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The post Busch and Mohseni-Cheraghlou cited in the UK Parliament’s research briefing on climate-related trade disruptions appeared first on Atlantic Council.

Where does Europe stand on the green agenda? Are concerns over a wide spread “greenlash” in Europe exaggerated? Why did climate policy not play as much of a significant role in the last European Parliament elections compared to the elections in 2019? Under her next Commission mandate, will Commission President von der Leyen bring continuity on climate change policy in the EU?

On this episode of #AtlanticDebrief, Carol Schaeffer sits down with Nils Redeker, Deputy Director Jacques Delors Centre, to discuss European voter sentiment on climate policies and the future of the EU’s approach.

Fellow

Carol Schaeffer

Nonresident Senior Fellow

Europe Center

Energy & Environment Energy Transitions

The post #AtlanticDebrief – Where does Europe stand on the green agenda? | A debrief from Niels Redeker appeared first on Atlantic Council.

Climate change cost estimates by 2049 will be close to $40 trillion per year for countries such as Germany and the United States. How is Germany managing both the scale of the climate problem and related economic costs? What is the German government doing to get citizens onboard to support climate change policies? What is the role of technological innovation in Germany when it comes to combatting climate change? And what is Germany doing to decarbonize its industrial sector? What role can a post-war Ukraine play in the green energy sector in Europe, and what are the possibilities for bilateral energy trade between Ukraine and Germany?

On this episode of #AtlanticDebrief, Carol Schaeffer sits down with Dr. Lukas Köhler, member of the German Bundestag, to discuss Germany’s approach to climate policy and green energy opportunities.

Fellow

Carol Schaeffer

Nonresident Senior Fellow

Europe Center

Energy & Environment Energy Transitions

The post #AtlanticDebrief – What is Germany’s approach to climate policy? | A Debrief from Lukas Köhler MdB appeared first on Atlantic Council.

In the Call to Action, the secretary-general makes clear that governments and policymakers must protect and care for the lives and livelihoods of frontline communities, protect workers, advance the evidence base to drive innovative resilience solutions, and limit global temperature rise to 1.5 degrees Celsius. 

This clear recognition from the Office of the Secretary-General is an important moment for us all. Extreme heat is often underestimated and ignored, but its impacts are unavoidable. The planet is heating up faster than we thought. We are outside scientific model predictions and extreme weather events are becoming more frequent and devastating. 

Rising heat affects our major critical systems—such as water, energy, food, transportation, and communications. It also feeds mega droughts, wildfires, and storms, creating cascading and compounding crises. It’s a global crisis. But we are not ready for any of it. We’re sleepwalking.

In my work as global chief heat officer and first chief heat officer for the city of Athens, I have worked directly with cities and have seen the impacts of heat firsthand. Cities are heating up at twice the rate of the global average. At 1.5 degrees Celsius of global warming, sixty-seven cities will experience 150 or more days per year of temperatures exceeding 35 degrees Celsius (95 degrees Fahrenheit). At 2 degrees Celsius, the number jumps to ninety-four cities. At just under 3 degrees Celsius of global warming, it soars to 197 cities.  

Policies to address extreme heat so far remain scattered, disjointed, and underfunded. But the rising temperatures mark a global crisis with local impacts. That’s why the global focus of the UN’s Call to Action is so crucial. Increasingly, our world is facing challenges that go beyond the capacity and limited mandate of single nation states. We’re facing crises, like climate change, that need international cooperation to support and facilitate equitable, multilevel, science-based decision making and solutions. The UN is the only legitimate multilateral governance structure able to address issues that need global mobilization and localized solutions. As cities take on climate change, they need support at every level.  

In 2022, globally, humanity spent a little over one trillion dollars on adapting to and mitigating the effects of climate change. For comparison, the world spent $11.7 trillion on COVID-19 emergency fiscal measures in 2020 alone. As temperatures rise, this funding gap is a dangerous threat. And there is another issue that needs to be urgently addressed: In 2022, about one trillion dollars went to financing emissions mitigation, while only one hundred billion dollars went to adaptation and resilience-building initiatives. We urgently need both climate adaptation and resilience financing. 

The UN’s Call to Action is an important milestone for climate resilience, but it is also only the beginning. As the document explains, the world urgently needs a Global Action Strategy to “mobilize governments, policy makers, and all stakeholders to act, prevent, and reduce heat risk.” A dedicated trust fund for urban heat resilience initiatives is also needed, because cities are on the frontlines of extreme heat, and they are where more than half of the world’s population lives—a share that is expected to rise to seven-in-ten people by midcentury. Finally, more dedicated heat champions, like the community of chief heat officers established by the Arsht-Rock Resilience Center, with heat resilience departments that can articulate the challenges and co-create the best solutions are needed. These champions are critical to ensuring that the dangers of—and the solutions to—extreme heat are understood widely.

Each of these essential efforts, as well as others, requires building an international consensus around the scope of the problem and its solutions. Here, the UN’s Call to Action on Extreme Heat can help shape conversations in positive directions at upcoming conferences such as Climate Week NYC and this year’s UN Climate Change Conference of the Parties, also known as COP29. Heat resilience must be at the top of the agenda at these and other international meetings, and work is needed at every level to ensure that cities have the support and finances they need to scale solutions.

As the Call to Action makes clear, everyone is at risk from extreme heat, and we must enable resilience at the local and international level, taking “bold decisions to change the way we live to avoid an even more scorched Earth in the future.” 

Eleni Myrivili is the world’s first global chief heat officer, a role jointly created and appointed by the Atlantic Council’s Arsht-Rock Resilience Center and the United Nations Human Settlements Programme (UN-Habitat).

The post The world is sleepwalking into an era of extreme heat. The UN just issued a wake-up call.  appeared first on Atlantic Council.

On July 22, IPSI nonresident senior fellow Ryo Hinata-Yamaguchi was quoted in Deutsche Welle regarding Japan’s strategic competition with China in the Pacific Islands. He emphasized that Japan aims to be a reliable partner to Pacific nations through infrastructure development and climate change efforts, in contrast to China’s significant investments and security agreements.  

Fellow

Ryo Hinata-Yamaguchi

Nonresident Senior Fellow

Indo-Pacific Security Initiative Scowcroft Center for Strategy and Security

Defense Policy Indo-Pacific

The post Hinata-Yamaguchi quoted in Deutsche Welle on Japan’s efforts in the Pacific Islands appeared first on Atlantic Council.

Read up on the events shaping the democratic world order.

Reshaping the order

This month’s topline events

Tensions mount within the Israeli government as conflict grinds on. As June ended, Israel and Hamas still had not agreed on a cease-fire, despite hopes earlier in the month that both sides would sign onto a previously floated three-phase plan. Although the United States assured that Israel accepted, it is unclear whether Israel declined the latest three phase. Yet Hamas requested some unworkable changes after all the parties alleged acceptance. Even as the two sides haggled over cease-fire terms, Israeli military operations in Gaza slowed due to operational tempo, but there remained an increase in intensity in the continued tit-for-tat exchanges between Israel and Iran-backed Hezbollah, driving global concern over a potential war between them that could evolve into a broader regional conflict. Netanyahu dissolved his war cabinet, the unit established to bring a unified approach to Israel’s fight against Hamas. The decision came following the resignation of former military chief Benny Gantz from the cabinet. Gantz resigned amidst protests over the continued lack of a strategic plan to defeat Hamas. Illustrating further divisions within the Israeli government over war aims, the Israeli army’s chief spokesman publicly questioned the government’s articulated goal of destroying Hamas, noting, “Hamas is an idea, Hamas is a party. It’s rooted in the hearts of the people—whoever thinks we can eliminate Hamas is wrong.” Tens of thousands of Israeli people protested in Tel Aviv to demand a cease-fire and the return of hostages.

• Shaping the order. Tensions within the Israeli government, between Netanyahu and his military leadership, came to a head as the two sides seemed at odds over end goals for Israel’s military operations. There remains limited consensus on the way forward. In February, Netanyahu presented a post-war plan aiming for local officials to govern Gaza, with Israel preparing to test the experimental model with “humanitarian bubbles.” Allies have collectively strategized various pathways and there remains widespread skepticism of the plan. Yet the Israeli government continues to struggle to advance a post-conflict plan and receive sufficient buy-in from the United States, Arab states, and others, which remains a key priority for regional stability and US interests.
• What to do. The Biden administration should continue to work with allies in Doha and Cairo to pursue a path to a temporary cease-fire and hostage-for-Palestinian-prisoners deal—that would also enable a flood of humanitarian relief in Gaza—despite the low probability of success.

The United States and its allies step up support for Ukraine. The United States expanded its policy to allow Ukraine to use US-provided weapons to strike “anywhere that Russian forces are coming across the border from the Russian side to the Ukrainian side to try to take additional Ukrainian territory,” according to US National Security Advisor Jake Sullivan. This builds on its May decision to allow Ukraine to use US-provided weapons to strike a limited set of targets, largely across the border from Kharkiv.

The Biden administration, following the G7 meeting in Italy, announced it would rush the delivery of air-defense interceptors to Ukraine by delaying the delivery of them to most other nations. The G7 also agreed to use interest on immobilized Russian sovereign assets to collateralize a fifty-billion-dollar loan to Ukraine. The United States added new and strong US sanctions against Russia and finalized a US-Ukraine ten-year memorandum of understanding on security cooperation.

As US munitions began to reach the front lines in Ukraine, the Russian offensive against Kharkiv lost momentum. Although Russian attacks on Ukrainian energy generation did considerable damage (taking down almost half of Ukrainian electric generation), the US decision to rush delivery of air-defense interceptors may help further mitigate such attacks, as will Romania’s decision to send to Ukraine one of its Patriot batteries. Meanwhile, Ukrainian attacks on Russian military infrastructure in Crimea were taking an increasing toll, and Russian President Vladimir Putin visited North Korea to shore up his relationship with dictator Kim Jong Un and ensure Pyongyang continues providing munitions and arms to Moscow for the war in Ukraine.

On the diplomatic front, Russia escalated its demands for a cease-fire in an unrealistic fashion, insisting that Ukraine must first abandon territory it currently holds in the four provinces partly occupied by Russia, land that Russia has been unable to take by force. Days after that, from June 15 to 16, ninety-three countries attended a peace conference in Switzerland to discuss Ukrainian terms (its ten-point plan) for a settlement and seventy-eight countries signed a document that called for the restoration of Ukraine’s territorial integrity, a key Ukrainian point (more countries have signed on since). China did not attend, however, and some key countries in the Global South such as South Africa, India, Brazil, and Mexico did not sign the conference document.

• Shaping the order. The Biden administration’s decision to allow Ukraine to use US-provided weapons to strike inside Russia, beyond initial restrictions on targets near Kharkiv, is a significant, positive step in Western support for Ukraine. Using frozen Russian assets to collateralize a loan for Ukraine is another positive step, but the United States and its allies may find they need to go further, using said assets themselves rather than continuing to use their own funds exclusively.
• Hitting home. Some US experts argue that Ukraine is a strategic liability and that US focus there diverts resources better used in the Indo-Pacific. Russian victory in the war, which is likely to result from a US withdrawal, would cause cascading security problems in Europe that would draw on even more US resources.
• What to do. The United States and its allies must marshal continued military assistance for Ukraine, including air defense and weapons that support Kyiv’s attacks on Russian military targets in occupied Ukraine, especially Crimea. The United States has the means to intensify pressure on the Russian economy and should use such tools. Washington should consider enforcing sanctions to hit smugglers of technology subcomponents utilized for Russian weapons and evaders of the oil price cap (the latter missing from the otherwise strong June 12 US sanctions package). A successful Ukrainian land offensive may not be possible in the near term. 

The center holds, but the right makes gains, in European Parliament elections. Across the EU’s twenty-seven member states, voters cast ballots to select their representatives to the European parliament. The election saw gains for the center-right and right, but it was a disappointing showing for French President Emmanuel Macron’s centrist Renew party. The European People’s Party, the European Conservatives and Reformists Group (of Italian Prime Minister Giorgia Meloni), and Identity and Democracy—the hard right—were the main beneficiaries of the elections. These results were overshadowed by Macron calling for a snap parliamentary election after his party’s incredibly poor performance in the European Parliament election (garnering less than half the votes of their far-right rivals, the National Rally): The snap election resulted in the left-wing New Popular Front on top, Macron’s  centrist alliance placed second, and  Marine Le Pen’s far-right National Rally, which finished third. Yet, the right did not do well in Scandinavia, Spain, and Romania, and had only a modest uptick in Poland, where the ruling Civic Platform came in first place. The parties in Germany’s ruling coalition—the Social Democrats, the Free Democrats, and the Greens—all lost ground in Germany, but the center-right alliance between the Christian Democratic Union and the Christian Social Union did well.

• Shaping the order. Snap elections in France overshadowed the fact that the center mostly held its ground in the EU elections. The far right’s marginal gains will matter, however, if said forces can unite and if center-right parties are willing to engage with the far-right. Even so, the incoming parliament is likely to be more fragmented and polarized than its predecessor. And the French elections, the first round having wrapped, are pointing to a major defeat for Macron and a surge of the right, which is both nationalist and wary about the extent of French support to Ukraine.
• Hitting home. Even though the center largely held in the European Parliament elections, the increased fragmentation will likely mean less clarity on policy issues that impact US companies.
• What to do. The United States should constructively engage the European Parliament, encouraging it to hold firm to its moderate stances and not bend to the far right’s proposals.

Quote of the Month

“The votes cast put the far-right forces at almost 40 percent and the extremes [on the right and left] at almost 50 percent. This is a political fact that cannot be ignored.“
—French President Emmanuel Macron, speaking after the European Parliament elections.

State of the Order this month: Unchanged

Assessing the five core pillars of the democratic world order

Democracy ()

• On June 30, the far-right National Rally won in the first round of the parliamentary elections, although it’s unclear whether they will get a majority with the second-round vote upcoming on July 7. Many French citizens have been protesting against the National Rally out of concern for women’s rights and minority rights, where thousands of women marched in dozens of French cities, including Paris, to protest against Marine Le Pen’s far-right National Rally.
• Mexico elected Claudia Sheinbaum, its first female president, in the country’s largest election in history with 98 million registered voters. As Mexico City’s former mayor and the favored successor of outgoing President Andrés Manuel López Obrador, Sheinbaum was favored to win. Promising to continue López Obrador’s policies, she believes the government has a strong responsibility to address economic inequality and establish robust social security.
• On balance, the democracy pillar was unchanged.

Security ()

• Chinese forces seized Philippine small boats that were attempting to resupply a Philippine military outpost at Second Thomas Shoal. Multiple Philippine vessels were damaged, and sailors were injured in the incident. One US official called China’s actions “deeply destabilizing.”
• Houthi rebels launched an aerial drone, striking and damaging the Transworld Navigator in the Red Sea, one of more than sixty attacks targeting specific vessels. The attack comes after United States recalled its USS Dwight D. Eisenhower after an eight-month deployment. Shipping in the corridor—crucial for connecting Europe, the Middle East, and Asia—has slowed significantly. The Houthis said they would continue the attacks as long as the Israel-Hamas war continues.
• On balance, the democracy pillar was unchanged.

Trade ()

• Amid the European Commission’s anti-subsidy investigations into electric vehicles (EVs) coming from China , the European Union announced additional tariffs on  imported Chinese EVs. The tariffs range from 17.4 to 38.1 percent—and that’s on top of the 10 percent duty already in place. As a result, Chinese car companies may consider raising prices or establishing factories in Europe, as the continent recently became China’s largest EV export market.
• On balance, the democracy pillar was unchanged.

Commons (↓)

• The United Nations conducted a worldwide poll that revealed 80 percent of people want governments to take more action on addressing climate change. The survey noted majority support for stronger climate action in twenty of the world’s biggest greenhouse gas emitters and majority support globally a quicker transition away from fossil fuels. Despite the increasing state of global conflict and rise of nationalism, the desire to set aside geopolitical differences and work together on climate change is expanding.
• Record-breaking heat, fueled by climate change, affected millions around the globe, scorching four continents and surpassing last summer as the warmest in two thousand years. There were more than forty thousand suspected heat stroke cases in India between March 1 and June 18, and in Saudi Arabia, over one thousand people died participating in the Hajj pilgrimage amid soaring temperatures. Devastating forest fires spread in Europe and northern Africa, and a heat dome trapped large regions of the United States, preventing cool air from getting in.
• On balance, the commons pillar was weakened.

Alliances (↑)

• For the first time in twenty-four years, Russian President Vladimir Putin and dictator Kim Jong Un met in North Korea, reinforcing their commitment to cooperate and protect each other’s interests. As part of the meeting, they signed a mutual military-assistance treaty, with Putin announcing that Russia could provide weapons to North Korea—with potentially destabilizing effects for the democratic world order.
• The leaders of the G7 convened in Apulia, Italy, for the 2024 G7 Summit to discuss supporting Ukraine, pushing back on unfair economic practices, combating climate change, addressing food and health insecurity, leveraging critical technologies, and partnering with like-minded countries around the globe.
• On balance, the alliances pillar was strengthened.

Strengthened (↑)________Unchanged ()________Weakened (↓)

What is the democratic world order? Also known as the liberal order, the rules-based order, or simply the free world, the democratic world order encompasses the rules, norms, alliances, and institutions created and supported by leading democracies over the past seven decades to foster security, democracy, prosperity, and a healthy planet.

This month’s top reads

Three must-read commentaries on the democratic order

• Michael Doyle, in Foreign Affairs, argues that democratic peace is back in vogue and great powers can prevent the tensions between democracies and autocracies from escalating into full-blown global cold war.
• Robert C. O’Brien, in Foreign Affairs, outlines a Trump administration foreign policy centered on the return of peace through strength.
• Célia Belin and Mathieu Droin explore in Foreign Policy what a far-right victory would mean for French foreign policy.

Action and analysis by the Atlantic Council

Our experts weight in on this month’s events

• Niva Yau, in an  Atlantic Council report, shows how China is training future authoritarians overseas in order to secure its interests in Global South countries and beyond.
• Matthew Kroenig and Dan Negrea, in Foreign Policy, explain that the United States’ competition with China should be focused on weakening and defeating the Chinese Communist Party regime.
• Daniel Fried, in the New Atlanticist, offers seven ways to reboot G7 sanctions on Russia, stating that United States and its allies must commit to dedicating resources to identifying targets for taking economic steps against Russia.
• Andrew Michta, in a piece for the German Council on Foreign Relations, contends that Germany must commit to significantly expanding its defense industrial base so that it will be well positioned to establish strong cooperation with whichever candidate wins the next US presidential election.

__________________________________________________

The Democratic Order Initiative is an Atlantic Council initiative aimed at reenergizing American global leadership and strengthening cooperation among the world’s democracies in support of a rules-based democratic order. Sign on to the Council’s Declaration of Principles for Freedom, Prosperity, and Peace by clicking here.

Patrick Quirk – Nonresident Senior Fellow
Dan Fried – Distinguished Fellow
Ginger Matchett – Project Assistant

If you would like to be added to our email list for future publications and events, or to learn more about the Democratic Order Initiative, please email pquirk@atlanticcouncil.org.

The post State of the Order: In June, the world’s alliances strengthened—but concerning risks for the democratic order remain appeared first on Atlantic Council.

Prime Minister Keir Starmer’s pitch is that the government will be focused on “mission delivery” with mission delivery boards chaired by Starmer personally. He has said that his approach to all issues will be “country first—party second.”

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Almost all members of the Shadow Cabinet have been appointed to those same portfolios in government and, in addition, Starmer has also brought back some former ministers from the Tony Blair/Gordon Brown years. They are all therefore familiar with their portfolios, widely respected, and able to hit the ground running. It is also clear that the prime minister wants to work closely with the private sector in order to make early progress on the government’s priorities.

Ed Miliband has been appointed as secretary of state for energy security and net zero. This is broadly the role he held when Labour was last in government before 2010, so he knows the issues well and is a genuinely passionate advocate for tackling climate change and delivering net zero.

With the UK government now one the most secure among the large western nations (with a five-year mandate and a very large majority), the United Kingdom is expected to reassume a leading role in the international discussions on climate change. As the only country to have reduced its carbon emissions by over 50 percent since 1990, many will welcome that leadership once again.

In most areas, there will not be a huge difference in UK government energy policy under the new administration, but there will be a few distinct changes.

Labour has set a very challenging target to decarbonize the electricity grid by 2030. Until there is much more detail about how this can be done, industry will understandably be skeptical about the feasibility of such a goal, the costs involved, and how local communities will be brought on board. This will involve a significant further commitment to renewables, including a welcome early announcement to end the ban on onshore wind. The United Kingdom’s success in developing offshore wind will be continued.

There is evident government support for new nuclear, including next generation small modular reactors, and in the longer-term for fusion. The government wants to see a significant role for hydrogen and for tidal power, but these cannot deliver at scale in time for the 2030 target, so expect to see an acceleration of carbon capture utilization and storage programs. Starmer has spoken recently about the continuing role for gas in the mix, to deliver energy security, and this can only happen if its use can be decarbonized.

Labour is committed to ending the granting of new oil and gas licenses for the North Sea, while respecting the licenses that have already been issued. In reality, these would be for field developments that are many years off, so they would not make any significant difference to the United Kingdom’s energy security in the short-term. Of more immediate impact, there will be a new levy on companies operating in the North Sea oil and gas sector, and here the detail will be crucial—if not done carefully, companies may simply choose to leave the United Kingdom, as many have already done.

At the heart of its energy policy, there will be a new government organization, Great British Energy, and although its full details are still to be clarified, its purpose is to drive forward the clean energy sector and accelerate the transition. If done properly, it will help ensure the roll-out of the grid infrastructure needed to harness the wealth of renewable energy that the United Kingdom has in abundance.

Also of value will be greater attention on issues that have not had the attention they deserve, such as energy efficiency, decarbonizing heat, and an acceleration of demand-side response measures that are already starting to transform the electricity market. The government already knows that the success of its energy policy will be judged in large part by whether people can afford their bills.

Sadly, energy rarely seemed to be center-stage under the Conservative government (unless in response to a crisis), and that seems to be changing fast. There is already a sense that energy deeply matters to this administration—not just to deliver energy security but as an economic driver, helping to decarbonize homes and businesses, and creating a mass of new green jobs.

As a former Conservative energy minister, I wish this new administration well. If they can get these policies right, they stand a very good chance of delivering the holy grail in energy terms—clean, and secure energy, at a price people can afford.

Charles Hendry is a distinguished fellow with the Atlantic Council Global Energy Center, a former member of the UK Parliament, and former UK minister of state for energy.

EnergySource

EnergySource is the Global Energy Center’s (GEC) online publication providing commentary and analysis on developments in the energy and climate sector from a wide-array of thought leaders, politicians, and experts.

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Charles Hendry

Distinguished Fellow

Global Energy Center

Energy & Environment Energy Markets & Governance

EnergySource Jun 12, 2023

Leader perspective: Forging a green special relationship between the United States and United Kingdom

By The Rt Hon. Chris Skidmore, MP

The United Kingdom had long been a climate leader, but other countries have caught up. By working with its close ally the United States, the United Kingdom can reassert its climate leadership through a green special relationship that can galvanize net-zero objectives domestically and abroad.

Climate Change & Climate Action Energy & Environment

EnergySource Mar 11, 2021

Can green finance compensate for London’s post-Brexit losses?

By Paddy Ryan

Supporters of Brexit suggest that making London a “world leader” in green finance could compensate for the City’s post-Brexit losses. Green financial leadership could boost Britain’s domestic industry and transform its foreign policy. But competitive advantages for its financial sector may not materialize.

Economy & Business Energy & Environment

EnergySource May 3, 2024

G7 pledges to end coal—but only inclusive action will make a real climate impact

By Elena Benaim

During the G7 energy ministerial in Turin, Italy, climate, energy, and environment ministers made a historic pledge to phase out coal power plants by 2035 among other agreements. But members ultimately need to turn pledges into action to blunt the impacts of climate change.

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The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

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The post The UK sets a path for clean, affordable energy—and renewed climate leadership appeared first on Atlantic Council.

The Occupational Safety and Health Administration (OSHA) has proposed new federal regulations to protect workers. When the heat index reaches or exceeds 80 degrees Fahrenheit, employers would be required to monitor workers and provide water and rest areas. At 90 degrees Fahrenheit, more protections kick in, including mandatory fifteen-minute rest breaks every two hours and monitoring employees for signs of heat-related illnesses.

Heat-related illnesses have been recognized as occupational hazards for a decade, with an estimated 2,300 workers in the United States dying from extreme heat exposure last year alone. However, this number is likely an undercount and does not capture the many more who suffered nonlethal or chronic heat-related illnesses, as well as workers who injured themselves on the job due to the heat. For instance, researchers at the University of California, Los Angeles found that workers in California are up to 9 percent more likely to suffer a workplace injury on days with temperatures over 90 degrees Fahrenheit than on days that are between 50 to 60 degrees Fahrenheit. This is a problem that will only get worse. The summer is only a few weeks underway in the Northern Hemisphere, and already more than one hundred million US residents have been exposed to extreme heat.

What comes next?

Despite the need for action, OSHA’s proposal will have significant opponents. Industry groups are gearing up for battle, arguing that the rule will be both administratively cumbersome and costly. This is a sentiment that some political leaders have already embraced. Earlier this year, both Florida and Texas enacted state-wide bans to prevent localities from instituting their own worker-protection ordinances. Both state governments are unlikely to accept OSHA’s proposal without protest. In fact, despite the persistent threat of extreme heat, only five states have extreme heat worker protections: California, Colorado, Minnesota, Oregon, and Washington.  

The argument that extreme heat worker protections will come at a cost often ignores the very real cost of maintaining the status quo under dangerously high temperatures. Aside from the price that workers pay with their health, extreme heat in the workplace has significant economic impacts, from lost labor productivity to healthcare costs. The high and growing price of extreme heat on US residents’ lives and livelihoods illustrates not only that this new rule is necessary, but also that, on its own, it is not enough.

Since 2021, the Biden administration has worked to reestablish the role of the United States as a leader in the fight against climate change, both domestically and abroad. This new rule could help cement the United States’ leadership role on climate—but only if it is properly enforced and expanded upon. For the rule to be effective, the administration should continue significantly utilizing OSHA’s National Emphasis Program for Outdoor and Indoor Heat-Related Hazards, which gives it latitude to direct resources toward both employer education on heat safety protocols and inspections that will better ensure compliance.

The Biden administration should also leverage existing funds to ensure that workers remain safe even when they head home for the day. As temperatures rise across the United States and the world, workplace regulations alone will not be enough to adequately protect workers. Federal agencies should incentivize states to direct Low Income Home Energy Assistance Program (LIHEAP) funding toward cooling assistance in vulnerable households, and lawmakers should ensure that LIHEAP is funded adequately to cover energy needs during both the summer and winter months. Currently, only approximately 5 percent of LIHEAP’s four billion dollars in funding goes to cooling assistance (heating receives ten times as much), despite the accelerating demand for relief from high nighttime temperatures that place a significant burden on the human body, and which can lead to heat exhaustion while on the job.  

Ultimately however, this issue cannot be solved at the federal level alone. It also requires efforts at the state and local level to ensure that the most vulnerable communities and individuals are being identified and solutions tailored to local contexts are being implemented. The appointment of a Chief Heat Officer (CHO), at the city, county, or state level, is one tool that can address the local challenges of extreme heat. Local governments such as Miami-Dade County, Phoenix, and Los Angeles have already taken this approach. Local climate leaders—like CHOs—are well positioned to work closely with their communities to tailor solutions to meet their specific needs and to create a unified response to build resilience to extreme heat both during the workday and off the clock.

Catherine Wallace is the associate director of strategic partnerships and advocacy for the extreme heat resilience pillar of the Atlantic Council’s Adrienne Arsht–Rockefeller Foundation Resilience Center (Arsht-Rock).

Owen Gow is the deputy director for the extreme heat resilience pillar at the Atlantic Council’s Adrienne Arsht–Rockefeller Foundation Resilience Center (Arsht-Rock).

The post Feeling the heat? Biden’s proposed protections for workers are a welcome start. appeared first on Atlantic Council.

Unfortunately, this is a familiar scene for the region, which routinely battles the effects of extreme weather events and climate change. Hurricane Beryl once again spotlights why focusing on the mitigation of climate change, through such methods as cutting carbon emissions, alone is insufficient. Caribbean countries must prioritize climate adaptation as the primary mechanism to withstand hurricanes and other baked-in effects of climate change.

Climate adaptation is the answer to these extreme weather events, but it requires significant investment that governments in the Caribbean cannot afford. International support, including private finance, is needed. In five months, the United Nations Climate Change Conference of the Parties, also known as COP29, will take place in Baku, Azerbaijan. It has been dubbed the “finance COP,” and there governments and the private sector should come together and show the commercial utility of prioritizing climate adaptation. Doing so can unlock new financing and create project pipelines that are commercially attractive to global investors.

The Caribbean is often categorized as the world’s most vulnerable region to climate change. Seventy percent of the region’s population lives or works on the coast, meaning that storm surges from hurricanes affect businesses, lifestyles, and government operations. Hurricanes and strong storms also bring the tourism industry to a halt, disproportionately affecting the region’s tourism-dependent economies and severely slowing economic growth. Hurricane Maria in 2017 cost Dominica an estimated 225 percent of its gross domestic product, while Hurricane Irma in the same year cost Antigua and Barbuda more than $136 million in damages, of which the tourism industry represented 44 percent.

Strong storms damage critical infrastructure. Downed power lines cause widespread power outages, while flooded roads and bridges can prevent rescue operations. Already, Hurricane Beryl has caused power outages in Saint Lucia, and homes in Saint Vincent and the Grenadines have lost their roofs. And stronger storms lead to longer recovery periods, which can increase governments’ public debt as they borrow at high interest rates from multilateral institutions to rebuild after the storm has passed. Six years after Hurricane Maria, for example, citizens in Dominica are still rebuilding.

Withstanding strong storms and other effects of climate change requires new climate adaptation projects. For hurricanes with high wind speeds (such as Beryl, which sustained wind speeds of 150 mph at its peak), it is necessary to retrofit infrastructure to be resilient. To achieve this, governments need to require building codes for new homes and infrastructure that ensure sufficient resilience across structures. To brace for storm surges, governments need to move water and energy infrastructure underground where possible to avoid damage. New sea walls and flood protection systems also need to be built.

In all, the region needs more than $100 billion dollars in investment to meet its climate adaptation goals, but it has only been approved for less than one billion dollars from various climate funds. Governments are often left to fend for themselves, taking high-interest loans (due to the classification of many Caribbean nations as middle- and high-income economies by the World Bank) since they often do not qualify for concessional financing. At the same time, governments have borne the brunt of the responsibility because these types of climate adaptation projects are not always attractive to the private sector. Retrofitting infrastructure and other climate adaptation projects, for example, have high upfront costs with little return on investment.

COP29 is an opportunity to bring the public and private sector together to unlock new financing and advance climate adaptation projects. The private sector—both in the region and around the world—has access to needed technologies and has the capacity to undertake climate adaptation projects, from providing drainage on roads and bridges to help ease flash flooding to building decentralized energy grid infrastructure to limit widespread blackouts. Climate adaptation is, after all, in the private sector’s interest. If the effects of hurricanes and climate change worsen and the region’s economies slow, then businesses’ profits will be affected.

