Feasibility
TL;DR: Russian energy embargo is feasible both technically and economically, and popular counter-arguments do not stack up
Economical studies
Numerous studies by different research institutes and think tanks show that immediate embargo of Russian gas, oil and coal would be manageable. The costs are estimated comparable or below Coronavirus protection measures (e.g, -0.5% to -6% GDP in Germany). Importantly, most studies analyzed the impact of an embargo starting from March/April 2022. Banning Russian energy now (May/June) would be even easier/cheaper: EU gas storage filling levels increased from 25% in March to 50% as of June, 5th [1]. Cynically, this "improvement" was paid by thousands of Ukrainian lives.
Author | Date | Scope | Energy type | Title | Estimated impact |
---|---|---|---|---|---|
IWH Halle [2] | 26.04.2022 | Germany | Natural gas | Regional effects of recession in Germany due to Russion gas supply interruption | The results are nuanced and often (arbitrarily?) misinterpreted by gas embargo opponents. Hence, we discuss them in detail here. |
DIW Berlin ifo München IfW Kiel IWH Halle RWI Essen [3] |
12.04.2022 | Germany | All | From pandemic to the energy crisis – Economy and politics under permanent stress | GDP: +1.9% in 2022, -2.2% in 2023 Unemployment: 5.2% in 2022, 6.0% in 2023 in gas embargo scenario, as opposed to non-embargo scenario, which assumes 5.0% for both years (p. 67) |
DIW [4] | 08.04.2022 | Germany | Natural gas | Energy supply in Germany is secured also without natural gas from Russia | ~10% gas shortage |
Agora Energiewende [5] | March/April 2022 | Germany | Natural gas | Energy security and climate protection reconciled: The way out of the fossil energy crisis | Short-term saving potential between 160 TWh and 260 TWh, which is close to the amount of Russian gas to be replaced (230--290 TWh) |
Leopoldina [6] | 08.03.2022 | Germany | Natural gas | How Russian gas can be substituted in German and European energy supply | "We come to the conclusion that immediate stop of Russian gas supply would be manageable for German economy. It could come to shortages in the next winter, however it is possible to limit negative effects and alleviate social hardness by implementing the suggested counter-measures." |
ECONtribute [7] | 07.03.2022 | Germany | All | What if...? The economic impact of a Russian energy import ban on Germany | -0,5 % to -3 % GDP |
Allianz Research [8] | 03.03.2022 | Europe | Natural gas | Can Europe do without Russian gas? | +40% electricity price increase and a +100% gas price, which would reduce demand by 8-10% and increase supply from alternative sources by 8-10% in the short-term |
Aurora Research [9] | 03.03.2022 | Europe | Natural gas | Impact of Russia-Ukraine war on European gas markets: can Europe cope without Russian gas? | -14% demand reduction with concerted efforts by regulators, industry and consumers EUR 60-100 billion investment and government intervention to fill the storage Video presentation |
Bruegel [10] | 28.02.2022 | Europe | Natural gas | Preparing for the first winter without Russian gas | If all Russian gas imports were to stop on March 1, 2022: "Europe would need to reduce demand by at minimum 400 TWh (or 10%-15% of annual demand). This is possible. A portfolio of exceptional options could abate at least 800 TWh." |
- MEP Michael Bloss, Dr. Manuel Köhler (Aurora), Prof. Veronika Grimm (FAU), Franziska Brantner (BMWK), Elias Perabo on Europe Calling "Stop gas, oil and coal from Russia?", 2022, https://youtu.be/ab7jFm8CUnU . At the beginning the analyzes by Aurora Energy Research, especially from minute 9 "Halt to Russian gas imports scenario", and Prof. Grimm, then discussion.
