Beyond Russia-Ukraine war
2022-11-28Asoke K Laha, President & MD, Interra Information Technologies
“Every calamity presents an opportunity” is not mere cliché only. I have written a few times in this column how World Wars I and II led to phenomenal research in various aspects of human behavior and came with innovations, inventions, and discoveries, which have far-reaching results. Breakthrough discoveries in health, aviation, manufacturing, transportation etc. have had their origins in World Wars. For instance, penicillin, which would have saved millions of lives since its discovery, had its origin during the World Wars to save the life of wounded soldiers. Let’s come to the more recent discoveries. Mysteries of the Internet have revolutionized the transfer of information leading to the US military for sending encrypted messages faster and without being intercepted. Down the history highway, if one looks at calamites and turbulence in a philosophical way, there were discoveries taking place in the aftermath of such occurrences that helped humanity to change the course of life. Yet, it depends on how people would use such discoveries. There is also a fundamental lesson which we must learn from these breakthroughs. The universe is never static; it is always dynamic and pushing mankind to newer vistas of creation and knowledge. No one can predict the course of discoveries and their aftereffects. While human ingenuity is exploring new vistas of science and technology, there is uncertainty of the results those investigations would unfold. The discoverer does not know the result until he takes it to the logical end.
Let me now come to the subject that I am about to discuss: the aftereffects of the Russian-Ukraine war. I am not getting into the root causes of the conflict. Like anyone else, I am also convinced the ongoing war like any war has caused many disruptions in every way, including deaths of innocent people. Inflation has triggered fuel prices; the food crisis is harassing the countries importing food articles from Russia or Ukraine or countries in that neighborhood because of the sanctions. Disruptions in fuel supply from Russia have forced searching for alternative sources for importing fuel. Meanwhile climate change devastated most of the countries, particularly the developing countries in Africa and Asia. Carbon emission has become one of the key issues, which is creating shifts in climate pattern leading to incessant rains, floods, droughts and what have you. At present no country seems to be insulated from the onslaught of the vagaries of nature.
Economists predict a global recession as a fallout of these developments. Signs of that fault line in the economy are evident. The US keeps increasing the interest rate. The Chinese economy is slowing down. Cross country investments are declining fast. Close on the heels of the debilitating effect of the Covid-19 pandemic, the Russian-Ukraine war is creating havoc. Corporations are preparing to take the recession head-on by cutting manpower. Several big corporations and technology leaders have announced significant downsize. These are the challenges which may become aggravated in the time to come.
My esteemed readers, you may ask me what would be the silver line into this sordid scene? I cannot give a straight answer; but I have certain clues about the elements of new growth architecture. During severe disruptions in the cross - country movement of capital, there is one area where capital is getting invested. That is in technologies that help reduce carbon emissions. Billions of dollars are pumped into Africa from the West and the US for installing technologies that can limit carbon emission. Look at the investments in clean technology that have emerged at the COP27 being held in Egypt. The Western countries are competing in investing in green technology in Africa. The proposals have come from most of the developed countries including the US, France, Spain, Italy, Great Britain, and the list is ticking. Not to fall behind, China and Japan are also showing keen interest in investing globally in electric vehicles and in trapping solar energy for ensuring clean energy.
Will this wave towards clean energy eclipse the mining of fossil fuel? Well, I presume, hardly so! At least for some time, mining of fossil fuel will continue in the same manner since there are limitations for tapping nonconventional energy because of various reasons. Foremost is the lack of finance for tapping them on a global scale since it is highly capital intensive. Developing countries can hardly afford such a huge cost.
The second problem is relating to technology. There are technology gaps that make tapping of alternative sources of energy exuberantly expensive. Because of the high cost of batteries and their retention of power only for a limited time, not many are enthused about switching over to alternative sources of energy. There are massive R&D efforts underway across the world to develop low - cost batteries which have high retention power. The mass switch over to clean energy depends on how soon we can develop such batteries. Coupled with that is the cost of the technology that goes into clean technology. Equipment like photovoltaic cells, smart grids etc. that are required for a household to tap, say solar energy, is costly and beyond the reach of ordinary people in a developing country. Only the few rich can afford that because of the high cost involved. Therefore, success lies in bringing such equipment within affordability of the common man, which is possible only when there is a tight leash in the cost of such equipment. The third threat comes from the established fossil oil industry. The oil rich countries are reluctant to move on the path that will phase out their operations. One of the vowed objectives of the global initiative is to phase out coal mining, a major pollutant, by 2030. But not many countries are coming around to that concept since the pick-up of generation of clean energy is very weak in these countries. Also, their dependence on coal is quite heavy. It will take years for them to phase out the coal mining, where thousands of people are employed and drawing their livelihood. Across the world, one can see reluctance from countries which are dependent on conventional energy to switch over to alternative sources of energy.
There are vested interests blocking the switch over to clean energy. For instance, South Africa depends on coal for firing their thermal power stations to produce energy; so also, India, which has huge coal reserves, and the energy generation is mostly centered around coal. Thousands of people are employed in such mines and power stations run by coal. They are resisting switching over to clean energy fearing loss of jobs. Though there are theoretical arguments how green energy can create more jobs in every economy, it has yet to be practically demonstrated to the stakeholders that in the new dispensation there will be more opportunities for job seekers.
Another critical factor that comes in the way of clean energy is the non-availability of raw materials that go into making equipment. I am talking of electric vehicles. Most of the parts of the electric vehicles are made of cadmium, which is a rare earth, mostly found in Africa, Latin America, and other lesser-known parts of the world. There are supply side problems related to these goods. Another example is lithium, the rare earth mostly used for making batteries for storage in solar energy and in electric vehicles. They are in short supply. R&D efforts are underway to zero in on more rare earth that can be used to manufacture batteries, which can have better operational performance. Similarly, there are efforts underway to find alternative methods for manufacturing electric vehicle parts using cheaper and stronger materials. If there is any breakthrough in such efforts soon, the concept of clean technology will spread faster than what we initially thought of.
The other positive spin off from the present issues is the increased emphasis on food production. Several countries in Asia and Africa, which have been dependent on import of food stuffs are paying the price because of the dislocations in food supply due to the ongoing war. Now, they are focusing more on growing food crops in their own countries, more driven by the uncertainties in the oil front. That is a good sign since Africa is not only the largest continent but also commands unfathomable acreage of fertile lands. Undoubtedly, that will lead to a larger supply of food grains and food security. That is perhaps the most important takeaway of the present scenario, a world free from hunger.
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