What will it take to get the private sector more involved? Attracting private sector participation requires regulatory reforms and carve outs by governments to ensure that companies yield a return on projects. Governments can provide incentives, such as giving exclusive benefits to companies participating in projects and providing subsidies or tax exemptions on materials used. Equally important is access to low-cost finance and capital. Governments can work with institutions such as IDB Invest and global donors that provide grant finance to funnel capital to companies undertaking long-term developments while engaging with insurance agencies that can underwrite riskier projects. 

Caribbean leaders have begun to explore private sector participation in climate adaptation projects, notably through the Bridgetown Initiative and the Blue Green Investment Corporation, but there is still work to be done. COP29 might well be the ideal forum to strengthen these initiatives and encourage commitments from governments and the business community. Doing so requires flexibility from both sectors and a focus on projects that are investment-friendly and can attract global donors. 

In the lead-up to COP29, governments will need to begin laying the regulatory groundwork and soliciting the required technical assistance from development institutions to encourage private sector participation. Moreover, Caribbean governments should consider adding or increasing the size of the private sector groups to their delegations for COP29 to ensure they have a seat at the table and are bought into any signed agreements. Building these public-private relationships can go a long way toward showing global donors and companies the viability of investing in climate adaptation projects in the Caribbean and unlock needed capital that can save lives in the long run.

Wazim Mowla is the associate director and fellow of the Caribbean Initiative at the Atlantic Council’s Adrienne Arsht Latin America Center.

The post Hurricane Beryl spotlights the importance of climate adaptation in the Caribbean appeared first on Atlantic Council.

• Introduction
• Severe consequences of energy insecurity
• Energy-transition barriers
• Applying the CEWG roadmap
• A global call to action
• Acknowledgments
• About the author
• About the Caribbean Energy Working Group Co-Chairs

Introduction

Countries in the Eastern Caribbean¹ are among the world’s most energy insecure nations. These countries grapple with high electricity costs that undercut economic competitiveness and growth, are heavily dependent on petroleum products, and are uniquely vulnerable to the effects of climate change. At the same time, a World Bank designation as middle- or high-income economies significantly limits access to concessional financing. The result is a slow transition to renewable energy power generation, including attracting commercial interest for the relevant infrastructure and unbundling utility systems that often stymie regulatory changes and curtail needed investments in the energy sector.

The time may be ripe for accelerating the pace of the transition in the Eastern Caribbean. A broad consensus exists among regional governments, the business community, and multilateral partners to further usher in a transition to renewable energy, given the unique vulnerabilities facing Eastern Caribbean countries. Meanwhile, countries in the Southern Caribbean (Guyana, Trinidad and Tobago, and Suriname) are leaning into their hydrocarbon reserves as they balance their own energy transition, while other countries are either attracting commercial interest or are far along in their renewable energy development relative to the Eastern Caribbean. Though there is an abundance of solar and wind power potential in the Eastern Caribbean—along with significant geothermal reserves in Dominica, Saint Vincent and the Grenadines, and Saint Kitts and Nevis—countries in this region are faced with defining how a realistic, affordable, and just energy transition can take place and unlocking new private sector and multilateral resources.

The Atlantic Council’s Caribbean Initiative engaged in a series of consultations with the Caribbean Energy Working Group (CEWG), whose members identified two main constraints to the region’s transition: the top-down vertically integrated nature of state-owned utility systems; and limited access to low-cost financing and credit to governments and clean energy developers. While recognizing that an energy transition requires a holistic approach, CEWG members propose that the starting points must be addressing utility constraints and access to finance to ensure a reliable and resilient energy system transformation that is sustainable and affordable for consumers, governments, and the private sector in the Eastern Caribbean. An energy transition in the Eastern Caribbean must ensure reliable power to combat price volatility for consumers while energy infrastructure should be resilient to the effects of climate change, hurricanes and strong tropical storms, and rising temperatures.

The CEWG brings together up to fifteen policy and technical experts from across the Caribbean, and was first convened in 2023 by the Atlantic Council. This publication builds off the CEWG’s first report, “A roadmap for the Caribbean’s energy transition,” which was published last year and outlined a five-step process that governments, developers, and regional partners can undertake to facilitate an energy transition in the Caribbean. The five-step process includes: conducting energy modeling and analysis; modernizing energy grids; diversifying utility structures; creating bankable projects; and scaling project investment to national and subregional levels. This publication focuses on applying steps three and four of the roadmap.

The CEWG met as part of two roundtable discussions, followed by five one-on-one consultation sessions across the group to identify barriers and solutions to accelerating a reliable and resilient energy transition in the Eastern Caribbean. This publication serves as a complement to existing initiatives and projects dedicated to facilitating an energy transition, with the aim of raising additional awareness of the reality and the urgency of the moment for the world’s most vulnerable countries.

Severe consequences for energy insecurity

Countries in the Eastern Caribbean are open facing, small market economies, vulnerable to ebbs and flows of the global financial system. The region’s import dependence means that supply chain constraints and rising global interest rates have a disproportionate effect on these economies. For example, when Russia’s war in Ukraine stemmed the flow of fertilizer to agriculture commodity exporters, food inflation in the Eastern Caribbean skyrocketed and remained high even as prices eventually declined in industrialized nations.² And although the price of renewable energy, such as solar photovoltaic (PV) power, has declined dramatically over the past decade, capital and investment in this sector naturally gravitated to the bigger economies in the Global North.

Stronger storms, more outages
Climate change is a significant driver of the energy transition in the Eastern Caribbean. Hurricanes and strong tropical storms cause flash flooding and high wind speeds that damage energy infrastructure. Global warming, as a result of increasing greenhouse gas emissions (GHG), is fueling stronger and more frequent tropical storms. The result is lost power for days and weeks, as was the case in 2017 when Hurricane Irma hit Antigua and Bermuda, damaging transmission lines and generators. Similarity, in 2019, Hurricane Dorian caused widespread power outages in Dominica.³

The makeup of these economies has resulted in Eastern Caribbean countries paying some of the highest electricity prices in the Americas, including double and sometimes triple of what the average consumer pays in the United States ($0.109 per 1 kilowatt-hour (KW/h).⁴ On average, consumer costs in Antigua and Barbuda ($0.367 per 1 KW/h) and Saint Kitts and Nevis ($0.333 per 1 KW/h) rank on the higher end of the spectrum, with Saint Vincent and the Grenadines ($0.185 per 1 KW/h) on the lower end, and the rest of the countries falling in between. These high costs coincide with an import dependence on petroleum products, with Antigua and Barbuda (100 percent), Dominica (92 percent), Grenada (93 percent), Saint Lucia (98 percent), Saint Kitts and Nevis (87 percent), and Saint Vincent and the Grenadines (95 percent) all relying on fossil fuels to satisfy almost all of their energy demand.⁵ The cost of these imports account for almost 7 percent of the subregion’s gross domestic product, cutting into public expenditure needed to invest in climate adaptation projects and social sectors such as education and health services.⁶

High electricity prices and energy imports undercut the competitiveness of key economic sectors in the Eastern Caribbean—notably the hospitality sector—and limit the purchasing power of consumers. According to the Inter-American Development Bank, six of the countries prioritized in this publication rank in the global top ten of tourism-dependent economies.⁷ The tourism industry accounts for a significant share of energy demand in these countries, increasing the prices for hotel rooms due to high usage of air conditioning and lighting.⁸ Given that the tourism industry is an economic driver, high energy costs can make industries uncompetitive vis-à-vis other tourist hubs in the region such as Jamaica and the Dominican Republic. Beyond the tourism sector, more than a quarter of energy demand in the Eastern Caribbean is for residential use.⁹ High power bills can take up a large share of household income and decrease the purchasing power of individuals, leaving them unable to spend money on local products and services, like food and transportation, which help to stimulate economic growth.

Despite the challenges facing the Eastern Caribbean, bright spots exist. Renewable energy, such as solar, wind, and geothermal reserves, are abundant. Across the region, the sun shines more than 200 days annually,¹⁰ has an estimated potential of almost 70 gigawatts of available offshore wind (excluding Dominica), and (excluding Antigua and Barbuda) houses an estimated 6,290 megawatts (MW) of available geothermal reserves.¹¹ But this potential has not been tapped. Current installed capacity of renewable energy (as a percentage) stands at: Antigua (4 percent), Dominica (25 percent including hydroelectric power), Grenada (4 percent), Saint Lucia (3 percent), Saint Kitts and Nevis (5 percent), and Saint Vincent and the Grenadines (17 percent including hydroelectric).

Geothermal development is a high priority in the Eastern Caribbean
Dominica has an estimated 1,390 MW of geothermal potential. The country’s small population and energy grid had not provided adequate incentive to develop that capacity, due to the high capital costs of exploring its geothermal reserves at scale- until recently. Commitment by the government in 2023 to develop its reserves and support this year from the World Bank have helped the country begin developing its geothermal potential. The World Bank is financing a new project at $38.5 million to support drilling of new geothermal wells and helping construct new transmission lines and substations to connect the future geothermal plants to consumers. Meanwhile, St. Kitts and Nevis is consistently looking for new partners to support its own geothermal ambitions for close to a decade, with a total project cost estimated at US $505 million. A mixture of bilateral and multilateral financing will be needed to bring this project closed to Dominica’s stage.¹²

Energy-transition barriers

The utility systems in the Eastern Caribbean are state-owned entities—excluding Saint Lucia, which has a public-private model—tasked with providing power to citizens. Tax revenues are used by governments to invest in critical and social services. These are top-down systems in vertically integrated structures, meaning that they single-handedly operate the generation, transmission, and distribution of power. This model can stifle innovation and competition, leaving customers without alternative choices and increasing the cost of electricity. Further, it means that introducing new clean energy technologies, when possible, must be financed and implemented by the utility, which is often devoid of the needed capital and technical assistance to act. Therefore, incorporating renewable energies into this model can be expensive—particularly since these technologies have high upfront costs. It is both a political and economic challenge that clean energy is not necessarily cheap energy.

However, unbundling utility systems is not a straightforward solution and not all state-owned entities are necessarily bad. Breaking these systems apart might divide consumer bases and may not lower the cost of electricity given the small size of Eastern Caribbean countries’ populations. Instead, as discussed below, the best-case scenario is to introduce innovation into the utility system, such as diversifying the utility structure across generation, distribution, and transmission by using public-private models. Maintaining an intact customer base is critical for utilities to keep the costs low for consumers while ensuring that utilities and the private-sector entities are still turning a profit. This does not mean that breaking up systems is the sole way to ensure low prices for renewable energy generation. Some markets, particularly in micro economies like in the Eastern Caribbean, might be too small to introduce competition and keep prices affordable. There is no one-size-fits-all solution, as changes in utility structures need to adapt to and be contextualized for each individual country.

Changing the business model of the utilities can help to create more incentives to incorporating renewable energy generation by factoring in the social cost externalities (the associated costs of fossil fuels on the broader public and society) of depending on fossil fuels as a realistic price comparison. Current models determine the price of electricity based on the cost of petroleum imports. But the emissions of fossil fuels—not just carbon dioxide but also other toxins that cause respiratory illnesses—increase cancer risks and, generally, overall poor health. The future healthcare costs for the consumer and the burden on governments to invest in adequate healthcare infrastructure are typically not added to the total cost of importing fossil fuels. If a full cost analysis and reformed business model are developed, then the price of importing fossil fuels might be higher than renewable power generation.

Commercial developers fund projects initially on their own before seeking to make projects bankable by obtaining loans that are backed by cash flow. Projects in the Eastern Caribbean take a long time to develop, given financing challenges due to unclear regulations and permitting, and a lack of investment-grade utility systems to guarantee payments under negotiated power purchasing agreements. Due to the long period of development, investors and governments look to derisk their projects by seeking full grants or convertible loan grants to help them clear these hurdles.

Commercial renewable energy projects also suffer from limited access to low cost and concessionary finance and capital. As discussed, state-owned utilities and governments are responsible for financing new renewable energy projects. These countries do not have the fiscal space or national budgets to self-finance these projects, leaving them to seek loans and grants from multilateral development banks (MDBs) and bilateral lenders. However, the World Bank classifies Eastern Caribbean countries as middle- and high-income economies, disqualifying them from accessing low-cost loans from the World Bank and those that also use this classification, such as the US Development Finance Corporation. This also applies to the business community and energy developers who need access to financing during the pre-project phase (prefeasibility studies, production of design drawings, and environmental social and impact assessments, among others).

Applying the CEWG roadmap

Addressing utility constraints and unlocking new access to finance and capital both are needed, but a well thought-out process that takes the context and nuances of each country into account is needed. To the international community, these countries are bound by their similarities (e.g., population and market size, and geographic location). Realistically, there are enough differences between them that suggest that no solution to the region’s energy transition challenges can be a one-size-fits-all approach. Each country’s context will determine how the below solutions are applied, from unbundling utility structures to attracting finance and capital based on renewable energy. While each country needs a transition that is contextualized to its own reality, technical assistance and transmission upgrades are at the core of the energy transition. Policy action and financial resources are both required, and Caribbean governments and regional institutions will need the assistance of partners like the US Trade and Development Agency and the Inter-American Development Bank (IDB) to deploy the assistance throughout the transition process.

Based on the small consumer bases and state-owned nature of utility systems in the Eastern Caribbean, unbundling utilities might not actually lower electricity costs. Instead, the structure of the utility might be reformed to a public-private partnership (PPP) model that also accounts for price comparisons between fossil fuel imports with social cost externalities attached to a transition to renewable energies. In essence, PPPs are a collaborative model that leverages the strengths of both the public and private sectors, which can help accelerate the deployment of renewable energy infrastructure while ensuring cost-effectiveness and financing sustainability. For example, needed transmission upgrades can be undertaken by governments to help absorb costs and prevent them from being passed to consumers. And the private sector can take responsibility for generation projects, driving down costs and improving competitiveness. Governments and utilities are still able to benefit from the revenue to use for public-sector investments while private-sector entities can streamline innovation in the energy sector, helping to attract more commercial interest.

Designing PPP models will be complex. Each country and its utility or utilities are unique. The challenge will be designing the appropriate model. Here, entities such as the IDB should work with the Caribbean Development Bank (CDB), and use input from private-sector companies in the region, to design a PPP model for utility structures. The IDB houses the experience and expertise in designing PPP models, and through its new One Caribbean program is already building a project preparation facility that can incorporate PPP designs into its model.¹³ The challenge is that Eastern Caribbean countries are not members of the IDB, though they are borrowing member countries of the CDB. In the past, the CDB and the IDB have worked together to streamline assistance to and analysis for the Eastern Caribbean. The same can be done here, with the added benefit of the CDB already understanding the nuances of each of the countries in the subregion.

However, designing and implementing a PPP model requires political will and government support. Governments might not be anxious to adopt renewables if the cost of the electricity does not lower prices—affecting key political constituents—and if accelerating an energy transition comes with increased public debt through high-interest loans. Simply put, a transition is only possible if governments are given assurances and feel comfortable that incorporating renewables will not affect their standing with their constituents, meaning that entities like the IDB, CDB, and partners, such as the United States, will have to secure government support before an energy transition can take place.

As utility systems are able to reform their models to ensure that renewable energy projects are affordable for governments and consumers, support to countries and investors is needed to finance projects through the project pipeline. As discussed in the CEWG’s first report, the projects in the Caribbean tend to fall in the “valley of death,” due to project delays ranging from limited site access to an inability to secure additional financing. Key to moving projects through the pipeline is to derisk them and ensure their bankability. Two steps are needed. First, Caribbean countries need access to the expertise and capacity to conduct feasibility studies, environmental social and impact assessments, and design power purchase agreements, among other things. Second, Eastern Caribbean countries need access to investment vehicles that prioritize grants or low-cost loans for the upfront costs of renewable energy projects. Entities like IDB Invest have pockets of financing that allows the institution to inject equity into projects, but the pool of funds is small relative to what is available for other countries or subregions in Latin America.

This is where regional partners like the United States and existing regional programs like the CARICOM Development Fund (CDF) and the Bridgetown Initiative¹⁴ should be utilized. The United States government, through the International Development Finance Corporation (DFC), should take advantage of the current DFC reauthorization process to create a carve out for clean energy projects in the region. The scale of investment is minimal compared to other DFC-financed projects and would have outsized effects in the small markets and grids in the Eastern Caribbean. This would take an act of the US Congress—particularly for a middle-income country exception—but there is precedent and increasing appetite to prioritize energy security in the Caribbean. Further, the United States should encourage the IDB and the CDB to work with the CDF and the Bridgetown Initiative to create a project pipeline (with attached equity investments available) to attract large-scale financing and grants from global donors. Capital and finance around the world are available if regional partners and entities are able to build mechanisms that streamline funding to energy projects in the Eastern Caribbean and build a project pipeline to attract commercial investors.

A global call to action

An energy transition in the Eastern Caribbean requires political will, regional coordination, and consistent technical assistance. Relative to the cost of the global energy transition, the needed capital in the Eastern Caribbean is minimal. But the tides are changing in the region, as more political actors and financial institutions are thinking creatively of how to accelerate an energy transition. Still, human capital and capacity limitations stifle the region’s ability to undertake this process alone. Partner governments like the United States and Canada have committed to the region’s energy security in the past few years, but these two countries do not have the funding or domestic political will to direct their attention consistently to the Eastern Caribbean. Addressing the climate crisis and facilitating a global energy transition is increasing in urgency each day, meaning that more actors across governments, international bodies, the business community, and foundations are unlocking new forms of support. Tapping into these resources will be critical. Regional governments and their partners need to continue raising the profile of the Eastern Caribbean and using regional and global platforms, from the Group of Twenty to the UN General Assembly to the COP29 climate talks in November to ensure that these countries are not left behind.

Acknowledgments

The Atlantic Council thanks board member Melanie Chen for her financial support of this publication and the corresponding working group. A thank you also goes to the CEWG members who joined the numerous one-on-one consultations and roundtables that informed this publication, including co-chairs David Goldwyn and Eugene Tiah. A special thank you goes to Jason Marczak, vice president and senior director of the Adrienne Arsht Latin America Center, which houses the Caribbean Initiative, for his guidance and comments throughout the working group and during the drafting of this publication. Maite Gonzalez Latorre managed the production flow of this publication.

About the author

Staff

Wazim Mowla

Associate Director & Fellow, Caribbean Initiative

Adrienne Arsht Latin America Center

Caribbean China

Wazim Mowla is the associate director and fellow of the Caribbean Initiative at the Atlantic Council’s Adrienne Arsht Latin America Center. He leads the development and execution of the initiative’s programming, including the Financial Inclusion Task Force, the US-Caribbean Partnership to Address the Climate Crisis (PACC) 2030 Working Group, and the Caribbean Energy Working Group. Since joining the Council, Mowla has co-authored major publications on the strategic importance of sending US COVID-19 vaccines to the Caribbean, strategies to address financial derisking, and how the United States can advance new policies to support climate and energy resilience.

About the Caribbean Energy Working Group Co-chairs

David Goldwyn is president of Goldwyn Global Strategies, LLC (GGS), an international energy advisory consultancy, and chairman of the Atlantic Council Global Energy Center’s Energy Advisory Group. He is a globally recognized thought leader, educator, and policy innovator in energy security and extractive-industry transparency.

Eugene Tiah is a senior business executive with in-depth knowledge and more than forty years of experience in the oil and gas business within the United States and the Caribbean region. He is also the president and CEO of the Caribbean Energy Chamber.

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The post Accelerating the energy transition in the Eastern Caribbean appeared first on Atlantic Council.

Executive summary

The European Union (EU) has increasingly raised its climate ambition, especially since the launch of the European Green Deal in 2019, which set a target of climate neutrality by 2050. The bloc’s achievement demands a contribution from all sectors: power, industry, buildings, and transport. The latter is sizable, accounting for almost a quarter of the total emissions of the twenty-seven EU members (EU-27) in 2021—with road transport responsible for more than 75 percent of the transport sector’s total emissions given its reliance on fossil fuels. Additional policies and measures are required since the sector’s emissions have substantially increased since 1990, unlike the other sectors.

While EVs are gaining relevance and are set to become an increasingly important factor in decarbonization, policymakers will need to address critical issues, especially relating to enabling infrastructure (i.e., charging stations) to have a sustainable and smooth transition. Italy, one of the largest car markets in Europe, has much to do to decarbonize road transport. It has developed alternative fuels, but electricity still accounts for less than 0.3 percent of vehicle fuels. It has set ambitious EV targets to achieve by 2030: 6.6 million cars including 4.3 million BEVs.

This article explores Europe’s rising ambition in electrifying this sector and the political and market drivers at work; presents the case of Italy, including its national objectives, trends, and challenges in the transition; and provides a summary of takeaways and policy recommendations to further support the electrification of the road transport sector, especially in Italy.

Pier Paolo Raimondi is a researcher in the Energy, Climate and Resources Program at the Istituto Affari Internazionali (IAI) in Rome. His main research topics are related to energy markets, energy policy, energy geopolitics, and geoeconomics. He also is a PhD student in institutions and politics at the Catholic University of Milan. He holds a master of international relations and a bachelor degree in political science from the University of Milan.

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The post Electrification of the road transport sector in Europe and the case of Italy appeared first on Atlantic Council.

But now, climate-skeptic voices and opposition to climate efforts are gaining political weight, as shown by recent trends in the European Parliament election results earlier this month. While Europeans still see climate change as a major challenge, discontent with financial developments and concerns about defense and security rank even higher in their priorities, according to the latest Eurobarometer polling.

With the changing composition of the European Parliament, some of the biggest implications will concern climate policy. A weakened EU climate agenda could result in the continent falling short of decarbonization targets. It could also influence partners abroad to mirror more lax climate policies. In the face of these shifts, Europe’s policymakers need a resilient environmental policy profile that endures political shifts and builds trust in the longevity of EU climate action among voters and international partners. 

The legacy of a climate consensus

In the 2019 European Parliament elections, climate change was a decisive topic for voters. Following the vote, the then nominee for European Commission president, Ursula von der Leyen, promptly pledged a strong focus on climate action as part of her eventually successful bid to secure the approval by the European Parliament. The Commission turned her pledge into action with the European Green Deal, which comprised numerous ambitious decarbonization policies. Von der Leyen called it Europe’s “man on the moon” moment.

To align EU legislation with the intermediate goal of reducing net greenhouse gas emissions by at least 55 percent by 2030, the Fit for 55 package expanded the EU emissions trading system, introduced the Carbon Border Adjustment Mechanism for carbon-intensive imports, and set new standards for the land use, transportation, and energy sectors, among other policies. Furthermore, at least 30 percent of the European recovery package funding was allocated for climate action.

Despite the initial progress, the wind in the sails of the EU’s green agenda now appears diminished. A sluggish economic recovery, stubbornly persistent inflation, and rising energy costs—in part, a downstream effect of Russia’s full-scale invasion of Ukraine in 2022—have resulted in the green agenda as a target for farmers’ protests and rallies.

Interest group pressure and conservative opposition to climate action have hampered green policies at the national level, too. A watered down German climate change law, climate-skepticism among Italian political leadership, and French President Emmanuel Macron calling in May of last year for a “pause” of EU environmental regulations exemplify the simultaneous nature of developments on the member state and the EU level.

Green parties lost in this year’s European Parliament elections, greatly diminishing their political weight in the body. Some commentators have already written the obituary of the bloc’s green agenda, arguing that “Europe’s green moment is over.” 

What’s next for the Green Deal?

The center-right European People’s Party (EPP), von der Leyen’s party group and the largest in the European Parliament, reaffirmed Europe’s leading role in global climate action in its 2024 party platform. At the same time, it advocates for technological neutral approaches and distances itself from the Greens and Socialists, whose position the EPP calls “ideological” in their manifesto. The rejection of a contentious bill on pesticide use in 2023 demonstrates the group’s ambiguous stance on environmental legislation as it restrained von der Leyen’s Green Deal objectives to foster sustainability in the agricultural sector. Newly and reelected EPP members are “completely divided on where to go with the Green Deal,” according to Greens/EFA co-president Terry Reintke, emphasizing the limbo in which the project currently hangs.

In the incoming European Parliament, support for the Green Deal will continue to come from the center-left Socialists and Democrats (S&D) group, which highlights the social aspects of a just climate transition, and the liberal Renew Europe group, which emphasizes the need for pragmatic implementation. While the Greens proposed an even more ambitious Green and Social Deal as a major investment plan, other left groups are more critical of the bloc’s approach to decarbonization.

Further to the right, the green backlash has become a rallying cry for conservative and far-right political groups, such as the European Conservatives and Reformists (ECR) and the populist Identity and Democracy (ID), which oppose the Green Deal, advocate for local climate strategies, and call decarbonization targets unrealistic. A more prominent role of the ECR and ID in the European Parliament, following their gains in the European elections could slow down the already insufficient emissions reduction and impede the effective implementation of Green Deal policies.

However, it’s too soon to declare the death of the green agenda. It will, instead, likely be deprioritized, contending with competing policy interests. While the overlapping crises of climate change, pandemic recovery, the war in Ukraine, and the resulting inflationary trends have drawn away the electorate’s focus on climate issues, environmental concerns remained salient for voters. It is unlikely that the European Green Deal will be abandoned, especially if von der Leyen stays on as European Commission president.

The new distribution of the parliamentary seats opens possibilities for a more conservative majority but also for coalitions with center-left parties. While the three main centrist groups have reportedly reached an agreement on top European Union posts with von der Leyen as Commission president, it is not a given that she will gather enough votes in parliament. Given the new distribution of parliament seats, Green parties might therefore be the key to securing von der Leyen a second term and thus exert influence on climate protection to remain prioritized.

Regardless, even a weakened climate agenda would be a mistake. Both for political and strategic reasons, European policymakers cannot abandon the green transition. Other priorities may, rightly, deserve attention, but the climate crisis must not be ignored. Europe is, after all, the fastest-warming continent, according a recent report by the United Nations and EU. Temperatures there are rising at around twice the global average.

To ensure the viability and centrality of the Green Deal in the new European parliament, officials will need to link policy issues and make the case that the green transition can help the competitiveness agenda. A focus on implementation rather than new legislation is likely. In this consideration, a nonpartisan commitment to technologically sound and ecologically just climate action is necessary to accommodate voters’ demands and bridge party gaps. This will require political leadership, especially from von der Leyen and her EPP party group, which has yet to find a common line regarding the future of the European Green Deal.

Moritz Ludwig is a young global professional with the Atlantic Council’s Europe Center.

The post Green Deal fatigue? How the European Parliament elections could affect EU climate policies. appeared first on Atlantic Council.

But that assessment seems to be more of an issue of semantics than an accurate reflection of voter sentiment. Widespread discontent among Indian farmers and agricultural laborers (sectors that represent 43 percent of the country’s total workforce), persistent inflation, and a lack of jobs for India’s youth, have all been cited as reasons for the BJP’s slide. All of these problems, at least in part, are caused by climate change, whether post-election coverage acknowledges this or not. To maintain popular support, the coalition government will need to adopt long-term climate solutions that connect directly to the livelihoods and economic needs of India’s youth and agricultural sector.

Farmers have been struggling with the impacts of extreme weather events on their crops for years (not to mention their anger over Modi’s attempts to disincentivize crop residue burning). The corresponding rise in agricultural product prices has stoked inflation. Additionally, disruptions in supply chains caused by flooding, cyclones, and droughts exacerbated already high costs for consumer products. Certainly, extreme heat impacted worker productivity in the agricultural and construction sectors, contributing to lackluster hiring of young workers, who often fill these jobs. Climate change is the hidden hand behind many of these worrying economic trends.

Notably, the BJP did take some significant actions on climate change prior to the elections: Modi made pledges that India would achieve energy independence by 2047, have five hundred gigawatts of renewable energy by 2030, and become central to the manufacture of green technologies. While these are laudable goals, it seems that they were not ambitious enough, or targeted for dates too far into the future, to quell voters’ concerns. Going forward, Modi and his coalition government will need to do more to connect climate change initiatives with kitchen table issues.

An example of a winning climate change solution already exists in Punjab. India’s largest bio-compressed natural gas (CNG) facility became operational in Lehragaga, Punjab, in 2022, with support from the BJP’s Sustainable Alternative Towards Affordable Transportation program, even though Punjab is not a BJP-controlled state. This facility converts paddy stubble (the leftover plant debris after a rice harvest) into bio-CNG, which significantly reduces the need for stubble burning, a major cause of air pollution throughout India. The stubble is collected directly by the facility, alleviating the cost and time that normally burdens farmers, thereby making the harvesting process more profitable. The byproduct of the facility’s process is biomanure, which can be used to enrich soil, further benefitting farmers. Ultimately, the plant produces cost-effective renewable CNG, which can be used for cooking, automotive fuel, and other applications. Duplicating this kind of facility throughout the agricultural regions of India could win over disgruntled farmers, provide new renewable energy jobs for young people, address the harms caused by climate change, and strengthen India’s energy security. The BJP’s Waste to Energy Programme under the Ministry of New and Renewable Energy could be expanded and more aggressively mobilized to facilitate this.

Likewise, the use of vetiver grasses to mitigate the impacts of flooding, which has markedly increased due to climate change, has a long history in India. Unfortunately, a byproduct of the industrialization of agriculture in the name of enhanced productivity has caused traditional, yet effective, practices like the use of vetiver grasses to be left behind. These hardy grasses, when planted along rivers and other sources of floodwaters, strengthen embankments and can largely prevent the soil erosion responsible for catastrophic landslides. These grasses also absorb carbon from the atmosphere and help recharge local groundwater. A new coalition government program that encourages vetiver use would help farmers avoid crop damage from flooding, while also reducing the cost of irrigating fields. The program could create vetiver planting jobs (suitable for youth and agricultural workers) and dovetail with national goals for planting more carbon-sequestering vegetation. This is a climate change solution with a direct connection to the issues that voters care about. Notably, vetiver can also be harvested for use in cosmetics, perfumes, and other personal care products. It can also be used as a feedstock for producing cellulosic ethanol, a renewable fuel. Producing these products domestically using vetiver would also give a boost to Modi’s “Make in India” initiative.

While Modi’s emphasis on building infrastructure for transportation, power, and sanitation has proven popular with the Indian public, more can be done to improve the country’s water management. Rainwater and floodwater retention systems have a long history in India, with the famous Rani Ki Vav stepwell and rainwater retention system (located in Modi’s native state of Gujarat) even being featured on the one-hundred-rupee note. A government coalition program that emphasizes such kinds of water catchment systems would help recharge local groundwater and reduce the impacts of flooding, creating value for the agricultural sector while also allowing Modi to lean into traditional practices that provide a source of national pride. 

There are many climate change programs that connect with kitchen table issues and resonate especially well with farmers and youth; Modi has an opportunity to strengthen support for the BJP by redirecting some of his energies to these programs. His prior use of short-term subsidies on grain and cooking gas temporarily obscured underlying problems without fixing them (which likely had the effect of inhibiting the development of long-term climate solutions). Similarly, export restrictions on rice and other agricultural commodities dampened market demand and farmers’ incomes in the name of marginally helping the common person. Instead of these approaches, Modi and his coalition government would be well served by promoting long-term, job-creating solutions, such as those involving bio-CNG, vetiver grasses, and water retention and detention.

Whether acknowledged or not, climate change influences the Indian electorate and underlies the discontent felt by many voters. Importantly, making progress on climate change in ways that are highly visible to the common person will help galvanize support from India’s youth, who currently have pessimistic views of humanity’s prospects of enduring climate change. They also happen to be the key to winning future elections.

Shék Jain is a nonresident senior fellow at the Atlantic Council’s South Asia Center and chairman of the Pura Terra Foundation.

