How the energy transition will reshape geopolitics

Article (PDF Available)inNature 569:29-31 · May 2019with 1,595 Reads 
How we measure 'reads'
A 'read' is counted each time someone views a publication summary (such as the title, abstract, and list of authors), clicks on a figure, or views or downloads the full-text. Learn more
Cite this publication
Abstract
Transitioning to a low-carbon world will create new rivalries, winners and losers, argue Andreas Goldthau, Kirsten Westphal and colleagues.
EMISSIONS Permafrost collapse
could double predicted
warming p.32
EVOLUTION Does explaining
the origin of life call for new
physics? p.36
PHOTOGRAPHY A hymn to the
artform’s relationship
with science p.38
NEUROSCIENCE Sex
differences are gateway
to precision medicine p.40
E
nergy is at the root of many political
ructions. President Donald Trumps
intention to pull the United States
out of the Paris climate agreement in 2020,
the European Unions restrictive policies
against importing Chinese photovoltaic
cells and the political hostility towards the
school strikes over climate-change in action
are all reactions to attempts to shift the
world to a low-carbon economy.
The future benefits of clean energy can
seem distant when weighed against pay
packets or votes now. Despite the impacts
of climate change becoming increasingly
evident in devastating cyclones, heatwaves
and floods, politicians want to protect local
jobs and incumbent industries, such as coal
and manufacturing. Voters are swayed
by issues such as equity, health care and
national security.
This bumpy ride is no surprise.
Historically, most major transitions have
proceeded in unexpected ways. Climb-
ing the energy ladder from wood to coal
between the eighteenth and nineteenth
centuries, for instance, enabled industriali-
zation. But it also disenfranchised large
How the energy transition
will reshape geopolitics
Paths to a low-carbon economy will create rivalries, winners and
losers, warn Andreas Goldthau, Kirsten Westphal and colleagues.
Solar panels decorate the desert in Dubai.
ASHRAF MOHAMMAD MOHAMMAD ALAMRA/REUTERS
2 MAY 2019 | VOL 569 | NATURE | 29
COMMENT
parts of the working class, prompting
Karl Marx and Friedrich Engels to write
The Communist Manifesto. The transition
to renewable energy sources will be disrup-
tive, too. Yet the geopolitical implications
are, for the most part, yet to be analysed.
International energy organizations have
flagged some issues. Oil exporters might
lose global influence, whereas importers
will be empowered, concluded a report
from the International Renewable Energy
Agency (IRENA) published earlier this
year1. Economies that produce oil and gas
could lose US$7trillion by 2040, the Inter-
national Energy Agency has warned
2
. And
wider strategic quarrels will also emerge.
With their huge markets, industry lead-
ers China and the United States are vying
to dominate the clean-technology sector.
And new relationships and allegiances,
such as the Global Energy Interconnection
Develop ment and Cooperation Organiza
-
tion (a platform for companies and enter-
prises) might replace state-led clubs of old
such as OPEC, the Organization of the
Petroleum Exporting Countries. Compe-
tition over the use of land for energy pro-
duction will have implications for food and
water security and migration in develop-
ing countries. And energy is woven into
the infrastructure investments and rela-
tionships that form China’s Belt and Road
Initiative.
We present here four geopolitical sce-
narios to illustrate how varied the transi-
tion could be by 2030 (see ‘Four futures’).
To minimize conflict and maximize equity,
states’ policy choices over the next decade
will be crucial. Researchers and decision-
makers should widen their focus to exam-
ine the implications of such alternative
pathways to decarbonization — issues
that go well beyond technology. Smoothing
the road will take multilateral agreements,
generous funding and cooperation.
ALTERNATIVE FUTURES
These four trajectories were explored
by a group of international energy and
foreign-policy researchers in two work-
shops, in which we all took part. Partici-
pants discussed what drives global energy
transformation, where and at what pace.
The meetings were held in Berlin in 2018
at the German Institute for International
and Security Affairs (SWP), convened by
the Geopolitics of Energy Transformation
2030 (GET 2030) project in parallel with
the 2019 IRENA report, and funded by the
German Foreign Office.
