Clean energy’s explosive growth is good news for the global quest to confront climate change, but its geopolitical effects might not be uniformly beneficial. This should come as no surprise. Fossil fuels have driven not only global economic growth, but also global conflict. For decades, the United States has waged wars and built international institutions to keep a thumb on the scales.
As they replace fossil fuels, leading clean energy technologies – wind, solar, hydro, and nuclear energy – as well as emerging ones, such as electric vehicles and batteries, will reorganize power balances between energy producers and consumers and shift U.S. diplomatic interests.
Recognizing the massive shifts ahead, this week the International Renewable Energy Agency (IRENA) set up a commission to examine the geopolitical effects of clean energy technologies as they displace fossil fuels. The commission will examine changing trade patterns, cybersecurity risks and rare-earth mineral access.
And in a timing coup, we’ve managed to simultaneously publish a new book chapter on exactly this topic! Our chapter adopts a U.S. perspective and examines many of the same themes that IRENA will take up, as well as several others. We imagine a future in which clean energy has substantially displaced fossil fuels by midcentury, and we describe five ways that the geopolitical landscape could shift as a result. Anticipating these shifts will require farsighted policymaking to safeguard U.S. interests and retain leadership through the transition from old to new energy systems. Here are the five most important geopolitical implications of a clean-energy future:
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1. America’s military footprint in the middle east could shrink
In a plausible future in which electric vehicle sales skyrocket and countries around the world stock up on strategic petroleum reserves, the U.S. economy will require less oil to function and will be more resilient to potential supply shocks. This could clear the way for America to scale back its longstanding strong military presence in the Middle East. This is likely to bring benefits to the United States, which could cut spending or redirect its military elsewhere, for example to the Asia-Pacific region, to address other pressing threats. Importantly, the United States does have regional interests beyond securing the free flow of oil; in a future dominated by clean energy, the Middle East’s oil-producing states might succumb to instability owing to lower oil revenues, posing security threats to the United States. Still, America could maintain a lighter footprint that mirrors its current military posture in sub-Saharan Africa, where its fewer bases focus more narrowly on counterterrorism operations.
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2. Russia and China could dominate the nuclear industry, thwarting U.S. geopolitical goals
Although nuclear energy seems to be in secular decline in the developed world, it may well thrive in the world’s emerging economies in the future. Many developing nations may opt for nuclear generation to fuel economic growth while working toward increasingly ambitious emissions reductions plans. And innovative reactor designs might also attract new countries to nuclear energy by lowering financial and geographical barriers to entry. However, the United States, which created and led the global nuclear market for decades, is not positioned to benefit. Instead, Russia and China, America’s two greatest geopolitical rivals, lead the growing market. They may use their dominance in nuclear exports to build up coteries of client states willing to advance their geopolitical interests. In a double whammy, global nuclear security standards – an important U.S. security concern – might degrade under Russian and Chinese leadership of the nuclear industry.
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3. A modernized power grid could strengthen North American cooperation but create cyber-threats
Clean energy technologies could transform the North American power grid. To balance increasing amounts of intermittent wind and solar generation, Canada, Mexico and the United States will be tempted to band together to interconnect their national grids. In such a scenario, solar energy from Baja California could power San Diego while wind power from the Oklahoma panhandle could light houses in Mexico City. Such connectivity would require deep levels of intergovernmental cooperation, which could anchor the continent even if other tensions over issues like trade persist.
The modern grid will also integrate an exponentially increasing number of internet-connected devices. While these technologies will help grid operators manage the complex two-way, decentralized electricity flows, they also expose the United States to cybersecurity risks. Unless the U.S. government invests in cyber-defense, resilience and deterrence, savvy adversaries like China, Iran and Russia could credibly threaten the United States.
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4. The rise of clean energy could provoke global trade wars
The clean energy transition could fundamentally reshape the global economy. Clean energy products are not inherently tied to resource rich nations like fossil fuels. As wind turbines, solar panels and batteries supplant fossil fuel predecessors, trade disputes could become more frequent, as countries seek to stake their claim as the new energy exporters. Indeed, the benefits an energy-dependent nation could yield from domestically producing and exporting its own energy may outweigh any penalty from flouting international trade rules. Yet the slow erosion of trade norms could threaten the global trade order from which the United States has reaped prosperity.
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5. America’s stance on climate and clean energy technology leadership could profoundly affect its global standing
While our chapter lays out grave geopolitical risks posed by a clean-energy transition, there are also important opportunities for the United States. If America leads on climate action and energy innovation in decades to come, it could carve out a new axis of international cooperation. As climate change rises on many countries’ diplomatic agendas, so too would the benefits that America yields from helping other nations address it. Such a strategy would also grease the wheels of diplomacy in other international arenas critical to U.S. interests. By contrast, if the United States cedes leadership to countries such as China, it will not only jeopardize prospects for limiting climate change but also alienate allies and adversaries alike.
A transition to clean energy will shake up the geopolitics of energy. IRENA’s commission on the topic recognizes the tectonic shifts ahead. Now it is up to U.S. policymakers to determine whether the shifting energy landscape will serve America’s interests or force it to cede its privileged position at the centre of global geopolitics.
This post is co-written by Sagatom Saha, Fulbright fellow in Ukraine and visiting fellow at the Dixi Group. It originally appeared on cfr.org. Read Varun Sivaram and Sagatom Saha’s new book chapter, “The Geopolitical Implications of a Clean Energy Future from the Perspective of the United States” in the edited volume, The Geopolitics of Renewables (Springer, 2018, ed. Dan Scholten) here.
