Barry Gardiner 2019
Barry Gardiner 2019

Barry wrote for The Times Red Box last week and appeared in Thursdays edition. The article was titled; “Renewable energy will power new era of foreign policy.” The article can be read in its entirety below.

From coal and whale oil to crude and shale, the geopolitical map has been moulded by the need to control energy supplies. Distribution pinch points such as the Suez Canal or the Strait of Hormuz have been flashpoints for conflict and the projection of global power has relied upon the ability to maintain security of supply.

Nobody who recalls the past 50 years of statecraft as it has responded to the 1973 Opec oil embargo, successive wars in the Middle East, or Ukraine’s dispute with Gazprom of Russia, would doubt that fossil fuel has dominated the trade and power relations between nation states and been a root cause of geopolitical instability and conflict.

All that is changing. The transformation in energy that is seeing the world move from fossil fuel to renewable technologies will bring with it new power relations that will profoundly shape our century.

The inevitability of this shift is not simply a matter of the rapidly declining cost of renewables — the latest auction of solar power in Saudi Arabia recorded an all-time low of $17 per MW/hour — which are now outcompeting oil and gas prices without any subsidy. Nor is it simply a matter of the health and climate problems associated with fossil fuels. The World Health Organisation estimates that air pollution kills seven million people each year.

Unlike fossil fuels, renewables are widely available in many forms in most countries, promoting domestic self-sufficiency. Renewables are not stocks that are used and then depleted; they are flows that are constantly recharged and are therefore less vulnerable to choke points. They can be deployed swiftly and easily at a local community scale and are compatible with decentralised energy production and consumption, and have marginal costs. Solar and wind have cost reductions of approximately 20 per cent every time capacity is doubled.

Control of the energy resources enables a country to protect vital domestic production and leverage political interests abroad. So just as the geographic concentration of coal, oil and natural gas has moulded our political landscape since the industrial revolution; it is the dispersed nature of renewable energy that will erode those traditional patterns.

States that have been historically energy rich nonetheless start the energy transformation with significant advantage. Countries such as the UAE are investing the wealth of their oil reserves to develop the infrastructure for a renewable future alongside the other elements of social and physical infrastructure that are part of a developed economy.

But renewables are also turbo charging emerging economies such as India which is predicating a growth in renewables of 50 per cent of its entire generation capacity in just four years. In sub-Saharan Africa the reduction of fossil fuel imports will have a double benefit in the reduction of import costs and in the creation of new jobs and opportunities in the domestic production of solar, wind and hydro power.

The democratising impact of this should not be underestimated. As local communities become self-sufficient in electricity, countries can leapfrog the model of a centralised fossil fuel grid that would take years to connect every community and rural village.

As the world becomes less reliant on fossil fuel, Russia, which generates 40 per cent of its fiscal revenues from gas and oil, is not positioned well to compete against its Chinese neighbour, which accounts for 40 per cent of the total global investment in renewables. Latest figures show Russia had less than 15,000 patents in energy renewables; the United States had 100,000, while China had 165,000.

Oil and gas exporting countries such as Iran, Iraq and Nigeria could see their economies devastated by a rapid decline in fossil fuel rents because they have not adequately prepared for the transformation in energy. Their resilience is poor precisely because they have not sought to use their historic wealth to diversify their economy or invest in other forms of socio-economic development.

For countries such as Iran and Nigeria where fossil fuel rents represent 10 per cent of GDP such a loss of revenue could bring with it domestic political instability. Subsidies and services that citizens have come to expect may no longer be affordable as government revenues decline. Subsoil assets should have been transformed into surface assets of human, social and physical capital. In too many countries they have not.

Mark Carney and Michael Bloomberg have long argued for a better understanding of the specific financial risks of climate change and the energy transformation in the work of the Financial Stability Board. They have alerted the world to the potential shock to the global financial system from a sudden shift away from fossil fuels that would create stranded assets. It is often said that the Stone Age did not end because of a lack of stone and the fossil fuel age will not end through a lack of oil, gas or coal. It will probably end with stranded assets.

The map of the modern world, its trade routes, the power of its nation states and its military battles have all been fashioned by the exploitation of fossil fuel energy. New renewable technologies do not rely upon these geographically concentrated stocks and for that reason they can disperse power and create new alliances as every country taps into the geothermal, hydro, solar, tidal, wave and wind energy it possesses. Managing this energy transformation is the fundamental issue of international relations in the 21st century.

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