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The most consequential new class of AI, generative AI, is able to analyze and create text, audio, code, and even molecular design—doing so faster and often with higher quality than human-created counterparts. Generative AI uses extraordinary volumes of training data and novel data-processing mechanisms which require unprecedented computational power. Data center load growth, driven by a range of factors, is forcing utilities across the United States and Europe to revisit system planning needs. Indeed, this added demand is—in some regions—delaying the retirement of coal-fired power plants. To ensure that climate targets are met, data center growth must coincide with transmission upgrades, energy efficiency improvements, and new low-carbon generation capacity. More broadly, policymakers must also consider how to harness the potential from generative AI while managing complex uncertainties, from inaccurate outputs and data leakage to AI-enabled cyberattacks on critical infrastructure. The deployment of generative AI will require rigorous human oversight, particularly in the early stages.

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Given the capabilities of generative AI, integration into organizational workflows can help energy stakeholders in multiple ways—for example, lower regulatory compliance costs, consider strategic planning options, and evaluate the financial risk around their low-carbon investments, among others.

1. Strategic planning

Recent demonstrations of generative AI capabilities are impressive. Generative AI can already outline, summarize, and draft documents cheaper and faster than many humans. It can also help humans conduct strategic tasks more effectively. A study by Harvard Business School examined the effects of GPT-4—the model behind ChatGPT—on knowledge workers’ productivity, finding that GPT-4 significantly improved workers’ abilities to generate effective ideas and develop implementation plans. Another study from University College London found that a collection of LLMs could give strategic recommendations at a comparable level to human experts. As strategic planning use cases are systemic and across industries, improvements in productivity would apply across the decarbonization value chain.

2. Regulatory compliance

Some generative AI use cases will directly enhance clean energy project developers’ ability to manage cumbersome regulatory processes. As generative AI capabilities are integrated into institutional workflows, they will assist on tasks ranging from simple emails to complex, costly, and time-consuming regulatory processes. The Pacific Northwest National Laboratory, as part of its PolicyAI, initiative, recently found that LLMs could streamline the public comment-review process under the National Environmental Policy Act (NEPA), which is burdensome for many renewables firms.

Importantly, generative AI may aid regulators by accelerating reviews of a variety of environmental impact studies. For instance, after New York State attempted to ease traffic and pollution by passing traffic congestion pricing, an exhaustive environmental review took five years and more than 4,000 pages of analysis. By streamlining portions of these document-intensive regulatory tasks, generative AI can speed up environmental reviews, giving infrastructure projects a quicker go/no-go decision.

3. Decarbonization investment analytics

A range of AI tools, using both existing techniques and generative AI, are being developed to assist with financial and economic modeling, a critical but resource-intensive task for renewable energy projects. While still at the early stages, generative AI tools may be able to partially or even fully build financial models or propose complex scenario plans. In addition, AI is already being used to enhance corporate due diligence by detecting anomalies in financial statements, summarizing earnings call transcripts, or rapidly analyzing trade press. These capabilities will continue to assist both investors and corporate mergers-and-acquisitions teams in their decarbonization investments.

4. Energy asset management

Financial and economic modeling tools overlap with another essential aspect of decarbonization: advanced energy asset management. Currently, communications with energy asset field operators are typically executed via middle management and dashboards with both planned and ad hoc analytics. Generative AI may enable more simplified analytics and communication with the workers physically assessing and repairing assets. At the energy asset management level, generative AI tools could deliver improvements in compiling, summarizing, and communicating asset performance in a customized manner for financial managers. 

5. Wildfire risk assessment

In parallel to generative AI, another area of quiet yet significant advancement has been machine-learning (ML) models for weather forecasting, which have produced some extraordinary results. Further advances in weather forecasting could help mitigate the climate change-driven fire season. Wildfires themselves exacerbate the climate crisis—global fires produce emissions of about 2 gigatons of carbon dioxide equivalent per year, equal to 4 percent of total global emissions. These fires can also force large populations indoors for weeks due to health risks and poor air quality. Further investment in AI/ML-based modeling could help manage these risks by predicting the probable location and magnitude of potential wildfires and improving real-time surveillance of smoke, enabling firefighters to combat the over 80,000 wildfires that occur in the United States alone every year. 

Despite the current AI hype cycle and the early-stage risks around generative AI, improving the broad range of AI models will be integral to developing a low-carbon economy. The magnitude and pace will be difficult to predict, as models are integrated into institutional workflows. Human oversight, particularly around critical infrastructure, must remain comprehensive. If managed appropriately, these emergent capabilities will yield important advances in regulatory analysis, environmental management, strategic planning, and an array of challenges essential to achieving net-zero emissions.

Joseph Webster is a senior fellow at the Atlantic Council Global Energy Center.

Shaheer Hussam is a partner at Aetlan, an energy advisory and analytics firm.

EnergySource

EnergySource is the Global Energy Center’s (GEC) online publication providing commentary and analysis on developments in the energy and climate sector from a wide-array of thought leaders, politicians, and experts.

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EnergySource Oct 14, 2020

Artificial intelligence can protect all companies in the energy transition from cyberattacks

By Leo Simonovich

The operational and information technologies responsible for running energy systems today were never engineered to be secured in a digital environment, posing a technical challenge tough to solve and difficult for small and mid-sized operators to afford. New developments in artificial intelligence-based solutions can help all energy companies put defenders ahead of attackers, while adapting to the changing energy landscape.

Cybersecurity Energy & Environment

EnergySource Jan 21, 2021

Why digitalization is the future of energy as big oil and gas players decarbonize

By Leo Simonovich

The way companies handle the rapid transformation caused by digitalization across their value chains—and their resilience and security against cyberattacks—will become a major market differentiator. As the oil and gas industry increasingly relies on digitally connected energy assets, automation, and remote operations, cyber risks will have a direct, and growing, impact on operations. Cybersecurity is quickly becoming a key enabler of companies’ competitive advantage in the digitized energy future, protecting core value by ensuring trust and providing stability of operations and resilience against unplanned outages.

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EnergySource Aug 9, 2023

The IRA supercharged US R&D. But does it go far enough?

By William Tobin

The IRA intends to stake a claim for US leadership in decarbonization by providing much needed funding for key clean energy research programs. However, US R&D spending has still not reached parity with historical levels.

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The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

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A recent survey by the Yale Program on Climate Change shows that Indians are highly aware of climate change and its impact on India’s future: A staggering 86 percent “favor the Indian government’s commitment to reduce India’s carbon pollution to nearly zero by 2070.” According to the survey, 85 percent agree that “transitioning from coal to wind and solar energy to produce electricity will reduce air pollution,” and 82 percent say “doing so would reduce global warming.” Surprisingly, the survey revealed that 84 percent “favor banning the construction of new coal power plants, closing existing ones, and replacing them with solar and wind energy.”

At the same time, Indians are concerned about the unintended consequences of climate change policies. The Yale survey showed that 61 percent say transitioning from coal to wind and solar energy to produce electricity “will increase unemployment in India,” 58 percent say “it will cause electricity outages,” and 57 percent say “it will increase electricity prices.” 

Indians are aware that they are among the world’s top emitters of greenhouse gases, including carbon dioxide (CO2). India’s CO2 emissions are relatively low per capita, ranking just sixteenth in Asia and ninety-ninth globally. But India’s burgeoning population, need for economic and job growth, and role in the global digital and technology ecosystem mean that India will need multiple power sources, including coal and other fossil fuels, for the near future. In fact, the International Energy Agency’s 2021 India Energy Outlook notes that the country needs to add a power system the size of the entire European Union grid to meet its energy requirements over the next twenty years. A blend of energy sources that moves swiftly toward green energy is the only viable option.

Indian leaders have committed to lowering their country’s dependence on coal and other fossil fuels, reduce its carbon intensity by 45 percent, and achieve 50 percent cumulative electric power from renewables by 2030. Equally ambitious, India would like to achieve net-zero carbon emissions by 2070. A 2023 report by the International Energy Agency stated that India is expected to produce over half of the world’s new capacity for renewable energy over the next three years. Much of this should be credited to India’s aggressive renewable energy policies.

Three opportunities for Modi to boost clean energy

But with Prime Minister Narendra Modi winning a historic third consecutive term, leading a coalition government, he has the mandate to go beyond issuing regulations and providing government financing. There are three opportunities that the Modi government could take right away to further support and strengthen its clean energy agenda.

First, businesses require certainty. Indian laws and regulations are not required to have sunset provisions and can be revoked or terminated at any time. This discourages large-scale private sector commitments and investments. Defined regulatory and legislative terms articulate the government’s commitment to its policies and allow businesses to accurately assess its financial commitments. Similar to the United States’ 2022 Inflation Reduction Act, the Modi government could commit to a ten-year sunset for its clean energy programs. After ten years, when the regulations need to be reauthorized, the laws can be updated to meet current demands.

Second, to help support clean energy businesses, the government needs to expand its institutional capacity at the state level and properly invest in education systems to produce a skilled workforce.

Third, with the increase in power generation, India must ensure that its electrical grids can receive and transmit the power to customers (the last mile). Failure to do so could cause India to miss its clean energy targets and lead to a slowdown in economic and job growth.

Over the past three decades, more than 3,500 climate policies have been announced by nations around the world, according to the World Economic Forum. From 2010 to 2015, China issued the highest number of climate policies. But from 2015 to 2022, India took the lead by issuing more than fifty climate change policies. These ranged from production-linked incentive schemes to policies that encourage the use of clean energy products such as rooftop solar energy. This multifaceted approach is backed with the objective of reducing India’s carbon intensity by 45 percent compared with 2005 levels and generating 50 percent of electric power from renewable sources by 2030.

What the private sector is already doing

The private sector has positively responded to India’s ambitious goals. For example, in 2022 the Adani Group* started developing the world’s largest renewable energy park. Through an ecosystem of manufacturing, generation, and transmission, the Khavda renewable energy park, located in the deserts of Gujarat, is combining wind and solar power to generate 30 gigawatts of energy for the national grid. When completed in 2029, the park will power 16.1 million homes and eliminate 58 million tons of CO2 emissions annually, the developers say. To put that in perspective, it is the equivalent of planting more than two billion trees or not burning 60,300 tons of coal each year. Another massive Indian conglomerate, Tata Group, recently completed India’s largest solar and battery energy storage system via its Tata Power Solar Systems subsidiary. Tata says that the facility, which is in Chhattisgarh, combines a 100 megawatt solar photovoltaic project combined with a 120 megawatt hour battery storage system. The developers expect the project to reduce India’s carbon footprint by 4.87 million tons of CO2 over twenty-five years.

However, more is needed. The Adani Group has the size and diversity of businesses to marshal the necessary resources to build something like Khavda. It was able to develop the basic infrastructure—including the roads and telecommunications systems, an airstrip, a self-sustaining ecosystem for a workforce of more than eight thousand, and the transmission lines—within twelve months of launching the project. But Adani, Tata, and other major Indian conglomerates are the exception more than the rule in terms of ability to marshal resources.

To encourage even more private capital and participation, public-private partnerships (PPPs) will be needed. For example, earlier this year, First Solar inaugurated India’s first fully vertically integrated solar manufacturing plant in Tamil Nadu. Buoyed by a $500 million loan from the US International Development Finance Corporation, the First Solar facility will produce its Series 7 photovoltaic solar modules supported by an annual capacity of 3.3 gigawatts while employing approximately one thousand people. This can be a model for future PPPs.

India’s emissions will continue to grow before they peak and fall. The question is, can a third Modi administration continue creative policies that fulfill India’s ambitious climate goals—and will the rest of the world meet India both where it is today and can be tomorrow?

Kapil Sharma is the acting senior director and a senior fellow at the Atlantic Council’s South Asia Center.

Note: The Adani Group is a donor to the Atlantic Council’s South Asia Center.

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This is a report from the Atlantic Council’s Adrienne Arsht Latin America Center in partnership with the US Department of State. This readout was informed by multi-stakeholder dialogues focused on facilitating greater, constructive exchange among multi-sectoral thought leaders and government leaders as they work to implement commitments made at the Ninth Summit of the Americas.

Executive summary

On March 14, the Atlantic Council’s Caribbean Initiative partnered with the US Department of State to organize the PACC 2030 Road to Implementation Summit on the sidelines of the Energy and Climate Partnership of the Americas Ministerial Meetings in the Dominican Republic. The summit built on the PACC 2030 Climate Resilient Clean Energy Summit, which took place on the sidelines of US Vice President Kamala Harris’s inaugural trip to the Caribbean in June 2023, and previous partnerships with the Department of State to advance commitments adopted at the Ninth Summit of the Americas in Los Angeles in 2022. Since then, the Atlantic Council has organized a PACC 2030 Working Group and has worked closely with governments, the business community, and civil society organizations to support the implementation of PACC 2030’s objectives.

5 recommendations for implementing PACC 2030’s commitments:

Report

Apr 16, 2024

Advancing health and resilience policies in Latin America and the Caribbean

By Isabel Chiriboga, Martin Cassinelli, Diego Area

During an off-the-record private roundtable, thought leaders and practitioners from across the Americas discussed how to further enhance access to and finance for health services and products in the region.

Coronavirus Latin America

Summit of the Americas

Amid global uncertainties and new challenges, the ninth Summit of the Americas is a renewed opportunity to bring about hemispheric cooperation and consensus to reach regional prosperity and security.

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Hurricane readiness: Building climate resilience in the Caribbean

The conversation is part of the Caribbean Initiative’s continued focus on how climate change impacts the region.

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Road to the Summit. Responding to the next disaster: Building health and climate resilience in the Americas

A conversation to generate strategies for creating stronger hemispheric collaboration ahead of the ninth Summit of the Americas.

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The joint future of the Caribbean working with Latin America

A series of discussions featuring heads of state and government following the conclusion of the Summit of the Americas.

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Severe weather is not a new phenomenon for the state, which has seen record-breaking rainfall in recent years. A foretold tragedy, the flooding in Rio Grande do Sul is the fourth weather-related crisis to hit the state in less than a year. At the end of 2023, Rio Grande do Sul saw a similar situation, when a heat wave exacerbated intense storms and major flooding.

The region is prone to weather-related disasters, and the current flooding has been linked to the periodic El Niño weather phenomenon. In the past few decades, the state’s capital city, Porto Alegre, has adapted to control the extent of the impact of torrential rains on the city. However, the infrastructure in place must be updated to the new reality of extreme weather events, which are more intense due to climate change. Designing suitable financial instruments for resilient infrastructure with support from international and domestic financial institutions will be crucial.

The extent of this disaster is immense. To put it into perspective, about 90 percent of the 497 municipalities in Rio Grande do Sul were impacted by the rain and flooding. Brazilians are bearing the immediate brunt of these floods, including on their economy. There will also be implications for global trade and food security in the weeks and months ahead.

Rio Grande do Sul is an important state for Brazil. It represents 6 percent of the country’s gross domestic product (GDP), the fifth largest state GDP in the country. A major agribusiness state, it accounts for 70 percent of Brazil’s rice production. It is a significant producer of soybeans—of which Brazil is a leading producer and exporter—and an important meat-producing state. And while in Rio Grande do Sul rain continues to fall, not too far from there, in other regions of Brazil, farmers are suffering through a winter drought.

The governor of Rio Grande do Sul, Eduardo Leite, estimates that a yearslong reconstruction plan costing some nineteen billion reais (around $3.7 billion) will be needed in his state. Private sector investments and insurance could play a crucial role in supporting the recovery of the region, implementing adaptation measures and building the resilience of the affected communities. This level of support now will be critical to reduce future losses and tap into the immense economic, social, and environmental benefits of investing in adaptation and resilience. According to one recent estimate, each dollar invested in resilience and adaptation could generate up to twelve dollars in economic benefits.

Local and federal governments must take on the responsibility to put climate adaptation at the core of their strategic plans and development efforts. Countries must prioritize adaptation and resilience investment plans that strategically crowd in private sector investments and ensure that subnational governments and local communities can access insurance and financing to adapt and build resilience. Brazil is in a unique position to do so. With Brazilian municipal elections in October, this is a crucial moment for Brazilians to institutionalize climate mitigation and adaption efforts as part of local governments’ agendas.

At the geopolitical level, the G20 Leaders’ Summit in Rio de Janeiro in November will be an opportunity for Brazil to drive the climate adaptation agenda forward and to obtain buy-in and financing from the largest economies in the world. COP30 in Belém, Brazil, in 2025 is another such opportunity. The site for COP30, located in the Amazon rainforest in Brazil’s north, was chosen in part to showcase the roles of biodiversity, sustainability, and conservation in climate action. The flooding in the country’s south will be a tragic reminder of the importance of adaptation being central to the climate agenda, as well.

Valentina Sader is a deputy director at the Atlantic Council’s Adrienne Arsht Latin America Center, where she leads the Center’s work on Brazil, gender equality and diversity, and manages the Center’s Advisory Council.

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The Select Committee’s report, published in December with minimal fanfare, proposes that the United States reset the terms of economic relations with the People’s Republic of China (PRC), prevent US capital and technology from aiding China’s military buildup and human rights violations, and build US technological leadership alongside allies and partners. This bipartisan blueprint, though not perfect, is a useful foundation for US policy toward the PRC for the next Congress and the next administration—regardless of who wins the November elections.  

The authors of this article come from different political perspectives, but we agree that it’s time for a comprehensive economic strategy to advance US interests and deter the PRC’s ability to do them harm. Building on the Select Committee’s work, here are eight principles to inform a comprehensive playbook.

1. Be affirmative, agile, and systemic

Defense alone is not enough to prevail in the United States’ strategic competition with the PRC. The economic playbook needs to be affirmative in its outlook, agile in its execution, and systemic in its analysis. Those qualities will be required to simultaneously strengthen the US industrial base, foster innovation and new technologies, and pursue a positive economic agenda with partners and allies while taking the necessary defensive actions.

2. Get industrial policy right

Policymakers should look to history and geopolitics to develop a prudent two-pronged approach to industrial policy that focuses on strengthening the US domestic manufacturing base in targeted sectors (e.g. semiconductors) and investing in innovation and broad industrial infrastructure and training. Investment in research and development and a favorable tax and regulatory environment may be more effective than direct subsidies, which, although potentially needed in narrow circumstances, are more susceptible to industry capture and extra-economic considerations.   

3. Arrest the PRC’s market distortions and manipulations

The PRC has not lived up to the commitments it made when it joined the World Trade Organization (WTO) in December 2001. Nowhere is this more obvious than with respect to the PRC’s brazen and persistent excess capacity in electric vehicles, solar panels, steel, semiconductors, and pharmaceuticals, just to name a few. It is imprudent for the United States to afford China the same tariff treatment as other WTO members. However, merely revoking the PRC’s permanent normal trade relations status and reverting to Smoot-Hawley tariffs would be inefficient, outdated, and counterproductive. The Select Committee report puts forth a more sophisticated and effective approach by creating a new tariff column for China and renewing certain WTO safeguard mechanisms. This offers a promising foundation for a more modern and modulated trading framework with the PRC and should be put in action in close coordination with Group of Seven (G7) and Quadrilateral Security Dialogue members.

4. Stop US capital and technical knowhow from aiding the adversary

Export control measures on semiconductors and other advanced technologies put forth by the Biden administration and Congress to thwart the PRC’s military modernization are an important start. Next should come screening of outbound investments to prevent US investors from unintentionally aiding China’s military and human rights violations. This calls for a modulated approach involving both specific entities and sectors. Additionally, the US government should work with domestic and allied academic and research institutions on a principled, pragmatic, and robust cross-border research protocol to preclude the PRC’s intellectual theft and unauthorized technology transfer. 

5. Pursue a positive economic agenda with partners and allies

Punitive measures such as tariffs, investment restrictions, and export controls are necessary but insufficient for winning the strategic competition. A positive economic agenda with partners and allies is needed to incentivize the private sector—both in the United States and overseas—to diversify important supply chains away from China. The Select Committee report promotes bilateral trade negotiations with Taiwan, the United Kingdom, and Japan based on the high standards set out in the US-Mexico-Canada trade agreement. If a new free trade agreement is practically or politically challenging, the report suggests targeted agreements with trusted trade partners in areas such as the medical sector or critical minerals. As part of this effort, a comprehensive review and modernization of the Bretton Woods institutions to better reflect geoeconomic realities is urgently needed. 

6. Win the transition to the green economy

The road to the green economy rests wholly within the geopolitical and geoeconomic contest between the United States and the PRC. The United States should leverage its substantial advantages over the PRC in traditional and renewable energy and technology to address the immediate energy security needs of its partner nations while also offering them a credible energy transition toward a greener economy.

To ensure that its energy supply chains remain secure and that it remains energy independent, the United States should aggressively pursue sectoral agreements and minerals security partnerships recommended by the Select Committee report. Furthermore, the United States should remain vigilant against climate engagement with the PRC without due reciprocity and must avoid unwittingly facilitating the PRC’s declared intent to monopolize and dominate future green industries.

7. Set the trends around standards for the digital economy

As the world’s largest digital economy, the United States bears the responsibility to articulate the rules, norms, and practices of digital governance—including over artificial intelligence—that favor Western values over China’s model of censorship and control. The United States must lead on digital standards in order to keep its superiority in technology and financial markets. 

8. Modernize US policies, instruments, and institutions

Unlike defense and diplomacy, there is no identified lead US agency to engage and prevail in the economic competition with the PRC. The diverse and often discordant set of economic policies, instruments, and institutions engaged in the effort are frequently found wanting in both efficacy and efficiency. In short, US institutions are underprepared for the complexity of economic competition with the PRC. The United States has a long history of modernizing its government levers to address the challenges it confronts, from the 1986 Goldwater-Nichols legislation to reinforce the military chain of command after problems surfaced during military operations in Iran and Grenada, to post-9/11 reforms to federal intelligence and law enforcement agencies. A similar endeavor is needed to improve US economic diplomacy, coordination, and engagement.

Prevailing over the PRC in economic competition calls for total national commitment and engagement. It requires a comprehensive, nuanced, and tailored playbook utilizing not only the proverbial hammer and scalpel, but all the multipurpose tools in the toolbox. The Select Committee has done the nation a service by unequivocally identifying the PRC as an adversary and a rival, and it put forth a useful framework with pragmatic recommendations to bolster national economic security. Its report represents a useful transition from the initial chapter prioritizing industrial policy and tariff measures to the next chapter of working with allies and partners to prevail in the global marketplace.

Domestic prosperity depends on the United States leading the global economy. Now is the time to develop and execute a new US economic playbook to maintain that lead. 

Kaush Arha is a nonresident senior fellow at the Atlantic Council’s Global China Hub and previously served as the senior advisor for global strategic engagement at USAID and the G7 Sherpa for the Blue Dot Network during the Trump administration.

Peter Harrell is a nonresident senior fellow at the Carnegie Endowment for International Peace and previously served as senior director for international economics with a joint appointment to the National Security Council and National Economic Council during the Biden administration.

Clete Willems is a nonresident senior fellow at the Atlantic Council’s GeoEconomics Center and previously served as deputy assistant to the president for international economics and deputy director of the National Economic Council during the Trump administration.

The post A new US economic playbook to lead the world economy and counter China appeared first on Atlantic Council.

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The commitment of “phasing out coal by 2035 or on a timeline consistent with the 1.5 temperature limit” marks a further step in the direction indicated last year by the UN climate summit, known as COP28, to reduce the use of fossil fuels, of which coal is the most polluting. Mentioning the IEA’s Net-Zero Roadmap report, G7 countries say that “phase-out of unabated coal is needed by 2030s in advanced economies and by 2040 in all the other regions, and that no new unabated coal power plant should be built.” This represents the first agreement on a timeline for phasing out coal after the initiative had previously failed due to opposition by some members. However, it should be noted that, despite the positive step towards a common goal, by using the term “unabated” in the communication, members of the G7 leave open a potential path for the use of coal beyond the indicated timeline. 

In addition to the importance of ending coal reliance, it is now widely recognized that the success of the energy transition is linked to a technology-inclusive approach both for reaching climate neutrality and strengthening energy security. The communication of the G7 promotes members’ increasing use of diverse low-carbon energy technologies including renewable energy, energy efficiency, hydrogen, carbon management, storage, nuclear energy, and fusion.

Energy ministers fully committed to the “implementation of the global goal of tripling installation of renewable energy capacity by 2030 to at least 11 terawatts (TW)” and to “double the global average annual rate of energy efficiency improvements by 2030 to 4%,” signaling the intention to create a strong connection with COP28 pledges.

On energy storage, G7 members agreed to a global goal in the power sector of 1500 gigawatts (GW) in 2030, a more than six-fold increase from 2022. Introducing this target for storage is very important to support renewable implementation and ultimately reach the installation capacity target set in Dubai.

The communication highlights the importance for countries to reduce reliance on civil nuclear technologies from Russia and commits to strengthening the resilience of the nuclear supply chain. Countries opting for nuclear energy would work to deploy next generation nuclear reactors.

Fusion made it in the final text with a strong emphasis on the potential of this technology to provide a lasting solution to the global challenges of climate change and energy security in the future, marking an important addition to the G7 joint communication, since in the Hiroshima Communique, fusion was not mentioned.

In order to implement these targets and scale technologies, the G7 countries this year also reaffirmed their commitment to jointly mobilize $100 billion per year until 2025 and their intention to scale up public and private finance. “We stress the need to accelerate efforts to make finance flow consistent with a pathway towards low greenhouse gas emissions and climate-resilient development,” and “we acknowledge that such efforts involve the alignment of the domestic and international financial system.” Attention is now directed toward the upcoming G7 finance meeting, the G20 in Brazil, and the “finance COP” in Azerbaijan.

Finally, convergence and cooperation with countries outside the G7 will play a crucial role in the success of the transition. The joint communication acknowledges that developing countries represent “an important partner in the just energy transition” and recognizes “the great potential of the African continent in becoming a global powerhouse of the future.”

At this year’s energy ministerial meetings, Azerbaijan’s Deputy Minister on Energy Elnur Soltanov (representing the 2024 COP29 presidency), Brazil’s Minister of the Environment and Climate Change Marina Silva (representing the 2024 G20 presidency), and Kenya’s Principal Secretary on Energy Alex K. Wachira, participated along with the G7 partners. This approach shows recognition of the fundamental role that inclusivity plays in a successful transition and the willingness to create strong synergies with the upcoming multilateral forums.

It would be difficult to overstate just how critical pragmatism and convergence are to the energy transition. But this message, in addition to being successfully incorporated in the communication was further reinforced during the Future of Energy Summit, a half-day event hosted by the Atlantic Council Global Energy Center, Politecnico di Torino, and World Energy Council Italy as part of Planet Week on the sidelines of last weekend’s G7 ministerial meeting. Experts and speakers at the Summit emphasized the need to strengthen a technology-inclusive, not exclusive, approach and cooperation among countries.

The IEA’s Net Zero Emissions by 2050 Scenario (NZE) envisages that by 2030, advanced economies would end all power generation by unabated coal-fired plants, making the new G7 historic commitment unfit for purpose. However, the overall success of the transition will not be determined by pledges, but more so by the will of countries to transform pledges into action. Whether G7 countries will be able to succeed in the energy transition will depend on their capacity to create resilient clean energy supply chains, implement diversified energy mixes, promote collaboration with developing countries, scale up public and private finance, and it seems like many steps are being taken in the right direction. 

Elena Benaim is a nonresident fellow with the Atlantic Council Global Energy Center.

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What can Europe learn about decarbonization from the US Green New Deal? How can climate action now save costs for healthcare later? Do we need more advanced renewable energy technologies to successfully reduce carbon emissions at the necessary rates?

On this episode of #AtlanticDebrief, Carol Schaeffer sits down with ark Z. Jacobson, Professor of Civil and Environmental Engineering and Director of the Atmosphere/Energy Program at Stanford University about what challenges policymakers need to consider in developing renewable energy infrastructure.

You can watch #AtlanticDebrief on YouTube and as a podcast.

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The post #AtlanticDebrief – What lessons can the EU take from the US Green New Deal? | A Debrief from Professor Mark Z. Jacobson appeared first on Atlantic Council.

With wars raging in Ukraine since 2022 and in Gaza since October 2023, not to mention other conflicts, one question that comes to mind is the cost in terms of climate change. First, direct conflict-related emissions from military equipment, damage to facilities that cause emissions—such as fuel reserves and chemical plants—or fires, and a reversion and reliance on carbon-heavy fuels, including coal. Most estimates quantify emissions from the Ukraine conflict, for example, as equivalent to Belgium’s annual emissions. The other is the opportunity cost of the lack of cooperation on climate issues across borders. (For more on this topic, see the author’s forthcoming report for the Atlantic Council to be released in summer 2024.) 

As long as Israel and Lebanon, for example, cannot agree how to cooperate on optimizing exportation from the region and eventually transition out of natural gas reserves from any shared sources towards cleaner sources of energy, both countries and the wider region will lose. (It’s worth noting that under the important Lebanese-Israeli Maritime Agreement, brokered by the United States, there are some provisions for how the parties will exploit any said gas fields and any revenue therein, but as long as the parties are not in direct contact and dependent on mediation, any additional prospect for cooperation beyond exploitation and border demarcation likely will be limited.) The same principle applies to cooperation in mitigation of extreme weather impacts through exchange of meteorological data, for example. The first cost is more straightforward to quantify, but the consequences of the second cost will only be assessed by future generations. These are the “double costs” of conflict-driven climate change impacts.

With the ongoing wars, it’s easy to dismiss the notions of climate change cooperation across borders as detached from reality. Unfortunately, the devastating impacts of climate change are not going away because of the existential threats posed by conflict. Instead, they are being worsened because of conflict.

For most countries, climate change has become a national security issue as they face mounting challenges from its impacts. In the MENA region, the risk for conflicts increases as the region becomes dryer, with scarcer sources of water, food, and energy. As the region looks to undertake an effective energy transition—which entails sharing of emission-reduction technology such as carbon capture, interconnecting electricity grids that are also capable to include increasingly renewable energy-based electricity, etc.—cooperation across borders becomes critical. Unless countries in the region and beyond find ways to work to mitigate and adapt together, it will turn into a race to the bottom—a lose-lose situation. 

As long as the world has reckless and authoritarian leaders who are bent on continuing to rule by force and conflict, the rest of the world will suffer. Beyond the immediate loss of human life in conflict zones—including Ukraine, the Israel-Hamas war, Sudan, and Myanmar—other parts of the world will suffer the impacts of the “double cost” of climate change due to these events. 

The trouble is that most politicians think short-term due to election cycles. So, medium- to long-term climate impacts are often not prioritized. Democratic countries governed by policies endeavoring to tackle climate change impacts can play an important role, as has been demonstrated by governments in Europe and North America. However, the continued success of such policies only works as long as a new government isn’t sworn in with a change of policy towards climate change, which undermines the milestones achieved. This was evident when then US President Donald Trump withdrew from the Paris Climate Accord in 2020. If he returns to the White House, Trump may repeal the Inflation Reduction Act, a move that would take away incentives for companies to invest in cleaner energies and, rather worryingly, send a strong signal to other global players that the United States is not a reliable partner for dealing with climate change.

A successful energy transition will address developing and developed economies’ current real energy needs, including hydrocarbons, for a defined period. However, it will critically establish medium- to long-term plans to scale up green energies. Moreover, democratic systems of government with policies and agendas in place to adapt and mitigate the effects of climate change would be wise to consider establishing mechanisms that help ensure the longevity of these policies beyond a change of government. This is a tall order to ask democratic governments to do, especially as the tools they have to limit the ability to reverse such policies are restricted. Nonetheless, the more such policies are enshrined, for example, in international relations, and with clear economic incentives, the more difficult it is to undo them. 

