The one thing we know about transitions, Goldthau says, is that “they are never, never linear.’’ Think of the post-Cold War Yugoslav conflicts, or the shift away from planned economies that the former communist bloc began in the late 1980s. Many ex-republics, from Ukraine to Turkmenistan, remain in turmoil or stalled well short of market democracy 30 years later.
Nor do transitions necessarily end with a neatly tied bow. The Canadian scientist Vaclav Smil has mapped out coal’s fall from 95% of primary energy use in 1900, to just 26% a century later. Yet in absolute terms, global consumption rose from an estimated 800 million tons a year in 1900 to about 5.5 billion tons today. Though the same might not happen to oil, the fuel is likely to burn much longer than most climate scientists would prefer.
Coal's Long Tail
It’s hard to see a smooth, rapid energy transition taking place in the current competitive and nationalistic environment, says Eirik Waerness, chief economist of Norway’s state-owned energy giant Equinor ASA. He took part in Grimsson’s commission, and generally agrees with its optimistic conclusions. “For the energy transition to happen fully, we probably need a relatively benign geopolitical climate,” Waerness says. “There is to some extent a virtuous circle we have to create here.”
While the sources of clean energy are available to everyone, the battle will be over who profits from the products used to harness them. Solar panels, wind turbines and batteries will be in such demand that countries are already jostling to make sure they get their share of the pie. Many will get left behind.
About 60% of solar panels are manufactured by Chinese companies, a level of market influence the Organization of Petroleum Exporting Countries can only dream of when it comes to oil. That creates a big trade advantage, but not one President Xi Jinping can easily leverage for geopolitical ends.
“What are you worried about? You buy it, you run it and once you have what you have they can’t take it away from you,” says Karen Smith Stegen, a professor of political science at Jacobs University in Bremen, Germany, who has examined the potential of 165 countries to emerge from the transition as political winners and losers.
Global inequalities and rivalries will instead likely center on access to technology and finance, standard setting and control of key raw materials. China controls more than 90% of some of the rare earth metals needed for electric vehicles and offshore wind turbines. It already used that monopoly power once, cutting off Japan’s supply after a 2010 clash near islands both nations claim to own. Japan has since reduced the share of its rare earth imports that come from China by more than a third to reduce its exposure.
In November, Johnson’s U.K. will host the COP26 climate summit in Glasgow, Scotland, where countries will negotiate the rules for the road ahead. Leaders want to make sure everyone else is doing their fair share to cut emissions, and that their countries don't lose out.
That fear could lead to what German economist Hans-Werner Sinn has called the “green paradox.” He argues the transition could prompt oil producers—especially those with high extraction costs or shallow reserves—to start pumping as fast as they can while demand lasts. The increased supply would boost carbon emissions and also lower the price of crude, making it more competitive with renewables and slowing the move to cleaner energy.
Cheap oil could also decimate the budgets of fragile regimes before they have time to find other sources of revenue. A February study by U.K. think tank Carbon Tracker found that 40 fossil-fuel dependent governments would suffer an average 51% drop in oil and gas revenues if global climate targets are met. That could destabilize governments and leave the likes of Nigeria or Iraq unable to afford security to deal with threats from terrorist organizations such as Boko Haram and Islamic State.