The global pivot from fossil fuels to clean energy technologies by 2060 is not just an environmental imperative but also a strategic move that could significantly enhance energy security and reduce trade risks for most nations. This shift, however, comes with a geopolitical twist, as the materials critical for this transition—lithium, nickel, cobalt, copper, and rare earth elements—are predominantly concentrated in the Global South. This redistribution of energy resources is set to reshape the geopolitics of energy and global trade, challenging the status quo and forcing countries to adapt.
The study, led by Steve Davis, a professor of Earth system science at Stanford, underscores that for many countries, the trade-off between reducing dependence on imported fossil fuels and increasing reliance on these new materials is a net positive for energy security. This is a bold assertion that challenges conventional wisdom and demands a rethinking of energy strategies.
For the United States, which has abundant fossil fuel reserves but limited critical mineral deposits, decarbonisation could still bolster energy security, especially if the country forges new trade partnerships. The U.S. has already made strides in reducing its dependence on foreign oil, but the electrification of transportation will require a significant shift in energy imports. “Generating electricity with solar and wind will require more imports than using abundant gas and coal resources in the US, but reduced dependence on foreign oil will be a big advantage as transportation is electrified,” Davis explained. This shift could open up new opportunities for trade and cooperation, but it also presents challenges that policymakers must navigate carefully.
Oil-rich nations like Russia and Saudi Arabia, however, face a different reality. For these countries, a net-zero future could mean a decline in energy security, even with expanded trade networks. This stark contrast highlights the uneven impacts of the energy transition and the need for tailored strategies to ensure a just and secure transition for all.
The study’s methodology is rigorous, involving a systematic analysis of potential new vulnerabilities under decarbonisation relative to continued reliance on fossil fuels. Lead author Jing Cheng built a comprehensive database of countries with reserves of various energy resources and critical materials, along with the trade flows of these resources. The researchers then calculated the resource requirements for meeting energy demand in 236 countries across 1,092 scenarios for reaching net-zero emissions by 2060. This extensive analysis allowed them to quantify trade risks using a new “trade risk index,” which considers factors such as the availability of domestic reserves, the share of demand met by imports, and market concentration.
The findings are clear: if countries maintain their current trade networks, trade-related risks to energy security would decline by an average of 19% in net-zero scenarios. If they expand their networks and trade with all resource owners, trade risks would fall by half. This underscores the importance of diversification and cooperation in the global energy transition.
Moreover, reducing the need for imported virgin materials through recycling and less material-intensive designs could further minimise trade risks. The study found that quadrupling today’s recycling rates for critical minerals could reduce trade risks by an average of 17%, and by more than 50% for the U.S. This highlights the potential of circular economy principles in enhancing energy security.
The study also identified an optimal energy mix for the U.S. that minimises trade risks: approximately 70-75% renewables, 15-20% fossil fuels, and 10% nuclear. While this mix offers security benefits, it is not the only path forward. Other mixes could provide advantages such as lower costs or reduced air pollution, but the key takeaway is that maintaining a significant reliance on fossil fuels generally drags down a nation’s energy security.
The implications of this study are profound. It challenges nations to rethink their energy strategies, prioritise diversification, and foster new trade partnerships. It also underscores the need for international cooperation to ensure a secure and just energy transition. As the world moves towards a net-zero future, the geopolitics of energy will continue to evolve, and countries must be prepared to adapt and innovate. The energy transition is not just about reducing emissions; it is about building a more secure and resilient energy future for all.