While it is tempting to focus on the here and now, especially with respect to devastating live conflicts, it is critical to equally take steps to enable climate change mitigation and adaptation cooperation across borders—including across conflicting ones. Although nearly impossible to contemplate in the midst of conflict, this is precisely what needs to be done. Warmongering leaders in the region and beyond inflict not only direct losses today, but the impacts will be felt for generations to come. In the national security realm of climate change, this means that damage done to the planet is not just the direct emissions from conflict but also the opportunity cost of the lack of cooperation in dealing with the largest threat facing humanity. The “double costs” of conflict-driven climate change need to be understood and acted upon today in the MENA region and beyond.

Ariel Ezrahi is a nonresident senior fellow with the Atlantic Council’s Middle East Programs. Ezrahi currently serves as the director of climate strategy at a fintech fund. Ezrahi is also on the board of the MENA2050 Climate Action Committee and the chairman of its Energy Transition Subcommittee. He was the architect of the Gas for Gaza project, the inaugural director of energy at the Office of the Quartet, and the Energy Adviser to the Quartet Representative, former UK Prime Minister Tony Blair. 

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The second half of the twentieth century experienced significant economic integration. International trade, cross-border migration, capital flows, and technological diffusion increased per capita incomes across countries and reduced global poverty.1 However, events such as the global financial crisis of 2007 to 2009, Brexit, and the COVID-19 pandemic—all against the backdrop of escalating great power rivalry and tensions between the United States and China—have demonstrated the rise of geoeconomic fragmentation (GEF). Since the 2022 Russian invasion of Ukraine, a growing numberof world leaders have addressed the impacts of GEF on global energy and agricultural markets. For one, higher and increasingly volatile food and energy prices have made it increasingly difficult for developing nations to prioritize environmental concerns and implement sustainable development initiatives.

The International Monetary Fund (IMF) describes GEF as a pattern of “policy-driven reversal of global economic integration” that threatens capital flows to low-income countries, hinders innovation in emerging markets, and discourages cooperation on international crises. Stemming from the prioritization of national security objectives, GEF takes the form of policies that reduce reliance on other countries by incentivizing domestic production and employment. In our increasingly fragmented world, nations have focused on reshoring essential goods and supply chains, including minerals crucial for green technologies, semiconductors, and military hardware due to concerns over national security and geopolitical motives. These transformations are in direct opposition to the founding principles of the Bretton Woods institutions (BWIs)—the International Monetary Fund, the World Bank, and the World Trade Organization (WTO)— which collectively seek to promote free trade, globalization, unified and competitive exchange rates, and the reorientation of public expenditures to achieve reductions in global poverty and increased economic prosperity for developing nations.

The costs of GEF are far-reaching and include higher import prices, segmented markets, diminished access to technology and labor, reduced productivity, and lower living standards. A June 2023 article in the IMF’s Finance & Development magazine points to diminished output in a scenario where countries must align with either a US-EU as 2.3 percent of global gross domestic product (GDP). Advanced economies and emerging markets could face permanent losses of between 2 percent and 3 percent, while low-income countries are at risk of losing more than 4 percent of their GDP. These losses could deepen risks of debt crises, exacerbate social instability, and increase food insecurity. The most vulnerable nations, heavily dependent on the imports and exports of key commodities, will find it particularly costly to adapt to new suppliers under fragmented trade conditions. Moreover, a 2023 IMF paper with a comprehensive analysis of GEF and its potential effects on the future of multilateralism found that increasing international trade restrictions could lead to a long-term decline of up to 7 percent in global economic output, or approximately US$7.4 trillion. Building on these findings, an October 2023 IMF blog, titled “Geoeconomic Fragmentation Threatens Food Security and Clean Energy Transition,” argued that disruptions in the global trade of goods induced the spike in inflation experienced globally in 2022, heightened food insecurity in lower-income nations, and contributed to a deceleration in global economic growth. In addition, GEF is posing a threat to food security and the clean energy transition, namely by impacting the trade of essential minerals and agricultural goods, according to the blog co-authors.

GEF also risks short-circuiting the multilateralism needed to coordinate climate change mitigation and sustainable development in the years to come. An IMF policy report, titled “Geo-Economic Fragmentation and the Future of Multilateralism,” noted signs of GEF including:

• Formation of regional economic blocs.
• Declivities in cross-border capital flows.
• Prioritization of resilient supply chains over and above efficiency.
• Growing income inequality.
• Rising geopolitical tensions.
• Increasing discontent associated with a free trade system.

Among the goals of the BWIs is to achieve global net-zero emissions by 2050; however, GEF has limited these organizations’ abilities to work with governments, businesses, civil society organizations, and other stakeholders to mobilize resources and accelerate the transition to a low-carbon economy. Policymakers and scholars have raised growing concerns, suggesting that increased GEF will have implications for sustainable development outcomes. However, there remains a paucity of research on the impact of GEF on net-zero targets specifically. This report builds on previous scholarly work to examine the impacts of GEF on the ability of nation states to attain their net-zero targets to combat climate change.

In conclusion, the paper calls for a democratized governance structure in the BWIs, emphasizing the need for reevaluating quota allocations and diversifying leadership roles. By addressing these foundational challenges, the BWIs can navigate the complexities of today’s global economic landscape more effectively, fostering trust, representation, and robust leadership. The authors also argue persuasively that BWI reform can not only reinforce the legitimacy of the IMF and World Bank but also indirectly help the soft and hard power of the states most hesitant to reform the international monetary system.

Shirin Hakim is a Senior Fellow at the Center for Middle East and Global Order and a former Bretton Woods 2.0 Fellow with the GeoEconomics Center.

Amin Mohseni-Cheraghlou is the macroeconomist with the GeoEconomics Center and an assistant professor of Economics at the American University in Washington, DC. He leads GeoEconomics Center’s Bretton Woods 2.0 Project.

At the intersection of economics, finance, and foreign policy, the GeoEconomics Center is a translation hub with the goal of helping shape a better global economic future.

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The post Geoeconomic fragmentation and net-zero targets appeared first on Atlantic Council.

Executive summary

As the geopolitical relevance of the Pacific Islands has grown, so too has the attention paid to them by the outside world—including an influx of diplomatic attention, development assistance, and more as external powers seek to curry favor with the sixteen countries. Australia, India, Japan, and the United States—which collectively comprise the Quadrilateral Dialogue (known as the Quad)—have independently and collectively scaled up their engagement with the Pacific Islands.

In doing so, the Quad has sought to pursue a positive, practical agenda that aligns with the Pacific Islands Forum (PIF)’s 2050 Strategy for the Blue Pacific Continent.

Broadly speaking, the PIF members welcome the Quad, but some are critical of the “free and open Indo-Pacific” narrative that undergirds it. As the Quad seeks to bolster its engagement in the Pacific Islands, it should ensure that it accounts for the unique challenges facing this vast maritime region, which relies heavily on foreign assistance.

In 2023, the Quad announced a range of programmatic initiatives intended to address key regional issues, including climate, connectivity, economic development, and maritime security. The bloc is currently standing on solid ground, but the group is still finding its footing as a new player in the complex multilateral architecture in the Pacific Islands.

Looking forward, it should embrace four broad-based, cross-cutting policy recommendations that align with the stated priorities of the Quad, its member states, and Pacific Island countries:

1. Prioritize programs that bolster physical and digital connectivity, such as the Quad Partnership for Cable Connectivity and Resilience that was announced at the 2023 Quad Leaders’ Summit.

2. Emphasize maritime domain awareness and enforcement by providing partners with tools to facilitate greater enforcement capacity and enhanced monitoring.

3. Implement positive, practical programs in areas of strategic advantage that fit into an already-complex regional donor landscape and meet Pacific needs.

4. Take a forward-leaning approach to public diplomacy, including through elevated branding that proactively communicates intent, emphasizes shared values, and does not overemphasize geopolitics.

Introduction

As the geopolitical relevance of the Pacific Islands has grown, so too has the attention paid to it by the outside world. Other issues, from climate change to fisheries, drive engagement as well—but geopolitics is what has drawn the lion’s share of international media coverage and interest from decision-makers in foreign capitals who do not focus on the region day-to-day.

This, in turn, has brought an influx of diplomatic attention, development assistance, and more as external powers seek to curry favor with the sixteen Pacific Island countries.¹ As the most aid-dependent region in the world, this recognition is welcomed, but Pacific Islanders remain leery about geopolitical competition and the detrimental impact it could have on their sovereignty and well-being.

Australia, India, Japan, and the United States have independently and collectively scaled up their engagement with these Pacific Islands. In 2007, the four countries formed the Quadrilateral Dialogue (the Quad), which has become an increasingly important element of the Indo-Pacific’s growing multilateral architecture. It serves as a forum for addressing shared challenges across the Indo-Pacific, including in the Pacific Islands.

In February and March 2024, the Indo-Pacific Security Initiative (IPSI) of the Atlantic Council’s Scowcroft Center for Strategy and Security convened public and private discussions with governmental and nongovernmental experts from Quad member states and Pacific Island countries to formulate policy recommendations for the bloc as it expands activities in the region.

The collective output of those discussions, in turn, is the basis for this policy brief, which provides an overview of the relationship between the Quad and the Pacific Islands as it stands today, followed by a series of policy recommendations for the former as it seeks to bolster its engagement with the latter over the coming years.

The Quad and the Pacific Islands: An overview

It is no coincidence that the Quad’s revival in 2017 came at a time of heightened geopolitical competition in the Indo-Pacific. As noted in the 2023 Joint Leaders’ Statement, its members are committed to ensuring “a free and open Indo-Pacific that is inclusive and resilient” and one where “all countries are free from coercion, and can exercise their agency to determine their futures.”

Alongside other fora, the Quad has become an increasingly important node in the Indo-Pacific’s growing “minilateral” architecture. Cooperation within it focuses on six key areas—climate, critical and emerging technology, cyber, health security, infrastructure, and space—that are reflected by the bloc’s formal leader-level working groups.

While they may skate around thornier issues that could divide the bloc, these agreed-upon priority areas have helped the Quad formulate a positive, practical agenda that will benefit not just the four Quad countries but also partner nations. Leaders’ meetings have become an annual occurrence and overall cohesion in the bloc has increased—no small feat, considering how quickly it went dormant after being first conceived in 2007.

Along with its thematic focus areas, the Quad has emphasized cooperation with countries in three key Indo-Pacific subregions—Southeast Asia, the Pacific Islands, and Indian Ocean rim—and expressly acknowledged the centrality of their respective multilateral forums: the Association of Southeast Asian Nations (ASEAN), Pacific Islands Forum (PIF), and the Indian Ocean Rim Association (IORA).

In the Pacific Islands, the Quad has sought to align itself with the objectives of the 2050 Strategy for the Blue Pacific Continent (2050 Blue Pacific Strategy), a long-term road map for addressing key regional issues that were agreed upon by PIF members in 2022. The PIF strongly encourages external partners to work within this framework, and the Quad’s commitment to supporting its objectives is an important sign of respect for regional institutions.

It should be noted that the PIF is not the only regional institution in the mix; others, such as the Melanesian Spearhead Group (MSG), cater to subregions and may deviate from the PIF at times and contend with it for influence. Furthermore, each of the sixteen Pacific Island countries have unique cultures, histories, and interests. It is therefore important that the Quad members build bilateral relationships with each country rather than opting for the easier route of painting the region with a monolithic brush.

Regional footprint of Quad members

Outside of the Quad framework, Canberra, New Delhi, Tokyo, and Washington also independently maintain regional presences that reflect each country’s unique priorities and interests. The added value of the bloc is its ability to capitalize on members’ regional initiatives to maximize the efficiency and impact of joint initiatives.

Of the four, Australia has historically been the most engaged in the region. It is a PIF member, maintains a comprehensive diplomatic footprint with missions in all sixteen Pacific Island countries, and is by far the single largest aid donor to the region. Canberra possesses unmatched levels of deep and long-term engagements with the Pacific Island countries, but, as with any long-standing bilateral relationship, this inevitably comes with areas of tension.

India has long maintained an interest in Fiji due to the latter’s large Indo-Fijian population but remains a relatively new player in the Pacific Islands region. Its amplified Pacific Islands engagement flows from a broader effort by Prime Minister Narendra Modi to enhance India’s global footprint. For instance, Modi’s 2023 visit to Papua New Guinea included the announcement of a strategic action plan to expand cooperation on a diverse issue set with Pacific Island countries.

Japan has a long history in the region and ramped up its modern-day engagement in the late 1990s, initiating the Japan-Pacific Islands Leaders Meeting (PALM) mechanism in 1997. It is the region’s second-largest provider of overseas development assistance and well-known for its focus on infrastructure and fisheries. As the originator of the “free and open Indo-Pacific” concept, it has been a leading voice for increasing regional cooperation through mechanisms like the Quad.

The United States has deep regional roots due to its ties with the three freely associated states² (FAS) and the geographic location of the US State of Hawaii within Polynesia. The United States significantly scaled back its regional presence in the early 1990s and only truly returned to previous levels of engagement in the late 2010s due to rising geopolitical competition. Since then, it has reestablished itself as a regional player by amplifying development aid, opening new embassies, and more—but questions linger about its long-term reliability and staying power.

All four countries have broadened their engagement in the region. Although Australia is the only full member of the PIF, India, Japan, and the United States hold observer status. They also maintain their own dialogue mechanisms with Pacific Island countries—for example, India’s Forum for India-Pacific Islands Cooperation and the now-annual US-Pacific Island Forum Leader’s Summit. Additionally, Australia, Japan, and the United States are members of the Partners in the Blue Pacific (PBP) mechanism.

The view from the Pacific Islands

With a collective exclusive economic zone (EEZ) of over sixteen million square kilometers, the Pacific Islands occupy nearly 10 percent of the world’s maritime space. In recent years, Pacific Island countries have sought to define themselves as “large ocean states” instead of the more common moniker of “small island states.” Their maritime nature is a defining, cross-cutting feature of the region.

Broadly speaking, the Quad has been welcomed, albeit not universally. Some are critical of the “free and open Indo-Pacific” narrative that undergirds it, arguing among other things that it is incompatible with the 2050 Blue Pacific Strategy and could “funnel resources away from investment in Blue Pacific interests and objectives.” Others contend that the Quad is an unnecessary addition to an already complex multilateral landscape.

As the Quad expands its engagement with the Pacific Island countries, it is important to consider how regional actors define and view key international challenges, especially when such definitions and views may differ from those espoused by Quad members. The PIF’s 2018 Boe Declaration, which incorporates traditional and nontraditional security issues into a single definition of security, is perhaps the most pertinent example.

Climate change, which Pacific Island countries see as their single greatest threat, is central to their definition of security. Quad members, in the 2023 Joint Leaders’ Statement, did expressly acknowledge the significance of climate change as it pertains to global security. However, their words have not always aligned with actions taken on the issue at home, which in turn has periodically strained relations due to perceptions that Quad members’ climate rhetoric is more talk than action.

There are diverging views on geopolitics, but a general through line is a desire to maintain peace, stability, and positive relations with external parties. This is exemplified by Fijian Prime Minister Sitiveni Rabuka’s Zone of Peace concept, which is “deeply rooted in Pacific ideas of family and relationships,” and was welcomed by many Pacific Island leaders at their 2023 PIF retreat.

The development and economic challenges facing Pacific Island countries may be similar to those faced by other developing countries, but they are exacerbated by the region’s vast maritime nature and imminent challenges stemming from climate change. Although there are notable variances between the individual countries, the common priorities include but are by no means limited to disaster management, fisheries, labor mobility, infrastructure, public health, and regional connectivity.

Current Quad-Pacific Islands initiatives

Although the Pacific Islands were briefly referenced in the 2021 Joint Statement of Quad Leaders, the focus on this expansive subregion has grown exponentially since then. A range of programmatic announcements, many of which pertain to the Pacific Islands, were made at the 2023 Leaders’ Summit, including:

• Climate: Quad Climate Change Adaptation and Mitigation Package to accelerate regional cooperation on climate resilience.

• Critical and Emerging Technology (CET): Establishment of an Open Radio Access Network (Open RAN) with Palau, the first of its kind in the Pacific Islands.

• Cyber: Quad Joint Principles for Cybersecurity Partnership to strengthen defenses against cyber threats to critical infrastructure and services.

• Health Security: Quad Health Security Partnershipto strengthen coordination and collaboration in support of health security in the Indo-Pacific.

• Infrastructure: Quad Partnership for Cable Connectivity and Resilience to strengthen cable systems in the Indo-Pacific.

• Space: Exploring avenues to deliver Earth observation data and other space-based applications to assist nations across the Indo-Pacific in strengthening climate early warning systems.

The Joint Leaders’ Statement positively signals the Quad’s intent to work in partnership with the Pacific Islands region and to align programs with the 2050 Blue Pacific Strategy, stating that, “In these efforts, Quad Leaders will listen to and be guided at every step by Pacific priorities.” These programs are only in the preliminary stages of implementation, though, and successful delivery will be crucial to achieving long-term goals.

Policy recommendations

As the Quad looks ahead this year and beyond, it is both standing on solid ground and still finding its footing in the Pacific Islands. Moving forward, the bloc should continue to pursue achievable, practical policies that deliver on Pacific needs while ensuring the Quad is not stretched too thin. In addition, the Quad should take a forward-leaning public diplomacy approach that helps it win over public opinion and build stronger ties with Pacific Island countries.

To support these efforts, IPSI convened a February 2024 public panel discussion, “Bolstering Cooperation among Quad and Pacific Island Countries,” that featured speakers from all four Quad members and the Pacific Islands, including His Excellency David Panuelo, the former president of the Federated States of Micronesia (FSM). IPSI also convened a private track 1.5 workshop, which was attended by thirty-three government and nongovernment experts.

What resulted from the panel discussion and workshop are four broad-based, cross-cutting policy recommendations. These are by no means exhaustive; rather, they reflect the themes most frequently raised and are intended to align with the stated goals of the Quad, its member states, and the Pacific Island countries.

1.  Prioritize programs that bolster physical and digital connectivity

As noted previously, the region’s expansive maritime scale cuts across every issue facing it. Pacific Island countries are geographically isolated, and their isolation is further exacerbated by limited physical connectivity. Physical infrastructure is an issue that is frequently raised in the region, and there are urgent needs for the construction and refurbishment of new and existing facilities: ports, highways, airports, and the like.

Digital connectivity presents a crucial opportunity to circumvent geographic barriers, but most Pacific Island countries are not adequately connected to transnational undersea cable systems. Furthermore, they face challenges with building sufficient telecommunications networks within their own borders. That is why technology and connectivity emerge as one of the seven thematic areas of the 2050 Blue Pacific Strategy

Improving physical and digital connectivity would unlock opportunity across the region, especially on the economic front. The Quad has acknowledged the issue’s centrality in joint statements and laid out concrete programs to improve it throughout the Indo-Pacific. For the Pacific Islands region, this includes the Quad Partnership for Cable Connectivity and Resilience initiative (noted above), and at a country-level includes the Palau Open RAN program (also noted above).

In this and coming years, the Quad should maintain its focus on programs that improve connectivity, especially in the digital realm. The CET and infrastructure working groups are well positioned to continue their work on cables. As the digital realm increases in complexity, the Quad should consider how the space working group can help deliver satellite-based internet coverage—which is in high demand in the Pacific Islands.

It should be noted that this is an area where the Quad can capitalize on existing programs initiated by one or more member states. One example is Australian and US support for incorporating eight Pacific Island countries into US-based Google’s plans for a trans-Pacific subsea cable. Through such a mechanism, the Quad can build upon existing work rather than start from scratch. It also demonstrates the value of bringing private-sector partners into the fold to maximize impact.

2. Emphasize maritime domain awareness and enforcement

Maintaining the territorial integrity of their maritime space is a daunting task for Pacific Island countries. To illustrate, the FSM has an EEZ of almost three million square kilometers and the Solomon Islands has an EEZ of one and a half million square kilometers. Both countries face acute difficulties when seeking to monitor and enforce these EEZs owing to a wide range of resource limitations, from patrol boats to human capital.

The significance of this issue is noted in the 2050 Blue Pacific Strategy, which calls to protect “sovereignty and jurisdiction over our maritime zones and resources” and to “strengthen our ownership and management of our resources.” Yet the ability to do so is under imminent threat from foreign state and nonstate actors on matters ranging from narcotics trafficking to illegal fishing, both of which have increased in recent years.

Echoing this, the Quad announced the Indo-Pacific Partnership for Maritime Domain Awareness (IPMDA) initiative at the 2022 Leaders’ Summit, which aims to “provide near-real-time, integrated and cost-effective maritime domain data to maritime agencies in Southeast Asia and the Pacific.” This, in turn, provides each country with useful tools to help navigate responses to natural disasters and monitoring of climate patterns.

Looking forward, the Quad should consider how the resources it offers can facilitate greater enforcement capacity and enhanced monitoring for Pacific Island countries. One area worth exploring is coordinating the provision of patrol boats, which individual members have historically provided on a bilateral basis. The Quad should not duplicate existing programs; instead, it should serve as a coordination hub to ensure maximally beneficial allocation across the region.

3. Implement positive, practical programs in areas of strategic advantage

While the Quad holds a lot of promise, it should be careful to not overextend itself and become another flashy diplomatic initiative that overpromises and underdelivers. To do so, the Quad can align its strategic advantages with priorities identified by the Pacific Island countries themselves.

As outlined earlier, individual Quad members have unique histories with specific Pacific Island countries. However, the Quad itself is viewed with some skepticism due to its relatively new advent, collapse, and reemergence onto the scene. Australia, India, Japan, and the United States seem to be cognizant of this issue, and their emphasis on positive, practical programs with tangible outcomes will help allay skepticism.

In addition, Quad members should clearly and consistently communicate what they can and cannot do, and how they envision Quad-driven initiatives fitting into an already-complex donor landscape. Doing so will help manage inevitable misunderstandings that tend to come with new initiatives and allow it to focus on producing results that earn credibility and trust from Pacific Islanders.

The bloc has been met with fanfare and gained staunch support in Canberra, New Delhi, Tokyo, and Washington. However, the attention of and priorities for these capitals are becoming split in multiple directions as increasing threats across the world lead to limit the resources and time that can be devoted to the Pacific Islands. Quad and Pacific Island countries alike should be careful not to place all their bets on the Quad, lest it collapse under its own weight.

4. Take a forward-leaning approach to public diplomacy

Globally, the information domain has become more competitive, fast-moving, and fragmented. At both a regional and country level, the Pacific Islands region has a particularly unique information space due to limited digital connectivity and a geographic location that any external actor must fully comprehend in order to seek engagement with local populations.

The Quad may have started off on the right foot, but there is still much to be accomplished to maintain an advantage in the information space, especially as it becomes increasingly contested due to geopolitical competition. Ultimately, Quad members’ status as the partners of choice for many Pacific Island countries is at risk if a forward-leaning approach to public diplomacy is not implemented.

Specific recommendations for implementing this approach include the following:

• Proactively communicate intent: Stress that the Quad is meant to complement, not supersede or replace, the existing regional architecture. Building upon the shift in its official name from the Quadrilateral Security Dialogue to the Quadrilateral Dialogue, it should make a more concerted effort to expand its focus beyond just traditional security issues. Doing so will quell apprehensions from the region regarding the true nature of the Quad’s intentions for the region.

• Emphasize shared values: Quad and Pacific Island countries share democratic values—democracy, rule of law, freedom of speech, and more—that should be actively highlighted. But doing so requires that Quad members practice what they preach at home, lest they open themselves up to charges of hypocrisy.

• Do not overemphasize geopolitics: Pacific Islanders are well aware of the growing geopolitical competition in the Indo-Pacific and the impact it may have on their region. Overly aggressive rhetoric about it may resonate in the capitals of Quad member states, but much less so in the Pacific Islands. It certainly should be discussed at times, but it should not be the overarching crux of public interactions.

• Elevate branding: If the Quad is to achieve its goals, it must back up its rhetoric with concrete evidence of successful implementation of initiatives on the ground. One of the best ways to do so is through physical and digital branding that clearly indicates that the Quad or one of its member states is delivering and working with Pacific Island countries to implement a project. Although Australia and the United States have sometimes been reluctant to elevate branding alongside their individual development programs, the Quad presents an opportunity for a fresh approach.

Parker Novak, the primary author of this issue brief, is a nonresident fellow with the Atlantic Council’s Global China Hub and Indo-Pacific Security Initiative, where he specializes in Southeast Asia, the Pacific Islands, Indo-Pacific geopolitics, and US foreign policy. He previously served as the Indonesia and Timor-Leste country director for an international non-governmental organization.

Kyoko Imai, the project lead and contributor to this issue brief, is the associate director for the Indo-Pacific Security Initiative (IPSI) of the Atlantic Council’s Scowcroft Center for Strategy and Security. She spearheads IPSI’s work on US-ROK-Japan, Quad, AUKUS, and other multilateral frameworks, in addition to the Japan, Southeast Asia, and Pacific Islands portfolios. Imai’s functional expertise centers on non-traditional security including but not limited to economic security, human rights, climate security, and migration.

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The Indo-Pacific Security Initiative (IPSI) informs and shapes the strategies, plans, and policies of the United States and its allies and partners to address the most important rising security challenges in the Indo-Pacific, including China’s growing threat to the international order and North Korea’s destabilizing nuclear weapons advancements. IPSI produces innovative analysis, conducts tabletop exercises, hosts public and private convenings, and engages with US, allied, and partner governments, militaries, media, other key private and public-sector stakeholders, and publics.

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Summary

The Caribbean is one of the most vulnerable regions globally. It harbors economies that are open-faced and import-dependent, making it susceptible to the ravages of climate change, fluctuating commodity prices, and inflationary pressures. While governments and financial institutions grapple with these perpetual stresses, it is the Caribbean citizens, particularly women and girls, who bear the heaviest burden.

Nestled in this uniquely vulnerable region, women and girls face a multitude of challenges, demanding comprehensive support from both governments and financial institutions to enhance their resilience and opportunities throughout society. Their integration across various sectors, including government, business, and local organizations, emphasizes that addressing gender challenges cannot occur in isolation.

The global issues looming over the Caribbean magnify the specific hurdles confronting women and girls. From gender-based violence (GBV) and economic barriers to limited political influence and the disproportionate impacts of climate change, the challenges intertwine, creating a crisis of gender inequality and inequity across the Caribbean.

This publication compiles findings from a yearlong consultative effort, revealing that the challenges faced by women and girls are rooted in societal perceptions of their roles and restricted access to tools and resources. To overcome these barriers, a fundamental reshaping of social norms, alongside political and financial institutions, is imperative. Moreover, integrating women and girls into the development model aligns with the region’s broader ambitions of achieving UN Sustainable Development Goals (SDGs), unlocking untapped human capital and fostering long-term prosperity.

In collaboration with the UN Women Caribbean Multi-Country Office, the Atlantic Council’s Adrienne Arsht Latin America Center and its Caribbean Initiative embarked on a year-long partnership. This initiative aimed to address GBV, economic empowerment challenges, limited political influence, and the disproportionate effects of climate change facing women and girls in the Caribbean. The extensive consultative process involved roundtable discussions, capacity-building sessions, and one-on-one consultations, shedding light on the preconceptions held by both men and women toward women and girls in Jamaica and Guyana during 2023. The partnership has honed in on social norms as a focal point, recognizing their impact on perceptions and discussions about the challenges faced by women and girls.

About the authors

Wazim Mowla is the associate director and fellow of the Caribbean Initiative at the Adrienne Arsht Latin America Center. He leads the development and execution of the initiative’s programming, including the Financial Inclusion Task Force, the US-Caribbean Consultative Group, the PACC 2030 Working Group, and the Caribbean Energy Working Group. Since joining the Council, Mowla has co-authored major publications on the strategic importance of sending US COVID-19 vaccines to the Caribbean, strategies to address financial de-risking, and how the United States can advance new policies to support climate and energy resilience. As part of his work on the Caribbean, Mowla was called to provide Congressional testimony to the US House Financial Services Committee on financial de-risking.

Valentina Sader is a deputy director at the Atlantic Council’s Adrienne Arsht Latin America Center, where she leads the Center’s work on Brazil, gender equality and diversity, and manages the Center’s Advisory Council. During her time at the Council, Valentina has managed the launch of the Center’s Advisory Council, a high-level group of former policy makers, business leaders, and influencers from the United States and the region. She has co-authored publications on the US-Brazil strategic partnership and coordinated events with high-level policymakers, business leaders, and civil society members in both Brazil and the US. She also provides English- and Portuguese-language commentary on political and economic issues in Brazil to major media outlets, such as Al Jazeera and BBC Brasil.

The Adrienne Arsht Latin America Center broadens understanding of regional transformations and delivers constructive, results-oriented solutions to inform how the public and private sectors can advance hemispheric prosperity.

Learn more

The post Not without her: A roadmap for gender equality and Caribbean prosperity appeared first on Atlantic Council.

On October 24, Imran Bayoumi, associate director at the Scowcroft Strategy Initiative in the Scowcroft Center for Strategy and Security, and Wazim Mowla, associate director and fellow of the Caribbean Initiative at the Adrienne Arsht Latin America Center, were published in The Globe and Mail and featured on the Canadian Forces College’s Spotlight on Military News and International Affairs. They discuss the Canada-CARICOM Strategic Partnership (CCSP) announced in October 2023 and argue that, while the partnership is an excellent first step, it requires actionable steps toward implementation on the core priorities of “strengthening regional security, addressing climate challenges, and increasing access to finance.”

Staff

Imran Bayoumi

Associate Director

Scowcroft Center for Strategy and Security Scowcroft Strategy Initiative

Staff

Wazim Mowla

Associate Director & Fellow, Caribbean Initiative

Adrienne Arsht Latin America Center

Caribbean China

The post Bayoumi and Mowla in The Globe and Mail and Canadian Forces College on the Canadian-Caribbean partnership appeared first on Atlantic Council.

Rivers and canals

The Panama Canal services 50 percent of trades from Asia to the US east coast and a yearly merchandise value of $500 billion, two-thirds of which goes to the United States. Given the unprecedented droughts in that region and lower water levels in the Canal, the authorities have restricted the number of vessels that can pass through each day by 50 percent. Many vessels have fully given up on using the canal in favor of traveling around the Cape of Good Hope, increasing the cost of dry bulk shipping by approximately 14 percent compared to the previous year.

The current shipping crisis in the Panama Canal is not an anomaly. In the future, the Canal may only be functional at full capacity for three to four months of the year. Panama Canal Administrator Ricaurte Vasquez Morales explained last year, “This is a new reality that is not unique to the Panama Canal; it’s something that you’re seeing in some other rivers in Europe, it’s something that you’re seeing in the Mississippi… Climate change is essentially the reason why this is happening.”

Morales is not wrong. The Mississippi river, through which flows 60 percent of US grain shipments and 22 percent of oil and gas exports, faced the same challenge in September 2022 with a drought that increased grain shipment prices by 400 percent compared to the average, in turn raising the price of delivered soybeans by 24 percent. Just a month earlier and in another part of the world, a drought in China’s Yangtze decreased the river’s width by half. The Yangtze is critical for connecting cities like Chongqing and Wuhan with major coastal ports like Shanghai. After the August drought, container export volumes fell by 8 percent along the river, and the transit period from Chongqing to Shanghai increased by three times. Other examples include drought-related shipping bottlenecks along the Rhine River in Europe and rivers in the Amazon, all of which are creating significant challenges for the local economies with ripple effects on the global economy.

