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Europe/US team: transitioning to a low-carbon world will create new rivalries, winners and losers

In an opinion piece in the journal Nature, a team from the US and Europe suggests that the transition to a low-carbon world will create new rivalries, winners and losers, and that it is therefore necessary to put geopolitics at the heart of debates about the energy transition.

… 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 countries 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, and should be encouraged to do so.

—Goldthau et al.

In their commentary, Andreas Goldthau (Royal Holloway University of London), Kirsten Westphal (German Institute for International and Security Affairs (SWP)), Morgan Bazilian (Colorado School of Mines) & Michael Bradshaw (University of Warwick) present four geopolitical scenarios to illustrate how varied the transition could be by 2030.

  • Big green deal. This scenario assumes a full global consensus for action on climate change. G20 countries build a generous Green Climate Fund, well above the $100-billion-a-year goal in the Paris climate agreement. Financial 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 allows all countries to share in the benefits of decarbonization. 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.

  • Technology breakthrough. A major technological advance steers the world along a different path. The US 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 gravitate towards one of the leaders, reinforcing 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 outside their groups.

    The renewables race displaces fossil fuels quickly, but some regions lose out. 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 rapidly to falling demand. Some don’t manage, and political tensions rise in sub-Saharan Africa, the Middle East and Central Asia.

  • Dirty nationalism. Elections bring populists to power in the world’s largest democracies; nationalism grows. Nation-first policies put a premium on self-sufficiency, favoring 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 scale and slows progress towards decarbonization. Fossil-fuel exporters rush to produce as much as they can, despite falling 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 mechanism of voluntary emission cuts underpinning it.

  • Business as usual. Business as usual results in a mix of energy clubs, with little cooperation. As unit costs keep declining, renewables claim an increasing share of the energy mix by 2030, but fossil fuels remain dominant. 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 bankrupt and others consolidate into a handful of global energy giants. Exports concentrate in fewer countries and companies, which compete rather than cooperate. Exporting fossil fuels becomes a risky business, revenues falter and OPEC collapses. Oil-producing countries in the Middle East, Russia and Africa see political 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 pursuing 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 geopolitical imbalances (such as global north–south relations) are reinforced and energy inequality rises.

From these scenarios, the authors derice a set of lessons:

  1. The falling costs of technology will deliver a low-carbon world. Politics will be an essential ingredient in success or failure.

  2. A zero-carbon world does not do away with zero-sum games; it just produces different ones.

  3. The pace of change matters.

  4. Some pathways might not be politically palatable to all.

… 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 access. Governments might link low-carbon technology with foreign and security policy, as they did with oil and gas.

Second, policymakers need to draw lessons 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.

—Goldthau et al.

Resources

  • Andreas Goldthau, Kirsten Westphal, Morgan Bazilian & Michael Bradshaw (2019) “Model and manage the changing geopolitics of energy” Nature 569, 29-31 doi: 10.1038/d41586-019-01312-5

Comments

Engineer-Poet

We've already played this game and know how it comes out... at least for the first half-century.  60 years ago the technology breakthrough was nuclear energy.  By 1969 it was growing rapidly and was forecast to completely replace coal in US electric generation.

What happened?  Fossil-fuel interests, led by the Rockefeller Foundation, subverted science (including the Nobel prize committee) to award the science Nobel to Herman Muller for his fraudulent claim that any and all radiation is dangerous.  This was politically appealing in a world facing the threat of nuclear war between two superpowers... but (a) it was still wrong and (b) it was engineered as a pretext to demand absolute "safety" from commercial nuclear power.  The public could be exposed to radiation and radionuclide fallout from the tramp uranium in coal without concern or regulation, but much smaller doses from nuclear power plants were deemed hazardous and subject to massively expensive requirements to prevent them.

