The Geopolitics of Renewables: The World in 2050

Renewable energy is increasingly popular as the urgency for climate action intensifies around the globe. Meanwhile, ongoing technological and economic challenges dominate the debate over the deployment of renewables, marginalizing the discussion of the geopolitical consequences of a renewables-heavy future. However, a research group sponsored by the International Renewable Energy Agency (IRENA) and the Norwegian Ministry of Foreign Affairs pursued just this subject. In a paper published by Harvard Belfer Center and Columbia Center on Global Energy Policy, researchers Meghan O’Sullivan, Indra Overland and David Sandalow discussed their findings.

Analyzing the geopolitical impacts of renewables depends on the trajectory of their adoption into the global energy mix. Industry experts create these trajectories by either “forecasting” or “backcasting.” Forecasting starts with assumptions on how policy, technology, demographics and many other trends might pan out to create forward-looking “best-case” scenarios of energy balance. In contrast, backcasting starts at an ideal  future scenario and backtracks to demonstrate what technology and policies need to exist in specific geographies and industries to reach that point.

In their study to understand potential impacts of high renewables deployment on geopolitics, the authors backcasted from a scenario suggested in a joint study by the International Energy Agency and IRENA. They backtracked from a world where renewables would constitute 45 to 65 percent of the global energy mix by 2050 and global temperatures would have a 66 percent chance of rising to 2 degrees Celsius above pre-industrial levels by 2100. For comparison, the Paris Agreement aims to limit rise of global temperatures to 1.5 degrees Celsius above pre-industrial levels by 2100.

The authors predicted that in such a world, there would be widespread electricity generation and grids connecting neighboring countries, decreasing the risk of border conflict but creating vulnerability for importers. Trade among nations would include technology transfer, and capital for renewables infrastructure may be the source of cooperation or rivalry. This reality potentially shifts the source of power from securing access to energy resources (as with oil and gas) to strategically positioning generation capacity and efficiency, making renewable R&D budgets a serious geopolitical tool.

A key concern is the likelihood of new OPEC-like cartels based on resource trade. Rare earth elements (such as dysprosium, europium and yttrium) are critical components of renewable hardware. Lithium and cobalt are important for solar panels and batteries. China and Russia hold more than 57 percent of global reserves of rare elements (Resnick Institute, 2011). Australia, Chile and China have the biggest lithium reserves while the Democratic Republic of Congo provides more than half of the world’s cobalt. As renewable demand mounts, OPEC-style cartelization would become increasingly likely. However, there is awareness that the world’s supply of lithium and cobalt is not enough to meet the demand in this future scenario (Hunt, 2015), and investment in technology could scale up more ubiquitous substitutes for these materials, reducing such dependency.

This study’s imagined world would avoid the worst effects of climate change by controlling global temperature increases and improving the living experience of several vulnerable communities, especially in the Global South. It would also reduce the dependency on oil and gas among developing countries, improving their energy security and trade balance, and empowering them in global discourse. The advent of renewables creates sustained access to energy, facilitating economic growth and reducing the risk of instability. While a renewables-heavy world would likely see complex transformation in global power balances — the rise of new cartels and the use of technology transfer in geopolitical negotiations — the impacts of increased access to energy could contribute to lasting solutions to global conflict.

Article source: O’Sullivan, Meghan, Indra Overland, and David Sandalow.“The Geopolitics of Renewable Energy.” Harvard Kennedy School Faculty Research Working Paper Series, RWP 17-027 (2017).

Featured photo: cc/(lovelyday12, photo ID: 928862770, from iStock by Getty Images)