Energy security, green transition and geopolitics
The Foreign Affairs magazine, published by the American think tank Council on Foreign Relations, analyses the energy security concept that has become a mantra for many governments in the wake of the recent energy crisis and the return of great power rivalry in the world. Energy security has led Europe and the United States to adopt industrial policies to promote the transition to a green economy, that paradoxically undermine the international cooperation needed in the fight against climate change by fueling the forces of fragmentation and protectionism.
- Energy transition and geopolitics are entangled: The war in Ukraine showed us that the transition to a clean energy economy is chaotic in practice, producing new conflicts and risks in the short-term leading to a new government´s mantra: energy security. The energy crisis has highlighted the different views from governments and the lack of coordination in developing new energy sources around the world.
- The energy crisis reinforced the determination in Europe and the United States to move away from oil, gas, and coal. In both regions, the legislation (Green Industrial Act in Europe and Inflation reduction Act in US) is creating incentives for the domestic production, refining, and processing of critical minerals now centralized in China which is also a leader in the clean energy supply chain. But since both regions are promoting domestic industries, they are fueling protectionism and fragmentation, both of which can make economies less energy secure as interconnected and well-functioning energy markets increase energy security by allowing supply and demand to respond to price signals so the entire system can better handle unexpected shocks.
- Climate change will be a major threat to energy security in the coming decades, posing risks to infrastructure old and new. Warmer waters and more severe droughts will make it harder to cool power plants, and rely on hydropower. The article mentions how in 2022, California lost half its hydroelectric output because of drought, and how Brazil was nearly forced to ration electricity after losing much of its hydropower.