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Global Commission on the Geopolitics of Energy Transformation says the new energy age will reshape relations...Read More
Our New Energy Strategist co-authored this report for the International Renewable Energy Agency (IRENA)
Fundamental changes are taking place in the global energy system which will affect almost all countries and will have wide-ranging geopolitical consequences. Renewables have moved to the centre of the global energy landscape. Technological advances and falling costs have made renewables grow faster than any other energy source. Many renewable technologies are now cost-competitive with fossil fuels in the power sector, even before taking into account their contributions to the battles against air pollution and climate change.
This Report argues that the global energy transformation driven by renewables will have significant geopolitical implications. It will reshape relations between states and lead to fundamental structural changes in economies and society. The world that will emerge from the renewable energy transition will be very different from the one that was built on a foundation of fossil fuels.
Global power structures and arrangements will change in many ways and the dynamics of relationships within states will also be transformed. Power will become more decentralized and diffused. The influence of some states, such as China, will grow because they have invested heavily in renewable technologies and built up their capacity to take advantage of the opportunities they create. By contrast, states that rely heavily on fossil fuel exports and do not adapt to the energy transition will face risks and lose influence.
The supply of energy will no longer be the domain of a small number of states, since the majority of countries will have the potential to achieve energy independence, enhancing their development and security as a result.
While the precise scope and pace of the energy transformation cannot be predicted, its impact on countries, communities and companies will be profound.
Benefits and opportunities of the transition
The transition will generate considerable benefits and opportunities. It will strengthen the energy security and energy independence of most countries; promote prosperity and job creation; improve food and water security; and enhance sustainability and equity. Some states will be able to leapfrog technologies based on fossil fuels. The number of energy-related conflicts is likely to fall.
Countries must prepare for the changes ahead and develop strategies to enhance the prospects of a smooth transition. At the same time, the energy transformation will generate new challenges. Fossil fuel-exporting countries may face instability if they do not reinvent themselves for a new energy age; a rapid shift away from fossil fuels could create a financial shock with significant consequences for the global economy; workers and communities who depend on fossil fuels may be hit adversely; and risks may emerge with regard to cybersecurity and new dependencies on certain minerals.
Despite difficulties, the energy transformation will ultimately move the world in the right direction by addressing climate change, combating pollution, and promoting prosperity and sustainable development.
As the world gets ready for the geopolitical consequences of the energy transformation, this Report can provide leaders of governments, business and all sectors of society with a foundation for dialogue and debate, thereby contributing to policy development and new courses of action.