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Report reveals inequity in electricity pricing, calls for rate reform to help fight climate change

Researchers from the Energy Institute at Haas analyzed 11 million Californians’ utility bills and concluded that one-half to two-thirds of  the charges amount to a hidden electricity “tax.” The report was commissioned by nonprofit NEXT 10.

Power lines stretching out across golden California landscape
Photo: Pgiam for iStock

Every time a California resident switches on a light or toasts some bread, they’re helping to pay for the damage wrought by wildfires across the state.

In fact, one-half to two-thirds of the electricity bills paid by Californians subsidize costs beyond providing the electricity itself. Some of these costs are closely related to electricity, like the maintenance of infrastructure or investments in energy efficiency, while others are more tangential, like wildfire mitigation and victim compensation.

“The price that we pay for electricity doesn’t reflect the cost of supplying that electricity,” says Severin Borenstein, professor of the graduate school at the Haas School of Business and a co-faculty director of the Energy Institute at Haas. “And, importantly, all these programs that we finance through our electricity bills disproportionately burden low-income households. This amounts to a regressive tax.”

In a new report released today, Borenstein and Energy Institute colleagues Meredith Fowlie and James Sallee—both professors in UC Berkeley’s Department of Agriculture and Resource Economics—analyze the impact of this hidden “electricity tax” on Californians. They recommend two significant policy reforms to ease the burden on low-income households and spur consumer interest in the adoption of electric vehicles, heat pumps, and other electric technology.

The researchers suggest shifting some of the systemwide costs into the state budget, which is funded by less regressive forms of taxation: income and sales taxes. The remaining system costs could be paid using a monthly fixed charge on electricity bills that is tied to income, and therefore more progressive.

The report, “Paying for Electricity in California: How Residential Rate Design Impacts Equity and Electrification,” was commissioned by Next 10, a nonpartisan research nonprofit organization. It builds on the findings of a previous study released last year.

Tallying the invisible costs 

The three largest investor-owned utilities (IOUs) in the state—Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric—combine to serve over 11 million people. The researchers matched electricity use from these customers with census data to paint a picture of how much households with different incomes were paying for charges beyond the cost of electricity. These costs include maintaining the grid as well as policy goals such as wildfire mitigation, compensation for past victims of wildfires, investments in renewable technologies, and subsidies for rooftop solar, energy efficiency programs, and low-income customers.

The report finds that in 2019, IOU residential customers were paying an effective electricity tax that averaged $678 per year. The effective electricity tax was $809 for typical PG&E customers, $512 for SCE customers, and $786 for SDG&E customers during the period covered by the study.

They found that the lowest-income households, earning $25,000 or less per year, spend on average more than three percent of their income on these additional electricity charges. Households earning more than $200,000 per year, by contrast, spend half-a-percent or less of their annual income.

“Proportional to their income, lower-income households are paying more than three times what wealthier households are paying,” says report co-author Fowlie, co-faculty director of the Energy Institute at Haas. She also explained that as California invests more money in climate change adaptation and mitigation measures, and as extreme heat becomes more common, “it’s a safe bet that those costs will increase, pushing prices even higher. We should be even more concerned going forward about this relative regressivity.”

On top of this inequitable distribution of costs, the current electricity rate structure discourages many of the actions that are necessary for California to achieve its goals for fighting climate change. The researchers estimate that these extra charges on utility bills reduce the adoption of electric heat pumps by about one-third, and of electric vehicles by between 13%” and 33%. “This is particularly noteworthy given California’s recently adopted rule requiring 100% of new vehicles sold in 2035 be zero-emission.

“When people go to buy an electric vehicle or a heat pump, if they think carefully about not just the upfront costs but also the operating costs, then the amount California is charging these consumers is simply putting up a barrier to adoption,” Borenstein says. He noted, in contrast, that natural gas is priced at roughly the true cost to society, and gasoline is priced below its true cost.  “If we’re massively overpricing electricity while underpricing or correctly pricing these other, more carbon-intensive alternatives, then we’re undermining everybody’s incentives.”

A better way to pay

Two proposals emerged from analysis. The researchers advocate moving some of the system costs for the grid and policy goals out from under the purview of electric utilities and into the state budget. To cover remaining costs, they propose a fixed monthly charge based on income.

In the example the authors present for PG&E,  e. Households in the middle of the income distribution would pay $70-80 per month in additional fees. Those at the top of the income distribution would pay roughly $150 in fees. Borenstein recognizes that this sum is not negligible, but points out that the accompanying decline in the price consumers pay for electricity would mean that even customers in the highest income bracket would see their overall bills go up by less than $40 per month.