Nuclear power did manage enough of an expansion through the 1970's and early 80's to almost completely replace oil for electric generation in the US; that much was done, and the CO2 emissions eliminated.  But that is as far as the battle against fossil fuels was allowed to go, and at this time fracked natural gas (which is grossly under-regulated as a polluter of both air and water) is being allowed to kill off nuclear in electric generation.

And that is how the game was actually played.  If it's going to turn out differently this time, it's going to take the political will to put the fossil fuel industry in the penalty box and not let it hide behind its "backup" role for "renewables".

HarveyD

Unless NPPs become affordable and better accepted by the general public, it seems obvious that REs, with enough storage, will eventually-progressively replace CPPs/NGPPs and older NPPs for 24/7 energy.

The most predominant REs may be Solar, Wind, Hydro, Geothermal, Waves and Tides. Combined/mixed together, those REs will require less storage for 24/7 operation. Large Hydro water reservoirs (and 500+M BEVs/FCEVs) will become important for backup and clean energy storage.

Engineer-Poet

More broken-record stuff from AlzHarvey.

Don't you ever get tired of doing this, or embarrassed by being wrong all the time?

mahonj

Short of a breakthrough, I don't think you'll ever get medium - long term energy storage.
Thus, you'll always need something else to balance renewables, most likely the fossil units you had before the renewables came along.
Even then, it probably won't work - you'll need "new" thermal plant designed to be switched on and off continuously. You'll need the storage to manage this by load shaping.
Can you do this with nukes?, I don't know.
IMO, the best use of batteries is in vehicles, where it they be used to replace inefficient ICE engines. After that, you might be able to use it to generally destress the grid and manage peak demand and unit switching.
An alternative would be to get people to use electricity when it was available, rather than when it suits people. For instance, you could use dish and clothes washers at night rather than straight after eating.
Also, you will end up with loads of renewable energy that nobody can use, unless we find a way of storing it, or doing something with it. Actually, we have this now, and it will get a lot lot worse as more and more renewables come onto the world's grids - look at Germany on sunny, windy sunday afternoons. (Sounds like The Kinks !)

Engineer-Poet
You'll need the storage to manage this by load shaping. Can you do this with nukes?, I don't know.

Most certainly.  Cal Abel has some very credible concepts for using molten-salt storage for both sodium-cooled reactors and light-water reactors.  They do not require any technology we do not have; we just have to spend the money to design the specialized machinery for the LWRs and the sodium-cooled reactor stuff uses off-the-shelf machinery.

An alternative would be to get people to use electricity when it was available, rather than when it suits people. For instance, you could use dish and clothes washers at night rather than straight after eating.

This is not particularly difficult, but getting people to set it up is likely to be.  You'll also need ultra-quiet appliances so noise doesn't disturb people's sleep when work is done overnight.  That will probably take some time to filter through, as old machinery will need to be replaced.

It may be possible to sell this using a combination of appliance rebates and better performance.  If e.g. electric booster heaters can make dishwashers work better and it costs less to run a new-model DW overnight than a current one in the evening, people will tend to gravitate toward them.

Also, you will end up with loads of renewable energy that nobody can use, unless we find a way of storing it, or doing something with it.

I lived through an Iowa winter, and it struck me that the night-time wind power produced during winter storms would find a good use making space heat in lieu of natural gas; it would allow very fine-grained demand-side control and be a great help in grid balancing.  All this would take is extra electric heating elements in the duct-work of gas furnaces, one more circuit breaker and a control unit.  Similar DSM could be done with extra electric heating elements in gas-fired water heaters.  I am aware of exactly zero proposals to do this.

mahonj

@EP:
"This is not particularly difficult, but getting people to set it up is likely to be." - I agree, easy to do, hard to get people to change. Might need a mandate to force the timers onto new machines. [ Still can't force people to use them, but its a start. ]
I don't think the noise thing is a problem (it never struck me till now). Maybe spin washers a bit slower.
If you had retail pricing that followed wholesale prices, it would go a long way.
But probably too complex for most people, old people especially. Most people are unable to sort for recycling, so timing washing is just another thing, plus, after the second time of coming down in the morning to find the dishes / clothes unwashed, they'll put them on as soon as it is filled.
I take your point on adding extra heating elements + controls to air / water heaters.
Again, you'll need a robust, hard to hack, control signal + control boxes everywhere.

