For all the promising developments at COP26, it is somewhat uncomfortable to read that 2021 will see power generated from coal at its highest ever level. As in thermal coal, by far and away the dirtiest source of electricity generation currently available. Part of the reason for this is down to a global economy emerging from a pandemic lockdown causing a surge in energy demand, and partly due to other factors: like the price of natural gas. The price of natural gas in places like Europe and Asia, where there is little local supply, has gone ballistic and pushed consumers to look for cheaper sources. Like coal. For much of Europe this is now a real problem as running into the depths of winter there is now not enough gas in storage, and there is not enough gas coming down the pipes. Hence prices up 600% so far this year. And all this with a top-down diktat in China – themselves also short of energy – for buyers to buy natural gas at any cost. Sadly for global mandarins, it’s not just natural gas. Take magnesium, one of the main inputs into the production of aluminium alloys, a material that keeps – amongst others – auto makers in autos. For a number of reasons China now makes up about 85% of the global supply of magnesium. The making of magnesium is incredibly energy intensive, and in a world where there is increasingly not enough energy, there are cracks in the chain. Governments who are faced with keeping their people warm, or keeping energy intensive factories going, are likely to side with what will keep them in votes. The issue here is linkages. Connections. Like the recent rapid knock-on effect of shuttering a fertiliser plant in the UK on account of soaring energy costs, a shortage of magnesium will send volts through an intricately woven supply chain, putting lots of jobs at risk. Reports are starting to bubble up describing a magnesium supply crisis of not-ever-seen-before magnitude. All these shortages and soaring costs are not only inflationary; they are also negative for growth. The mighty Goldman Sachs has just cut its GDP forecasts as Biden’s ‘Build Back Better’ plan hits the skids. Toyota has announced it is stopping production in five factories due to supply chain issues. Chile, the world’s largest copper producing country, has just elected a new far left President. Stack all these issues up, and when they start to bite and spit, Goldman’s latest GDP cut might not be its last.