How Defending Ukraine Unearthed a Tool for Green Foreign Policy

In March 2014, shortly after the Russian annexation of Crimea from Ukraine, the United States and Europe imposed a set of sanctions against Russia’s oil sector.  These sanctions eventually blocked ExxonMobil’s plans to expand exploration in Russia and drill in new areas like the eastern Black Sea, in a collaboration where ExxonMobil worked with and transferred technology to Russian state oil producer Rosneft . ExxonMobil sought waivers that would allow it to resume these technology transfers, but American and European governments have instead expanded sanctions following Russia’s full-scale invasion of Ukraine in 2022.

In doing so, Washington and Brussels inadvertently took effective action against expansion of environmental damage in Russia, and created a basis on which a progressive foreign policy can build, purposefully, as part of global climate action—a set of policies that could use this accidental environmental protection as a model for restrictions on American-based multinationals for the sake of limiting extractive industry worldwide.

The Accidental Environmentalist

In 2014 the Russian environmental activist Konstantin Rubakhin called for sanctions as an ecological measure. In the call, he identified foreign extractive industry as a culprit in environmental exploitation in Russia: they “continue to buy Russian natural resources, sell technology, and take advantage of capital of dubious origin, supporting in essence the destruction of my country, and the pressure put on its civil society.” Rubakhin himself had campaigned against the Khopyor nickel mining operation which was owned by oligarchs who themselves financed the mine through European banks. 

Sanctions against individuals have been part of an international response to the invasion of Ukraine, but have significant limits for both the anti-war and environmental purposes. The effectiveness of a sanctions regime to change state behavior is increasingly in question, especially as a clouded international financial system allows oligarchs to continue circumventing these sanctions. The circumvention works to the detriment of efforts to compel Russia to end its invasion as these oligarchs help finance the Russian war effort while also profiting from it, and it works to the detriment of environmental causes in Russia that depend on slowing down financing or technological inputs into extractive industry.

At the same time, scaling back of sanctions is meant to reward a reversion from bad behavior (or may end due to an emptying of political will behind them), which means their utility for environmental protection is limited, temporary, and hangs by a thread. Whether because the U.S. or its allies seek to offer a carrot to the negotiating table, the war ends, or efforts to turn U.S. commitment to punish the Russian invasion are successful, the sanctions could someday be removed, and drilling in the Black Sea resume (though there is no guarantee that license for Russian companies to massively expand drilling there would be any benefit to peace with Ukraine in the long run anyway). 

Extractive industry across Russia and Central Asia is linked on several fronts to multinational firms and other systems and institutions headquartered in the United States. These firms supply equipment despite restrictions. The U.S. Department of Defense in part due to its own massive energy demands has found itself buying fuel made from Russian oil. Despite popular (though crude and often inaccurate) descriptions of Kazakhstan as part of Russia’s sphere of influence, American investment in Kazakhstan’s hydrocarbon sector towers over that of most other countries. This existing American entanglement with Russia’s energy sector means the sanctions effect on ExxonMobil’s investments is a significant one (the company left behind billions in capital when it left Russia entirely in 2022).

Clearing the Air

A global “sanctions package”—with purposeful, clear, and simple theory of change stopping or limiting environmental damage at the hand of multinational corporations is imaginable. Rather than attempting to shift the logic and behavior of states, it would exercise power to limit the shadow foreign policy conducted by American business to expand extractive industry abroad. Such a foreign policy package would start with bans on technology transfers that allow foreign investment to expand drilling operations, essentially making the state of affairs over ExxonMobil’s exploration of the Black Sea a permanent policy. These could be expanded to other places where oil firms are seeking to establish new drilling operations against the concerns of environmental groups, like the Mediterranean, especially as improved technology makes these remaining oilfields easier to extract. 

But these sanctions need not be limited to one sector or one type of policy. A foreign policy green new deal could constrain financing from American or European sources used to expand destructive environmental projects, even when those projects are not conducted by an American-headquartered firm. This could include the Khopyor nickel mine’s financing through Cypriot banks, or the Anglo-Australian Rio Tinto corporation’s potentially destructive Simandou iron mine in Guinea, which depends more for financing on its shares on the New York stock exchange (and would therefore be subject to such restrictions) since its Chinese state financiers have been slow to provide funding.

Rulemaking to guide arbitration processes is also a potential target. When the government of Kyrgyzstan nationalized a gold mine owned by a Canadian firm, citing environmental concerns as one reason to do so, the arbitration process between the government and the firm centered on appropriate compensation to both parties as well as payments for environmental protection totalling $86 million (a paltry percentage of the profit the mine has provided over its history). A more climate-conscious set of international arbitration agreements might have guided restrictions on future expansion on the gold mine as a condition for the new owners and determined a higher climate cost for the gold mine’s past environmental damage as part of restitution with conditions that it go to the communities affected by the mine’s notorious groundwater contamination. Global climate sanctions might then bind the new owners to meet these agreements.

Many potential actions along these lines are now possible,  with a basis for constraining American business in the name of American environmental interests now established by the 2014 sanctions on technology transfers to Rosneft and later Trump administration refusal to waive these restrictions for ExxonMobil. These are based in existing sanctions law, though a bill under congressional consideration would expand applicability of U.S. actions in the Black Sea to meet climate goals. A progressive foreign policy should  reflect the American public’s interest in mitigating climate and other environmental damage. It can also foster goodwill among frontline communities, just as the Biden administration has now determined that defense of Ukraine is an interest that takes priority over ExxonMobil’s new opportunities. 

The use of sanctions has a problematic record; as with most U.S. foreign policy it necessarily involves blunt exercise of power, and is questionably useful. However, a sanctions package on global extractive industry might at least demonstrate that a foreign policy undertaken by the state can be compassionate in limiting the impulses of the shadow foreign policy undertaken by American business entities. 

Abhi Goyal is a researcher and professional in development assistance specializing in Central Asian politics, migration, and urbanism. You can follow him on Bluesky at abhigoyal.bsky.social