Embracing globalization to foster the energy transition

Besides facilitating imports and exports to achieve an efficient distribution of resources (demonstrated by the two scenarios above), globalization could also benefit the energy transition by enabling international investments, joint research or multilateral agreements. The willingness of countries to engage and collaborate in these topics is crucial in fostering and accelerating the energy transition.

However, there are some opposing factors that might hinder the energy-globalization process: requirements for large-scale infrastructure and logistics, disruption to the global trading system, threat to the vested interests of the current beneficiaries, concerns for energy security, and so on. Let’s take a closer look at the following two opposing factors.

Opposing factor 1: resistance from the current beneficiaries

The fossil fuel-based energy landscape has brought significant benefits to some stakeholders, such as fossil fuel exporters (e.g., OPEC countries), lobbies, conventional technology companies. Shifting from fossil fuels to renewables will inevitably challenge their current positions, both economically and politically.

OPEC’s Secretary-General «criticized a report calling for radical action to fight climate change, saying the idea that renewable energy was the world’s only future was misguided and that a “bombardment” of green advocacy could be harmful», reported by Reuters. The American Petroleum Institute (API), a main U.S. oil and gas lobby, tries to protect their vested interests by supporting the rollback of the US methane emission regulation.

Opposing factor 2: concerns for energy security

Relying on foreign energy sources through globalization might raise concerns for energy security – a painful lesson learnt from the oil embargo in 1973, when OPEC curtailed oil supply and caused the global oil price to rise by nearly 300%.

Switzerland, as a country with barely any fossil fuel resources and more than 80% of energy being imported, is also sensitive to energy security. The Swiss Energy Act explicitly promotes energy from domestic resources and the government is “following the geopolitical shifts on the global energy map with great interest”.

Energy-globalization: embrace it, don’t fear it

As argued at the beginning of this article, globalization could foster the energy transition by mobilizing, redistributing, and utilizing global resources – not only energy resources, but also financial and technological resources. However, how should we deal with the opposing forces? An empathetic attitude is important: We should first understand that paths to a low-carbon economy will certainly create rivalries, winners and losers. Thus, the opposing forces are not our enemies; we just have different priorities. With this mindset, we could try to find win-win solutions.

For example, when the OPEC countries lose their benefits from oil export, can we develop solar power projects in these countries? When the coal miners lose their jobs (and often with occupational disease such as Pneumoconiosis), can we thank them sincerely and find them placements in the renewable industry? When countries with limited resources worry about energy security, can we diversify the energy supply through integrated energy networks and ensure that no one can effectively manipulate the markets?

It is clear that energy-globalization will be a tough journey, but it is not a new concept. There are already projects that facilitate international energy collaboration, such as the creation of ENTSO-E and the ASEAN power grid. However, there is still a long way forward to go beyond the electricity sector and to broaden the geographical coverage.

(The cover picture is provided by pixabay. Pixabay license: Free for commercial use, no attribution required.)