“Though economists play the role of      the wet blanket, bearing bad news, I actually think this is a good news story,” Fowlie says. “Policymakers have at-the-ready the levers and instruments needed to respond to this issue.”

The strongest opposition to this work, interestingly, comes from the solar industry, as high electricity prices make solar installations more attractive. But, as the report makes clear, residential solar adoption occurs among predominantly higher-income customers. As these customers install panels and consume less from the grid, the current rate structure becomes even more inequitable, further shifting costs to low-income consumers.

The researchers are optimistic. Just this year, California Senate President Pro Tempore Toni Atkins put forward legislation to move some of these costs to the state budget; and California’s newest budget (AB205) requires the California Public Utilities Commission to implement an income-based fixed charge. It remains to be seen how large, and how progressive, this charge will be.

Borenstein sees this as significant progress. “Even two years ago, a lot of people were saying high electricity prices are a good thing as they force people to conserve,” he said. “Far fewer advocates and politicians are now talking this way, so the work we’ve done has moved the ball. They know the current system simply doesn’t work.”

Read the full report:

Paying for Electricity in California: How Residential Rate Design Impacts Equity and Electrification
By Severin Borenstein, Meredith Fowlie, and James Sallee
Commissioned by Next 10. Read the press release.
Media Contact: John Stodder (Better World Group) stodder.john@gmail.com

About the Energy Institute at Haas:

The Energy Institute at Haas helps create a more economically and environmentally sustainable energy future through research, teaching and policy engagement. The Energy Institute produces research and analysis backed by rigorous empirical evidence and the frontiers of economic research so that energy and environmental policy and business decisions are based on sound economic and business principles.

About NEXT 10:

Next 10 is an independent, nonpartisan, nonprofit organization that educates, engages and empowers Californians to improve the state’s future. With a focus on the intersection of the economy, the environment, and quality of life, Next 10 employs research from leading experts on complex state issues and creates a portfolio of nonpartisan educational materials to foster a deeper understanding of the critical issues affecting our state.

Norman Y. Mineta, BS 53, first Asian-American federal cabinet secretary, dies at 90

Photo of Norman Mineta at the Capitol
Norm Mineta, BS 53, former U.S. Transportation Secretary, speaks during a news conference in Sacramento, Calif., on March 31, 2005. Mineta died Tuesday, May 3, 2022. He was 90. (AP Photo/Rich Pedroncelli, File)

Norman Y. Mineta, BS 53, a 10-term Democratic congressman from California and the first Asian American to become a federal cabinet secretary under Presidents Bill Clinton and George W. Bush, died Tuesday at home in Edgewater, Md., at 90.

Mineta, who as a child was interned with his family and thousands of other Japanese Americans during World War II, died of a heart ailment, according to the The New York Times.  

After graduating from Haas in 1953 with an undergraduate degree in business administration, Mineta joined the U.S. Army and served as an intelligence officer in Japan and Korea.

Mineta broke racial barriers for Asian Americans in becoming mayor of San Jose, Calif. in 1971, according to his AP obituary. Elected to Congress in 1974, he became popular with voters by supporting transportation projects and fostering public-private partnerships that created explosive growth in Silicon Valley.

After 9/11, Mineta guided the creation of the Transportation Security Administration.

In an interview about the aftermath of 9/11, recorded by The Japanese American National Museum, Mineta discussed concerns over some public calls for “putting Arab Americans and Muslims in camps.” Recalling a Sept. 12 cabinet meeting, he said a Michigan congressman shared that his Arab American constituents were concerned about fallout from the attacks. President Bush responded that he was also concerned. “We want to make sure what happened to Norm in 1942 doesn’t happen today,” Mineta recalled in the interview, adding that after the meeting he told his staff that “one of things we have to make sure we do is no racial profiling.”

After leaving public service, Mineta became vice chairman of Hill & Knowlton. San Jose’s airport was renamed Norman Y. Mineta San Jose International Airport in 2001; in 2007, Mineta was awarded the Presidential Medal of Freedom. In a statement, President Bush called Mineta “a wonderful American story about someone who overcame hardship and prejudice to serve in the United States Army, Congress, and the Cabinet of two Presidents.”

Read Mineta’s New York Times obituary.

Listen to a 2008  NPR interview with Mineta, who talked about his road to White House leadership and leading the nation through acts of terror on Sept. 11.