Maybe people will just have to get used to all this.
People are happy to listen to the weather forecast, maybe they could get used to listening to the power forecast, if you had sufficiently attractive forecasters.
"Be sure to charge your cars tonight, lot of wind blowing through" etc., or,
"Charge your cars in work tomorrow, lots of sun on the way".

Paroway

Ambri is developing the storage needed.

Engineer-Poet

The latest news I can find about Ambri is a post on Next Big Future from December, about a purported pilot deployment in 2020.

Nothing since then.  Ambri has thus far been a nothingburger.

Calgarygary

I think petroleum for mobility will be on a distinctly different track from coal and natural gas to produce electricity and heat. I think the big players in regards to petroleum nowadays, Putin, bin Salman and Trump (whomever he represents) may resist or try to slow the decline in use of oil but right now it's demise looks to be a question of when more than if.
I presume the Rockefellers and Rothchilds have already divested of their coal investments and are most likely in the process of exiting oil and since renewable energy is too relatively simple to control and manipulate, the logical next step would be too gain control of nuclear power production and rehabilitate it's image which should be fairly simple given their omnipotence of these invisible hands. Curious though that they were unable to stop the fracking that unleashed gas and killed off coal.

Engineer-Poet
I think petroleum for mobility will be on a distinctly different track from coal and natural gas to produce electricity and heat.

I believe that China and Japan are the ones to watch here.  Japan was first into hybrids (Insight, then Prius) and China is making a huge BEV push.  S. Korea's LG Chem is teaming up with Japan and France to put heaps of high-performance Li-ion batteries into vehicles in the near future.  This is very likely the opening move in de-petroleumizing (is that a word?) the transport systems in both countries, and maybe Korea as well.

This could go extremely fast.  If PHEVs are used instead of BEVs to minimize battery requirements, about half of all motor gasoline demand could be eliminated in less than a decade.  If there is a simultaneous biofuels push to replace petroleum on the supply end, the hit could wind up being 75%.

The irony is that this same shift would deal with GHG emissions as a bonus, but nobody's signing on to it in the name of dealing with climate change.

SJC

EP is still trying to intimidate using insults.

Engineer-Poet

SJC is stung by the truth.

mahonj

@EP, it would be nice if everyone went to Hybrids or EVs, but there is not much sign of it. Some people are moving, but not many. Oil is too cheap (even in Europe) and petrol is too convenient.
Hybrids and EVs are still too expensive (unless you count used Leaf mk1's).
Also, as the rich west + East gets into more electric vehicles, the poorer parts of the world will buy up their used ICEs.
Maybe, you can shame people out of ICEs, but IMO you really need a pull to EVs (and lower prices would be a good start).

Engineer-Poet
it would be nice if everyone went to Hybrids or EVs, but there is not much sign of it.

When the First World decided it had had enough of smog, it didn't say "it would be nice if everyone went to unleaded gas and catalytic converters."  It MANDATED them.  I don't see a problem with mandates for e.g. maximum fuel consumption over the WLTP either.  The customer can always replace liquid fuel with batteries and grid power; if they want a bigger vehicle, they shell out for more batteries.  This would be far better than the trend to monster SUVs and would put a lid on it.

HarveyD

New energy sources for 2019:

To SAEP's displeasure:

1) total add-on for new NPPs and CPPs will be negative for 2019/2020.
2) total new REs and NGPPs will reach up to +28% and +18% for 2019/2020.

The world trend is to more lower cost clean REs and less NPPs/CPPs.

Engineer-Poet

What AlzHarvey refuses to admit is that the increase in NGPPs is directly related to the unreliability of the "renewables" he loves so much.

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