The Geopolitics of Renewable Energy - Global Trade Magazine
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  July 7th, 2017 | Written by

The Geopolitics of Renewable Energy

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  • Cartels could develop around rare earth elements critical to renewable energy technologies.
  • Technology transfer and competition over finance of renewable energy could spark international rivalry.
  • Petro-states could become less stable, or they could be motivated to diversified their economies.

Oil and gas have dominated the discussion of energy geopolitics for many a decade. But, as a paper published jointly by the Columbia University School of International and Public Affairs and the Harvard Kennedy School points out, “geopolitics and the global energy economy are both changing,” yet “the geopolitics of renewable energy has received relatively little attention, especially when considering the far-reaching consequences of a global shift to renewable energy.”

Among the potential negative consequences of renewables is that cartels could develop around materials—such as rare earth elements used in solar panels and wind turbines—critical to renewable energy technologies. “Even if these cartels are unable to achieve the kind of impact that OPEC did in the 1970s oil market,” the report said, “they might be able to exert influence over consumers of these materials.” China does the lion’s share of mining of rare earth elements these days.

Technology transfer and competition over finance of renewable energy could spark international rivalry, or the could become the source of increased cooperation . Increased tensions between developing and developed countries could develop over technology transfer, the report noted, while conflict over renewable energy infrastructure could also develop.

If oil and gas should lose their dominance, petro-states could become impoverished and less stable, or they could be motivated to diversified their economies. Countries that produce large amounts of renewable energy could become subject to the resource curse noticed among oil and gas producers, where plentiful energy jeopardizes a country’s ability to achieve its full development potential. On the other hand, says the report, “it is also possible that countries producing renewable energy for export may actually end up with more diversified economies than they would otherwise.”

Renewable energy may lead to greater crossborder trade in electricity which in turn could create vulnerabilities for electricity importers. Greater electric interconnection could also increase interdependence among countries, reducing the risks of conflict.

The positive impact of the growth in renewables on climate change would surely reduce “the risk of conflict and instability that climate change would otherwise generate,” especially in Africa.

“Access to modern forms of energy is one of the preconditions for achieving sustainable development,” the paper concludes. “The geopolitical impacts of access to energy are important, as such access can contribute to lasting solutions to instability and conflict. It is possible that renewables not only have an impact on geopolitics but that geopolitics, particularly in risky and institutionally unstable environments, can also influence investments in renewable energy by increasing the cost of capital.”


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