 

Using Trump’s vaccine endorsement boosts COVID-19 shots

A screenshot of a Fox News interview showing former President Trump urging Americans to get the COVID-19 vaccine.
A screenshot from the video created for the experiment.

A video compiled from Fox News clips of former President Trump and his family urging his supporters to get vaccinated against COVID-19 proved to be a cheap and effective way to convince some vaccine skeptics to get their shots.

In a large-scale ad experiment published today, a team of researchers from UC Berkeley’s Haas School of Business, Stanford University, University of North Carolina at Chapel Hill, and North Carolina State University compiled a public service announcement from existing footage and aired it on YouTube channels—including Fox News’ channel—in more than 1,000 U.S. counties with low vaccination rates. Compared with similar counties where the ad wasn’t shown, those counties recorded 104,036 additional vaccinations, at a cost of less than $1 per new shot.

The randomized controlled trial proved the researchers’ hunch that a partisan message would be a potent way to overcome the entrenched partisan divide around COVID-19 vaccines, according to co-author Steven Tadelis, professor of business and public policy at the Haas School of Business. It was also relatively inexpensive.

“Creating an intervention that effectively costs about $1 per extra vaccine is remarkably cost-effective, and a small fraction of the cost of other interventions,” Tadelis said, noting that studies of U.S. state vaccine lotteries put the cost at $68 to $82 per vaccine. Offering people direct compensation for getting vaccinated in Sweden put that cost at $24.

“Creating an intervention that effectively costs about $1 per extra vaccine is remarkably cost-effective, and a small fraction of the cost of other interventions.” —Steven Tadelis, Berkeley Haas

Using politics to overcome the political divide

Data from the Kaiser Family Foundation found that among the 27% of American who remained unvaccinated as of October, 60% identify as Republicans and just 17% as Democrats. Counties that voted heavily for Trump experienced COVID-related death rates nearly three times higher than counties that voted heavily for Joe Biden, an NPR analysis found.

Although Trump spearheaded Operation Warp Speed and he and former First Lady Melania Trump got their shots as soon as the vaccine was available, Trump did little to encourage vaccine uptake. Meanwhile, messaging from the Centers for Disease Control and Prevention (CDC) and medical experts about the vaccine’s efficacy has been overshadowed by a drumbeat of skeptical Fox News personalities who are also among Trump’s biggest boosters.

“We felt like there should be a better way to send a message that would resonate with people on the right,” said Stanford economics professor Brad Larsen, lead author of the study, in a press release.

“We felt like there should be a better way to send a message that would resonate with people on the right.” —Brad Larsen, Stanford University

The National Bureau of Economic Research working paper was co-authored by political science professors Timothy Ryan, Marc Hetherington, and Rahsaan Maxwell from the University of North Carolina at Chapel Hill and Steven Greene from North Carolina State University.

Creating the experiment

The researchers received funding for the experiment from the Vaccine Confidence Fund, and it was approved under the Institutional Review Board at Stanford University.

They hired a professional video editor to create a 27-second public service announcement with an upbeat soundtrack. It opens with the Fox 13 News Utah anchor declaring, “Donald Trump is urging all Americans to get the COVID-19 vaccine.” It then cuts to a phone interview in which Fox News anchor Maria Bartiromo nods in agreement while then-President Trump says, “I would recommend it, and I would recommend it to a lot of people that don’t want to get it, and a lot of those people voted for me, frankly.”

Next is another clip of the Fox 13 News Utah anchor explaining, “Both Trump and former First Lady Melania Trump did receive their vaccines privately in January at the White House.” The final shot shows a social media post Ivanka Trump shared when she got her jab. The ad closes with the statement, “Your vaccine is waiting for you.” It also includes a link back to the original broadcast.

The research team spent just under $100,000 on YouTube’s advertising platform, Google Ads, to air the video in counties with vaccination rates below 50%. The video was pushed out to 1,083 counties across the U.S. from Oct. 14 to 31, 2021. The study included a control group of 1,085 similar counties that did not receive the ad.

While the researchers had no control over which channels it would appear on, the Google Ads’ algorithms sent it most often to Fox News’ YouTube channels, where it was attached to segments hosted by Laura Ingraham, Tucker Carlson, Sean Hannity, and other Trump supporters and vaccine skeptics. It also appeared on some neutral channels and some not supportive of Trump, including Saturday Night Live, MSNBC, and NBC News.