1. Big green deal. This scenario assumes
full cooperation — a global consensus for
action on climate change leads to a con-
certed international policy drive. G20
countries build a generous Green Climate
Fund, well above the $100-billion-a-year
goal in the Paris climate agreement. Finan-
cial markets divest fossil-fuel assets and
reallocate capital to low-carbon firms.
Green-technology corporations dominate
the Fortune 500 by 2030.
A wave of green globalization, as
enshrined in the United Nations sustain-
able development goals (SDGs), allows all
countries to share in the benefits of decar-
bonization. Petro-states are compensated
to transition smoothly to a sustainable
economy, avoiding a last-ditch attempt to
flood the world with cheap oil and gas. The
result is a win–win for climate and security.
Geopolitical friction is low.
2. Technology breakthrough. A major
technological advance steers the world
along a different path. A step change, for
example in energy storage, makes solar
and wind power easier to integrate into
the grid and even cheaper. The United
States and China take the lead in scaling up
the technology, given their large markets,
tech-friendly regulatory environments
and industry giants, such as Google and
the State Grid Corporation of China. But
competition between nations also spikes.
The world fractures into two camps in
a clean-tech cold war. Technology leaders
hold the power. Other countries gravi-
tate towards one of the leaders, reinforc-
ing regional blocs and increasing rivalry.
These blocs seek to control the materials
needed, such as rare-earth metals, cobalt
and lithium. They might also withhold
access to technologies from nations out-
side their groups.
The renewables race helps to mitigate
climate change, and displaces fossil fuels
quickly, but some regions lose out. For
instance, Europe lags behind China and
the United States because its single market
remains less integrated. Russia might align
with China. Some developing nations are
excluded from advanced energy know-how
altogether, compromising the SDGs.
Fossil-fuel producers have to adapt rap-
idly to falling demand. Some don’t manage,
and political tensions rise in sub-Saharan
Africa, the Middle East and Central Asia.
3. Dirty nationalism. Elections bring
populists to power in the worlds larg-
est democracies, and nationalism grows.
Nation-first policies put a premium on
self-sufficiency, favouring domestic energy
sources over imported ones. This drives the
development of fossil fuels, including coal
and shale production, as well as renewables.
States ring-fence their industries and
zero-sum logic returns — one country’s
gain means another’s loss. Public opinion
turns against foreign energy investors.
Energy markets fragment in the face of
protectionism, which limits economies of
FOUR FUTURES
TECHNOLOGY BREAKTHROUGH
DIRTY NATIONALISM MUDDLING ON
1980 2100 1980 2100
Geopolitics in the next decade (hashed regions) will dictate whether or how fast energy
from renewable sources will outpace that from fossil fuels, as these four scenarios depict.
Renewables surge then slow as
competition limits their spread.
1980 2100
Total energy
1980 2100
A scientic
advance creates
competition
Fossil-fuel industries are protected and
energy markets fragment.
Fossil fuels dominate and renewables fail
to mitigate climate change.
Total energy
BIG GREEN DEAL
Policies, funding and cooperation drive
rapid decarbonization.
Fossil fuels
Renewables
Some oil companies
and states go bankrupt
SOURCE: A. G. ET AL.
30 | NATURE | VOL 569 | 2 MAY 2019
COMMENT
scale and slows progress towards decar-
bonization. Fossil-fuel exporters rush to
produce as much as they can, despite fall-
ing prices and constraints on trade.
Power rivalries marginalize the UN and
undermine multilateral institutions such as
the UN Framework Convention on Climate
Change (UNFCCC). EU nations disagree,
weakening joint policies. This wrecks the
Paris climate agreement and the mecha-
nism of voluntary emission cuts underpin-
ning it. With climate change unmitigated,
food prices rise as a result of droughts and
tariffs. Water and other shared resources
are fought over as climate change amplifies
stresses and multiplies risks.