Seaports

There are more than 3,800 commercial seaports and inland ports through which more than 80 percent of global trade is processed. Rising sea levels are threatening the viability and functionality of the seaports. According to The Global Maritime Trends 2050 report, some of the world’s major seaports—such as Shanghai, Houston, and Lazaro Cardenas—could become inoperable by 2050 if the sea levels only rise by 40 cm, which is very probable if the current global warming trajectory is not effectively addressed now. These are serious threats to global trade because port of Shanghai alone is responsible for more than a quarter of all China’s foreign trade and its value of imports and exports are estimate to be near $1.4 trillion in 2023. Moreover, in 2022, Port of Houston contributed more than $900 billion to the US economy.

At the same time, the higher frequency and intensity of storms are undermining the operations of seaports and inland ports. The estimated cost of severe climate events on ports around the world are estimated to be around $7.5 billion each year. Additionally, 0.8 to 1.8 percent of world’s maritime trade—$200 to $450 billion in value per year—is facing disruption risks because of severe weather events, and Small Island Developing States face about four times higher trade risks that of other economies.

Arctic trade route

As climate change is threatening some trade routes, it is opening new ones. It is estimated that within three to four decades, the Arctic will no longer remain frozen all year-long, opening up new, shorter maritime trade routes. New route openings, such as the Northern Sea Route and Northwest passage, would make it possible for ships to move between the Pacific Ocean and the Atlantic Ocean. The tremendous economic benefit of these shorter trade routes, in addition to Arctic’s massive natural resources, has led to increased geopolitical tensions in this part of the world between the United States, European Union, Russia, and China. The war in Ukraine, Finland’s recent ascension into NATO, and Sweden’s serious move towards NATO membership have further exacerbated the geopolitical tensions in the Arctic. Seven NATO and soon-to-be NATO members of the eight-member Arctic Council—comprised of Canada, Denmark, Finland, Iceland, Norway, Russia, Sweden and the United States—have suspended all forms of cooperation with Russia on Arctic governance. Hence, Arctic melting has not only opened new trade routes but also ignited fresh arenas of great power rivalry and increased the risk of conflict in this part of the world.

The case for multilateralism

These emerging challenges can only be addressed through a more effective multilateralism both to address global warming and to devise new frameworks of cooperation for existing and new trade routes. Governments cannot face this mounting challenge alone. The world needs a new multilateral framework where relevant private sector entities, international organizations, academia, and civil societies are involved in the conversation. Failure to do so not only risks disrupting trillions of dollars in global trade but also undermines the stability and growth of the global economy in the decades to come.

Amin Mohseni-Cheraghlou  is a macroeconomist with the GeoEconomics Center and leads the Atlantic Council’s Bretton Woods 2.0 Project. He is also a senior lecturer of economics at American University in Washington DC. Follow him on X at @AMohseniC.

Sophia Busch is an assistant director at the Atlantic Council’s GeoEconomics Center.

At the intersection of economics, finance, and foreign policy, the GeoEconomics Center is a translation hub with the goal of helping shape a better global economic future.

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The post Climate, drought, and the disrupted future of global trade appeared first on Atlantic Council.

Table of contents

Evolution of freedom

The countries of the Middle East and North Africa (MENA) region are stuck in economic and political transitions toward more open economic and political markets. The lack of economic freedom has long echoed the lack of political freedom in the region. To maintain the status quo, political elites have for many years sought to cultivate an enduring social contract wherein economic and political elites capture economic rents—including from oil revenues—and citizens receiving patronage spending have tended to look the other way.

That is evident from the overall freedom score for the region, which has remained considerably lower than the global average. Indeed, the MENA region’s freedom score in 2022 is the same as two decades before (around 46.9), 15.4 points below the global average. That said, an increase in the freedom score is evident at the beginning of the period of analysis (from 1995 to 2002) which coincided with a wave of both economic and political reforms.

While there are important cultural and legal similarities among MENA countries, the region is also heterogeneous in many ways. Three distinct groups have progressed at different speeds in their economic transitions: the high-speed group, mostly composed of Gulf Cooperation Council (GCC) countries; moderate-speed, mostly composed of North African countries plus countries like Jordan and Lebanon; and the low-speed group, which includes conflict or post-conflict countries. Indeed, the GCC countries, which are mostly nonpopulous economies with vast wealth, have outperformed the other two groups, increasing their average freedom score by 6.7 points over the sample (1995–2022). The “moderate-speed” group of countries in North Africa, plus Jordan and Lebanon, includes both oil-importing and oil-exporting states, with a mixed record of economic reforms. Most of these countries are populous, with Egypt home to the largest population in the region. The conflict and post-conflict group includes Iraq, Libya, Syria, and Yemen, each with a complex history of civil wars coupled with foreign invasions.

The diversity of circumstances is evident when considering the evolution of the economic freedom score. The regional score has increased by 5 points throughout the period, driven by improvements in women’s economic freedom and, recently, investment freedom. This increase is mainly driven by progress in the GCC group of countries, where economic freedom went up by 14.5 points. The GCC is now led by Saudi Arabia, which has embarked on an important economic and social transformation agenda. In the “low-speed” group, we see an overall decline over the period (−3.7 points). Across the region, trade freedom presents a significant negative trend since 2011, losing almost 15 points.

On the political freedom front, the region is home to the world’s last absolute monarchies, whose transition to constitutional monarchies has been slow, and at times reversed. Military involvement in politics is all too common and has been on the rise. The wave of protests that spread through almost the entire region and which came to be known as the Arab Spring is apparent in the data. The Arab Spring erupted in the early 2010s from the frustration of a young and educated population aspiring to more political and economic freedom and prosperity. The hope raised by the Arab Spring proved, however, to be temporary. Indeed, protests ended up either tamed by autocrats or resulted in internal conflicts, with foreign interventions supporting opposing sides. The political freedom score shows an increase starting in 2010, which has vanished by 2014. All indicators of the political freedom subindex have been affected. This shows that countries in the region are stuck in political transitions toward democracy. 

Legal freedom is relatively low in the region, with all its indicators except informality scoring below 50 in 2022. Most indicators of legal freedom have had a flat trend in the last decade, showing no signs of improvement. Here as well, the GCC countries score higher than the other two groups, with a stable score over the sample. In the other two groups, legal freedom is declining. Just as on the political front, legal reforms toward more fair and inclusive systems have stalled. 

From freedom to prosperity

The prosperity score of the MENA region has clearly diverged from the global average during the period 1995–2022. Overall scores mask important differences between countries in MENA, especially along economic lines. Indeed, the MENA region has the largest reserves of oil and other hydrocarbons in the world.¹ But not all countries in the region are rich in oil. The region is host to both oil importers and oil exporters, and the impacts of oil shocks far outweigh any policy intervention. Evidently, persistently high oil prices—albeit remaining volatile—have been good news for oil exporters and somewhat bad news for oil importers in the region. However, the reality is not always so straightforward, as high oil prices result in large and positive spillover effects from oil exporters to oil importers, especially in terms of remittances and foreign aid, and these have tended to mitigate the differences between the two groups.

While the consequences of oil market fluctuations continue to play a dominant role in driving prosperity in the region, that situation is clearly not sustainable as the world economy is firmly embarking on a transition away from fossil fuels. The MENA region scores higher than the global average in income, health, and environment, but the gap in the last two decades has been narrowing. Countries in the region should not be complacent and should transform their economies by supporting more (genuine) private sector development. The success of the economic and social transformation agenda led by Saudi Arabia is vital for the region. Yet the ultimate test of that transformation is whether it would be sustained and financed through (domestic and foreign) private investment instead of state funds, which will eventually run out.

Education is the best performing indicator for the region, with a score that has doubled in the period of analysis. Nonetheless, there is still room for improvement, as the level is still low (close to 45 points), relative to the global average. Educated but unemployed youth have been the drivers of the Arab Spring. That situation is a source of worry for leaders who want to keep the status quo, and has led them to place limits on political freedom and civil liberties.

The region scores significantly below the global average in inequality and minority rights, and the gaps have not been reduced in the last twenty-five years. Persistently high inequality is a source of further tensions. The need to promote equality of opportunity in the region—through free enterprise and curbing cronyism—has never been greater. Failure to address deficiencies in economic but also political freedom will hamper prosperity in the region and lead to further instability.

The future ahead

Over the next decade, countries in the MENA region will have to grapple with economic and political transitions in a world in mutation. To achieve freedom and prosperity, countries in the region will have to face up to risks linked to geopolitics, climate change, and the transformation of energy markets, as well as social polarization.

The region is at a tipping point when it comes to conflict escalation. Indeed, the alarming intensity and casualties resulting from the conflict between Israel and the Palestinian territories risk engulfing the whole region. This new phase of escalation of violence brings not only tragic loss of lives but also physical destruction, fear, and uncertainty. That new spread of violence will have far-reaching economic and social consequences. What is more, the Palestinian issue is an important fault line between the Global North and the Global South that could have global repercussions and tear the region further apart.

The region is also extremely exposed to the existential threat posed by climate change. Climate change is simply making the Middle East and North Africa unlivable at a faster rate than any other region. Specifically, temperatures have reached record highs and a water crisis is looming in the region, which could lead to heightened domestic tensions and interstate conflicts. The crisis is made worse by the inadequate governance of the water sector and other utilities, which has exacerbated the frustration of the citizenry over poor public services.

The region also needs to transition away from fossil fuels. Oil prices have been persistently high and this has provided some respite to the many oil-exporting countries in the region. Yet, as the world moves away from fossil fuels, the vast reserves of oil and natural gas with which MENA is endowed will eventually become stranded—and so will the capital investment in the sector. With these considerations in mind, several MENA countries have embarked on ambitious diversification programs to move away from oil, although success has, so far, been elusive. As we have said, Saudi Arabia’s ambitious economic and social transformation agenda could be a game changer for the region and perhaps offer a model for other countries to emulate.

A credible economic and social transformation agenda is long overdue, to meet the aspirations of an educated youth and to absorb millions of young people—females and males alike—into the labor market. The aborted political transitions have, however, polarized societies in the region: the people on the streets who continue to protest on the one side, and the political elites and crony capitalists on the other. The political and economic transitions are interlinked and failure to address both could result in further social tensions and instability.²

Rabah Arezki is a former vice president at the African Development Bank, a former chief economist of the World Bank’s Middle East and North Africa region, and a former chief of commodities at the the International Monetary Fund’s Research Department. He is now a director of research at the French National Centre for Scientific Research and a senior fellow at the Foundation for Studies and Research on International Development and at Harvard Kennedy School.

Trackers and Data Visualizations

Jun 15, 2023

Freedom and Prosperity Indexes

The indexes rank 164 countries around the world according to their levels of freedom and prosperity. Use our site to explore twenty-eight years of data, compare countries and regions, and examine the sub-indexes and indicators that comprise our indexes.

The post Climate crisis fuels change in MENA region appeared first on Atlantic Council.

Achieving the needed reductions, according to the IEA, requires reducing fossil fuel emissions and tripling clean energy investments. The need for increased financing is even greater in emerging markets and developing economies. Current investment in clean energy in these markets is around $260 billion per year, but the IEA concludes that around $2 trillion a year must be invested by 2030.

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Reducing emissions in developing countries is critical to achieving the goal of net-zero greenhouse gas emissions by 2050. Although developing countries have contributed a very low percentage of historical greenhouse gas emissions, today, they emit nearly half of all greenhouse gas emissions and one-third of energy sector emissions. Failure to provide the needed finance would make achieving the 1.5-degree goal almost impossible.

Historically, the World Bank Group and other multilateral development banks (MDBs) have played the principal role in financing investment and providing guarantees to developing economies. They have supported catalytic projects, built capacity, provided grants, loans, and equity financing and guarantees to the poorest countries. They also developed the concept of blended finance where the public and private sector work and invest together. 

Despite these important results, however, the MDBs have not been able to attract a significant level of private investment in developing countries. Their processes are too slow, their financial regulations too narrow, and their bureaucracy too great to attract the needed trillions of dollars of investment that governments cannot afford and that only private investors can provide to reach emission reduction goals. The MDBs are working to reform their processes, but unless they develop innovative new financing structures, their existing structure, mandates, and limitations make it very unlikely that these reforms will sufficiently open the spigot of private investments.

Thus, innovative new approaches and institutions are needed to achieve emission reduction goals. There is a growing consensus that the best way to attract private investment in developing countries is to reduce the real and perceived risks of those investments by providing guarantees at a level that makes projects investment grade in the minds of the private investors. Guarantees provide the most efficient way of leveraging public financing since the cash needed is only the amount necessary to cover expected losses in the investments. Unexpected losses are protected against by balance sheet backups to the cash provided to cover expected losses.

There are many guarantee proposals being considered and implemented. To achieve the needed impact, one or more of the proposals should establish a facility that provides over a ten-year period at least $500 billion in financing guarantees for loans and possibly for equity. Sovereign nations and perhaps very large foundations and private corporations would fund the facility.

This proposal is very ambitious, but not as costly as it sounds. If, for example, the facility concludes that the risk of loss is very high, say 10 percent, the nations providing funding would have to put up $50 billion in cash over a ten-year period, or $5 billion a year. If ten sovereign funds contribute to the facility, each country would have to put up an average of $500 million a year. This is a significant commitment, but a doable amount, particularly given developed countries’ pledges of $100 billion a year in financing to the developing world. Moreover, the facility could ramp up slowly, requiring lower contributions in the early years.

The facility would structure itself to attract private institutional investors by setting up a simple and efficient process of evaluating their investments and approving the guarantees. It would guarantee projects in a portfolio of investments by an investor, setting standards in advance on due diligence, environmental reviews, and involvement of local communities (ESG). Investors would be responsible for conducting due diligence and implementing the standards. The facility would spot check due diligence and implementation, but not conduct its own reviews. It would require a very small fee on investments to raise funds for capacity building in EMDEs.

The facility would comprehensively guarantee all risks necessary to make the project viable, including political and operational risks. It would provide guarantees in the amount necessary to ensure that investors can internally rate a project as investment grade. It would not guarantee currency risks but would work with a partner organization to cover that risk. It would charge interest and fees at very low concessional rates.

This structure would thus allow an investor to make an investment in the manner it normally invests, without additional layers of review, approval, and bureaucracy. Because the guarantees would lower the risk of an investment, investors would be able to provide loans at a much lower interest rate and equity without a premium on return to cover risk. This would lead to more financially viable projects and lower costs to consumers.

Lower interest rates would also significantly contribute to ensuring that the developing world can compete economically since it is cheaper, often much cheaper, in most of the world to generate renewable energy than fossil fuel-based energy. Lower interest rates would also contribute to achieving equity between advanced economies and emerging and developing economies since the cost of investments would converge instead of investments being significantly more expensive in developing countries.

Reaching 2030 carbon reduction targets in developing countries will require support from many different types of financial institutions. Working with Ian Callaghan, the founder of the UK Climate Finance Accelerator, we have proposed, along with co-author George Frampton, distinguished fellow with the Atlantic Council Global Energy Center, a new facility, the emerging market investment compact (EMCIC), that meets all the above criteria. EMCIC or a similar type of facility would complement the financing provided by multilateral development banks and governments and would play a crucial role in enabling developing countries to achieve their carbon reduction goals.

Ken Berlin is a senior fellow and the director of the Financing and Achieving Cost Competitive Climate Solutions Project at the Atlantic Council Global Energy Center.

Frank Willey is a program assistant at the Atlantic Council Global Energy Center.

EnergySource

EnergySource is the Global Energy Center’s (GEC) online publication providing commentary and analysis on developments in the energy and climate sector from a wide-array of thought leaders, politicians, and experts.

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Meet the authors

Fellow

Ken Berlin

Senior Fellow

Global Energy Center

Chinese Climate Change & Climate Action

Staff

Frank Willey

Program Assistant

Global Energy Center

Energy & Environment French

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The post How to finance net zero in developing economies: Beyond the existing investment framework appeared first on Atlantic Council.

Fast forward fifteen years and Brazil and India continue to share views on key global issues. For the first time since its inception in 1999, the Group of Twenty (G20) will have four consecutive emerging economy presidencies (Indonesia in 2022, India in 2023, Brazil this year, and South Africa in 2025). As G20 foreign ministers kick off their meeting in Rio de Janeiro on Wednesday, expect to see the shared views of India and Brazil reflected in a high degree of continuity between their G20 agendas.

The members of the G20 collectively account for more than 80 percent of global gross domestic product, three-quarters of world trade, and two-thirds of the world’s population. Moreover, the forum remains the world’s premium platform for coordinating international policy. Over the next year, the Atlantic Council’s G20 programming and research will track how Brazil leads this group in addressing four key areas (presented below) and will work to promote continuity with South Africa’s presidency in 2025 and the United States’ in 2026.

Food security and hunger elimination

Both New Delhi and Brasília have sought to highlight the needs of emerging markets and developing economies through their agenda-setting role at the G20. Perhaps no need stands out as urgently and pervasively as food insecurity. According to the World Food Programme, 783 million people worldwide faced chronic hunger in 2023, and most are in emerging markets and developing economies.

Under the Indian G20 presidency, the New Delhi Declaration was adopted by all members at the leaders’ summit. Among other provisions, it committed members to cooperate on agriculture research, access to fertilizers, capacity-building, and market transparency to foster food security among vulnerable populations. In particular, India emphasized the export and provision of millets, aligning with the “International Year of Millets” initiated by the United Nations General Assembly. Indian Prime Minister Narendra Modi was even nominated for a Grammy award for his appearance in a song titled “Abundance in Millets.”

Brazilian President Luiz Inácio Lula da Silva has doubled down on the social dimension of development, with a focus on combating poverty, inequality, and hunger. Food security is front and center in his domestic and foreign policy. As president of the G20, he has announced Brasília’s intention to launch a Global Alliance Against Hunger and Poverty at the leaders’ summit in November. Brazil is the world’s second-largest exporter of agriculture and is central to global supply chains—and in particular supply chains for emerging markets and developing economies. Expect to see Brazil leverage its weight in global markets to build consensus on the path forward in addressing food insecurity this year.

Climate and development finance

On climate and sustainable finance, Brazil’s G20 presidency appears poised to build on the legacy of India’s, while offering notable innovations and customizations. The four priorities of 2024’s Sustainable Finance Working Group are illustrative of Brazil’s particular interests and this G20’s overall mandate of “Building a Just World and a Sustainable Planet.” For example, financial instruments for nature-based solutions are rightfully receiving greater attention than ever in Brazil, which should not be a surprise in a country that contains two-thirds of the Amazon rainforest and 15-20 percent of the world’s biodiversity.

Leveraging Brazil’s active participation in various international financial institutions, the Brazilian finance sherpas are also placing a sharp technical focus on streamlined coordination among multilateral development banks and vertical funds. The troika of India-Brazil-South Africa G20 presidencies will press on with key Global South development financing priorities, such as just transition plans and blended finance for adaptation (see Atlantic Council’s related work on this here). In addition, Brazil has a unique opportunity to bridge this year’s G20 with the UN climate change conference known as COP30, which it will host in Belem in 2025. Brazil can coordinate its presidencies of both platforms to spur continued progress in Belem on landmark accomplishments from recent COPs, including the Loss and Damage Fund announced during last year’s COP28, held in Dubai.

Digital public infrastructure

Another area of continuity and compatibility between the G20 presidencies of India and Brazil is the provision of digital public infrastructure through payments, identity, and other digital networks created by the state to digitize and upgrade the provision of public services. Through Brazil’s Pix and India’s Unified Payments Interface (UPI), for example, both countries have seen tremendous success in building digital payments ecosystems and increasing digital and financial connectivity. 

Through the payments working group, G20 member states set targets for payments modernization for central banks and multilateral institutions. These targets address the cost, transparency, and speed of global payments. In 2023, the cost of retail payments to businesses and individuals across countries exceeded the previously set 3 percent target in a quarter of jurisdictions around the world. Similarly, the average cost of remittances is more than twice the goal of 3 percent. These metrics benchmark the G20’s progress and lay out the actions that member states still need to undertake to achieve these targets by 2027 (for cross-border retail payments) and 2030 (for remittances). 

Both India and Brazil position themselves as leaders among emerging markets in the provision of digital public infrastructure, and the G20 provides a platform to showcase their digital payment and identity models to the rest of the world. While both countries view the adoption of these platforms as a mechanism to increase financial inclusion and digital democratization, the wider adoption of digital public infrastructure will also present challenges. The G20 will have to come together to provide robust frameworks on data privacy, consumer protection, cybersecurity, competition, and public-private collaboration. These are going to be ongoing discussions, to be reflected in targets to come in the future. 

International financial institutions

During its G20 presidency, India initiated a set of processes and frameworks through the New Delhi Declaration that committed to “pursue reforms for better, bigger, and more effective Multilateral Development Banks.” The Declaration also included provisions to improve the multilateral development banks’ capital adequacy frameworks, which could yield an additional two hundred billion dollars in lending headroom over the next decade. India’s efforts focused on the quality and quantity of financing provided by international financing institutions and were supported by the United States, the largest shareholder at the International Monetary Fund (IMF) and the World Bank.

Brazil is adding to India’s priorities with a focus on governance and on augmenting the influence of emerging markets over decision-making at international financing institutions. However, divergent interests between the United States and China, the world’s two largest economies, and heightened geopolitical tensions between Russia and Western economies will make meaningful progress on economic global governance difficult.

India learned as much late last year in negotiations regarding an increase in IMF quotas—or the capital a country contributes to the institution, which correlates with that country’s voting power. The United States had proposed an increase in the quotas that would leave voting shares unchanged—a proposal that drew criticism from China and other emerging market economies who feel underrepresented at the IMF. Ultimately, the countries agreed to the US-backed “equiproportional” increase in quota resources that, in effect, pushed the issue of expanding voting power in the IMF for emerging markets to a future date.

Just like the Indian G20 presidency, Brazil’s achievements in this area will likely be incremental yet important. For example, Brazil might advance innovative ideas for increasing private finance partnerships and for making measurable improvements in international financial institutions’s operations and development impact assessments. These increments will accumulate, particularly as the G20 presidency moves in 2026 to the United States, by far the largest shareholder of various international financial institutions. Reform is a current priority for the United States, as stated by US Treasury Secretary Janet Yellen at the Atlantic Council in April 2022 and elsewhere, and the subject will be high on the agenda when G20 finance ministers meet next during the April IMF-World Bank Spring Meetings in Washington, DC.

Mrugank Bhusari is assistant director at the Atlantic Council’s GeoEconomics Center.

Ananya Kumar is the associate director for digital currencies at the GeoEconomics Center.

Pepe Zhang is a senior fellow at the Atlantic Council’s Adrienne Arsht Latin America Center.

Valentina Sader is a deputy director at the Atlantic Council’s Adrienne Arsht Latin America Center.

The post What’s on Brazil’s G20 agenda? Start by looking at where India left off. appeared first on Atlantic Council.

Public Event Tue, February 13, 2024 • 1:30 pm ET

Maroš Šefčovič on US-EU collaboration towards a transatlantic green marketplace

AN #ACFRONTPAGE EVENT— European Commission Executive Vice-President Maroš Šefčovič on building more resilient, green transatlantic economies.

Energy Markets & Governance Europe & Eurasia European Union Geopolitics & Energy Security

Event transcript

Uncorrected transcript: Check against delivery

Speaker

Maroš Šefčovič
Executive Vice-President for the European Green Deal, European Commission

Moderator

Ana Swanson
Trade and International Economics Reporter, the New York Times

Opening remarks

Landon Derentz
Senior Director, Global Energy Center, Atlantic Council

LANDON DERENTZ: Well, good afternoon. I’m Landon Derentz, senior director of the Atlantic Council Global Energy Center and Morningstar chair for global energy security. Very excited to welcome our in-person audience and those joining us around the world virtually to AC Front Page. The AC Front Page is the Atlantic Council’s premier platform for live conversations with world leaders tackling today’s greatest challenges.

To that end, it’s my distinct pleasure to introduce you to a leader that has been an absolute stalwart of the transatlantic relationship and, as we had an opportunity to discuss earlier, across many, many administrations (so bipartisan support, opportunities to build partnership for many years). Maroš Šefčovič is executive vice president for the European Commission for the European Green Deal, and today’s featured speaker. We’re also joined by Ms. Ana Swanson, trade and international economic reporter at the New York Times, who will be moderating this conversation.

Later this week, the Atlantic Council will launch its flagship energy publication, The Global Energy Agenda. It’s a moment for us to reflect on what’s been accomplished in the year prior, in 2023, and an opportunity for setting new ambitions for the year ahead. Moments like today help us inform and drive forward with that outlook. And while geopolitics weighed heavily on the prior year, the European Union, through policies like the European Green Deal, like Repower EU, has demonstrated that you can be a champion for climate ambition while also prioritizing energy security and competitiveness. It’s kind of a major balancing act.

Whether navigating joint procurement of natural gas supplies or elevating the EU’s greenhouse gas emissions benchmarks, Executive Vice President Šefčovič is a central figure in shaping and transforming the future of our energy system. In a year dominated by democratic elections, it’s critical that we leverage partnerships like this and forge forward our international relations in a way that strengthens the transatlantic cooperation and helps us achieve our shared energy and climate goals. Executive Vice President Šefčovič, we’re very thankful you joined us today.

And with that, it’s my pleasure to turn the floor over to our moderator, Ana Swanson, to begin this conversation. Ana, the floor is yours.

ANA SWANSON: Thank you so much. And, as Landon mentioned, I’m Ana Swanson. I’m the trade and international economics reporter for the New York Times. Really delighted to be here. And thank you so much for joining me.

MAROŠ ŠEFČOVIČ: Thank you. Thank you for the invitation and your always very kind remarks. That’s why I’m coming back all the time, you know?

ANA SWANSON: I do want to mention up top that this event is live and on the record, and for those in the audience watching virtually you can submit questions using the “Ask AC” function, or you can submit questions on X, formerly Twitter, using hashtag #ACFrontPage. For those in the live audience, you will have the opportunity to raise your hands and ask some questions later on in the program.

So let’s dive right in. This month the EU announced climate targets for 2040 that included a 90 percent reduction in greenhouse gas emissions from 1990. How does that build on or differ from previous goals? And, obviously, the conflict with Russia has forced a reexamination of some energy policy. How is the need to shift away from Russian natural gas influencing European plans?

MAROŠ ŠEFČOVIČ: Well, thank you very much for that question to open our conversation with, because it’s, I think, very fundamental for, it was really correctly said by Landon, to find that sweet spot to do this balancing act. So for us, we have it in our climate law we should be climate neutral by 2050. So we want to be the first climate neutral continent. I think we share that ambition also with the United States of America. But we kind of enshrined it in the law.

So what is—what was very important in this communication was to launch the debate, how to get from 2030, where we wants to reduce our greenhouse gas emission by 55 percent, to 100. So what is the trajectory? How can we get there? And we wanted to launch this discussion based on very thorough impact assessment, different scenarios. What do we need from the technological development point of view? How to factor in, I would say, this absolutely new situation if it comes to the—to the energy supplies, which was one of the, I would say, most fundamental energy shifts Europe did since probably the 1970s. That from one year to another you shift away from Russian gas, from 150 billion cubic meters to a little bit more than 40 [billion] right now.

And here, I want to really do think, appreciate it, and use it as a, I would say, pattern for the future that what that good allies should do to each other. I mean, we, of course, as you know very well, we carry really the burden of having two very serious military conflicts close to our borders. And, on top of it, on helping the almost ten million refugees, in certain point of time. On opening our markets, opening our labor market, providing health care, providing the schooling for the refugees, and also providing 150 billion euros of the financial and military assistance to Ukraine. On top of that, we had to shift away from Russian fossil fuels. And we did it with great success, thanks to the excellent, outstanding cooperation with the United States of America, and the fact that the LNG sector was able to supply us with 56 billion cubic meters, again, from one year into another.

And that will be of course, for us a top priority for the next years, because we want to be climate neutral by 2050. But we know that without gas, as a very important transitional fuel, it will not be possible for us. And I think that, speaking of the global responsibility of US—and US became, indeed, the global guarantor of energy security—the responsibility goes also beyond Europe. I mean, if you want to decarbonize Southeast Asian countries, like India, but also Africa, Latin America. So simply there will be a need for this half of the carbon intensity fuel, like gas, comparing to coal, and to phase out—phase out coal. So the cooperation here is very essential. And for us, it was absolutely crucial to get the US LNG in time, despite the fact that we paid a lot for it. But, of course, the crucial was to keep the lights on, economics powered on, and really focusing how to deal with the crisis which was generated by Russian invasion of Ukraine.

ANA SWANSON: I understand that some of your recent conversations in Washington have focused around President Biden’s recent executive order about natural gas exports. Tell me about those conversations. How do you think that, you know, this order—which obviously does pertain to US environmental concerns—could impact the European economy or US-EU relations?

MAROŠ ŠEFČOVIČ: I mean, we had very good conversations on this topic yesterday at the White House, State Department, Department of Energy. And I appreciated that it was very open and constructive discussions. And what was of course very important for me was reassurance that if it comes to the next two or three years there should be no impact whatsoever on the supplies of US LNG to Europe. Then I think my interlocutor has been quite clear that, despite this announcement, what is expected in US is that export capacity of the LNG would double between now and 2030. So they should be able to accommodate also the big demand from Europe. And on top of it, there is a kind of emergency clause that if things will really go, you know, in the wrong direction, that there is a possibility to kind of adjust the measures which are currently under the discussion.

I have also the understanding for the description of the situation as it was presented to me that when the last type of this, let’s call it, inventory was done by the US government, it was in 2019. And it was well before, I would say, this shale LNG revolution started. So, I mean, to check the pipelines’ capacity, the tankers traffic, the ports, the ability to transport all that, I think it’s important. At the same time, what I was underscoring, it’s also very important, how the US government now and also in the future would approach the fact that now, indeed, you have the responsibility for the global developments in energy security.

So if you kind of make the statement, something is said in Washington, DC, about the gas and LNG, immediately it’s kind of transmitted, in a sense. I would say this has a ripple effect all over the world. We kind of felt it a little bit for a couple of—for a couple of days now. I think it’s stabilized because, indeed, the contracts are there, supplies are coming, we increased dramatically our regasification capacity to more than 230 bcm per year. So, I mean, the conditions are there that everything should follow well. But, of course, we will be continuing our discussions with the US administration, but also with the LNG sector. And we had very good meeting this morning with all LNG managers of United States.

ANA SWANSON: Mmm hmm. The shift away from Russian gas has been, you know, such a huge undertaking. I was curious if you could share, you know, maybe an obstacle that you’ve seen firsthand in that process. And then, are there any, you know, opportunities that you’ve seen in there, too?

MAROŠ ŠEFČOVIČ: I think that obstacles—there have been many, of course. The first one was that for decades, and today we can say mistakenly, we believed that through trade and good relations you can democratize the society of Russian Federation. That was, I would say, a belief which was there for a very, very long period. Very often when I was responsible five years ago for the project which was called the Energy Union, we—in Central and Eastern Europe—we remembered extremely well the lessons of 2009, the gas crisis, when simply from one day to another the gas supplies had been switched. And in our countries, including mine, Slovakia, we just had the energy left for just couple of days, and we had to completely shut down the industry and channel the remaining parts of energy to hospitals and households.