Overall, the ad appeared on more than 150,000 YouTube channels and was delivered to more than 6 million viewers, resulting in 11.5 million impressions.

The researchers used data from the CDC on the number of vaccines administered in each county from one month before and month after the campaign to analyze the effect.

Their findings:

  • The number of vaccinations in the average county where the ad was shown increased by 103, with a total of 104,036 additional vaccines in all (compared with counties where the ad was not shown).
  • With an advertising budget just below $100,000, that amounted to about $1 for each additional vaccine.
  • More intensive advertising made a difference: An increase of 1,000 ads led to 8.6 additional vaccines on average. Put differently, 116 ad impressions were required to yield one additional vaccine.
  • While the ads moved some skeptics to action, they were only effective in counties with up to 70% Trump voters. The heaviest pro-Trump counties were unmoved. 

Read the full paper:

Using Donald Trump’s COVID-19 Vaccine Endorsement to Give Public Health a Shot in the Arm: A Large-Scale Ad Experiment
By Bradley J. Larsen, Timothy J. Ryan, Steven Greene, Marc J. Hetherington, Rahsaan Maxwell, and Steven Tadelis
National Bureau of Economic Research, April 4, 2022

Minority voting power dropped after court weakened Voting Rights Act, study finds

A car with a sign reading "Protect Our Vote!" waits in line at a voting rights demonstration.
A car waits in line at the John Lewis Voter Advancement Day Votorcade at the Arizona State Capitol in Phoenix, AZ, on May 8, 2021. (Photo by Alexandra Buxbaum/Sipa USA)(Sipa via AP Images)

Since the Supreme Court struck down a key provision of the Voting Rights Act in 2013, minority voter underrepresentation has intensified—especially in places where Black, Asian, and Latino voters are on the brink of being electoral majorities, according to a new Berkeley Haas study.

The study found sharp drops in minority voter registration and representation in cities that had new freedom to change their voting rules following the Shelby County v. Holder decision, which effectively lifted “preclearance” rules requiring federal approval for election changes in states and counties with a history of voter discrimination.

This suggests organized and concerted efforts to limit minorities’ voting power, says co-author Francesco Trebbi, professor of business and public policy at the Haas School of Business.

“Something is deeply skewed in terms of the electoral playing field here, and it’s surgical,” Trebbi says. “If you just look overall, everything may look okay. But if you dig deeper and look at the areas where minority voting share is on the brink of being pivotal, you see that something bad is happening.”

“Something is deeply skewed in terms of the electoral playing field here, and it’s surgical.” —Francesco Trebbi

Along with co-author Federico Ricca, a PhD candidate at the University of British Columbia, Trebbi used U.S. Census data to analyze patterns of minority representation and voter registration in more than 7,600 cities, paying particular attention to how these patterns shifted in areas that had been covered by preclearance rules. They found compelling evidence that voter disenfranchisement is not a relic of American history, but is now on the rise.

Removing federal gatekeepers

The Voting Rights Act of 1965 deemed some states and counties in need of a federal gatekeeper of sorts: Before these jurisdictions could change any law related to voting, they had to obtain federal permission.

To determine which places would require this oversight, the Voting Rights Act implemented a formula: Any jurisdiction that required a test or other prerequisite—such as a poll tax or document requirements—in order to vote, and in which less than half the eligible voters were registered or turned out in the 1964 election, would be covered by the preclearance rule. The Voting Rights Act’s coverage was later updated to include jurisdictions that met the same criteria in 1968 and 1972. The rules covered nine states, mostly in the Southeast plus Alaska and Arizona, as well as specific counties and townships in six other states, including California, New York, South Dakota, and Michigan.

The Shelby County v. Holder ruling’s specific move was to strike down this preclearance formula as unconstitutional. Though it upheld the preclearance requirement itself, the protections are, in effect, removed until Congress passes legislation describing a new formula.

“The removal of the Voting Rights Act protection could be particularly damaging going forward in a period of increasing diversity in the U.S., with the growing number of minorities deserving a fair shot at representation” —Federico Ricca

In his majority opinion, Justice John Roberts hinged his argument on how much voting access has improved in the nearly half century since the Voting Rights Act was passed, arguing that the  coverage criteria were outdated.

“Voter registration and turnout numbers in the covered States have risen dramatically in the years since,” Justice Roberts wrote. “Racial disparity in those numbers was compelling evidence justifying” the Voting Rights Act’s preclearance rules. “There is no longer such a disparity.”