4. Muddling on. Business as usual results
in a mix of energy clubs, with little cooper-
ation. As unit costs keep declining, renewa-
bles claim an increasing share of the energy
mix by 2030. But fossil fuels remain domi-
nant. The speed of the energy transition
is too slow to mitigate climate change, but
too fast for the fossil-fuel industry to adapt.
Some national oil companies go bank-
rupt and others consolidate into a handful
of global energy giants. Exports concen-
trate in fewer countries and companies,
which compete rather than cooperate.
Exporting fossil fuels becomes a risky
business, revenues falter and OPEC col-
lapses. Oil-producing countries in the
Middle East, Russia and Africa see politi-
cal turmoil as government coffers empty.
Motivated by energy security as much as
climate change, countries pursue diverse
energy strategies. China is keen to improve
air and water quality and build ‘national
champions’ in industry. Europe is more
concerned with climate change, and pursu
-
ing bilateral partnerships with like-minded
and developing countries. The United
States is on the sidelines.
Because some regions have inadequate
regulation or fail to benefit from these
partnerships, existing economic and geo-
political imbalances (such as global north–
south relations) are reinforced and energy
inequality rises, undermining the SDGs.
LESSONS LEARNT
What lessons an be drawn from these
scenarios?
First, falling costs of technology — the
focal point of current debates — will not by
themselves deliver a low-carbon world. Poli-
tics will be an essential ingredient in success
or failure. Some economists suggest a global
carbon tax as a panacea. But the pace, scope
and direction of the transition will depend
on domestic political economies, regula-
tions and access to finance and clean tech-
nology. Decisive factors include: the degree
to which powerful fossil-fuel lobbies are able
to resist change; whether incumbent regula-
tory environments hold back the advance of
renewables; and whether low-carbon know-
how finds its way from the global north to
the global south.
Second, a zero-carbon world does not
do away with zero-sum games. It produces
different ones. In the current energy sys-
tem, the struggle is over secure and afford-
able access to oil, coal and gas. The United
States has historically cultivated a special
relationship with Saudi Arabia over oil,
and the EU with Russia over natural gas.
In a low-carbon world, the struggle will be
how to finance the infrastructure and to
control the technology needed to harness
wind, solar and other renewable power
sources, and how to secure access to the
materials required for the manufacture of
that technology.
Third, the pace of change matters. For
example, should a tech breakthrough bring
rapid change,
unstable fossil-fuel
producing states
such as Venezuela
or Algeria might
not have time to
adapt, and their
internal conflicts could spill over into neigh-
bouring regions. The problem here is not so
much stranded assets
3
, as it is the degree to
which countries share in the benefits of trans-
formation.
Fourth, some pathways might not be
politically palatable to all. For example,
many Western policymakers assume that
technological progress is best achieved in a
liberal market underpinned by free trade.
This is not necessarily the case. China has
scaled up renewable energy through top-
down rule and state planning. Brazil’s suc-
cess story in biofuels is in part a function of
a former military junta seeking self-suffi-
ciency and a more favourable trade balance.
Thus, the ‘one size fits all’ approach based
on Western norms in international organi-
zations should be questioned.
NEXT STEPS
Three steps will help to put geopolitics at the
heart of debates about the energy transition.
First, researchers and decision-makers
need to shift their gaze from targets to
pathways. Logistics need to be considered,
as well as uncertainties. This process will
involve more than green growth, economic
diversification and energy access4. Govern-
ments might link low-carbon technology
with foreign and security policy, as they did
with oil and gas.
Second, policymakers need to draw les-
sons from past and parallel experiences.
For example, digitalization, another deep
transition, is doing more than reshaping
economies and societies; it is throwing up
questions related to individual freedom
and political power. The path from planned
to market economies meant economic
hardship for most of the former communist
bloc; it also showed how elites can hijack
transition processes for personal gain.
Third, abating carbon will create losers. So
far, the policy focus has been on empowering
the early winners of an unfolding renewable-
energy race. It now needs to switch to the
potential conflicts resulting from falling
fossil-fuel demand, and the related economic
and security risks. For example, rich coun-
tries such as Germany can throw billions
of dollars at their coal sector to ease their
transition pain, offering generous financial
aid to lignite-producing regions. Nigeria
or Algeria cannot do the same for their oil
industry. Saudi Arabia and Kuwait might
5
,
and should be encouraged to do so.