So for me, a priority at that time was that we had to diversify our energy supplies, to have at least three different sources. And I was working a lot to get there, and to build that pipeline from Azerbaijan, from increasing the capacity for LNG, to work with the Norwegians, simply to have a more diverse portfolio. But, nevertheless, if you look at it, the major flows—the major flow has been clearly coming from the east to the west. And suddenly you’re now in a situation that is a big flow, which was like almost—at certain point, almost 40 percent of gas coming from Russia through Ukraine to Europe—you had to reverse these flows.

And the good thing was that we’d been investing over the last years a lot into building of interconnectors, LNG terminals and introducing the reverse flows. But still it was—at that time we, and also I, perceived it as an emergency capacity if something goes wrong. And it’s completely different thing. Like if you now tell the whole industry, OK. This huge quantity which was coming from the east will come from the west, from the north, from the south. And you figured out how to do it. So the major problem was infrastructure, to build and complete the regasification fleet.

And, here, I would say that Germany did miracles, I would say, in very short period of time. Poland’s been very strategic in building the Baltic connectors straight from Norway, with Azeri gas help as well. The Southern Europe also, the Balkan countries building up their regasification capacities. So we’ve been kind of dealing with that in a lightning speed, I have to say. But then you had the second problem where US came in.

When you came to the global markets, everyone was telling you: Market is tight. Meaning, there is no gas for you guys, yeah? So, I mean, and then it resulted, of course, in these very high prices in certain bottlenecks, when we were getting the LNG. But I think here, again, the decision of President Biden, and that agreement which was found with my boss, Ursula von der Leyen, the president of the Commission, to focus on 50 billion cubic meters from the US to Europe was absolutely crucial. And I’m very impressed that it was even exceeded to 50 billion, because it kind of sends that calming effect. And we could then, in a more peace, look for other supplies from other corners of the world, just to have the energy we needed. So the infrastructure and the tightness of the market, that was, I would say, the major, major challenges.

ANA SWANSON: I want to shift to asking a bit about critical minerals. What kind of transatlantic cooperation are you pushing for when it comes to critical minerals? I understand this was—you know, is always and was a topic of the US Trade and Technology Council meetings last month. You know, how do you see—you know, where are those initiatives right now, and how do you see things moving forward?

MAROŠ ŠEFČOVIČ: I think we have—we have quite, quite intense, I would say, diplomatic activity around the critical minerals or critical raw materials. But I think that we are still kind of waiting and working on how to translate the diplomatic activity into the concrete projects. Because I’m a project driven person. And I think the good thing is that we understand each other, that we cooperate. But I would like to see one or two major projects which we would execute together and show, you know, how can we kind of push for the common solutions, develop the mine, or get the critical raw materials to you and to us.

Because if it comes to critical raw materials, we in Europe are much more dependent on China that we’ve ever been on Russia, if it comes to the fossil fuels. And any future energy technologies, electrolyzers, wind turbines, photovoltaic panels, chips—I mean, for all that you need the critical raw materials, rare earth, magnets and all these things, which are—we need to kind of get from outside. And simply, we are concerned that any dependency could be weaponized. And therefore, we adopted this Critical Raw Material Act, through which we want to explore everything what we have in Europe, what we have in our neighborhood, and work with our friends like United States of America on the projects in the in the third countries.

My ideal solution would be that we would advance or eventually complete our agreements on the critical raw materials, because it would—it would set the framework. And we are discussing it. We are—hopefully, we will—we will find the solution for that. And I think it will also help from the perspective that EU would finally get the FTA status, as Japan did, and it will help us in many other aspects, kind of consolidate our EU-US relations. So yesterday we also discussed the fact that we have very similar philosophy if it comes to critical raw materials.

So what I want to say is that when we would be working on some projects in a third country, we would like to make sure that it would not just be extraction of the critical raw materials, putting it on the ship, leave with the raw materials and leave the mess behind. What we want to do is develop the project, create big value added in the country, create new jobs, share the revenues and profits, and make sure that all of us would benefit. Because I think that’s the approach we would like to see in cooperation with the third countries who have the critical raw materials, and need the funding, need the expertise to make sure that these critical raw materials would be not only available but also extracted according to the highest sustainability standards.

ANA SWANSON: You mentioned Europe receiving free trade agreement status from the United States. That’s been a hurdle to European companies have been benefiting under the Inflation Reduction Act, of course. Where do those discussions stand right now? And you were just mentioning, you know, a partnership with relation to third countries. I understand that that was kind of a major hurdle in those discussions so far.

MAROŠ ŠEFČOVIČ: Yeah. I mean, there have been—I mean, yesterday with Mr. John Podesta we kind of agreed that, of course, a lot of things is going on. And, I mean, this is, like, a very, I mean, difficult time. And obviously what’s happening on the global scale, I fully understand how overwhelmed we are with the dynamics of day-to-day management, and permanent crisis management. But we also agree that let’s have another look where our critical minerals agreement was struck, why it was stuck, and what we can do to kind of intensify this negotiation. So we’re going to do that. And we gave ourselves rather, let’s say, short term, you know, to looking into it.

And at the same time, with Amos Hochstein and Jose Fernandez, we also focused on, that would be my preference, let’s select two or three projects, maybe one per continent—Africa, Latin America, Southeast Asia—and try to put our experts, our financial institutions—like EIB, like World Bank, like IMF—our development agencies together so we can actually learn how to use our experience from these territories, our financial firepower, to execute one of these projects. Because it would create, I would say, the know-how, it would create, I would say, the teams which would be dealing with these issues. And this would be, I would say, such an important topic for the future economic development both in the United States and in Europe. That we simply need to learn how to work together and execute this project.

Maybe one more thing. I am very hopeful about potential of Ukraine, because I was there many times before the war started. I was—as you probably know, I was working on this EU-Ukraine-Russia negotiations at the time, on transit of gas through Ukraine. But we’ve been also signing together with the Prime Minister Shmyhal agreement on cooperation in the field of critical raw materials. So geological surveys, mapping up of the, you know, reserves, which they have there. And to put it simply, I think Ukraine has everything what we need and what we’ve been getting from Russia. So I see the potential for critical raw materials, but also potential for low-carbon energy in Ukraine as huge, as very, very, very complementary to us.

We are already today using the huge underground gas storage to kind of beef up the energy security on Central and Eastern European front. And that would be, I would say, the one area where, again, I think EU-US can come together as a part of our reconstruction efforts to kind of build this potential Ukraine clearly has.

ANA SWANSON: That’s interesting. You were talking about looking into projects in other parts of the world, in Africa, South America. Because, you know, I think the United States and the EU are clearly very aligned on values when it comes to critical minerals, but they both tend to be, you know, really kind of consumer—net consumers, right? Big consumers of these minerals, and will both have a large demand for it. So I was curious at what point you kind of bring other countries into the—you know, your conversation, your partnership. And then how you see that dynamic kind of working, you know, vis-à-vis China, and China’s efforts to move around the world for this industry as well?

MAROŠ ŠEFČOVIČ: I think that you’re right, from that perspective, that it’s not only, let’s say, to us talking to each other because there is lots of, I would say, movement in this front, under the [Group of Seven], even [Group of Twenty]. We set up different so-called clubs for cooperation in the field of mineral extractions. And so therefore, I would say that the understanding, the intent, and this diplomatic work is, to great extent, done. Now what we need are the, let’s say, most promising projects, and go through this planning, and hopefully execution phase. So we would see how this, let’s say, diplomatic understanding is translated into the concrete projects execution. So that’s, I think, what should be the next phase.

And I think if it comes to China, indeed, that’s a huge challenge. I think 80 percent of the global critical raw materials extraction and processing is with China right now. I think we in Europe, we have only 1 percent of critical raw materials for our economy from Europe. So clearly, we need to diversify. And how to do it? I think we have to be much more agile, and we have to offer the better alternative. And the alternative is that if you are with us, I mean, we are ready to create high value added, we are ready to share, and we are—we are ready to make sure that community where these projects are, and a country where these projects are, would clearly benefit.

And we in Europe are the biggest development aid providers. We are the biggest climate finance provider. I mean, just to put this, I mean, two figures on the table in climate finance, if we put together public and private financial transfers in the realm of more than forty billion euros. And more or less the same figure goes for development aid. So I believe that we have financial firepower to kind of support these projects, and to do it with philosophy of sharing, not just extracting and taking it away, and not even creating the local jobs, and leaving with a material, and lots of debt for the local government.

So, I mean, we started a project, which is called Global Gateway. We had huge turnout in Brussels, I think it was two months ago. And I have to say that it resonated well with the countries whom we invited. But I would say that it’s a success when I will see the first project is being executed, and that we are actually delivering on this political intention with practical, concrete projects.

ANA SWANSON: I know there had been a lot of, you know, sort of heartburn and upset in the EU with regard to the Inflation Reduction Act last year. What is the status of that now? I mean, are you still, you know, worried about the inflation Reduction Act worrying certain industries away? And have internal discussions in the EU—has there been kind of a resolution about how much to subsidize green industry in response to the Inflation Reduction Act?

MAROŠ ŠEFČOVIČ: I think—well, of course, our systems are different. And I have to say that Inflation Reduction Act came to us as a surprise. I understand that it was kind of surprising conclusion also for quite many people in US. But the fact is that because of Inflation Reduction Act, some of the projects—and several of them been projects upon which I was working, like building up the battery ecosystems in Europe, building up the gigafactories. All these projects being slowed down, or postponed, or transferred to US. And for us, it came at this difficult moment which I was referring to—the energy crisis, and coping with all the, I would say, consequences of the war in Ukraine.

Of course, we are discussing this with our American friends. Therefore, I think that if we can find a way through this mineral agreement to kind of look into what we can do better together, and also use this cooperation for the FTA status for the EU, I think that would be very welcome. Very welcome development. And the next stage, which is, let’s say, my proposition I’m pitching for in all the meetings I have in US, is that we should kind of move onto the next level of cooperation. And I call it creation of the transatlantic green tech market.

So I know that it’s not the free trade agreement. But I think that we would benefit hugely if we would create, I would say, this marketplace from the perspective of, you know, common standards, from the perspective that we would inform each other about, you know, the sort of subsidies policies, or as we call it in Europe, state aid. If we kind of would push for building bridges across the Atlantic in the form of joint venture mutual investment so we can use the economies of scale for these new technologies in a way that would be beneficial not only for US and EU, but also for the third countries.

Because if you want to be serious about really dealing with the climate change, and I think that fact that we are now over the 1.5 degrees Celsius is kind of telling that the time is pressing. So Africa, Southeast Asia, Latin America, all of them would need this clean and green technologies. And sooner we develop them, sooner we develop them at scale so they’re affordable, the better it would be for the planet. So I see this transatlantic marketplace as a recipe for making our cooperation even closer, stronger, but with a very positive impact it might have on, I would say, sharing these kind of technologies with the rest of the world, and helping us to also tackle overheating of our planet.

ANA SWANSON: One area I had been following with interest was the green steel negotiations, what the US calls the Global Arrangement on Sustainable Steel and Aluminum. I was curious, you know, what happened with that negotiation? Do you think that the United States has kind of an adequate methodology to measure carbon emissions? Was that an issue? And then just kind of more generally, do you think the United States is ready for the European Carbon Border Adjustment Mechanism to come into force? Or could that be a new source of trade friction in the future?

MAROŠ ŠEFČOVIČ: I think we have—we have, I would say, two different approaches and philosophies, which kind of stem from our traditions. So we—because we’re twenty-seven different member states. So for us to work together and for our single market to perform, we, of course, have to work a lot with the legal frameworks, with the regulation, with a uniform application of the laws. So there is a guarantee that when you produce something in Slovakia, it will be produced according to the same standards as in Denmark, or Italy, and nobody needs to check it anymore, because we are kind of following the same rules. So that’s, I would say, the tradition upon which you build the European Union.

So we use the same approach to the Green Deal. We kind of look at it comprehensively from all sectors, from energy, through industry, down to the agriculture. And I think that when I talk to my American friends, nobody questions that we have probably the most advanced and most sophisticated legal framework for the Green Deal. But the issue is that the parameters of the Green Deal has changed so much because of these two crises—COVID-19, war in Ukraine, this energy spikes, high inflation—that they need to work much harder on how to translate this legal framework into reality by creating business case for the Green Deal in Europe. Because you cannot fund everything with public money. And you need this entrepreneurial energy and entrepreneurial—I would say, this entrepreneurship to bring this, I would say, new project into fruition.

In US, I mean, the approach is different. Here you—I mean, we have the same goal, to be climate neutral, to tackle the climate change. But in US, you will drive more, I would say, the projects which generate the revenue. And whatever the technology who can do it, so they do because it’s good for business and, of course, if it’s good for environment, it’s a plus. And we just discussed yesterday that now we need more of this kind of attitude and business case from US, but probably in the frame of five to ten years. Also, yes, we would need some kind of regulatory framework to know how to push the—I would say, tackling the climate change to the next stage. So we had, I would say, the different cycles. But this is, I mean, where we are. And I think we can just only learn from each other.

And therefore, I think—again, coming back to this green marketplace—would be good bridge over the Atlantic and over these two different approaches to the policy, because we share the same goal. And on CBAM, we see it clearly as an environmental measure. It’s a mechanism which should prevent the carbon leakage from Europe. More or less what I want to say is that we are looking for the ways how to reward those companies which have low carbon footprint, which have sustainable production, which treat their employees decently. And we want to avoid the eventual punishment that because of the public procurement now we go for the cheapest alternative. Often, that is somewhere from faraway—Asian countries.

Because we want—the Green Deal will be, of course, linked with our growth strategy, with creating new jobs and, of course, with bringing economic advantage as well. And I think that if I look at also the figures, what would be the effect on US exports, I think it’s like 0.5 percent, something like that. But, of course, we are working on it. We are discussing that. For me—I know that we are running out of time, but this last point.

For me, the best solution for creating level playing field on the global scale would be to have the global carbon price. I know that it’s not going to happen tomorrow. So we are working very closely also with Canadians on linking up the carbon pricing mechanism. Because I think that would help us a lot to kind of have a level playing field, that carbon has a price. And if the price is the same everywhere, then lots of problems of this kind would be avoided.

ANA SWANSON: Great. It’s time to open it up for Q&A. I do have some questions submitted online. If you’d like to submit a question in the audience, I believe someone can bring over an iPad to you, or perhaps you can ask them in the room. So let me start with one of the online questions. Someone asks: How can Europe ensure the Green New Deal does not exacerbate or confirm fears regarding deindustrialization in the EU? What can the EU do to tame electricity prices? Is there a structural fix?

MAROŠ ŠEFČOVIČ: I think, I mean, it’s very clear. I can tell you that I’m—as was kindly highlighted by Landon, on the EU affairs for probably more than two decades. But I never seen such emphasis put by the European leaders—I’m talking about presidents and prime ministers and, of course, the institutional leaders—on the competitiveness as right now. Because I think that the two crises—war in Ukraine, high energy prices—and that fear of eventual deindustrialization kind of focused the minds of the leaders that this is under no circumstances are going to happen in Europe.

And therefore, now you see the flurries of activities focused on the competitiveness. I mean, we are working on energy prices. And I will tell you in a second how. We are having very intense interaction with the business leaders. We are talking, of course, to our agriculture sector, which is very, very restless these days, because they basically lost a lot of income over the last two or three days. And we are we are really working very closely with all the sectors of the industry which are the most affected by the by the green transition, how to help them to build on the advantages and pluses we have in Europe, and not to suffer from, let’s say, unfair competition from outside.

So for us, clearly we want Europe to be green and clean, but industrial. And revenue from the industry is absolutely crucial for sustaining our European social model, which is, I mean, something what our citizens would not even think that, I mean, could be—could be changed. So it’s absolute political priority. And if it comes to energy prices, that’s of course, the big challenge. And for us, it’s a big priority. So we changed the so-called electricity market design. What it means in colloquial language is that we changed the way how we can trade electricity in Europe, where we are going back to the possibility of long-term contracts, so-called power purchase agreements, where we are looking for the way and how we can allow the companies to invest in the long term. And we are using also governmental power to kind of limit the worries of the eventual fluctuation and eventual loss, if you invest in the right technologies.

So over time, I believe it would lower the energy prices. What would help us, of course, would be if we would have even more LNG on the market, because it hopefully would help us to lower the price. Because despite the fact that we generated more electricity from renewables than from fossil fuels last year, still in our gas—in our energy system, the gas is so-called what they call the last marginal fuel. So it means that—it’s a little bit technical—that you have to calculate the overall energy price based on what is the cost of these marginal fuels.

So let’s say if you don’t have enough sun and enough water, you still need that baseload. And the baseload is coming mostly by gas. And therefore, you have to buy—you have to pay the gas price if they are producing or idling, because they’re just there on standby. And that will be there for a long time. So for us to have a competitive price of gas would help us to lower the prices in Europe for electricity.

ANA SWANSON: OK. If there are any questions in the room, there’s a microphone stand here. Happy to take some questions from inside the room. I’ll give you just a minute to get over there. Great.

Q: Hi. Good afternoon. Sophie Hamer, I’m the climate counselor here at the German embassy in DC. And thank you very much for your remarks and your very interesting input.

I was wondering, what role do you see for The Climate Club when it comes to a transatlantic green marketplace, and in setting some standards?

MAROŠ ŠEFČOVIČ: I think that—thank you very much for that question. Of course, it’s also very important because from the perspective of the generational challenge, clearly tackling the climate challenge is the more difficult one. Very often, and I know that this is difficult for every politicians because you have to deal with the crisis managing, and unfortunately you have too many crises, I would say, these days. But, I mean, from the perspective of the scale of the task, from the perspective of the importance of the task, and I would say how you would hand over the planet to the next generation, clearly tackling the climate change and have a clear roadmap how we are—how we are going to make it possible for our children and their children. I mean, in this century, it’s absolutely crucial.

And I think we’ve been working very well with Secretary Kerry. In Dubai, I think that EU-US cooperation was absolutely crucial to, at a certain moment I would even use the word, unblock the negotiations on the final document. It will be very crucial this year for climate finance COP in Azerbaijan. And, of course, absolutely topical when the Brazil will take over in the next year. So I think that work on a—in the form of Climate Club I think would be very important for the future. Because it helps you to kind of adjust the approaches, to exchange the best practices, and look for the—for the common solutions.

ANA SWANSON: Great. Maybe another here.

Q: First off, thank you so very much for your time today, your excellency. My name is Alex. I’m from Georgetown University.

And recently I had a discussion with His Excellency Enrico Letta. And we were talking about that one of the key issues about the Green Deal right now is how to finance it. And especially looking at the farmer protests right now, one of the questions is how to integrate all the mechanisms of the EU to try and finance the green transition, especially the common agricultural policy. Because right now, it seems like the Green Deal is relying a lot on NextGenEU, which is set to end soon and probably won’t continue afterwards. So how do you see this possibility of integrating the common agricultural policy, and the budget that’s allocated to that, to try and integrate into the Green New Deal—with the Green Deal? Thank you.

MAROŠ ŠEFČOVIČ: Thank you very much. I will start with the last part of your question, because, of course, agriculture is very much on the mind of every single politician in Europe. And if you look at, I would say, the situation of our farmers and foresters, you have seen that over the last couple of years, especially if it comes to farmers, their incomes dropped, in some cases significantly. One of the examples, just for you to see the scale, is that, I mean, from one year to another, let’s say, the revenue they had from cereal production and sale dropped from eighty billion euros to sixty billion euros. So, I mean, you suddenly—you have kind of loss of twenty billion euros, which is a lot of money for the farming community.

Then, of course, they suffer a lot because of the high gas prices and energy prices, because they use fertilizers, they use tractors. And simply I mean, the econometrics of the agricultural production have significantly changed over the last couple of years. And therefore, from one side when you talk to them they have lots of understanding and, I would say, they support the measures which we proposed under the Green Deal, because they know that we need to treat the soil in respect—in respectful way, that they need the biodiversity for pollinators, that we have a big problem with the droughts in parts of Europe. And I was talking to, you know, Spanish regional leaders from Andalusia, from Catalonia. I mean, their reservoirs already now, I mean, you have—at least in Brussels, we have an impression it’s raining all the time, which it is. But there, I mean, you have the water reservoirs filled like between 4 to 20 percent. And they are in the middle of what we would call in Europe the rainy season. So they understand all that.

But of course, they’re telling us that: Look, our incomes dropped. So if you want to kind of work with us on all these measures, we have to look at new sources of revenues for agriculture. Of course, one of the—one of the idea which we are testing, and we’ll see how it will be in the future. I, again, believe that we can use much more the concept of carbon removal certificates. So if you are the responsible forester, and if your forest serves as important carbon sink, or if you’re going to do what they’re going to do in Andalusia, as I heard from the—from the first minister of Andalusia—that they’re going to reforest part of the field, just to keep the water in the system, I think you should be rewarded for that.

I think—I mean, because you’re removing the carbon from the environment. So I think you should be—you should be rewarded for that. Like, you have to buy your emission allowance when you’re going to pollute. So I think you should be rewarded when you’re actually removing the carbon from the system. But for that, you need to discuss the methodology. That’s a little the same, like with the green steel and with other things. But I think that’s, I would say, one concept which we have to work.

And concerning the financial instruments, you are right that we are kind of funding the Green Deal projects from basically, I would say, two major sources. One is the seven years budget, what we call in EU-speak multiannual financial perspective. And there, it’s in the realm of 1.2 trillion euros. And like 40 percent of that is devoted to, I would say, climate-related projects. And then the NextGenerationEU, which is in the realm of eight hundred billion euros. So, again, I would say that more than 40 percent was devoted to this type of the project. But, of course, the scale of demand and change is much bigger than what you could fund from the, I would say, public funds, or through grants.

So, we are talking very intensively with the new management of the European Investment Bank, with the financial industry, because we need to work more with leveraging, with blended finance, and especially to bring also private investors, private equity investing into this transition, because it makes sense. We have to build, coming back to what I said earlier, the business case for this Green Deal project. And we are now figuring out, with the capitals of the European industry, how to achieve that.

ANA SWANSON: OK, well, we’re all out of time for today. But thank you so much for a great discussion. Thank you to everyone who joined us, both online and in the room today. And as a reminder, this event will be available both on YouTube and the Atlantic Council’s website. So thank you.

MAROŠ ŠEFČOVIČ: Thank you

Watch the full event

Public Event Tue, February 13, 2024 • 1:30 pm ET

Maroš Šefčovič on US-EU collaboration towards a transatlantic green marketplace

AN #ACFRONTPAGE EVENT— European Commission Executive Vice-President Maroš Šefčovič on building more resilient, green transatlantic economies.

Energy Markets & Governance Europe & Eurasia European Union Geopolitics & Energy Security

The post The European Commission’s Maroš Šefčovič maps the way forward for EU-US collaboration on energy security and critical minerals appeared first on Atlantic Council.

Public Event Tue, February 13, 2024 • 1:30 pm ET

Maroš Šefčovič on US-EU collaboration towards a transatlantic green marketplace

AN #ACFRONTPAGE EVENT— European Commission Executive Vice-President Maroš Šefčovič on building more resilient, green transatlantic economies.

Energy Markets & Governance Europe & Eurasia European Union Geopolitics & Energy Security

Last week, the European Commission released its newest climate targets, aiming to cut greenhouse-gas emissions by 90 percent by 2040, compared with 1990 levels. “We want to be climate neutral by 2050,” explained Maroš Šefčovič, executive vice-president of the European Commission for the European Green Deal. “But we know that without gas… it will not be possible for us.” 

Šefčovič spoke at an Atlantic Council Front Page event Tuesday hosted by the Council’s Global Energy Center and Europe Center. There, he explained that liquefied natural gas (LNG) is “a very important transitional fuel,” but also in short supply in Europe, after the European Union (EU) began to shift away from Russian gas—imports from Russia declined from 150 billion cubic meters (bcm) in 2021 to just over 40 bcm in 2023. Imports from the United States increased from 19 bcm to 56 bcm. 

Šefčovič—who is also the European Commission executive vice-president for interinstitutional relations and foresight—was in Washington, DC, this week to speak with Biden administration officials about a recent White House executive order that halted new approvals of LNG exports to countries that don’t have free trade agreements with the United States. “We had very good conversations on this topic yesterday,” Šefčovič said, adding that the US officials who attended the meeting were able to give him “reassurance” that in the next two to three years, “there should be no impact whatsoever on the supplies of US LNG to Europe.” 

“What is expected anyways is that export capacity of the LNG would double between now and 2030,” Šefčovič added. “On top of it, there is a kind of emergency clause that if things will really go in the wrong direction, that there is a possibility to kind of adjust the measures.” 

Below are more highlights from the event—moderated by New York Times reporter Ana Swanson—which touched upon US-EU cooperation on critical minerals, trade, and climate. 

Cooperation on critical minerals

• Following the 2022 passage of the US Inflation Reduction Act, Šefčovič said that some projects (including projects focused on strengthening Europe’s battery manufacturing industry or building gigafactories) have “slowed down” or are being “transferred” to the United States.  
• Šefčovič said he would welcome a US-EU agreement on critical minerals and would like to see cooperation result in a free trade agreement for the EU. He said that the EU and United States “understand each other” and have a similar philosophy on critical minerals, in that they want to make sure that any critical mineral project in another country creates added value for citizens there in the form of jobs, revenue, and more.  
• With China dominating the extraction and processing of raw materials, Šefčovič said that the EU and United States need to “offer the better alternative.” The EU and United States, Šefčovič argued, “have [the] financial firepower to support these projects and to do it with this philosophy of sharing, not just extracting.” He argued that such critical minerals sharing could benefit Europe in the long run, since it is currently dependent on China and “we are concerned that any dependency could be weaponized.” 
• Šefčovič also is bullish about a source of critical minerals (and low-carbon energy) closer to home: Ukraine. “To put it simply, I think Ukraine has everything we need,” he said. “I think [the EU and United States] can come together as part of our reconstruction efforts to kind of build this potential.” 

A transatlantic green marketplace

• Šefčovič argued that “the next level of cooperation” between the United States and EU should be a transatlantic green tech market that not only permits free trade but also sets the stage for common standards, a shared vision on subsidies, and improvements in investment flows.    
• Šefčovič said such a marketplace would allow the EU and United States to put their combined economic weight behind the development of new technologies, which would also benefit developing countries that need access to green technologies to mitigate and adapt to climate change. The “sooner we develop them… at scale so they are affordable, the better it would be for the planet,” Šefčovič said. 
• “So I see this transatlantic marketplace as a recipe for making our cooperation even closer, stronger,” Šefčovič said, “[and] with a very positive impact.” 

The United States’ inescapable responsibility

• The increase in US LNG exports to Europe as the bloc underwent its energy shift was “absolutely crucial”—despite the fact that the EU “paid a lot for it,” Šefčovič said. It had a “calming effect” that allowed EU countries time to “look for other supplies from other corners of the world” and to focus on how to deal with Russia’s invasion of Ukraine. 
• Altogether, the EU’s energy shift, Šefčovič said, is a “pattern for the future, of what good allies should do [for] each other.” 
• Šefčovič noted that the Biden administration’s executive order on new approvals on LNG exports, which was released last month, sent “ripples” around the world. That, he said, shows just how much the United States has become a “global guarantor of energy security,” and that Washington’s responsibility extends far beyond Europe—it also lies in developing countries across Southeast Asia, Africa, and Latin America. Cooperation on reducing carbon emissions in these countries “is very essential,” Šefčovič argued. 

Katherine Walla is an associate director on the editorial team at the Atlantic Council. 

Watch the full event

The post Why the European Commission’s Maroš Šefčovič is confident that US gas exports will keep flowing to Europe appeared first on Atlantic Council.

Von der Leyen’s election and her development of a European Green Deal came on the eve of multiple crises that would shape not just Europe’s trajectory on decarbonization, but its strategic defenses as well. Mere months after her election, the European Union (EU) began to face the COVID-19 pandemic’s health and economic crises. After pandemic recovery plans were shifted toward clean energy-oriented growth under instruments such as NextGenerationEU in 2021, Russia launched a full-scale invasion of Ukraine and weaponized European gas supplies the following year. Russia’s aggression led to a severe energy crisis across the continent, with electricity prices soaring and observers worried that all these factors were combining into existential threats that Europe had not faced since 1945. Compounding matters, Europe was squeezed in an intensifying competition between the United States and China, with Washington passing the Inflation Reduction Act (IRA) in 2022 with potentially significant effects for European industry and competitiveness.

In this context of exponentially growing danger to Europe, the von der Leyen Commission achieved an impressive record for progress toward the clean energy transition. The European Green Deal is the first comprehensive plan to make an entire continental union achieve net-zero emissions by 2050. To achieve the transition to net-zero emissions, the European Green Deal pushed emission reduction targets, expanded Europe’s Emissions Trading System, and launched a series of clean technology programs, especially on hydrogen, offshore wind, and energy storage. The subsequent reorientation of NextGenerationEU funding from pandemic recovery to clean energy investments in 2021, as well as the concurrent (and ongoing) drafting of the Green Deal-linked Fit for 55 legislative package that introduced the Carbon Border Adjustment Mechanism, have already accelerated Europe’s emission reduction policies. After Russia launched its full-scale invasion of Ukraine, the Commission introduced the REPowerEU Plan to reduce European consumption of Russian fossil fuels, notably doubling solar capacity and heat pump installations and prioritizing other investments into renewable energy sources. By the metrics released by the Commission in mid-2023, there has already been at least a 20 percent reduction in energy consumption across the bloc because of increased energy efficiency and lowered demand (partly due to government intervention). There was an additional 39 percent of the energy produced in the EU coming from renewable sources as well.

Despite these achievements, significant work remains on reducing EU carbon emissions. For one, out of the seventy-five pieces of Fit for 55 legislation, only thirty-two have been adopted, with another sixteen in final negotiations. A further twenty-one are still up for debate in the European Parliament, with six not even tabled for discussion. Other projects have failed to take off entirely, such as the Sovereignty Fund that the Commission floated as one of several responses to the IRA. In fact, as net-zero policy becomes an increasingly competitive economic race, the EU has yet to fully define its stance toward China and the United States. So far, it is unclear how, where, and when Europe should protect its industries. 

Given such a record, if von der Leyen were to launch and win a re-election bid, Europeans should expect more of an emphasis on executing all these existing proposals, rather than the announcement of new ones or any U-turns. The European Climate Neutrality Observatory has argued that much of the new legislation and reforms the von der Leyen Commission introduced have created the institutional framework for vital climate action, but that their implementation remains far too slow, partially due to a lack of financial support for a larger-scale adoption of clean energy technologies. Von der Leyen herself seems aware of this shortcoming; in her September 2023 letter to the incoming European Commissioner for Climate Action Wopke Hoesktra, her primary instruction was clear: implement, implement, implement. Even the Green Deal, the first major proposal of the von der Leyen Commission, is far from being finalized, as the ongoing legislative processes attest. Recent agreements on electricity market reform, industrial emissions, and new rules for hydrogen investments are necessary steps in that direction. 

On trade and the protection of Europe’s industries, the European Commission will have to outline more specific plans beyond the recent probes into Chinese practices the Commission just announced. However, the Net-Zero Industry Act, one of Europe’s answers to the IRA, has yet to put any new funding on the table. 

The next Commission will have to navigate another momentous challenge: enlargement. As Ukraine and ten other countries vie for EU accession, Europe’s unity, resolve, and ability to see its decarbonization goals through could once again be challenged as new members join the fold, even though this enlargement will likely not happen before 2030. On top of that, the EU’s existing enforcement of climate targets and other key decarbonization deliverables is lacking as well, leading to inconsistent approaches between the existing EU members themselves.

