Russia’s invasion of Ukraine has been accelerating changes in the existing model of the functioning of the world economy. Supply chain resilience is gaining in importance. The EU is facing a major challenge of reducing its dependence. At present, 76 per cent of oil and 68 per cent of gas imports in the EU are from non-OECD countries. Simultaneously, for as many as 11 of the 30 raw materials critical to the energy transition, the EU’s dependence on imports exceeds 85 per cent. More than 7 per cent of EU imports are products with a high degree of dependence on deliveries from outside the EU-27, including over 4 per cent among key manufacturing ecosystems such as electronics, energy and health. The EU is also twice as dependent as the US on demand in non-OECD countries. Therefore, changes in the current supply chain seem necessary – according to the Polish Economic Institute’s report entitled ‘The decade of economic resilience. From offshoring to partial friendshoring’.

In 2020, the crisis hit Southern Europe the hardest. The Economic Forecast Index (EFI) developed by the Polish Economic Institute (PIE) shows that Greece, Spain, and Croatia suffered the most severe economic consequences among EU countries. During the first wave of the pandemic, OECD countries protected up to 50 million jobs, which, among other effects, led to an increase in public debt in developed countries by 20 percentage points. These are the main conclusions of the latest PIE report “Pandenomics 2.0. How European countries coped with the second wave of the pandemic, the economic recession, and what scenarios await us in 2021.”

In 2017, the gap in corporate income tax (CIT) revenues may have reached a maximum of 1.08% of GDP, according to the latest report by the Polish Economic Institute (PIE) entitled “The horizon of optimisation – the origins, scale, and structure of the CIT gap.” This is one of the first comprehensive attempts in Poland to examine one of the most serious threats to public finances, alongside the VAT gap.

During the first three months after Russia invaded Ukraine, 70% of Poles got involved in helping refugees. Private spending on this purpose may have reached EUR 2.14 billion (PLN 10 billion) during this period, 0.38% of GDP, according to the Polish Economic Institute’s estimates. For comparison, in 2021 as a whole, private spending on charitable causes amounted to PLN 3.9 billion. The total value of help for refugees assigned  by the Polish authorities and provided by citizens during the first three months of the war amounted to almost 1% of the country’s GDP.

The sensitivity index (SI) created by the Polish Economic Institute shows that the following countries’ food security is the most threatened as a result of Russia’s invasion of Ukraine: Benin (SI = 97.6), North Korea (SI = 97.3), Sudan (SI = 92.5), Nicaragua (SI = 90.8) and the Democratic Republic of Congo (SI = 89.8), followed by Armenia, Egypt, Lebanon, Georgia, and Rwanda.

While the European Union strives to reach a consensus on banning gas from Russia, Putin is restricting supplies to a growing list of countries. Gas storage facilities in EU countries are currently 53% full, on average, and reaching the level of 80% expected in November will be difficult. Current storage level is 15% of annual consumption.

"Brussels Times": We are living in an era of unprecedented challenges that must be faced simultaneously. The energy crisis caused by Russia’s brutal invasion of Ukraine cannot disrupt our efforts to combat climate change. Instead, it should mobilize us to take further action with greater determination.

The Emitting 7 (E7) – the world’s most polluting countries: China, the United States, the European Union, India, Russia, Japan and Brazil – account for almost 72% of global GDP and 66% of global emissions. To stay on course for the 1.5°C target, the E7 will need to spend USD 67 trillion by 2030, the equivalent of 7.6% of global GDP in 2019 and 10.6% of the E7’s GDP in 2019 per year. Failure to reach the target will be even costlier: 11–13.9% of global GDP could be lost per year if the temperature rises by 2–2.6°C. None of these economies will hit its climate goals during its target year. Based on their current trajectories, net-zero emissions will be achieved by the EU in 2056, by the US in 2060, by China in 2071 and by Russia as late as 2086 – according to the Polish Economic Institute’s report entitled The Emitting 7: The time and cost of climate neutrality, presented during the World Economic Forum in Davos.

Poland was 18th out of 27 EU member states in the ranking of the indicator measuring the development of the green economy in 2011-2019. As the PEI’s analysis shows, the development of the green economy is positively correlated to economic growth. A comparison of average total GDP growth in 2011-2019 in the countries with the highest green economy development indicator (25.7%) and those with the lowest (15.4%) points to the benefits of developing green technologies and infrastructure, which translates into a noticeable difference in the rate of economic growth (10.3 pp). Although individual countries’ economic growth is the result of many factors, the results of the model raise questions about the need to choose between raising the standard of living and a sustainable development model. Investing in the green economy does not slow down economic growth, while simultaneously enabling countries to achieve climate targets, according to the PEI’s report entitled The green economy and its impact on the climate and economic growth.

The EU is largely dependent on energy commodities imported from Russia. 25% of the crude oil, 45% of the natural gas and 44% of the hard coal imported by the EU come from Russia. Yet as the Polish Economic Institute’s report entitled “An EU independent from Russia? Alternative sources of energy commodities” shows, the EU’s dependence on energy commodities can be reduced significantly. The EU could reduce gas imports from Russia by as much as 91% as already in 2022, the PEI’s analysis shows.