Shifting Power Balance in a Low-Carbon World

Pascal Lamy, Brunswick’s Chair of Europe and former Director-General of the World Trade Organization, on the global energy dynamics.

For more than a century, the need for energy security has defined geopolitical relations, and the production and trade of fossil fuels has become deeply woven into the fabric of the global economy. The energy sources that power our modern world are undergoing a period of rapid change, and a transition is taking place—away from fossil fuels and toward renewables. As this transition accelerates, it will have significant geopolitical implications.

Photograph: Miguel Navarro/Getty Images

Ensuring a secure supply of energy is a strategic priority for every country. Not only is energy required for a country’s industrial development and economic growth, it underpins the smooth running of national life. Serious disruptions to energy supply have negative economic impacts and can undermine social and political stability. Consequently, energy policy is a matter of national security, and it is fully integrated into foreign policy in most countries.

The global balance of power between nations and regions has therefore been largely, if not only, shaped by energy. The logic is straightforward: Countries that are able to export energy resources in the form of fossil fuels have “supplier power”; countries which import those resources have “buyer power”; and countries with control over the transit routes of those resources have an important intermediary power. Much of modern global history can be described as the interplay of these powers.

The transition to renewable energy sources will therefore have major geopolitical impacts. Renewable energy is now the fastest growing source of energy and will become the largest source of power by 2040, according to the BP Statistical Review. To examine the implications of this, the Global Commission on the Geopolitics of Energy Transformation has been established, and I am pleased to be one of its commissioners. Renewables have a couple of key characteristics that are very distinctive and will change the role of energy in international relations.

World SOLAR Potential

Fossil Fuels are unevenly distributed geographically. However, the two maps below show that renewable energy potential is spread across the globe

World WIND Potential

First, a key characteristic of fossil fuels is that they are concentrated in specific geographic locations and these locations are unevenly distributed across national boundaries. Renewables, on the other hand, are much more evenly distributed. Most countries have either sun or wind (see the maps at right). In theory, this has the potential to equalize the supply of energy, enabling every country the prospect of energy independence.

In practice, realizing this potential will require substantial investment. Current patterns suggest that emerging markets may leapfrog developed fossil fuel-based economies: The “Big 3” emerging economies – China, India and Brazil – account for 63 percent of renewable energy investment, and China significantly outstrips all others (see the chart at right).

A second characteristic of fossil fuels is that they are stocks, whereas renewables are flows. Oil, coal and gas have a physical mass that exists at a specific location: They must be sourced, transported and stored. Once used, they are exhausted. Renewables are, as the name suggests, inexhaustible. Thus energy supply is likely to become less easily disrupted and vulnerable to “chokepoints,” and the global energy economy will be less susceptible to the volatility caused by oil prices and currency fluctuations.

Most countries that depend heavily on the export of fossil fuels are already pursuing strategies to diversify their economies, and many countries that are net importers are already investing in renewables. Instead of competing to secure supplies of fossil fuel resources, nations will find that competitive advantage will come from efficiency in capturing, storing and distributing energy from renewable sources. This contest may redraw the geopolitical map.


Chart and Maps: Peter Hoey

Brunswick Review Sign Up

Download (2 MB)