Who should take the lead on managing
the transition? The G20 is one clear can-
didate. The UNFCCC involves 197parties
but, for all its achievements, it has failed
to slow the growth of emissions. The G20
states account for nearly 80% of global
emissions, and so could provide global
leadership and financial support, building
on their Climate and Energy Action Plan
for Growth and cemented by a tripartite
agreement between China, the EU and the
United States.
The journey to zero carbon is fraught
with geopolitical risk. By asking the right
questions, identifying threats and offering
solutions, we can get on the road to a just,
peaceful and effective energy transition.
Andreas Goldthau is professor of
international relations at Royal Holloway,
University of London, UK, and research
group leader at the Institute for Advanced
Sustainability Studies, Potsdam, Germany.
Kirsten Westphal is senior associate in
the Global Issues Division at the German
Institute for International and Security
Affairs (SWP), Berlin, Germany. She leads
the Geopolitics of Energ y Transformation
project funded by the German Federal
Foreign Office. Morgan Bazilian is director
of the Payne Institute and a professor of
public policy at the Colorado School of
Mines, Golden, Colorado, USA. Michael
Bradshaw is professor of global energy at
Warwick Business School, University of
Warwick, Coventry, UK.
e-mails: andreas.goldthau@iass-potsdam.
de; kirsten.westphal@swp-berlin.org
1. Global Commission on the Geopolitics of Energy
Transformation. A New World: The Geopolitics of
the Energy Transformation (IRENA, 2019).
2. International Energy Agency. Outlook for Producer
Economies: What Do Changing Energy Dynamics
Mean for Major Oil and Gas Exporters? (IEA, 2018).
3. Van de Graaf, T. & Bradshaw, M. Int. Aff. 94,
1309–1328 (2018).
4. Bazilian, M., Sovacool, B. & Moss, T. Glob. Policy
8, 422–425 (2017).
5. Goldthau, A. & Westphal, K. Glob. Policy https://
doi.org/10.1111/1758-5899.12649 (2019).
M.Ba. and K.W. declare competing interests; see
go.nature.com/2kzsi9s for details.
A zero-carbon
world does
not do away
with zero-sum
games.”
2 MAY 2019 | VOL 569 | NATURE | 31
COMMENT
  • ... It was facilitated by Foresight Intelligence, Berlin, Germany. This opinion also draws from an article jointly published by the present authors in Nature ( Goldthau et al., 2019). ...
    Article
    This opinion article offers insights into the geopolitics of the ongoing global energy transition. In doing so, it draws heavily on a workshop in Berlin in late 2018, and a subsequent paper in the journal Nature. Four scenarios are presented. First, the “Big Green Deal” offers a positive story of the future, under the assumption that there will be a multilateral approach to tackling climate change. Second, “Dirty Nationalism” explores the fallout of nations choosing to turn inward and pursue a short‐term, protectionist, and self‐interested agenda. Third, “Technology Breakthrough” illustrates how a technological leap forward could lead to a great power rivalry and distinct regional energy blocs. Finally, “Muddling On” investigates the outcome of an energy transition that reflect business as usual. By comparing and contrasting the different scenarios, the article highlights the potential winners and losers of the different scenarios, and the geopolitical consequences. It also sketches the implications for policy, theory, and scenario thinking more broadly. This article is categorized under: Integrated Assessment of Climate Change > Integrated Scenario Development The Carbon Economy and Climate Mitigation > Future of Global Energy The road to net‐zero is fraught with geopolitical dangers that threaten to de‐rail progress and create new sources of conflict and inequity (“Windfarm sunset” by brian.abeling is licensed under CC BY‐NC‐ND 2.0.).
