In the third article of his four-part series, Nicholas Trickett discusses security considerations and implications of a green new deal.
Though the green deal is a matter of domestic policy, it can’t be considered in isolation from policy abroad. The United Kingdom accounts for just 1% of CO2 emissions. Achieving net zero tomorrow would barely make a dent in the problem. Part of the painful process stumbling towards Brexit is the acceptance of the limits of being a middle power in the international system. Major proponents of a green deal need to start thinking internationally, especially when it comes to security.
The energy transition and move towards a green economy doesn’t happen in a vacuum. Oil still lies at the heart of the global economy, providing rents for government budgets, returns for firms and shareholders, financial assets in the form of futures, and billions of dollars in remittances to developing economies. Most importantly, low oil prices exert considerable pressure on foreign policies for oil rentier states, with varying effect. Take the following examples.
Russia’s economy has, thus far, failed to sustainably diversify away from hydrocarbon exports to create economic growth. Historically, Russia’s most aggressive foreign policy actions in the last two decades, including the invasion of Georgia and annexation of Crimea, have coincided with high prices and perceptions of strong demand for Russia’s supply. The transition will weaken its economic and, eventually, military power. There are many in Europe who see such an outcome as beneficial, most of all states in the East concerned about the potential for conflict.
Saudi Arabia – far more reliant than Russia on oil for its revenue base – is attempting now to diversify its economy, but that seems unlikely to deliver significant benefits for a very long time. Saudi foreign policy has sought to partner with Israel and use its considerable lobbying power in Washington D.C. to force a continued escalation of tensions with Iran to secure its position as the region’s preeminent power. Iran, however, is much less dependent on oil and has adapted considerably under the pressure of sanctions. If Riyadh finds that oil prices and demand weaken over time, it’s going to impact its calculus. States in relative decline compared to their competitors are just as risky as rising powers seeking their place in the sun.
Nigeria is an interesting counter-example of a petrostate now struggling to adjust as the federal budget has become steadily less dependent on oil in recent years. But the oil price still registers significant impacts through channels beyond the budget. The vast majority of oil is traded in US dollars, and when the inflow of dollars dries up, Nigeria and other oil exporters face currency risks, especially since they often invoice their non-oil imports and exports in foreign currencies. It’s safe to assume that hard times for the oil sector aren’t going to make it any easier for the central government to combat Boko Haram’s ongoing insurgency and spreading violence.
These are a small sampling of the types of the problems that emerge for rentier states. Whereas energy security for importers in the petroleum era meant securing access to oil and gas supplies, metals and minerals supply chains are going to groan under the weight of increased demand in the coming decade. Lithium, cobalt, nickel, copper, lead, aluminium, and more will see large investments.
The geography of metals and minerals supply differs than that of oil. The Democratic Republic of the Congo produces 60% of the world’s cobalt, a crucial mineral for the creation of the lithium-ion batteries found in EVs, laptops, and smartphones. China produces over 80% of the world’s rare earth metals, critical for electronics systems, particularly for military uses. Other metals and minerals have differing market structures, but the point is that securing reliable supply chains will entail redefining some of the aims of British foreign policy. Energy security and physical security are deeply linked, even when markets are sufficiently global and competitive to prevent any individual supplier from using its resource wealth for political gain.
The green deal must, as it’s elaborated, explicitly grapple with security considerations in a greener world. Not only is the UK not a significant contributor to global emissions comparatively, but the energy transition is going to create new winners and losers, shift balances of power between rentiers and importers, and feed existing and new conflicts. It’s unavoidable. Spelling out a vision for foreign policy situated in the green deal may prove a useful starting point to define the United Kingdom’s role in the world post-Brexit.