Analyzing new data

The study’s findings undermine Justice Roberts’ words. Since the ruling, Trebbi says, he’s been eager to investigate its impact on minority voting. He has previously published research on strategic minority disenfranchisement in the U.S., and he needed to wait for Census data to accumulate before he could dive into his questions around Shelby.

Racial and ethnic minorities are underrepresented at all levels of government. For example, they account for 40% of the U.S. population but are still only 23% of Congress. In 2018, Latinos made up 18.1% of the U.S. population, but only 1.2% of all national and local elected officials.

Trebbi and Ricca chose to focus on local politics because the elections are nonpartisan, yet often sharply divided by race and ethnicity. City councils are important because they often serve as a launching point for careers in higher office, and they make decisions on policies and services that directly impact the average voter. So the researchers’ first step was to analyze the relationship between shares of minority voters and shares of minority city council members.

Focusing on cities also gave them a large sample to work with. They used data on municipalities and their council composition, forms of government, and electoral rules from surveys managed by the International City/County Management Association (ICMA), complemented by sociodemographic data from the U.S. Census. Their sample covered 7,687 cities between 1981 and 2020.

Pivotal groups = more underrepresentation

What the researchers found when they looked into minority representation on city councils echoed throughout their other findings. As Trebbi puts it: “Every minority racial and ethnic group is underrepresented, but they are especially underrepresented when they start to become electorally important.”

Specifically, city council underrepresentation is the highest when minorities account for 55% to 60% of the total voting age population.

“Already this tells you that there is something going on here that is not just explained by minorities voting less or participating less in elections,” Trebbi says. If that were the case, underrepresentation would be roughly the same across cities with different percentages of minority populations—not so predictably most-pronounced in cities with pivotal shares of these voters.

The researchers also examined patterns in voter registration and found that, again, under-registration rates were highest at a similar sweet spot—when levels of minority population shares were between 45% and 50%.

Evidence of strategic rule changes

Next, Trebbi and Ricca sought to determine whether electoral rules tended to change when minority voters crossed a particular population threshold. In Trebbi’s previous research, he showed that “at-large” systems—where all voters vote for city-wide representatives—dilute minority votes more than systems where smaller districts elect their own council members, because minorities tend to be concentrated in certain neighborhoods. Consistent with this finding, the researchers found that at-large systems were most likely to be used in places where minorities represented about 25% of a population—not a large enough share to threaten a white majority in a citywide election. But as a city’s minority population grew, it was less and less likely to employ an at-large election system.

Shifts between at-large and district representative systems were the type of change that had required federal preclearance under the Voting Rights Act’s Section 4(b). In the third part of their research, Trebbi and Ricca analyzed data on the Act’s coverage collected directly from the U.S. Department of Justice.

“For some, the first two sets of results would be sufficient to identify a strategic component to this, but we also have the Shelby results that double down on intent,” Trebbi says. “You see that the moment the coverage restriction was lifted, minority representation declined.”

Specifically, minority voter underrepresentation increased by up to 6.3 percentage points in municipalities previously covered by the preclearance rule. In general, representation had been lower in non-covered jurisdictions before the ruling, but after the ruling, covered and non-covered jurisdictions’ representation numbers have converged.

“Throwing away your umbrella”

In her dissenting opinion in Shelby County v. Holder, Justice Ruth Bader Ginsburg wrote, “Throwing out preclearance when it has worked and is continuing to work to stop discriminatory changes is like throwing away your umbrella in a rainstorm because you are not getting wet.”

The researchers drew a similar conclusion, writing that the Voting Rights Act’s preclearance rule was an “an imperfect, but effective, tool in limiting the representation gap.” In January, the U.S. House of Representatives passed the John R. Lewis Voting Rights Advancement Act, which would restore the preclearance rule. It now awaits a vote in the Senate.

“The removal of the Voting Rights Act protection could be particularly damaging going forward in a period of increasing diversity in the U.S., with the growing number of minorities deserving a fair shot at representation,” Ricca said.

We must offer Putin an offramp from his war in Ukraine ASAP

David I. Levine is the Eugene E. and Catherine M. Trefethen professor of business administration at the Haas School of Business. Reposted from the Berkeley Blog

Ukraine and Russia Protests
Credit: iStock/Getty Images

The risks of escalation between NATO and Russia—a nuclear superpower with a potentially unstable leader—are clear. These risks imply that citizens of every nation have an interest in ending Russia’s invasion of Ukraine.

