Global warming to entail changes in global power balance
An inevitable shift from oil and gas is likely to affect many areas including the balance of power in the world. As countries that were traditionally dependent on fossil imports are increasing part of renewables in their energy mix, oil and gas exporting nations seem to have a good reason to worry about the future.
Climate change and attempts to mitigate it will change the global balance of political and geopolitical power, says Financial Times citing a recent report by the newly formed Global Commission on the Geopolitics of Energy Transformation. Such major oil and gas importers as China and India are gradually switching to renewable energy, which is getting more affordable. The average cost of solar energy has fallen by 73 per cent and the cost of wind energy by 22 per cent since 2010. If this trend continues, the large-scale replacement of fossil fuels is almost inevitable.
Considerations of national security are prompting many countries to move towards alternative energy. For example, China is worried about the security of its seaborne oil imports. India also imports more than 80 per cent of oil and more than 40 per cent of natural gas by potentially insecure sea routes. Besides, switching to renewable energy gives the country an economic advantage. “India is also succeeding brilliantly with renewables. The policy they have put in place to auction projects has been such a success that it is being increasingly imitated across Asia,” says Senior Fellow in Energy Security at the International Institute for Strategic Studies Pierre Noël. Although India is still heavily dependent on coal, the increase in the country's electricity demand is now being covered mostly by green energy.
Oil and gas exporting countries like Russia, Saudi Arabia, Qatar and Iran seem therefore to have a good reason to worry about the future, considers Financial Times. If oil ceases to be a central driver of the global economy, they are likely to lose influence and face serious internal challenges. However, gas-producing states believe that natural gas, which is the lowest emitter of greenhouse gases among the fossil fuels, will remain a key source of energy even if oil and coal are abandoned. In the near future, Russia’s vulnerability to a fall in global oil and gas consumption will be also masked by the quick ongoing decline in North Sea energy supplies to Europe.
Many people consider that Russia may even benefit from a warming climate due to the possibility to spread agriculture to remote regions of Siberia and the Far East that are currently frost-bound. At the annual conference of the Valdai Discussion Club this autumn, one of the speakers called Russia a future “water and food superpower”. On balance, the country may indeed compensate for a collapse of energy exports in the long term due to its huge food, land and water resources. Global food consumption is predicted to add up to 50 per cent in the next 30 years. However, Russia may face a serious crisis, as it is currently getting 40 per cent of its revenue from oil and gas trade.