Energy crisis has led UK to 'foothills of recession' says expert
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Professor Samir Dani warned of a “Catch-22 situation” when it comes to balancing climate goals and bringing down inflation and food prices, which are linked, in part, to energy prices. He added that consumers would likely have to live with higher prices for the time being if the world wants to achieve its climate goals.
Dr Dani is Professor of Operations Management and Deputy Director of Keele Business School and is an expert on energy and natural gas supply and prices.
Energy prices are a major causal factor in spiking inflation and food prices, according to Dr Dani.
He said: “At the moment, it’s an emergency situation, it’s inflation all over, it’s firing out into all sorts of domino effects through the food supply chain, which is key, because food is the major commodity for everybody.
“In terms of manufacturing, it can lead to a lot of job [loss] scenarios, it can lead to starvation, and all sorts of things coming through the process. Only this one perspective of gas, or energy requirements. Energy has become the key domain for the world’s major problems.”
However bringing energy prices down could be largely incompatible with the goals of climate change and have created a “catch-22 situation” where prices need to be brought down, but climate goals also need to be addressed.
He said: “People may have to realise that in the next 10 years energy prices, as we are resetting into a green economy or green energy generation, may take time for to go down.”
“I think we are in a Catch-22 at the moment, where we have to try to settle inflationary scenarios, that could be the Government subsidising some of the energy or doing certain deals across the globe, because this is not just a UK issue, but a global issue.
“Globally if they tried to reduce the price of fossil energy and do deals with OPEC and other places where energy and gas are available, there could be a levelling off initially, but I think it needs a long-term scenario for resetting.”
“How does the common person then intend to live with the decisions taken about green energy and the costs involved with it going forward?”
He said that even some solutions like insulating homes could backfire as climate change causes hotter summers and requires more people to invest in energy-hungry air conditioning systems.
The European Commission (EC) and International Energy Agency (IEA) have released a report which urges citizens to cut back on their individual energy use.
Dr Dani said this could be as simple as “turning the lights off” or reducing the thermostat temperature by a single degree.
The report states that if its citizens followed the advice set out in the report, Europe could save enough oil to fill 120 super tankers and enough natural gas to heat nearly 20 million homes.
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Some other steps outlined in the report include working from home, taking trains instead of planes, using public transportation and reducing speed while driving on motorways.
The report claimed that the average European could save around €500 a year by following the steps while supporting Ukraine by helping Europe wean off Russian energy.
IEA Executive Director Dr Birol said: “Using less energy is a concrete way to help the Ukrainian people – and to help ourselves.
“This guide has easy-to-follow steps that with little or no discomfort on our part can reduce the flow of money to Russia’s military and help put us on a path to a cleaner and more sustainable planet.”
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