The new geopolitics of climate change

The power of fossil-fuel independence

2023 was the hottest year on record. Climate change is rapidly changing the natural world and will soon also change the world order. Temperature increases may initially benefit some countries, making agriculture possible in previously barren lands. But what will ultimately determine the future balance of power is the degree of dependence on fossil fuels, argues Simon Dalby.

 

Record breaking weather events in numerous parts of the world in 2023 have made it clear that climate change is accelerating. Floods, droughts, heat waves and hurricanes demonstrated that repeated disruptions to agriculture, trade and production are to be expected in coming years. Sea ice in polar regions is receding, so too are glaciers in most parts of the world. The geographical patterns of the recent past are changing, and with them many aspects of human affairs, including agriculture, trade and finance.

An ice-free Arctic Ocean in summer, something that is coming into view, will offer new faster shipping routes from Asia to Europe. If political difficulties in the Red Sea and the Suez Canal restrict transit there, and climate change induced drought conditions in Panama continue to reduce transit through that canal too, then Arctic shipping routes may be useful in speeding at least summer trade across the world. Not surprisingly Asian trading nations are paying attention; shipping bureaus in Asia would be negligent if they didn’t consider this new faster way to get things from Shanghai to Hamburg. If Asian navies are surveying new routes there is no reason for alarm, at least not if you are a European consumer.

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If climate change accelerates, and fossil fuel consumption continues, then any new agricultural opportunities are likely to be short lived as growing areas continue to move.

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Warming is already changing agricultural possibilities. If wine grapes can be grown once again in England, and more northerly parts of Russia are now warm enough to grow grain, then new economic opportunities open up in these regions. This assumes that soils are suitable for such things and, much more importantly, that weather extremes, floods and droughts are infrequent enough for these new crop areas to flourish. But droughts, floods and heatwaves are already disrupting food production, only most obviously in Africa, and elsewhere in the record breaking year 2023, not least Brazil. This too is adding uncertainty to global food security. If climate change accelerates, and fossil fuel consumption continues, then any new agricultural opportunities are likely to be short lived as growing areas continue to move. Constant rapid adaptation in an increasingly disrupted climate system would involve numerous risky gambles with what crop to plant each season.

However, these most obvious climate change implications for world power may not be the most important. New sea routes may get attention but the larger issues of how (and if) the world transitions away from energy systems based on combustion, will have much more profound geopolitical implications. In the aftermath of COP 28 in Dubai in late 2023 at least one crucial point about global politics has been clarified. Climate change is now an important part of how world order is being recalibrated. The focus on fossil fuels as the problem to be tackled explicitly suggests realignments in world politics that may shift the relative balance of power among states. But it all depends on how policy responses play out, and the various competing industries within states that shape not just production processes, but ultimately politics.

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The disruptions to oil and gas supplies as a knock-on effect of the Russian invasion of Ukraine, and subsequently the disruption of tanker traffic through the Red Sea has made it clear that dependency on fossil fuels makes societies geopolitically insecure.

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While most states around the world are at least paying lip service to the need to tackle climate change, many are simultaneously supporting their domestic fossil fuel industries. This includes the US, Canada and the UK all of whom have made climate commitments but are undermining them by continued fossil fuel extraction. This is literally adding fuel to the fires that are causing climate change. When the accounting mechanisms in the Paris agreement only count “emissions” in the jurisdiction where the fuels are burnt, many states are incentivised to export their fossil fuels because that way they enjoy the economic benefits, while the climate costs are at least supposedly borne by some other country.

If the majority of countries rapidly wean themselves off using carbon fuels, then those who have invested in new drilling licences, infrastructure, wells, pipelines, refineries and tankers may well find themselves holding useless expensive equipment, “stranded assets” in the current jargon. Worse still, if those states are dependent on revenue from fossil fuels, they may well find themselves in serious economic difficulties.

What are today rich “petro states” could end up collapsing financially and looking for military solutions to their difficulties. In Southwest Asia many states are facing decisions about whether to bet on the continued international demand for petroleum and gas, or whether to reinvest their wealth in new economic ventures such as renewable energy, tourism and other sectors. If these alternative strategies don't succeed, collapsing states around the Persian Gulf could cause all sorts of geopolitical trouble. Qatar and the Emirates may make such a transition, but Iraq is a worrisome case given the desertification that is impacting its agriculture already and its heavy dependence on revenue from petroleum.

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The disruptions to oil and gas supplies as a knock-on effect of the Russian invasion of Ukraine, and subsequently the disruption of tanker traffic through the Red Sea has made it clear that dependency on fossil fuels makes societies geopolitically insecure. Being dependent on fossil fuels makes societies vulnerable to supply disruptions when distant political problems interrupt supply. Interrupted supplies cause unpredictable price spikes, with all the related political and economic knock-on effects. This suggests that in the coming years, sensible political policies should aim to rapidly aim to reduce fossil fuel dependency on other countries.

But given the large political influence of the fossil fuel sector in many states, the nightmare scenario is that such policies will be further delayed, making states insecure against fossil fuel vulnerabilities as well subject to worsening climate disruptions. Indeed, following the huge profits made in the 2022 price spike, the fossil fuel industry has reinvested further in fossil fuel endeavours, rather than moving to rapidly decarbonize economies. 

The most important point in all this is that military and political power, as well as the ability to influence global political shifts, is based on economic power. The global economy might be shifting to technology companies and a digital world, but to a large extent this is still powered by electricity generated by burning fossil fuels.

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What is clear is that whatever happens, states will be much more resilient in the face of climate and geopolitical disruptions if they are not dependent on fossil fuels.

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China has led the way in terms of producing electric vehicles as well as in much of the renewable energy sector. It has also of course relied on coal combustion to power much of its economic expansion in the last few decades, a matter that suggests a very contradictory state of affairs. Despite the numerous statements from the Biden administration in the US about climate change initiatives it remains the largest producer of fossil fuels. Here the US has, at least in the near term, and advantage in petroleum and gas production. But in a crisis in the near future, where China’s gas and oil imports are curtailed, it will have an incentive to fall back on domestic coal production which worsens long term climate impacts.

The geopolitics of the future now depends on decisions made in corporate boardrooms and national capitals as to whether they embrace transition strategies and invest in new economies that avoid combustion, or continue to rely on fossil fuels in an increasingly disrupted world. In the short run affluent states, including the US and much of Europe may be able to continue to use fossil fuels and cope with increasing disruptions for a decade or two. If China increases its electrification efforts and continues to lead the way with non-fossil fueled technologies it may be the long term economic winner both cutting its dependence on fossil fuels and benefitting from innovation.

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Regardless of the short-term advantages that reliance on fossil fuels may grant some states, the long term disruptions will be severe but hard to predict precisely. Reducing the use of fossil fuels is a strategy for all states to both improve short term security by reducing vulnerabilities to economic disruptions and long-term vulnerabilities to climate change. What is clear is that whatever happens, states will be much more resilient in the face of climate and geopolitical disruptions if they are not dependent on fossil fuels.

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