The transition currently underway from a fossil-fuel energy model to one based on renewables is surely the most important in our collective history. Some time ago, Nature published a brilliant article, “Model and manage the changing geopolitics of energy”, in which it reviews the geopolitical implications of this transition and the most likely scenarios to result from it, which will be determined fundamentally by international cooperation, technological disruption, and competing national interests.
The ideal scenario would see strong international cooperation based on a global consensus for action on climate change. So-called dirty nationalists like Donald Trump, who pulled the United States out of the Paris Agreement, are the most dangerous threat to this scenario, although incoming president Joe Biden has committed has committed to implement a vast program to combat the climate emergency. The much-needed change in attitude of the world’s largest economy, undoubtedly the best news of 2020, will be embodied in a clearly defined agenda and in the organization of the World Climate Summit in 2021.
On the other hand, a pandemic made worse by our longstanding war against nature, from which it can no longer protect itself, has increased social pressure on governments to come up with measures to address the climate emergency. The Paris Agreement provides for the establishment of a fund of about $100 billion per year by the G20 countries to contribute to this effort and to compensate oil-based economies to prevent them from dumping prices in a last attempt to survive while they strive to make the transition to renewables.
At the same time, the financial markets are sending increasingly powerful signs that they are disinvesting in oil and gas companies and moving into businesses that represent the clean economy. By 2030, the Fortune 500 is expected to be dominated by companies of this type or with very strong decarbonization commitments.
Such a scenario would not only help us reach the objectives of the Paris Agreement on time, it would also provide greater security as a result of global cooperation and a decline in geopolitical friction. Now that the myths pumped out by the oil industry for years have been dispelled, it is time to leverage the energy transition to generate not only significant savings, but also jobs.
What role has the pandemic played in increasing humanity’s chances of achieving such a scenario? On the one hand, dirty nationalisms such as Trump’s United States or Jair Bolsonaro’s Brazil have proved a disaster in managing the crisis and heavily discredited. On the other hand, the clean skies and air we enjoyed for a few weeks has made us realize that we can, through coordinated action, generate tangible effects quickly. More and more people don’t want to return to the previous normality, preferring instead to imagine other scenarios.
We are entering the greatest technological transition in history. It is time to abandon skepticism and biased objections, and to move in one direction only. At all levels: as consumers, as investors, as voters. There has never been a challenge so crucial and so existential. Let’s hope that 2020, for all that was wrong with it, proved the turning point in meeting that challenge.