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The Geopolitics of a Clean Energy Transition

AFP/ TENGKU Bahar

When discussing clean power and the ramifications it will have on the world, the topics typically discussed (and rightfully so) are on the effects a shift away from fossil fuels and towards carbon-free sources on:

  • The climate
  • The environment
  • Affordability of electricity
  • Energy resilience
  • Energy independence
  • Energy choice
  • Public health

The idea is that a shift towards clean energy can enhance regions that embrace those technologies, as well as the world as a whole, will bring fruits in each of those categories. These sources of optimism and postive outlooks for the future are so important to the implementation of clean energy and drive the transition. But one topic that bubbles somewhat below the surface is the geopolitical ramifications of this shift.

The reason this topic is one to keep an eye on is because the clean energy transition is inherently a shift away from fossil fuels like oil, coal, and gas. These resources, though, are a significant source of economic and global power for the nations that control them. We hear a lot about OPEC's collective action in keeping the price of oil at an optimal level for them, action that has been increasing in recent years. The advent of clean tech that renders their fossil fuels in less of a demand is a consistently persistent threat, and one that should not go unnoticed. 

As such, it was with great interest I read about the recent report from the International Renewable Energy Agency (IRENA). 

Some key takeaways, as detailed in this article, include:

  • The shift "will alter the global distribution of power, relations between states, the risk of conflict, and the social, economic and environmental drivers of geopolitical instability."
  • The shift will likely cause China to eclipse the United States, place oil-dependent Gulf states at risk and help impoverished African nations achieve energy independence
  • The IRENA commission also warned that countries are heavily dependent on fossil fuel exports would need to adapt to avoid "serious economic consequences"
  • But it said, renewables will be a powerful vehicle of democratisation because they make it possible to decentralise the energy supply.

 

 

What do you think-- are we talking about the worldwide geopolitical implications and potential power shift that would accompany a clean power transition enough? Are there discussions that need to take place now, perhaps agreements on a global stage, to ensure the transition doesn't cause instability in those dependent on the power (electrical and political) from fossil fuels?

 

Matt Chester's picture

Thank Matt for the Post!

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Mark Silverstone's picture
Mark Silverstone on January 22, 2019

Thanks for this information Matt.  I think your post supports the saying about putting all of one´s eggs in one basket.  There are so many variables that it is impossible to say what is or will be A winner, let alone THE winner in the competition to supply energy in the future.  I don´t think either the markets or government alone can or should ensure that the best mix of suppliers wins.  Investors will determine the markets and governments (the people, I hope) have to decide if and how to regulate.  Not easy decisions for either group. There will be mistakes and successes.  It is going to take a while to shake out.

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