The renewable war: geopolitics of a transition towards a green economy.

Prudence Dato (IREGE/ University Savoie Mont Blanc)

Recently, the Australian prime minister’s chief business adviser, Maurice Newman, the chairman of Tony Abbott’s business advisory council has accused the United Nations (UN) of using climate change science to lead a new world order, while Ms Figueres, the top UN climate negotiator is visiting Australia to urge the country to move away from heavily polluting coal production[1]. Although Newman’s statements are habitually provocative and climate change skeptical[2], this questions the geopolitics’ issues of a transition to a green economy.  Geopolitics’ considerations could hinder the transition to a green economy in the sense that energy transition may affect international relations between energy producers and energy consumers by creating a new world order.

The geopolitics of renewable energy may depend on the scarcity of rare minerals that are needed to produce renewable energy[3] and also on innovation in renewable energy technologies.  For instance, China has monopole (97%) on rare earth elements[4], which are critical for the production of renewable energy equipment.  Then an economy that relies on the sole use of renewable energy will give more power to China while it reduces that of the countries that currently dominate oil market. Although the energy transition can potentially improve social welfare, some countries (those having rare mineral resources) are winner while others (those having only oil for instance) are loser. In this regard, one needs to consider those disparities when negotiating international agreements on climate change. Otherwise, some countries may not keep their promises or may not even make promises on reducing or on eliminating their dependency on polluting sources of energy. What if international agreements consider the redistribution of the gain from energy transition to compensate the losers?

Are rare materials enough to dominate the new world order of renewable energy?  Renewable energy is also capital-intensive and its production efficiently depends on innovation. As a result, countries that are not endowed with rare minerals, can count on their capital and /or their investment in innovation. Concerning capital, USA and Germany were the countries that invested the most in 2008 respectively in new clean technologies and in classical renewable equipment (photovoltaic solar panels combined with wind energy). And Germany develops innovation as well as it owned the highest share (24%) of the awarded patents in the wind energy-industry between 2001 and 2005, while in the solar energy-industry Japan owned the highest share (50%) of all patents[5]. Without efficient exploitation of the rare minerals resources to produce the renewable energy, energy transition could not be sustainable[6] and could generate reverse results in the long term. Hence, investments should be more dedicated to innovation so that the transition to a green economy makes less pressure on rare materials and becomes economically, environmentally and socially efficient. 

 But as countries will have to secure energy that is important to support their economic growth, they will explore all the possible means to efficiently get renewable energy. Then, those countries endowed with rare materials, or those having appropriate innovation to produce renewable energy with less cost or those having capital to invest more in renewable energy can probably dominate the new world order. This may well generate political conflicts or war depending on the power concentration. How will poor countries without endowment, capital or innovation act in this new world order?

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[1] http://uk.reuters.com/article/2015/05/08/climate-change-australia-idUKL4N0XZ1I220150508

[2] http://www.theguardian.com/australia-news/maurice-newman

[3] For more details, see the previous post on: http://ethkf.blogspot.fr/2014/12/is-renewable-energy-really-inexhaustible.html

[4] de Ridder, Marjolein. The Geopolitics of Mineral Resources for Renewable Energy Technologies. The Hague Centre for Strategic Studies, 2013.

[5] Criekemans, David. "The geopolitics of renewable energy: different or similar to the geopolitics of conventional energy?." ISA Annual Convention. 2011.

[6] Vidal, Olivier, Bruno Goffé, and Nicholas Arndt. "Metals for a low-carbon society." Nature Geoscience 6.11 (2013): 894-896.