  • ... If the world manages to get on a trajectory that will result in an early peak in oil demand and a significant fall in consumption thereafter, then Russia, and possibly Saudi Arabia, will find themselves in a very difficult situation, perhaps joined by the likes of Nigeria and a few others. This study contributes an emerging discussion, stimulated in part by IRENA's report, that relates to the geopolitical consequences of the energy transformation [91]. The fossil fuel economies are not going to disappear overnight [92], but we would agree with the IEA that now is the time for them to start thinking about the economic development strategies required for them thrive in the 2030s and beyond when demand for oil and gas, and the prices that they command, seem certain to fall. ...
    Article
    Full-text available
    The COP24 meeting in Katowice, Poland, made clear the divisions between the winners and losers of a low-carbon energy transition. The IPCC's 1.5 °C report shows that climate change mitigation must see an early peak in oil demand and a rapid fall in consumption thereafter. The ‘shale revolution’ and the falling cost and rapid deployment of renewable energy are laying the foundations of a ‘new oil order’ that threatens the prosperity of oil exporting economies. A review of forecasts and scenarios reveals significant uncertainty surrounding the dynamics of future oil demand. This provides the backdrop for a comparative analysis of the world's largest oil exporters: Saudi Arabia and Russia. Saudi Arabia is shown to be concerned to maintain oil revenues to finance its ‘2030 vision’ to diversify its economy. Russia, by comparison, shows no such ambition, rather it seems determined to increase its reliance on the oil and gas sectors. The conclusions suggest that fossil fuel exporters must act now to prepare for the low carbon transition and that a failure to do so could result in tensions and conflicts that could undermine the collective action required to address climate change.
  • Article
    Full-text available
    Whether and how long-term energy and climate targets can be reached depend on a range of interlinked factors: technology, economy, environment, policy, and society at large. Integrated assessment models of climate change or energy-system models have limited representations of societal transformations, such as behavior of various actors, transformation dynamics in time, and heterogeneity across and within societies. After reviewing the state of the art, we propose a research agenda to guide experiments to integrate more insights from social sciences into models: (1) map and assess societal assumptions in existing models, (2) conduct empirical research on generalizable and quantifiable patterns to be integrated into models, and (3) build and extensively validate modified or new models. Our proposed agenda offers three benefits: interdisciplinary learning between modelers and social scientists, improved models with a more complete representation of multifaceted reality, and identification of new and more effective solutions to energy and climate challenges.
  • Article
    Full-text available
    This paper analyses four specific technological innovations-artificial meat, blockchain, drones for delivery, and off-grid electricity-by looking at them as weak signals and emerging issues with potentially positive and negative impacts on the environment. They are arising at a remarkably fast pace and this work examines the patterns of their emergence. The main purpose of this paper is to challenge the dominant view on their probable future and stimulate policymakers to consider their alternatives, and ultimately increase policymaking resilience. The analysis is based on a systematic review of available academic and non-academic literature, with the aim of synthesising obtainable knowledge on each of the considered technologies and enabling a broad understanding of potential threats and opportunities related thereto. Reduction of the total greenhouse gas emissions, improvements in energy efficiency, decreased pressure on limited natural resources, and increased protection of ecosystems are the main areas to which the selected technologies could make an important contribution. Yet, the complexity and the wide array of risks associated with their diffusion challenge the conventional view that technological innovations are the panacea for global environmental problems. We argued instead that potential risks and threats related to their dissemination must be addressed through adequate policies, adopted in a timely manner, and founded upon extensive research.
    • T Van De Graaf
    • M Bradshaw
    Van de Graaf, T. & Bradshaw, M. Int. Aff. 94, 1309-1328 (2018).
    • M Bazilian
    • B Sovacool
    • T Moss
    • Glob
    Bazilian, M., Sovacool, B. & Moss, T. Glob. Policy 8, 422-425 (2017).
    • A Goldthau
    • K Westphal
    • Glob
    Goldthau, A. & Westphal, K. Glob. Policy https:// doi.org/10.1111/1758-5899.12649 (2019).
  • declare competing interests; see go.nature.com/2kzsi9s for details
    • M Ba
    M.Ba. and K.W. declare competing interests; see go.nature.com/2kzsi9s for details.