To do that, it is crucial that we negotiate with our foe, no matter how distasteful. We must give Russia an attractive path to leave Ukraine as soon as possible. A concern is that any concessions from NATO reward Putin’s misbehavior.

In fact, if Ukraine and NATO offer Putin a deal they would have agreed to prior to the invasion, Russia has gained nothing from its costly war.

Furthermore, Russia’s invasion has strengthened NATO, devastated Russia’s economy, and demonstrated Russia’s military weakness.

Thus, Russian misbehavior has already been punished. Prior to its unprovoked invasion of Ukraine, Russia demanded the removal of all troops from NATO members that were once in the Soviet Union.

This week, Putin insisted on the lesser demand of Ukraine putting non-NATO membership in its constitution. The West must understand Putin’s true interests, not just his (shifting) public demands.

At the same time, the West should identify which of these interests are least costly to Ukraine and NATO. Then Ukraine and NATO can identify a deal they would have accepted prior to the invasion—and offer it today to Russia.

At a minimum, this approach means making clear to Russia that sanctions end when its troops leave Ukraine.

This approach may also mean making promises about delaying Ukraine’s membership in NATO, and a referendum (with international oversight) on autonomy for the parts of Ukraine that Russia already controlled prior to the war.

NATO may also address Russian fears of invasion by limiting its offensive weapons and large exercises near Russia—presumably in exchange for Russia agreeing to similar limits near its own borders. These are just examples, as a well-designed offer requires deep insight into the true interests of Putin, Ukraine, and NATO.

Finally, this approach may also mean promising Putin that he will not be prosecuted for war crimes if Russian generals and oligarchs pressure him to leave. While he deserves to be held to account, it does not make sense to risk nuclear war to preserve a slim chance to prosecute one war criminal.

A quagmire

At a deeper level, it is unfair that Russia annexed Crimea eight years ago, and then supported separatists who carved autonomous regions out of easter Ukraine. It is even more unfair to reach a peace deal that acknowledges those pre-war facts on the ground.

But while the deal I outlined may be unfair, it is even less ethical to prolong the war. To see why, consider the long conflict that will follow if we do not give Russia a quick exit.

Unless Ukraine can somehow defeat the massive Russian military, Russia will presumably install a puppet government in Kyiv. Assuming that most Ukrainians will continue to oppose a  Russian-backed regime, Russia will have to continue to station troops in Ukraine.

Russia’s economy will continue to suffer from sanctions, and Russia’s military will be tied down in a European “Afghanistan.”

Some anti-Russian commentators are delighted at the prospect of Russia’s military stuck in this quagmire. This “optimistic” scenario ignores the misery of Ukrainians and the suffering of Russian citizens, few of whom had any idea this war was coming.

Accepting this scenario also ignores the known costs of ongoing conflict on the West—and also the less quantifiable risks.

The known costs include higher energy and food prices, the disruption of several million refugees moving into the EU, the costs of permanently higher defense spending, a possible financial crisis in the West due to Russian defaults on its debts, and the end of cooperation with Russia on everything from the International Space Station to fighting global terrorism and climate change.

The political costs may include the need to support imperfect democracies such as Poland and to start cooperating with dictatorships such as Venezuela as we seek new supplies of oil.

The fog of war

The military risks are even greater.

Russia has many strategists searching for ways Russia can retaliate for Western sanctions and for arming Ukraine. The most predictable means include increasing Russia’s current misbehavior: more cyberattacks, more election meddling, and more support for separatist and terrorist groups around the globe.

More generally, Russia can exploit any instability caused by high energy prices, the refugee crisis it has caused, and any other instability it can foment or find.

Beyond what Russia plans, there are dozens of paths to unintended escalation and retaliation. Some examples:

  • A military plane accidentally crosses an international border
  • One side attributes hostile acts by hackers, terrorists, or foreign fighters to the other side: for example, an attack on a NATO convoy while it is still in Poland, or a Russian military supply convoy in Russia.
  • Russia may feel justified using force in NATO nations due to NATO support for Ukrainian resistance fighters that Russia calls “terrorists,” or to support ethnic Russians who protest in a Baltic state.

Given the many parties that can engage in violence—from terrorists Russia may plant among the millions of Ukrainian refugees to freelance hackers Ukraine recruits into its “IT army”— attributing blame for attacks will always include the risk of misunderstanding.

The risks of escalation are too great to imagine. Even if it requires some sacrifice, we must find a way for Russia to get out now.