- Palacio, A. (2022, February 28). How Europe Can Sustain Russia Sanctions | by Ana Palacio, et al. Project Syndicate. https://www.project-syndicate.org/commentary/europe-security-facility-to-enable-sanctions-by-ana-palacio-et-al-2022-02
- Hecking, Harald, Christopher John, and Florian Weiser. “An Embargo of Russian Gas and Security of Supply in Europe,” 2014. https://www.ewi.uni-koeln.de/cms/wp-content/uploads/2015/12/2014-09__An_Embargo_of_Russian_Gas_and_Security_of_Supply_in_Europe_0610.pdf
- Bayer, Christian, Moritz Kuhn, Benjamin Moll, and Moritz Schularick. "Russian gas import ban: Procrastination costs a lot more." The time. March 14, 2022, Economy. https://www.zeit.de/wirtschaft/2022-03/importstopp-gas-russia-ukraine-energie/komplettsicht
- Guriev, Sergei, and Olivier Itskhoki. The Economic Rationale for an Oil and Gas Embargo on Putin's Regime. bne IntelliNews, March 24, 2022. https://www.bne.eu/comment-the-economic-rationale-for-an-oil-and-gas-embargo-on-putin-s-regime-239019/?source=ukraine
- Guriyev, Sergei, and Oleg Itskhoki. "Oil and Gas from Russia: Why an Embargo Could End Vladimir Putin's War." Der Spiegel, March 22, 2022, sec. Economy. https://www.spiegel.de/wirtschaft/oel-und-gas-aus-russia-warum-ein-embargo-wladimir-putins-krieg-beenden-koennte-a-9537c522-5f56-4856-97bc-86080c2b7028
Opinions and statements
It is important to differentiate between evidence- and data-based studies listed above, and individual opinions, which are based on general wisdom and/or (presumed) expertise in the field, and can be heavily biased.
Pro-embargo
Prof. Veronika Grimm, Wirtschaftsweise: „Es gibt kein Modell, das eine Katastrophe plausibel darlegt“ [11]
Contra-embargo
Gas Delivery Reports
- ddobble.net. “EU Member State Spending on Russian Fossil Fuels.” http://beyond-coal.eu/russian-fossil-fuel-tracker/
- "EU Continues to Buy Russian Gas Amid Ukraine War - Bloomberg." Accessed March 29, 2022. https://www.bloomberg.com/news/articles/2022-03-04/eu-s-payments-for-russian-gas-surge-amid-war-chart
- ENTSOG gas flow data https://transparency.entsog.eu/#/points/data?points=
- European natural gas imports: https://www.bruegel.org/publications/datasets/european-natural-gas-imports/
cost accounts:
- 1 trillion EUR: Liadze, Iana, Corrado Macchiarelli, Paul Mortimer-Lee, and Patricia Sanchez Juanino. “The Economic Costs of the Russia-Ukraine Conflict,” no. 32 (nd): 12. https://www.niesr.ac.uk/publications/economic-costs-russia-ukraine-conflict?type=policy-papers
For comparison: US cost of war in Afghanistan: $2.313 trillion, Watson Institute. “Human and Budgetary Costs to Date of the US War in Afghanistan, 2001-2022 | Characters | cost of war." The Costs of War, 2022. https://watson.brown.edu/costsofwar/figures/2021/human-and-budgetary-costs-date-us-war-afghanistan-2001-2022
References
- ↑ https://agsi.gie.eu/
- ↑ https://www.iwh-halle.de/fileadmin/user_upload/publications/iwh_policy_notes/iwh-pn_2022-01_de_Gaslieferstopp.pdf
- ↑ https://gemeinschaftsdiagnose.de/wp-content/uploads/2022/04/GD_F22_Langfassung_online.pdf
- ↑ https://www.diw.de/documents/publikationen/73/diw_01.c.838841.de/diw_aktuell_83.pdf
- ↑ https://www.agora-energiewende.de/veroeffentlichungen/energiesicherheit-und-klimaschutz-vereinen/
- ↑ https://www.leopoldina.org/fileadmin/redaktion/Publikationen/Nationale_Empfehlungen/2022_Stellungnahme_Energiesicherheit_V1.1.pdf
- ↑ https://www.econtribute.de/RePEc/ajk/ajkpbs/ECONtribute_PB_029_2022.pdf
- ↑ https://www.allianz.com/content/dam/onemarketing/azcom/Allianz_com/economic-research/publications/specials/en/2022/march/2022_03_03_EU_without_russian_gas.pdf
- ↑ https://nkro22cl16pbxzrpzy39bezk-wpengine.netdna-ssl.com/wp-content/uploads/2022/03/Aurora_Mar22_ImpactRussia_Ukraine_EuropeanGas_InsightsPage-1.pdf
- ↑ https://www.bruegel.org/2022/02/preparing-for-the-first-winter-without-russian-gas/
- ↑ https://www.capital.de/wirtschaft-politik/wirtschaftsweise-grimm-fuer-gas-emabargo-gegen-russland-31805540.html