The Geopolitics of Green Energy
Fossil fuels have dominated the energy industry in the world since the industrial revolution began. This has largely had negative implications for our global climate and living beings inhabiting this planet.
To prevent further damage, the world needs to make a shift towards low carbon energy production. Renewable energy is becoming a key player in decarbonizing our economies with several nations investing in sustainable energy sources such as wind, solar and nuclear.
Global Green Energy Commitments
In 2015, the Paris Agreement set a global target of net zero emissions to be achieved in the latter half of the 21st century. A number of governments began constructing national strategies to transform their countries into carbon-free utopias.
Some countries like Uruguay and The Maldives were so committed that they pledged ambitious targets of as early as 2030. Finland followed closely, pledging to become carbon neutral by 2035.
We are now in 2021 and with just 9 years to go, just how realistic are these targets? In 2019, renewable sources contributed 26 percent to global electricity generation. So just how much will it take to make all energy completely green?
How China Became a Major Player in the Green Energy Space
China and the US have been major economic players in the fossil fuel industry, with their heavy consumption of oil and coal to produce energy. Xi Jinping has led China into global markets and Chinese investments in international organisations has grown, reaching over 70 countries.
Through a ‘Belt and Road Initiative’ (BRI) China hopes to improve its international relations by connecting Asia with Europe and Africa through maritime and land transport. By doing this China aims to increase trade and promote economic growth.
In 2020, China boasted new wind and solar projects that would produce 120 gigawatts of energy. This is four times the UK’s capacity and a double of China’s own wind and solar energy production. But shockingly, China also approved the construction of more coal power plants than the last 5 years.
As China makes its own energy sector less carbon intensive, its BRI overseas investments are posing a direct threat to global climate emissions. Although China has implemented a cap on its own coal consumption in an attempt to reduce home emissions, it has been building several coal and energy companies through the BRI in the DRC, Chile, and Australia.
So while China is working hard to reduce its own carbon emissions and meet the neutrality target, its actions overseas are causing further harm to the climate. And despite this, China has not shied away from declaring an ambitious 2060 carbon neutral target with new investments in the renewable energy sector, specifically nuclear to meet this goal.
Investing in green energy while retaining its coal and power industry, could be China’s way of retaining power in both industries. As fossil fuel supplies dwindle, China would already have a foundation in green technology that it can use to gain power in the renewable energy sector.
The Fall of the U.S. as a Green Energy Leader
In the late 20th century, being an energy superpower came from the control of fossil fuels, but this is soon changing due to climate change and largely due to the limited supply of coal, gas, and oil.
Under Trump’s administration, America continued strongly in its consumption of fossil fuels and had no plans to become carbon neutral despite being the top emitter of greenhouse gases. Trump even claimed America as the “Number one energy superpower” in the world.
In the recent decade, America has become the top producer of both oil and gas with both seeing doubled production. But with a huge shift from fossil fuels to renewable energy, will America be able to maintain this self-given title?
This shift is due to a number of things. Studies show that it’s not just the lack of supply but surprisingly the actual demand of oil that is decreasing rapidly. This is because there is a general acknowledgement of the negative impacts of fossil fuels on the world’s climate.
In unprecedented situations like the Covid-19 pandemic, the demand for oil fell drastically. Investors distanced their business from oil companies and in America the shale sector fell more than 50 percent since January. Large corporations such as ExxonMobil saw a big loss of their market capitalisation.
Despite this, China’s oil demand has continued to grow and provided stability to this sector. Its position as a buyer allows it to be almost invincible to Americas attempts to exploit oil exporters through sanctions. With oil demand decreasing so much, America loses the power it once held over oil producing nations.
The Struggle to Catch Up and Innovate
America’s energy sector largely relies on oil and has very little investment in renewable technology. China on the other hand, dominates the lithium ion battery supply chain with control over 60 percent of both the component manufacturing and cell capacity. And on top of that China also owns 70 percent of the world’s solar modules.
America now feels a real sense of being left behind in this green technology race. For a country that reigned over the fossil fuel industry and held a high status, they ultimately have very little ground in the world of renewable power.
Their long time running opponent, China has already begun making the necessary investments for a move towards a greener economy. But America has just re-joined the Paris Agreement in 2021 with the Biden Administration.
And fossil fuels are such an integral part of the US economy, that a shift to green energy could affect millions of people who work in coal and oil power plants. With such a short time till the 2050 Paris Agreement target, changing the workforce would only deplete the American economy further.
