Western Europe’s Cost of Living Crisis Makes My Jaw Drop

I’ve seen numbers for how the cost of electricity and fuel in Western Europe is rising. Some Western European businesses say they can’t handle the surge in prices and that if this continues, they must close. Many people in Northern Europe need fuel to get through winter—to prevent pipes from bursting and keep the physically vulnerable alive.

All this I understand intellectually, but my feelings refuse to accept this as truth.

We’re going through our own energy crisis in California now. The heat wave has led to more air conditioning, which has overwhelmed our electrical grid. Some people (including some of my contacts) have had blackouts. This is minor compared to what Western Europe faces.

If change doesn’t happen fast, it’s obvious that some businesses will fail. (Dutch greenhouses have already closed). Jobs will be lost—and how will the people who lose their jobs pay these rising energy bills? It looks like a downward spiral. Once some of these businesses are taken down for the winter, some might not come back in spring, even if energy and fuel are cheaper.

The floods in Pakistan—I’m not processing that either. If I did, my jaw would fall off my head. Though burning fossil fuels for centuries made the floods in Pakistan worse than they otherwise would’ve been, in the short term (within the past year) there was no way to stop that. The cost-of-living crisis in Western Europe could’ve been partially prevented by not putting sanctions on Russia.

From the beginning, I believed sanctions on Russia would hurt Western Europe far more than Russia for a simple reason: Western Europe needs Russian fossil fuels more than Russia needs Western European money or imports. Russia can sell fossil fuels elsewhere (such as China and India). Russia can even ‘launder’ the oil and sell it to countries which have sanctioned Russia through third parties… at a higher price to the final buyers. Western Europe doesn’t have any source as cheap as Russia. I didn’t dare say that before because… well, people in the English-speaking world tend to shout down any criticism of how the United States, the United Kingdom, and the EU are supporting Ukraine, even criticisms like ‘these facts suggest that this won’t work.’ Alas, refusing to discuss questions such as ‘how will Western Europe manage without buying Russian fossil fuels?’ doesn’t help Ukrainians.

In 1941, the United States (along with the United Kingdom and Australia) imposed an oil embargo on Japan. Back then, Japan got most of its oil from the United States. The purpose of the embargo was to hinder Japan’s invasion of China. It worked because Japanese military tactics relied on fossil fuels, and they had no alternate source (they had a stockpile, but no means to replenish it). Meanwhile, the United States had other buyers for oil and, after the attack on Pearl Harbor, needed the oil for its own military.

The way the Russian Federation’s leadership (including Putin) treats places like Chechnya isn’t news—it’s been known for decades. If Western Europe had taken steps 10 years ago to make sure it didn’t depend on Russian fossil fuels—such as through increased energy conservation—refusing to buy Russian fossil fuels now wouldn’t be such a disruption.

(There are other reasons to reduce the use of fossil fuels, of course).

That Western Europe didn’t impose strict energy conservation this year, at the start of the war, surprised me. Imposing strict energy conservation in March 2022 may not have been enough, but it would’ve helped. Would it have been unpopular? Sure. But the current cost-of-living crisis is even less popular. Ditto for the United States—I’m surprised our fuel and energy costs haven’t gone higher. If the government is serious about not buying fossil fuels from Russia, shouldn’t the government promote much greater energy conservation?

Now the Russian government knows how much of a threat putting an oil embargo on Western Europe would be. What would stop them from threatening—or imposing—an embargo in the future if Western Europe doesn’t do what the Russian government wants? Cutting dependence on fossil fuels. In the long run, that’s the only way to stop the Russian government from having this power.

In the short term, barring a surprise development, it’s in Western Europe’s best interests to drop some sanctions and negotiate a deal to buy more fossil fuels from Russia.

Some of you are in Western Europe. I hope you have what you need, and that your winter is mild.

If Western European businesses collapse en masse, that won’t be bad just for Western Europe. That will affect all economies in the world.

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