On August 14, the Russian President Vladimir Putin expressed his concern at the scale and nature of “absolutely unprecedented” natural disasters that have hit Russia.

Within hours of the publication of the Sixth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC), which set off the alarm on the imminent dangers of climate change, wild fires were wreaking havoc in Russia.

Whilst fire devours Siberia, burning almost two million hectares of forests, torrential rains in the southern part of the country have caused flooding, evacuations, and the interruption of the electricity grid. Other strategic infrastructure is at risk.

Urging local authorities to do everything possible, the Russian leader said “all this shows once again how important it is for us to make a deep and systematic commitment to the climate and environmental agenda in the future”.

The profundity of this change of perspective in Moscow is demonstrated by an anecdote from Corrado Clini. The former Italian environment minister met the Russian president in 2003 whilst he was heading an EU climate delegation hoping to convince the Russian President to sign the Kyoto protocol. A sceptic about climate change caused by human activity, Putin responded with a joke: “if temperature rises a few degrees, we will harvest more wheat in Siberia”.

The oil world faces the impact of climate change

Today, climate change is no laughing matter for anyone. It has become a matter of national security. NATO and the Pentagon agree.

Oil and gas pipelines and industrial plants are at risk of collapse due to thawing permafrost.

On 29 May last year, an oil tank collapsed, spilling 21,000 tonnes of crude into the Ambarnaya River in Siberia. The pollution devastated an area of more than 80,000 square metres.

The US, for its part, is also at risk. Particularly vulnerable is the Trans-Alaska Pipeline, a key piece of infrastructure in the US energy system. The government has recently authorised safety measures. An innovative cooling system to consolidate the ground is also under construction.

Assuming it works, geo-engineering alone will not solve the problem. Alaska, like Siberia, is warming twice as fast as the global average. The oil industry – and governments – are committing technology, resources, and huge investments to postpone the inevitable. Is it money well spent?

Probably not. With the world’s biggest economies pledging to become carbon-neutral and carbon credit trading systems being developed, pressure is mounting for fossil giants to change course.

For petrostates failing to adapt, this could spell economic disaster. This month, one of the leading Australian industry groups, based in another country resisting calls for tougher climate action, has warned that growing international commitments to decarbonisation are the biggest risk to current Australian trade and they are likely to drive down demand for Australian coal and gas exports.

Even more concerning for Big Oil is the fact that investors and states are starting to factor in the real cost of carbon. On February 26, the White House announced an initial estimate of $51 per ton of carbon to kick off the debate. 

Diversification of oil exports is a matter of economic survival. Russia, which has significant capacity to generate wind and solar power, doesn’t exploit these energy sources. Renewables accounted for just 0.32% of its power grid in 2020.

This article is also published on BrusselsMorning. Energy Voices is a democratic space presenting the thoughts and opinions of leading Energy & Sustainability writers, their opinions do not necessarily represent those of illuminem.