But despite this, Senator Granholm claims that the American clean energy technology could be worth $23 trillion US dollars by 2030. And to further boost the economy and ensure energy security, the US would create their own batteries rather than importing from their rival, China.
Plus, Senator Granholm is optimistic that rare earth minerals can be mined responsibly and sustainably within America, and that this new industry would create enough jobs and energy security for the country.
With the world rapidly moving towards green energy, America will have to slowly invest in more green energy projects to maintain itself as an energy superpower. With Joe Biden as president, and the US re-joining the Paris Agreement, there could be a transition to renewable technology.
The Inevitable Losers of the Green Energy Race
Fossil fuels are largely controlled by nations who have an abundance of coal, gas, and oil as well as nations who can afford to extract them. The Middle East has dominated the world’s oil supply, making it a source with limited access. In the past, if supplies were cut off, this caused a stark increase in prices and people suffered from the cold freezing their homes.
Low oil demand and lower prices are creating economic problems in the long term for countries in the Middle East which holds 48 percent of the world’s oil reserves. The social relations between monarchies and citizens have been affected by tightened budgets due to low revenue of oil exports.
Kuwait, for example, has an especially heavy reliance on oil, which accounts for 42 percent of its GDP. But, surprisingly, the country has no intention of diversifying its energy sector. This may have detrimental effects on the economy of this country as the energy sector rapidly transitions towards renewables.
Due to the lack of and late investments, the Middle East could lose its power as a major economy. Many countries are just 20–30 years away from their Paris Agreement targets of carbon neutrality. And a lot of them are already banning the use of fossil fuels in the coming decade. With such policies in place, the Middle East will not only lose millions in GDP but also lose its power as an oil exporter.
How Green Energy Will Determine the Geopolitical Power Dynamics
Green energy sources are more readily available and numerous countries can produce energy in this way, especially if they invest in wind and solar projects as these are naturally abundant and unlimited. If resources are available to all nations, this eliminates control as all are free to use it. However, it may not level out the power balance in regard to energy because despite having these resources, many countries still do not have the funding to utilize them.
China controls the processing of several rare-earth minerals such as lithium, graphite and cobalt. These are used to produce batteries that can power electronics such as phones and laptop as well as electric vehicles which are the latest demand in renewable technology. In 2019, 80 percent of the world’s total output of raw materials for batteries came from China.
This means that many countries including the US will be dependent on Chinese supply chains to produce these batteries. Here, China retains its power as an energy superpower through controlling this resource.
But most of the other minerals, are available in high concentrations in other countries. For example, cobalt originates from the Democratic Republic of Congo (DRC) which houses over 60 percent of the worlds cobalt. Surely, having such an abundance of this resource would allow the DRC to become a leader in battery production and renewable technology.
Unfortunately, however, the country does not have its own provisions or funding to extract and process cobalt. China’s operations in DRC allows it to exploit this source and make batteries which largely only benefits China’s economy. Plus, China also owns a majority of lithium mines in Chile, and manganese mines in South Africa.
So despite the minerals being a globally available resource, China has the most control over these sources. Ultimately China gets to build its green economy by supplying the batteries it produces from these minerals which are used in electronics in countries all over Europe and North America.
But the problem doesn’t stop here. Not only does this involve exploiting poorer nations but it also damages their natural environment. To extract the raw minerals, large plots of land have to be excavated and destroyed. This disturbs natural ecosystems and habitats. So how green is this technology if it still damages the environment?
Who Will Power the Future?
The fossil fuel industry has been polluting the world for over a century. It has been controlled by a small number of countries, giving them power over much of the world. This power and growth has always been limited to these parts of the world with poorer nations never having any opportunity to develop themselves. Nations such as China, the US, and the UAE have become major political powers thanks to their export and consumption of fossil fuels.
But renewable energy introduces the world to a new source that can be accessed in any part of the world. So really it’s a source that can be used by everyone. Renewable energy creates a possibility for developing nations to build their economies on sources such as wind and solar that are ready to be harnessed in their own territory.
This should lead to a breakdown of major energy powers because in this scenario, no one person would be able to control this natural resource. No one country should have the power to control the supply, or to implement sanctions.
But we’re leaning back to the same place we were before. Wealthier nations like China are able to invest in poorer countries and exploit their natural resources to produce green energy. Resources that those countries could be using to promote economic growth.
Yes, green energy will help reduce our carbon emissions and fight climate change. But the political power struggle between these nations and their race to develop green technology undermines and neglects the poorer nations.