The final, and possibly most difficult, predicament will be staying the course. Even as pressure continues to build on the European Commission to retain its momentum, policymakers should not underestimate the continued strength of climate-skeptic populist movements in European politics. The anxieties of continued economic decline and worries over increasing migration remain prevalent among significant parts of the European electorate, which could politically bolster the populists and threaten existing momentum on decarbonization and the energy transition.

Consequently, only two things can be said for certain about the next European Commission. The first is that it will have its work cut out for it, with these crises unlikely to dissipate within the next five years. The second is that whoever succeeds von der Leyen, whether it be in 2024 or in 2029, will have large shoes to fill when it comes to making progress toward reaching net-zero emissions.

Francis Shin is a research assistant in the Atlantic Council’s Europe Center.

Théophile Pouget-Abadie is a nonresident fellow with the Atlantic Council’s Europe Center and a policy fellow with the Jain Family Institute, focusing on decarbonization, the energy transition, and European policy.

The post Ursula von der Leyen has delivered major wins on decarbonization. What would she do with another term? appeared first on Atlantic Council.

Europe faced a perfect storm in 2022, with the invasion of Ukraine upsetting the post war security order, massive disruption in energy supplies especially coming from Russia undermining the backbone of Europe’s energy system and growing geopolitical rivalry, in particular between the US and China that crippled further the world trading system on which Europe relies for its economic growth. This is but the latest episode of Europe’s failure to insulate itself from the geopolitics of energy, a position of great vulnerability akin to a “Permanent Suez” crisis. The European response to double down on the energy transition and accelerate the decarbonization of its economies is sensible and necessary. It is also the only response that leads to a more secure and prosperous Europe.

Devoid of large fossil fuel and mineral resources, the continent is dependent on an arc of authoritarian energy powers, across central Asia, Africa and the Middle East. These toxic relationships, necessary to fuel the European economy, have repeatedly threatened European domestic politics, international security and wealth, culminating with the Russian war in Ukraine. In that light, Europe’s decarbonization policies can serve as more than climate policy, but also a security and foreign policy. Europe’s strategy in this energy transition will hinge on its ability to overcome five internal problems:

• The Fiscal problem: The European Union’s fiscal rules and limited budget limit the necessary financing Europe’s energy transition requires.
• The Hostage problem: Anti-transition interest groups continue to hold national politics hostage.
• The Collective Action problem: National veto players at the European level can hold the entire Bloc back.
• The Just Transition problem: The energy transition creates winners and losers, and the latter need to be compensated fairly, as exemplified by the “Gilets Jaunes” protests.
• The Industrial problem: Europe’s industrial base, green or otherwise, is increasingly challenged outside its borders.
• The Multilateral problem: Europe will need to support decarbonization outside its own borders, and in particular in less-developed countries.

Europe will need to completely overhaul its economic, trade and fiscal policies if it is to find a sustainable place in this new order. The race for critical minerals, of which Europe is once again bereft, will force European policymakers to redefine their relationships with mining states, while learning from the mistakes of the past. Further down the value chain, Europe risks massive deindustrialization if it fails to compete with Chinese and American firms. Finally, the Bretton Woods institutions that have governed global financial markets need to be reformed to unlock climate financing for less-developed States. This is a tall challenge that will require leaning on the US as much as possible.

Europe has entered the race to “net zero” from a position of weakness, and will need to reform internally and chart a path between the United States and China so as to avoid confrontation. Europeans should find an arm-length relationship that allows creating a Critical Minerals Club with the United States, reassure China about the scope of its economic de-risking and push hard for reforms international financial institutions, and push for a global “green” spending target as a percentage of GDP. This is an arduous path, but the only one which ensures Europeans a secure and prosperous place in the new world order.

About the authors

Ben Judah is director of the Transform Europe Initiative and a senior fellow at the Atlantic Council’s Europe Center. His current research focus is on the European consequences of Russia’s invasion of Ukraine, transnational kleptocracy, European energy and decarbonization politics, and Britain’s attempts to reset its diplomatic posture after Brexit.

Shahin Vallée is a senior research fellow in DGAP´s Center for Geopolitics, Geoeconomics, and Technology. Prior to that, he was a senior fellow in DGAP’s Alfred von Oppenheim Center for the Future of Europe.

Tim Sahay is a nonresident senior fellow at the Atlantic Council’s Europe Center and the senior policy manager at the Green New Deal Network, a coalition of labor, climate, and environmental justice organizations growing a movement to pass national and international green policies.

The Europe Center promotes leadership, strategies, and analysis to ensure a strong, ambitious, and forward-looking transatlantic relationship.

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During Iran’s population surge—ten to over eighty-five million over the course of a century—its renewable water resources have gone from 130 BCM to 80-85 BCM. Projections indicate a potential halving of resources by 2041, raising concerns as Iran’s population is expected to surpass 100 million. Per capita water availability for Iranians may drop below 500 cubic meters, marking absolute scarcity. Once adept at groundwater management, Iran now faces consequences like land subsidence due to depleting groundwater, which affects food self-sufficiency. This has led to farmers abandoning lands, causing an influx of ten million people into the outskirts and shanty towns since 2013—ten times the number of Syrian villagers migrating during the 2006-2009 drought in the Hasakah governorate. Many researchers have linked the Syrian conflict to this drought.

Regardless of the numerous opportunities to enhance its water management policies, the government persistently adheres to the path of Iran’s “Water Mafia”—a non-official alliance that comprises the energy ministry, executives, academics, consulting engineers, influential contractors, and a cadre of Islamic Revolutionary Guard Corps (IRGC) commanders overseeing the Khatam al-Anbiya Construction Headquarters. Disturbingly, if this group opts to construct a dam like Gotvand—where a multimillion-ton mass of salt became a part of the reservoir despite many warnings about this possibility due to nearby saline geological formations—there seems to be no governing authority capable of halting their actions.

The concept of top-down decision-making in Iran is not novel; Iranians have been acquainted with such a system for centuries. However, the adverse effects of water mismanagement have never wrought such devastation on the land and its water resources (the latter of which are steadily diminishing). Since the 1980s, when President Ali Akbar Hashemi Rafsanjani’s post-war reconstruction plans garnered substantial attention, the landscape of Iran has been transformed by the construction of numerous dams along rivers, absorbing considerable financial resources over time.

In the late 1980s, the establishment of two key organizations—the Khatam al-Anbiya Construction Headquarters, equipped with significant machinery and war-acquired experience, and the Iran Water & Power Resources Development Company (IWPC)—resulted in an enduring business alliance. IWPC was founded by a group of engineers, mainly consisting of the students who occupied the US Embassy in Tehran. During Rafsanjani’s era and beyond, those entrusted with managing water and agriculture, despite warnings from experts, advertised that constructing dams and transferring water between watersheds would guarantee self-sufficiency. However, these decisions, made without consultation with independent and qualified experts, led to a decline in lakes, wetlands, rivers, and groundwater sources.

Social impact

In 2016, many believed that a successful nuclear agreement and the lifting of sanctions would allow the Islamic Republic to address its financial challenges, solve the water crisis, and rehabilitate its endangered lakes and rivers. The Center for Naval Analysis, an institute in Washington, later warned the US government of escalating and enduring water tensions that could lead to local protests, potentially sparking violence worldwide and undermining US national interests. The report also highlighted the possibility of global terrorism and civil war over shared resources. This warning gained attention in December 2017-January 2018 during an unexpected uprising in Iran that reverberated across the nation—the largest at the time since the 1979 revolution. Thousands protested, leading to swift intervention from security forces. Official reports acknowledged over twenty casualties, with unofficial sources suggesting the death toll exceeded fifty. The critical aspect was that protestors lost their lives in towns that were struggling with the harsh impacts of water scarcity.

In 2019, the nation witnessed another widespread uprising, with reports indicating that over 1,500 protestors lost their lives at the hands of security forces. In Mahshahr, a town in the Khuzestan province in southern Iran, and other towns, individuals affected by the regime’s detrimental water policies were fatally shot. The unrest persisted into 2020 and 2021, as people in Khuzestan clashed with security forces over water-related issues, resulting in further loss of lives. Despite being considered a water-rich province, with major rivers like Karun, Karkheh, and Jarrahi, and possessing vast oil and gas reserves, Khuzestan has tragically become a victim of poor water management. Many rivers and marshes in the region have dried up due to the water management schemes implemented by the government and the Khatam al-Anbiya Construction Headquarters.

Amidst the desiccation of wetland areas—exemplified by Hoor-al-Azim in Khuzestan—intricate sediment deposits have become susceptible to the elements. With even the faintest breeze, these minuscule particles ascend into the air, launching as dust storms that target the cities within the province. This matter has engendered a noteworthy deterioration in air quality across various sectors of Khuzestan, concurrently fostering the widespread illness of thousands of residents in the province.

Inequities in Iranians’ access to water

Iran’s uneven water rights approach disproportionately impacts citizens in marginalized provinces, causing severe water scarcity. Provinces like Sistan and Baluchistan, Kerman, Fars, Isfahan, Southern Khorasan, Hamedan, Yazd, Khorasan-e Razavi, and Semnan face widespread water poverty due to disappearing lakes, groundwater depletion, and contamination. Projects like the Karun-3 dam and the Khersan-3 dam, as well as water allocation, displace residents, resulting in enduring hardships. On top of this, climate change and vanishing glaciers intensify water losses in different river basins. Inter-basin water transfers fuel further tension, benefiting lobbyists and the Water Mafia while simultaneously exacerbating environmental injustice against marginalized populations. Despite government assurances, residents of Zayandeh Rud basin resort to illegal well pumping, causing groundwater depletion, land subsidence, and health issues, threatening Isfahan’s existence. In northern Iran, Lake Urmia has dried up due to dam construction and unsustainable farming, leaving behind a saline desert filled with residues and particles contaminated by industrial and human wastewater and chemical fertilizers. Strong winds disperse these toxic particles, harming millions in nearby areas.

Despite the evidence of human and environmental damage from expensive water management projects, it has been empirically proven that, in many regions of Iran, nature-based solutions—unlike dam constructions and inter-basin water transfers—are more efficient and cost-effective. But Iran’s Water Mafia consistently opposes projects prioritizing efficiency and cost-effectiveness, as these initiatives undermine their ability to extract commission money.

Nowadays, IRGC generals and water executives have fallen in love with seawater desalination, a technology practiced mainly by Israel and nations in the Persian Gulf region. As FAO’s Slim Zekri told me, the production cost of one cubic meter of freshwater in the Persian Gulf is approximately $1. However, an insider in Iran revealed to me that the actual cost of freshwater production in the country exceeds $1.5. This is influenced, in part, by sanctions and the absence of a direct business relationship with Israel, which is the proprietor of Reverse Osmosis (RO) technology and the primary manufacturer of RO filters. The expense of transporting this water through a pipeline to central Iran, nevertheless, significantly escalates the overall cost to almost $5 per cubic meter.

The harmful impact of desalination plants is not often disclosed to the Iranian public. The hot brine is disposed of in the shallow Persian Gulf, leading to an environmental massacre. Many fish species have migrated from the extremely saline waters and coral reefs are experiencing bleaching and dying. In some circles, it has been said that the price tag of establishing this infrastructure and its pipelines is over $8 billion, and that it would produce a minimal amount of freshwater—approximately 4 BCM per year in 2044.

Iranian experts have developed cost-effective methods to manage flash floods and recharge aquifers by storing water underground, potentially saving at least 30 BCM annually at a cost of less than $8 billion. With an anticipated cost of nearly $500 per hectare for implementation, the execution of this project over a 14-million-hectare area would result in an expenditure of approximately $7 billion. Additionally, the resulting annual water storage capacity would surpass 40 billion cubic meters, even in a dry year. This approach would inspire a reverse migration among farmers and the reclamation of ancestral lands. Surveys suggest it can be implemented on nearly 8 percent of Iran’s land, providing water savings and flood protection while positively impacting microclimates.

Empowering farmers to establish floodwater management co-ops safeguards resources, mitigates destructive floods, and ensures water storage. The positive environmental impact of artificial recharge and spate irrigation, which would provide an extra 50 percent to Iran’s annual renewable water resources, stands in contrast to desalination’s minimal water addition and environmental drawbacks. Despite viable alternatives, regime insiders choose to sacrifice natural resources for a slight commission increase from an $8 billion project.

How can the United States help?

Compelling data underscores the dire situation facing millions of rural Iranians, pushing them to abandon their ancestral lands due to a substantial decline in groundwater resources. Projecting forward, if current climate conditions persist and water management remains inadequate, a mass exodus appears imminent. This demographic shift could significantly impact the United States’ interests and security concerns in the Middle East and beyond. In recognizing Iranians as potential allies, the United States could prioritize their well-being in alignment with its national interests. Transforming Iran’s water situation necessitates a fundamental shift towards a democratic system that values knowledge and encourages active public participation, departing from the prevailing top-down decision-making model.

The United States can help Iranians through technical assistance and knowledge transfer, capacity building and training, and supporting civil society as well as promoting climate change adaptation.

For Iranians, learning from Israeli water experts and the authorities who established Israel’s national water company (Mekorot) in 1937—a centralized body predating the nation’s formation by eleven years—is imperative. Such an entity should possess the capability to address the challenges posed by a changing climate, fostering resilience in Iran while concurrently navigating diplomatic intricacies related to shared water resources with neighboring nations. This approach aims to alleviate tensions and initiate regional cooperation within the Middle East and North Africa region. The United States has the ability to financially support the establishment of an organization like Mekorot situated outside of Iran. This organization, once operational, could initiate the implementation of modified water management methods, effectively alleviating damages resulting from the mismanagement of the Islamic Republic. Strategic intervention of this nature can contribute to achieving a state of relative stability following the possible decline of the Islamic Republic.

The pursuit of sustainable improvements in Iran’s water management requires a concerted effort toward capacity building in civil society and water-dependent sectors. American institutions, drawing on successful initiatives predating 1979, are well-positioned to play a pivotal role in this regard. Despite historical criticisms of Truman’s Point 4 Program and Iran’s adoption of the American “Hydraulic Mission,” a tailored sustainable development approach is crucial. Oversight by Iranian-American academics, who are well-versed in Iran’s environmental challenges, can ensure the effectiveness of these initiatives. Renowned figures in the agricultural and water sectors within the Iranian community can serve as exemplars, showcasing successful practices applicable to diverse regions in Iran. Disseminating knowledge through online training courses, television programs, and instructional animations demonstrating sustainable solutions can help diminish reliance on the authoritarian governance of the Islamic Republic. Foreseeing potential uprisings in Iran, particularly arising from water and environmental crises, emphasizes the need to promote democratic practices in the agricultural and environmental sectors. In early 2024, severe air pollution led to school closures in major cities, prompting protests in Ardekan and Arak against regional pollution linked to local and national industrial policies. The substantial decline in rainfall and snowfall heightens the imminent risk of severe water shortages in the upcoming spring and summer, which suggest a likely escalation in protests and instability based on historical trends.

The prevailing patriarchal system in Iran has hindered genuine democratic experiences, impeding accountability for officials and elites. In contrast, the US environmental management evolution, driven by civil society activism, led to the creation of the Environmental Protection Agency and pivotal legislation like the Clean Water Act. This empowered communities to influence projects, challenging top-down decision-making. The evolving social landscape in Iran provides an opportunity to transmit the experiences of American groups effectively. This would enable Iranians to envision impactful changes through civil means in their protests, aligning with the democratic values witnessed in US environmental governance.

Sharing knowledge builds trust and fosters cooperation and partnership between Iranians and Americans in alignment with US national interests, especially in the Persian Gulf region. While US institutions have shared rainfall and groundwater data with Iranian scientists, expanding these efforts is crucial. Disseminating valuable information to farmers, stakeholders, and shareholders in Iran is vital for informed decision-making and sustainable practices in water and environmental management.  Addressing financial constraints for talented Iranian students is essential and would empower them to study under top Iranian-American academics, facilitating knowledge exchange on updated water management methods. This collaborative effort within academia has the potential to significantly impact water and environmental management in Iran, contributing to the preservation of natural resources.

In a warming climate with a deteriorating water situation, Iran confronts declining livelihoods due to the Islamic Republic’s poor management, prompting potential mass migration and instability. Despite Iranians’ inclination to engage with the United States, a human-made drought affects them. In the post-Islamic Republic era, Iranians require the United States to be a reliable partner to navigate challenges while respecting integrity and choices. This partnership, which is crucial for US national security, should begin sooner rather than later. Iranian experts are prepared to establish their Mekorot today and initiate planning for a new environmental system to address resource mismanagement.

Nik Kowsar is an Iranian-Canadian water issues analyst. He produces and hosts a weekly TV show addressing Iran’s water situation, broadcast on several satellite TV channels. Follow him on X: @nikahang.

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On January 17, Imran Bayoumi, Associate Director of the Scowcroft Security Initiative, was quoted by The New York Times DealBook newsletter on one of the six ‘snow leopards’ to watch for in 2024, a super-reflective white paint that can reflect 98% of sunlight, lowering air-conditioning needs and emissions.

Staff

Imran Bayoumi

Associate Director

Scowcroft Center for Strategy and Security Scowcroft Strategy Initiative

The Scowcroft Center for Strategy and Security works to develop sustainable, nonpartisan strategies to address the most important security challenges facing the United States and the world.

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The post Bayoumi in The New York Times on a paint that can reduce emissions appeared first on Atlantic Council.

By Peter Engelke and Paul Saffo

Voters around the world cast their ballots on the fate of democracy. Ukraine determines whether its struggle against Russian aggression is winnable, China deploys measures just short of war against Taiwan, and broader hostilities engulf the Middle East. Insufficient action on climate change increases the chances of rogue geoengineering. Oceans governance and space exploration leap forward. Artificial intelligence becomes ubiquitous. 

These are just some of the biggest global risks and opportunities that we foresee in 2024. To create the following list, we conducted a miniature foresight exercise, assessing the most significant trends and developments that have occurred in the past, consulting Atlantic Council experts on what they’re monitoring in the present, and forecasting how geopolitical, economic, technological, political, demographic, and environmental forces could interact in the future.  

The scenarios below, which do not appear in a particular order (we consider all to be important, hence their inclusion on this list), are assigned a probability from “low” to “high.” A “medium” probability means that we have assigned a (roughly) 50/50 chance to the scenario occurring within the next year. A scenario with a “low” probability is no less significant than the others. This just indicates that it is unlikely to materialize in 2024. But as recent years have so dramatically illustrated, low-probability scenarios can cause a high degree of global turbulence. And the odds of such a scenario happening could rise over a longer timeframe. 

Top risks

There are two central worries associated with this risk. First, that the conflict between Israel and Hamas will not be contained to Gaza and instead spread to other countries bordering Israel. Since Hamas’s October 7 terrorist attack, Israel and Iran-backed groups in Syria and Lebanon, including Hezbollah, have traded artillery fire and engaged in other military activities such as airstrikes, with tensions recently spiking over the killing of Hamas leader Saleh al-Arouri in Beirut. These dynamics risk escalation, whether intended or unintended.

Second is the concern that the United States and Iran will be drawn into a direct conflict with one another. Iran’s well-developed regional network of armed militias and terrorist groups has already attacked US bases in Iraq and Syria and commercial vessels in the Red Sea. The latter development, in turn, has forced the United States and its allies to form a maritime security force to protect vital shipping lanes in the region and ultimately to carry out airstrikes in Yemen against the Houthi rebels behind the Red Sea attacks. Although neither Israel nor Iran nor the United States appears interested in a wider war in the Middle East, an accident, a miscalculation, unforeseen events, or rash and imprudent decision-making by a state or nonstate actor might prove the tipping point for a highly volatile region.

Although Israel has announced that it is winding down the first phase of its military campaign in Gaza, there are too many unknowns and potential flashpoints to forecast a rosy scenario in 2024.

It appears unlikely that Russia has the military capability to decisively defeat Ukraine on the battlefield. Yet it is not a given that Ukraine will be able to win the war outright, as shown by its own lack of offensive progress on land (if not at sea) in 2023.

In October 2023, a rare storm formed in the Pacific. Over a single day, it intensified from a tropical storm to a Category 5 hurricane, coming ashore around Acapulco and ravaging the Mexican city. In September, eight months’ worth of rain fell on eastern Libya in just twenty-four hours, collapsing two dams and washing out large portions of coastal communities.

Imagine a storm of such ferocity and speed hitting an even larger city—one of five, six, or twenty million residents. Over 600 million people live in low-lying areas within sixty miles of a seacoast and two-thirds of the world’s largest cities (with populations of five million or more) are located in these coastal zones. People around the world are increasingly moving to such megacities—some driven there because the effects of climate change have made life elsewhere untenable.

Clear data on the relationship between climate change and extreme weather events is elusive. For example, data from the US Environmental Protection Agency suggests that the frequency of hurricanes reaching the United States has largely not changed over the last century, but the data also points toward increasing activity since 1995 (coinciding with increases in sea surface temperature). In general, however, storm forecasters worry that higher ocean temperatures and other climate-related factors will both increase the number of hurricanes and rapidly transform weak tropical storms into severe hurricanes, as occurred in Acapulco.

Combine this climate reality with the infrastructure challenges facing many of the world’s megacities, and the stage seems to be set for an Acapulco-like disaster playing out on a larger scale, wherein a megastorm hits a megacity such as Dhaka, Manila, Ho Chi Minh City, or Rio de Janeiro. Whether such a disaster occurs in 2024 is hard to predict, but what is certain is that such an event will occur at some point in the coming years.

Fears of a Chinese invasion of Taiwan have been circulating in Washington and other capitals for years. Although an invasion scenario has preoccupied military planners in the Pentagon, another coercive scenario—a Chinese naval blockade of Taiwan—is as likely if not more so in 2024 and beyond.

With the world’s largest navy, coast guard, and maritime militia, China knows a blockade is more flexible and easier to execute than an invasion would be.

With relations among nuclear-armed countries deteriorating as they contest hot spots around the world, there is a real prospect in 2024 of two or more nuclear powers engaging in direct combat with one another using conventional weapons. The bigger concern is that such a conflict could escalate to a nuclear exchange.

While the final agreement from the recently concluded United Nations (UN) climate change summit known as COP28 included a commitment to “transition away” from fossil fuels, it also fell short—just like other COPs before it—of tying countries to binding collective action on reducing greenhouse gas emissions.

Since 2020, there have been eight successful coups in countries across Africa’s Sahel region and West Africa, forming what is now labeled a “coup belt” stretching from the Atlantic Ocean to the Red Sea. In 2024, the odds are high that additional coups will beset the region, within both countries that already have experienced coups (Mali and Burkina Faso, for example, have endured back-to-back coups in short succession) and countries that have not yet experienced them. The coup belt could also expand outward. In August, for instance, Africa’s most recent coup occurred in Gabon, well south of the Sahel in west-central Africa.

Strategic competition with China has quietly reached the United States’ neighborhood. Over the past two decades, China has become the largest trading partner of many countries in Latin America and the Caribbean. By taking numerous steps to enhance its position, China has quickly established itself as the region’s second-biggest trading partner overall, after the United States, and South America’s largest. In May 2023, for example, China signed a free-trade agreement with Ecuador, its fourth in the region following agreements with Peru, Chile, and Costa Rica. And Chinese entities have invested nearly $150 billion in the region since 2005 to support energy, transportation, infrastructure, and other public-goods projects.

Top opportunities

This will be a critical year for democracy. The world’s largest democracies, India and the United States, will hold general elections. So too will South Africa, Mexico, Indonesia, and a host of smaller countries, while the European Union will hold parliamentary elections. In total, according to the Economist, countries with more than four billion people will host local, regional, or national elections in 2024.

Over the past decade at least, democracies have been struggling against difficult headwinds. Economic frustrations, online disinformation, assorted grievances against established political elites, and social, cultural, and political polarization all have transformed the global democratic landscape for the worse. In 2024, it is reasonable to expect that voters in some countries will choose parties and candidates that flirt with authoritarian rather than democratic governance, as voters have done over the preceding years. Should voters choose illiberal paths in the majority of democracies holding elections this year, there is considerable risk of serious and lasting damage to the democratic project around the world.

However, we put this item on the opportunity side of the ledger because we remain optimistic about people’s faith in that democratic project. And with some reason: Global public opinion surveys consistently show broad support for democracy, though there also is widespread frustration with how it functions in practice. Voters across the world have an opportunity in 2024 to reaffirm their commitment to democratic governance by choosing parties and candidates that support democratic ideals and principles and, in so doing, reject illiberalism.

Since bursting onto the public scene in 2022, generative artificial intelligence (AI) and technologies involving large language models have advanced with breathtaking speed, with implications equally fascinating and terrifying. But relative to what will unfold in 2024, what we saw in 2023 barely qualifies as a warmup. Trying to predict anything in such a fast-moving area is a mug’s game, but there are a few elements we can count on:

• The global generative AI market will grow robustly in the year ahead and into the early 2030s. Goldman Sachs analysts have estimated that the diffusion of AI technologies will increase global GDP by 7 percent over the next decade.  
• 2024 will be the year when AI goes mainstream, and not just on our screens. AI systems are being embedded in the devices that define our everyday life. The result will be the arrival of the first “smartifacts”—devices with rudimentary intelligence having a greater ability to directly sense and interact with the physical world than they do now. This will begin with familiar objects—vehicles, appliances, personal electronics—but will also yield entirely new classes of devices, including dramatically more capable robots. 
• Meanwhile, AI will also yield more prosaic surprises. Chatbots will become ubiquitous on our communications devices, displacing traditional search. Such surprises will include downsides as well. AI will play a major disruptive role in influencing public opinion and this year’s many elections around the world. Indeed, the disruptions have already begun; in September 2023, for instance, Microsoft researchers unearthed a network of Chinese-controlled social media accounts using AI to influence US voters. 

Ukraine’s lack of significant progress during its 2023 counteroffensive surprised those who expected quick work against a Russian military that appears incompetent at best. Instead, Russian defenses have proven resilient, reducing Ukraine’s land offensive to a slow crawl. The war now appears to be settling into one of attrition that favors Russia given its larger economy and reserves of manpower, plus the expected impatience of Western publics for long wars (see the related risk above). In a November interview, Ukraine’s commander in chief, Valery Zaluzhny, lamented, “There will most likely be no deep and beautiful breakthrough”—at least, he implied, in the near term.

However, in 2024 there remains some hope of a breakthrough on the battlefield in Ukraine’s favor, assuming two factors align for Ukraine:

• The right mix of Western weapons and ammunition arrives at scale and on time. Although Western countries have been delivering these resources, the types and quantity thus far have fallen short of what has been needed to realize an offensive breakthrough.  
• Ukraine’s military leadership finds innovative solutions for a twenty-first-century battlefield that so far has favored the defense—an insight that Zaluzhny has readily admitted, while asserting that novel combinations of weapons, tactics, and information will provide the breakthrough. 

For such a scenario to materialize, the bad performance of Russian forces—a result of factors such as poor training, low morale, and inadequate supply—also would need to hold.

Should Ukraine’s military situation become more favorable in these ways in 2024, there is a chance that Ukrainian forces will achieve a breakthrough and, with it, the prospect of ending the war on Kyiv’s terms.

One of the fastest-growing economies on the planet isn’t on the planet—it is in space. According to the nonprofit Space Foundation, the global space economy grew 8 percent in 2022 to more than five hundred billion dollars and is on track to grow to nearly eight hundred billion dollars over the next half-decade. Commercial space efforts account for nearly 80 percent of activity in the sector, but military spending has also increased and is likely to continue to grow.

The hottest space real estate in 2024 will be low Earth orbit (LEO), where more sensor and communications systems will be deployed. In the coming year incumbents such as SpaceX and Blue Origin will expand the pace of their launch operations with new platforms such as Blue Origin’s reusable New Glenn launch vehicle, under contract with NASA to send two probes to Mars in 2024, and Rocket Lab’s two-stage Electron rocket, which has delivered dozens of payloads to LEO. Meanwhile, SpaceX has announced a goal of launching a rocket nearly every two days in 2024, which would roughly double its number of launches in 2023.

The incumbents are being chased by an ever-growing number of companies seeking their unique niches in the space economy. Look for the expansion of space-based telecommunications offerings beyond Starlink to encompass direct smartphone calling via satellite. The first space hotel is not projected to enter orbit until 2030 at the earliest, but even space tourism will grow modestly as Blue Origin, SpaceX, and Virgin Galactic expand their space-flight operations for tourists. And Axiom Space, a well-funded start-up with a goal to construct the world’s first commercial space station, has been sending commercial missions to the International Space Station.

Activities such as space tourism might seem frivolous, but they help fund and build out the space infrastructure needed to meet global challenges such as communications access for remote and underserved communities and environmental sensing for monitoring, predicting, and mitigating the effects of climate change. The growth of the industry matters because space-based activities are central to managing terrestrial issues and opportunities.

In September 2023, at the annual summit of the Group of Twenty (G20), Indian Prime Minister Narendra Modi announced that the African Union (AU) would be joining the G20 as a full member. Prior to this move, South Africa was the only African representative in the G20, despite representing just 4 percent of the continent’s population.

The G20 expansion presages Africa’s fuller inclusion in multilateral decision-making at the highest levels. A figurative dam has broken. For many years, Africa largely has been sidelined within global governance institutions such as the G20. AU membership in the G20 should make Africa’s economic, environmental, and security agenda of greater concern to the global community, and also help build trust between African nations and other countries within the G20 and elsewhere.

The big questions for 2024 and beyond are whether Africa’s agenda will be taken as seriously within the G20 as its inclusion in the bloc promises—and whether the AU’s entrance into the G20 increases Africa’s influence in other global forums such as international financial institutions.

Reforming the United Nations Security Council (UNSC), the most important body within the UN owing to its responsibilities for responding to war and upholding peace, has proven to be one of international diplomacy’s most intractable challenges. But the task has taken on greater urgency since Russia’s full-scale invasion of Ukraine in 2022 and Moscow’s subsequent blocking of all resolutions about the war. One fear is that the Security Council’s evident paralysis—in part the result of its inability to modify its membership and voting procedures—has rendered it illegitimate. The hope is that a reformed UNSC could regain much of its diminished legitimacy by acting more credibly and decisively on future matters of war and peace.

While reform proposals span procedural and membership changes, the core reform question is whether to expand the “P5,” the five permanent members of the Security Council that hold a veto: the United States, Russia, China, the United Kingdom, and France. P5 countries represent less than half of global GDP and one quarter of the world’s population. Major countries and entire regions, including Africa, Latin America, South Asia, and the Middle East, are excluded from permanent membership.

Despite the Biden administration’s support for new permanent members, and a significant global outcry over the lack of reform, we assess the odds of reforming UNSC permanent membership to be low in the short to medium term. There simply are too many conflicting interests within and outside the P5 to rate the prospects much higher. Nonetheless, addressing these problems remains an opportunity to act on a symbolically and substantively critical part of the global agenda, and a chorus of reform-minded voices is currently backing such moves.

The world’s five oceans, which together cover 71 percent of Earth’s surface, have come under threat from a range of human activities, including overfishing, plastics pollution, and climate change. Decades after the UN Convention on the Law of the Sea (UNCLOS) came into force, many of its most ambitious provisions remain in limbo. The recently adopted Biodiversity Beyond National Jurisdiction Treaty (commonly referred to as the High Seas Treaty), however, might just become a breakout exception in 2024 if sixty countries ratify it, allowing it to enter into force.

