a clear move away from dependency on Russian oil will be above and beyond the outcome of the upcoming U.S. midterm elections next month.
“The risk scenario is that we see a blue wave, but it has to be a pretty strong blue wave, especially in the Senate, in order for any real agendas to be pushed through,” said Calvin Tse, head of BNP Paribas Americas Macro Strategy.
“By blue wave, I mean Democrats gaining seats in the House and especially the Senate, which looks rather unlikely, but that’s the scenario that we would need to see in order for there to be a real market shock.”