The High Seas Treaty provides a framework for managing oceanic ecosystems. Among other measures, it builds capacity around marine technology, creates new marine-area management tools, establishes processes for environmental-impact assessments, and provides technical support to developing countries, all in the service of effective global stewardship of oceanic resources.

The treaty will go a long way toward preserving oceanic fisheries, but that’s not all. The Earth’s oceans account for half of the planet’s oxygen, absorb one-quarter of carbon-dioxide emissions, and act as a sink for 90 percent of the excess heat generated by anthropogenic emissions. By managing the ocean’s biodiversity, the High Seas Treaty also will help preserve the oceans’ capacity to assist in managing the effects of anthropogenic climate change.

Another area to watch: the exploitation of deep-seabed resources contemplated under UNCLOS’s Part XI, driven by advances in extraction technologies. Although the High Seas Treaty does not have jurisdiction over deep-sea mining, ratification of the treaty might convince countries that if they can act in concert to manage the living resources of the sea, then they can also agree to do the same for the resources on the seabed.

A decarbonized global economy requires a consistent supply of critical minerals, including lithium, cobalt, copper, nickel, and rare-earth elements. Like the fossil fuels that have powered the modern industrial economy, critical minerals are unevenly distributed in the earth’s crust. Frequently, there is a geographic divide between where they are mined and processed versus where they are consumed as components in batteries, wind turbines, and other technologies. Source countries often are in the Global South, especially Latin America and Africa, and in China, which also has managed to capture much of the world’s output through contracting or outright purchase of mines and other facilities. But as with oil and natural gas, critical minerals are consumed everywhere in the world, disproportionately in the wealthiest countries that boast the largest consumer markets and fastest energy transitions.

There is enormous interest within both producer and consumer countries in reorienting the global supply chains of such minerals. The United States and its allies and partners in East Asia and Europe want to move supply chains away from China, while producer nations want to add processing and manufacturing value to their operations so that they aren’t only exporters of raw materials. A reset of global supply chains would require consumer countries such as the United States to envision new models of working with producer countries, and begin crafting equitable and mutually beneficial partnerships with them. Such partnerships could result in consumer countries securing their supply chains while producer countries build capabilities for processing and manufacturing critical minerals based on sound environmental, social, and governance principles. Doing so would benefit producer economies (and their local communities) beyond the gains provided by simple export of unprocessed raw materials.  

Keep an eye on whether policymakers in producer and consumer countries seize such an opening starting in 2024 and begin the hard—but ultimately worthwhile—work of reorienting global supply chains for critical minerals around new models. 

Peter Engelke is the deputy director of foresight within the Scowcroft Strategy Initiative, a senior fellow with the Atlantic Council’s Scowcroft Center for Strategy and Security, and a nonresident senior fellow with its Global Energy Center. 

Paul Saffo is a Silicon Valley-based forecaster and a nonresident senior fellow with the Atlantic Council’s Scowcroft Strategy Initiative. 

Global Foresight 2024

In this year’s Global Foresight edition, our experts identify the top risks and opportunities for 2024. Our foresight team spots “snow leopards” that could have major unexpected impacts in 2024 and beyond. And we share findings from our survey of global strategists and foresight practitioners on how human affairs could unfold over the next decade.

Learn More Full Survey

Atlantic Council Strategy Paper Series Jan 12, 2024

Welcome to 2034: What the world could look like in ten years, according to nearly 300 experts  

To survey the future, we polled global strategists and foresight practitioners on our most burning questions about the biggest drivers of change over the next decade. Check out their forecasts on everything from the likelihood of war over Taiwan to the future of AI.

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Atlantic Council Strategy Paper Series Jan 17, 2024

Six ‘snow leopards’ to watch for in 2024

Atlantic Council foresight experts spot the underappreciated phenomena that could have outsize impact on the world, driving global change and shaping the future.

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Atlantic Council Strategy Paper Series Jan 17, 2024

The top risks and opportunities for 2024

By Peter Engelke, Paul Saffo

2023 was marked by war in the Middle East and in Europe. What else looms on the horizon? The Atlantic Council’s top experts brought their globe-spanning expertise to the task of forecasting the near future.

Artificial Intelligence China

The post The top risks and opportunities for 2024 appeared first on Atlantic Council.

The snow leopards that stalk the rocky mountains of Central Asia are so elusive and well-camouflaged that they’ve earned the nickname “ghost of the mountains.” They’re out there, but exceedingly hard to spot.

These solitary big cats are a useful analogy for the global phenomena that can seem to come out of nowhere and take even the most seasoned observer by surprise. In some cases, that’s because a high-profile threat has eclipsed others; we rightly worry about the proliferation of nuclear weapons, for instance, but missile proliferation receives relatively less attention. Some things are so woven into our daily lives that they become invisible, as in the case of the global shipping lanes that make it possible for us to tap “buy now” today and find a package on our doorstep tomorrow. Trends that gather momentum slowly but steadily, undetected developments, known but underappreciated risks—all of these “snow leopards” have the power to reshape the world. 

This makes snow leopard-spotting an essential complement to any attempt to peer into the future. So our next-generation foresight team at the Scowcroft Center for Strategy and Security compared notes and identified six under-the-radar phenomena to watch. These are not predictions (for those, check out our list of top risks and opportunities for 2024, and our expert survey forecasting the decade ahead). What follows are trends and developments already underway whose disruptive potential, for good or for ill, we are overlooking. 

In the year to come, here are six snow leopards we’re keeping an eye on.  

With a key provision of Antarctica’s governing treaty set to come up for debate in 2048, many countries are eyeing the vast fisheries and hydrocarbons there. Most forms of military and economic activities on the world’s only uninhabited continent are banned under the 1961 Antarctic Treaty, which lays out a vision of peaceful scientific inquiry and cooperation and which fifty-six countries have now signed. But with Antarctica home to an estimated 500 billion tons of oil and 300 billion to 500 billion tons of natural gas, and with 135 billion tons of oil in the Southern Ocean region, the stage is set for the continent to become yet one more arena of geopolitical competition. 

The Protocol on Environmental Protection to the Antarctic Treaty, signed in 1998, stipulates that during its first fifty years it can only be modified by the unanimous agreement of all parties to the treaty. In its current form, the protocol restricts any activities related to Antarctica’s natural resources except for those involving scientific research. But starting in 2048 any party can call for a review of the protocol, initiating a process that, while lengthy and complex, could result in a modified protocol that creates more of an opening for natural-resource exploration in Antarctica.  

Notably, neither China nor the United States recognizes existing territorial claims to Antarctica made by other powers, with both reserving the right to participate in “any future uses of the region,” as the US government phrases it. China sees both polar regions as strategically valuable and ungoverned spaces, and has been increasing its physical footprint in Antarctica for years—having just broken ground on its fifth research station. China is planning to construct powerful antennas at its Antarctic bases that could serve two purposes: furthering legitimate scientific research, but also allowing China to gather intelligence across the Indo-Pacific region.  

Given Antarctica’s increasing geopolitical and economic importance—from fresh water, iron, and copper resources to strategic transportation routes—it is unlikely that the protections of the original Antarctic Treaty will be renewed in their current form. In the meantime, expect countries to ramp up their jockeying for position in the region, in the process undermining one of the few successful expressions of cooperative global governance.   

Imran Bayoumi, Associate Director, Scowcroft Strategy Initiative

Bayoumi graduated with his master’s degree in global affairs from the Munk School at the University of Toronto where he held a Joseph-Armand Bombardier Canada Graduate Scholarship. He also holds a BA from Queen’s University in political studies.

Climate change is now threatening the shipping lanes that underpin global commerce. While major supply-chain disruptions have made headlines in recent years—resulting from the COVID-19 pandemic beginning in 2020, the Suez Canal blockage in 2021, Russia’s invasion of Ukraine in 2022, and Houthi attacks on shipping vessels in the Red Sea in 2023, climate impacts are poised to dominate such disturbances in the coming years. The disruption to the way water moves between the Earth and the atmosphere—the patterns of rain, evaporation, condensation, and runoff that affect how much water flows through the world’s waterways—appears to be here to stay.

Global supply chains depend on these waterways. China’s “golden shipping route,” the Yangtze River, carries as much as 2.93 billion tons of cargo annually, including advanced manufacturing products. But a severe summer drought in 2022 left the river at half its usual width, stopping shipping through the middle and lower sections of the river. Likewise, the water levels of the Mississippi River, which sends $130 billion in goods each year through the Port of New Orleans alone, dwindled during a major drought in late 2022 that led to $20 billion in economic losses. In both 2022 and 2023, the Rhine River, perhaps Europe’s most important inland waterway, was so low owing to drought that some ships were only carrying half their usual amount of goods. The capacity of the Panama Canal, which transports 40 percent of US container traffic, 5 percent of global trade, and $270 billion in goods, took a hit too. A 2023 drought—the region’s worst since 1950—reduced the number of ships transiting the canal each day, as well as the amount of goods each could carry, suggesting a difficult future for one of the world’s most important nodes of trade. 

With climate change expected to make extreme weather more frequent, a big rethink of how goods move around the globe is necessary. Adaptation strategies, including refitting ships for shallower water or dredging and reengineering rivers, are costly and fail to solve the larger problem. A future with reliable transportation of goods will require rebuilding the global shipping map, from its hubs to its methods of transport, along with new technologies to navigate the world’s rapidly changing waterways. 

Sydney Sherry, Project Assistant, Scowcroft Strategy Initiative

Before she joined the Atlantic Council, Sherry worked as an intern for the Wisconsin State Legislature and as a research assistant for a PhD candidate on projects focused on forced labor, migration, and female participation in governance in post-Soviet Central Asia. She graduated with a bachelor’s degree in political science and a certificate in history from the University of Wisconsin.

Cans of paint may prove to be an important solution in addressing the climate crisis—a very specific white paint, to be exact. A professor at Purdue University, Xiulin Ruan, and his team have developed a highly specialized white paint that can reflect 98 percent of the sun’s rays away from the Earth. It’s a record that goes well beyond what the best existing white paints can do. Coating structures with this paint lowers their surface heat, keeps them cool without requiring energy or generating waste heat, and reduces air-conditioning needs by up to 40 percent. Purdue’s paint stands out as a leading offering, but cool coatings, even those not as advanced as the one developed at Purdue, provide a number of benefits. 

Imagine painting 1 percent or 2 percent of the entire planet in this heat-reflective white. According to one calculation, this could entirely offset the additional warming associated with ongoing carbon emissions. Though applying paint to structures at that scale would probably be impractical and costly,  applying it to cars, roofs, and roads worldwide would create islands of coolness in a warming world. 

The world’s growing number of city dwellers would also benefit. Buildings, roads and other infrastructure absorb and trap much more heat than greener natural landscapes. The retention and release of this heat, among other factors, can cause an urban heat-island effect, with daytime temperatures up to 7 degrees Fahrenheit higher in cities than in rural areas. Already, 56 percent of the global population resides in cities, and seven in ten people will live in cities by 2050. As temperatures around the world increase, some of these cities are becoming increasingly unlivable. Painting even a small part of the planet could keep cities cooler and healthier. 

Imran Bayoumi, Associate Director, Scowcroft Strategy Initiative

Bayoumi graduated with his master’s degree in global affairs from the Munk School at the University of Toronto where he held a Joseph-Armand Bombardier Canada Graduate Scholarship. He also holds a BA from Queen’s University in political studies.

Take a global landscape of rising multipolar tensions and partnerships, add widely available dual-use technologies like unmanned aerial vehicles (UAVs), and voilà: A new era of proliferation is increasing the challenge to arms control and the potential for conflicts around the world to escalate. 

At the end of the twentieth century, only a handful of powers had long-range precision-strike technology—primarily in the form of cruise and ballistic missiles. The technology was closely guarded, with international agreements and norms limiting the spread of such missile systems. Today, the number of countries acquiring and deploying long-range precision-strike systems is rising steadily— twenty-four states currently operate cruise missiles with a range greater than 300 kilometers, relative to just three in 1991—and similar technologies are now being deployed by nonstate actors as well. 

More and more, agreements to restrict the proliferation of these systems have been eliminated or ignored. In 2019, the United States withdrew from the Intermediate-Range Nuclear Forces Treaty after years of allegations that Russia had violated its terms. Another crumbling component of the arms-control architecture is the Missile Technology Control Regime, a 1987 voluntary agreement among nations to not sell or transfer technology for long-range missiles to other parties. But exports of restricted missile technology by the United Kingdom, France, Russia, India, China, Israel, and the United States have diminished the normative power of the agreement. What’s more, the Missile Technology Control Regime and other agreements have failed to control the spread of long-range armed UAVs. In 2020, for example, the United States changed its interpretation of the agreement’s rules so that it could more easily export armed drones—in reaction to the widespread sale of similar systems by China, Turkey, and Israel. 

The proliferation of long-range precision-strike technology to nonstate actors has further confounded arms-control efforts. Iran has exported ballistic missiles, cruise-missile technology, and armed UAVs to Hezbollah in Lebanon and the Houthis in Yemen. Both groups have used these weapons in attacks in the region. Just in the past several months, the Houthis have attempted several missile attacks on Israel and targeted international shipping. 

The upshot of all these trends? We may be headed for a world where most states and many nonstate actors will be able to attack targets deep within their neighbors’ territory, or even far beyond their borders, within hours. Civilian populations will become more vulnerable during war, as Russia’s attacks on Ukrainian cities show. The likelihood of local conflicts escalating across their region may increase along with the range of the weapons deployed—and more countries may need to develop plans and capabilities for air and missile defense. 

Jacob Mezey, Program Assistant, Forward Defense Initiative

Jake Mezey is a program assistant in the Forward Defense practice of the Atlantic Council’s Scowcroft Center for Strategy and Security. He contributes to the program’s research on nuclear security, space security, defense innovation and modernization, and grey zone conflict. Previously, Mezey interned with the International Institute for Strategic Studies and contributed to its Missile Dialogue Initiative. Mezey graduated with distinction from Yale University where his senior thesis focused on the role of the Russian military in Transnistria.

If a US-China conflict ever breaks out, expect to hear a lot more about Palau. As the potential for a military clash in the Western Pacific grows, so does the strategic significance of this tiny island nation between the Philippines and Guam. Palau’s importance stems from its key geographic location and its political alignment: It is one of just four states in the Pacific that maintains formal diplomatic relations with Taiwan, and it provides exclusive military operating and basing rights to the United States. 

Geographically, Palau is at the center of the “second island chain,” farther from China’s coastline than the chain of islands that includes Taiwan and part of the Philippines. Since China’s anti-access military capabilities—particularly land-based missiles—pose such a threat to military operations within the first island chain, the prevailing wisdom among defense experts is that the second island chain would be a more defensible platform for US forces in the event of a conflict with China. Palau—considered the anchor of the second island chain—could be a key location for rearming and repairing US military ships and aircraft as well as an important basing location for resupply, surveillance, communications, and other supporting activities.  

Politically, Palau has long had a special relationship with the United States, with commitments on both sides that extend beyond those of the typical alliance. The 1994 US-Palau Compact of Free Association gives the United States exclusive military operating rights in Palau, including the right to establish defense sites. In return, the United States is committed to defend Palau and provide it economic assistance, among other forms of support. Under a May 2023 update to the original compact, Palau stands to receive $890 million from the United States over twenty years.  

Washington’s focus on Palau has increased in recent years. The US Department of Defense awarded a $120 million contract at the end of 2022 to install a radar system in Palau by 2026, expected to improve the United States’ ability to track air and maritime threats from China and North Korea in the Western Pacific. More recently, in December 2023, Palau was one of the sites of the latest rounds of the Pacific Partnership military-exercise series. Expect to see more defense and infrastructure investments by the United States in Palau, as well as more military exercises in the area, which will only add to Palau’s importance. 

Palau may not be the focus of a potential US-China military confrontation, but it could be the critical location just behind the scenes. 

Emma Verges, Assistant Director, Indo-Pacific Security Initiative

Emma received her master’s degree in global affairs as a Schwarzman Scholar at Tsinghua University in Beijing. Her time in China lends a unique perspective to her work. She also holds a Bachelor of Arts in International Studies and Russian Studies from Macalester College.

Climate change and the rising demand for fresh water strain global water supplies and spark conflicts. Water stress affects billions of people in rich and poor countries alike, but the problem is most acute in poor regions that are arid and drought-prone. The number of droughts worldwide has risen 29 percent since 2000. The good news: Cheaper and less energy-intensive approaches to desalination—the process of turning seawater into fresh water for human consumption and use—are on the horizon and may provide the means to better quench demand. 

For decades, desalination has increased the availability of fresh water in coastal regions with direct access to the sea. Yet the dominant process for converting salt water to fresh—reverse osmosis—is costly, uses a significant amount of energy (often from fossil fuels), and produces a lot of waste (known as brine) as a byproduct. As a result, reverse osmosis can only solve part of the fresh-water problem, mainly for low-volume and high-value applications such as drinking water, and almost exclusively in high- and middle-income countries.   

But recent research breakthroughs could turn the tide. Researchers at MIT and in China have developed a briefcase-sized, solar-powered device that “could produce drinking water at a rate and price that is cheaper than tap water,” according to MIT’s description of the effort. Many other researchers are exploring forward osmosis, an alternative to reverse osmosis that can be applied at scale in large desalination plants. Forward osmosis uses natural osmosis, with an already present osmotic pressure drawing water through a membrane that separates the water from solids, and requires far less energy than reverse osmosis. In 2023, for example, a researcher at New Mexico Tech announced a forward-osmosis breakthrough that reduces energy consumption and pollution production. 

Perfecting forward-osmosis processes for wider use should cut the cost of desalination dramatically, in turn allowing lower-income countries to create desalination facilities. With the right investment and scaling, it is possible that more of the world will have access to affordable, life-sustaining fresh water in the years to come.

Imran Bayoumi, Associate Director, Scowcroft Strategy Initiative

Bayoumi graduated with his master’s degree in global affairs from the Munk School at the University of Toronto where he held a Joseph-Armand Bombardier Canada Graduate Scholarship. He also holds a BA from Queen’s University in political studies.

Global Foresight 2024

In this year’s Global Foresight edition, our experts identify the top risks and opportunities for 2024. Our foresight team spots “snow leopards” that could have major unexpected impacts in 2024 and beyond. And we share findings from our survey of global strategists and foresight practitioners on how human affairs could unfold over the next decade.

Learn More Full Survey

Atlantic Council Strategy Paper Series Jan 12, 2024

Welcome to 2034: What the world could look like in ten years, according to nearly 300 experts  

To survey the future, we polled global strategists and foresight practitioners on our most burning questions about the biggest drivers of change over the next decade. Check out their forecasts on everything from the likelihood of war over Taiwan to the future of AI.

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Atlantic Council Strategy Paper Series Jan 17, 2024

Six ‘snow leopards’ to watch for in 2024

Atlantic Council foresight experts spot the underappreciated phenomena that could have outsize impact on the world, driving global change and shaping the future.

Climate Change & Climate Action Defense Technologies

Atlantic Council Strategy Paper Series Jan 17, 2024

The top risks and opportunities for 2024

By Peter Engelke, Paul Saffo

2023 was marked by war in the Middle East and in Europe. What else looms on the horizon? The Atlantic Council’s top experts brought their globe-spanning expertise to the task of forecasting the near future.

Artificial Intelligence China

The post Six ‘snow leopards’ to watch for in 2024 appeared first on Atlantic Council.

By Mary Kate Aylward, Peter Engelke, Uri Friedman, and Paul Kielstra

The 288 respondents were mostly citizens of the United States (60 percent of those polled), with 17 percent from Europe and 11 percent from Latin America and the Caribbean. In total, respondents’ nationalities were spread across forty-eight countries.

Respondents also work in a variety of fields, including the private sector (27 percent), nonprofits (18 percent), academic or educational institutions (16 percent), government (16 percent), independent consulting (14 percent), and multilateral institutions (4 percent). They are dispersed across age ranges as well, with 10 percent between eighteen and thirty-five, 23 percent between thirty-six and fifty, 37 percent between fifty-one and sixty-five, and the remaining 29 percent aged sixty-six or older.

So what do these seasoned forecasters of the global future expect over the coming decade? Below are the survey’s ten biggest findings.

Atlantic Council Strategy Paper Series

Jan 12, 2024

The Global Foresight 2024 survey: Full results

In the fall of 2023, the Atlantic Council’s Scowcroft Center for Strategy and Security surveyed the future, asking leading global strategists and foresight practitioners around the world to answer our most burning questions about the biggest drivers of change over the next ten years. Here are the full results. 

China Climate Change & Climate Action

1. The outlook for normal relations between Israel and Saudi Arabia remains positive—and a Palestinian state may be more likely than it seems 

Could the current convulsions in the Middle East portend major transformations in the decade ahead? A remarkably high percentage of respondents think so, given that the survey was fielded after the October 7 Hamas terrorist attacks against Israel and in the throes of the ensuing war in Gaza.

The outbreak of hostilities seemed to deal a big blow to progress that Saudi and Israeli leaders had been making toward a historic agreement to normalize relations between their countries. Some experts, in fact, have argued that one of the main goals of the October 7 attacks was to derail the deal.

Nevertheless, a clear majority of respondents—around 60 percent—expect Israel to have normalized diplomatic relations with Saudi Arabia by 2034, suggesting that the underlying conditions that had been drawing the two countries together prior to war engulfing the region could outlast the fighting and remain salient.

Perhaps even more surprising, nearly one in five respondents believes that by 2034 Israel will have normalized diplomatic relations with an independent, sovereign Palestinian state. While this was a minority view, it indicates an alternative reading of the devastation of the last few months: that in the long run the violence that makes peace seems such a remote possibility could ultimately reinvigorate calls for a two-state solution to the Israeli-Palestinian conflict. A slightly smaller percentage of respondents also anticipate normalized relations between Israel and Lebanon a decade from now.

Even if all this were to occur, however, don’t expect peace to break out all over the region. Few experts believe that Israel will have normalized relations with Syria (4 percent) or Iran (2 percent) by 2034.

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2. There are growing doubts about China seeking to forcibly seize Taiwan

Those surveyed are more convinced of ongoing political stability in China than in other world powers. For example, 86 percent believe that the Chinese Communist Party will still be in power by 2034, while only 3 percent expect the opposite. Only one respondent thinks that the country will become a failed state over the coming decade, a figure that rounds down to 0 percent of the total. For the United States, that figure is 5 percent. For Russia, it’s 11 percent.

This expert consensus cuts against speculation among some observers that recent developments such as the country’s economic struggles and the protests that brought Xi Jinping’s “zero COVID” policy to an abrupt end could threaten the regime.

Yet the survey results also cast doubt on another narrative about China—more prominent earlier this century—as the unstoppable future global hegemon. Perceptions of Beijing could be starting to shift.

On one of the most pressing issues on the horizon—whether China will attempt to retake Taiwan by force in the coming years—respondents expressed some notable skepticism. While half expect this to occur within the next ten years, the proportion who foresee such a military operation has gone down substantially from 70 percent of respondents when we asked this same question in last year’s survey. Also significant: One of the big changes from 2022 to 2023 is an increase in the percentage of experts who state that they “don’t know” whether China will try reunification by force.

One potential explanation for these shifts is that experts are reassessing either China’s intentions or its capabilities regarding Taiwan in light of developments over the past year. The difficulties Russia has faced in its war against Ukraine or China’s economic troubles, for example, might make Beijing more reluctant to assume the risks of major military action.

The survey pool also seemed split over China’s wider global role in the coming decade. For example, 44 percent think that the world will largely divide into China-aligned and US-aligned blocs over that period, ushering in a bipolar world, but 39 percent disagree. Similarly, 33 percent agree that China and Russia will become formal allies by 2034, cementing the less formal “no limits” partnership the two countries currently have, but 37 percent say the opposite. Are we headed for a new cold war? Our respondents aren’t so sure.

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3. Brace for upheaval in Russia, including a possible Russia-NATO conflict

Mark your calendars: Sometime in the next decade, according to many respondents, a new leader will likely assume control of Russia—under unknown circumstances and amid potential turmoil. In December Vladimir Putin, who has dominated Russian politics since 1999, announced plans to do what he has twice altered Russia’s constitution to make possible: seek more time in power. He is widely expected to win the country’s March presidential election, but the experts we surveyed do not expect his rule to last the decade: 71 percent say that he will not still be president of Russia by 2034, and a further 22 percent are not sure.

Will age end Putin’s rule—he will be eighty-two in 2034—or will political events intervene? A large number of survey respondents expect substantial turmoil in Russia over the next decade. In a similar result to one of the biggest findings from last year’s survey, 35 percent of respondents believe that Russia will break up internally in the coming ten years because of developments such as revolution, civil war, or political disintegration. For those who think that Putin will no longer be president in 2034, this figure rises to 40 percent. Even among those who think Putin will still rule Russia in 2034, nearly one quarter nevertheless expect the country to break up.

Around 11 percent of respondents cited Russia as the country that is not currently a failed state but is most likely to become one within the next ten years—lower than in last year’s survey and a small minority, but still the highest percentage that any country received.

Only 6 percent of respondents believe Putin will be able to achieve his war aim of turning Ukraine into a Russian client state within the next decade. But how any failures in Ukraine affect his political longevity remains to be seen. Even the June march on Moscow by Wagner Group commander Yevgeniy Prigozhin ultimately has not seemed to endanger Putin’s grip on power, given the swift suppression of the mutiny and Prigozhin’s death two months later in a plane crash.

Those who expect Russia to break up are more likely to foresee Moscow engaging in worrisome activity: Thirty-eight percent believe that the country and NATO will fight a war in the next ten years, compared with 25 percent of other respondents, and 20 percent think that Russia will use a nuclear weapon in the decade ahead, compared with 11 percent of other experts.

Overall, in another significant finding, nearly one in three respondents (29 percent) at least somewhat agree that Russia and NATO will engage in a direct military conflict over this timeframe—a slightly higher percentage than in last year’s survey.

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4. US military dominance will endure and prospects for other elements of its power are looking up, with diplomatic clout an exception

By 2034, according to a large majority (73 percent) of respondents, the world will be multipolar, with multiple centers of power, in contrast to the unipolar moment that followed the collapse of the Soviet Union, leaving the United States as the last superpower standing.

But at the same time, most also expect the United States to retain a preponderance of power across several key dimensions. Eighty-one percent of respondents expect the United States to remain the world’s dominant military power in 2034. A similarly large majority (79 percent) anticipate that US security alliances and partnerships in Europe, Asia, and the Middle East, forged over the course of the Cold War and unipolar moment, will endure—a notable expectation given that these alliances and partnerships could be a major subject of debate during the 2024 US presidential election. Notably, a smaller majority—63 percent—believe the United States will be the dominant source of technological innovation by 2034, and just over half (52 percent) say it will be the dominant economic power.

This level of confidence in the longevity of US power is, in fact, greater than the level respondents expressed when we conducted our last survey at the end of 2022. The exception is in the diplomatic realm, where once again only one third of respondents expected the United States to be the world’s dominant diplomatic power in ten years.

Even experts who expect the United States’ global military dominance to endure don’t think that will be enough to sustain a sole superpower status. Those who envision the United States as the dominant military power of 2034 are just as likely to anticipate that the world will be multipolar in that year (73 percent) as those who do not believe US military dominance will last the decade (72 percent). And while those who foresee future US military dominance are more likely to also expect the United States to maintain its European, Asian, and Middle Eastern security alliances and partnerships, it’s important to keep in mind that sustaining those alliances and partnerships also requires the kind of US diplomatic clout that respondents are less sanguine about going forward.

With these dynamics at play in the coming decade, will Europe turn all the talk about “strategic autonomy” into action by taking more responsibility for its own security? Only 31 percent of respondents believe that the continent will have achieved “strategic autonomy” by 2034. Even Europeans themselves are largely split: Forty percent think they will have such autonomy but 36 percent disagree. Among non-European respondents, half don’t see it happening while only 29 percent do.

The overall survey data also reflects mostly US perspectives. Sorting respondents by country of citizenship reveals more diverse views on the nature and longevity of US power. For example, while respondents from Latin America and the Caribbean are slightly more likely than respondents overall to expect US military dominance to remain in 2034, they are far less likely than other survey takers to say the same about US power in other domains.

A startling 30 percent of Latin American respondents also predict that the United States will break up internally in the coming decade for reasons such as revolution, civil war, or political disintegration (compared with 9 percent among other respondents).

That speaks to a broader potential vulnerability for the United States over the coming decade that doesn’t fit neatly into a single category of power: its domestic political divisions and challenges. Nearly 12 percent of respondents overall expect the United States to break up by 2034—a much lower percentage than those who thought the same about Russia, as noted above, but a higher percentage than those who said the same about other powers such as China (7 percent) and India (6 percent). Around 5 percent of respondents identified the United States as the country that is not currently a failed state but is most likely to become one within the next ten years—fewer than those who pointed to Russia (11 percent) and Pakistan (8 percent), but roughly on par with the percentage of respondents who cited Afghanistan, Argentina, and Lebanon. Only small minorities are expressing these views, but they are nevertheless worth heeding.

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5. Respondents have low confidence in the United Nations

While many respondents expect the world in ten years to be multipolar, they also foresee challenges with the international organizations that could mediate among competing centers of power. The multilateral institutions established after World War II—the United Nations (UN), the World Bank, and the International Monetary Fund (IMF), among others—were designed in part as places for rival powers to hash out their differences without resort to military force. The experts we surveyed, however, don’t expect these institutions to be fully capable of playing this role over the coming decade.

The most striking lack of confidence is in the United Nations. A mere 2 percent of respondents say that by 2034 the organization as a whole will be entirely capable of solving the challenges core to its mission, with a further 23 percent stating that it will be somewhat capable of doing so. As for the UN Security Council, nobody—literally zero respondents—believes that it will be entirely capable, and just 17 percent expect it will be somewhat so. This contrasts with 68 percent who think that the Security Council will display varying degrees of incapacity.

This lack of confidence holds across survey demographics. What seems to set apart those with at least some confidence in the Security Council is a conviction that it will reform itself: Seventy-six percent of those who think that the Security Council will be somewhat capable of executing on its mission in 2034 also believe that at least one new permanent member will be added to the body within the next ten years (the most likely candidates: India, Germany, and Japan). Among those who say the Security Council will be incapable of carrying out its functions, only 53 percent think at least one new permanent seat will be added.

The United Nations is just the clearest example of muted faith in multilateral institutions. Very few respondents expect any of the major international bodies we asked about to be entirely capable of doing their jobs. Nevertheless, over half of the experts we surveyed believe that the IMF, World Bank, and Group of Seven (G7) will be at least somewhat capable of doing so. Even this confidence, though, may reflect the largely Western perspective of our survey pool rather than a wider global consensus. Only 36 percent of respondents from Latin America think that by 2034 the IMF will be at least somewhat capable of addressing challenges central to its mission, and just 35 percent say the same of the G7.

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6. The next nuclear age will be an ungoverned one—with more weapons, fewer guardrails, and the resurgent threat of nuclear terrorism

We appear to be entering a third nuclear age following those that occurred during the Cold War and post-Cold War periods. And a lack of international governance is likely to be one of the new nuclear age’s defining features, as geopolitical competition intensifies and nuclear arms-control treaties unravel. What happens when the guardrails for limiting the buildup, spread, and use of nuclear weapons are removed?

A huge majority of respondents foresees proliferation: Eighty-four percent say that at least one currently non-nuclear state will obtain these weapons by 2034. The most likely country, cited by 73 percent of experts, is Iran, but considerable numbers also expect Saudi Arabia (40 percent), South Korea (25 percent), and Japan (19 percent) to join the nuclear club. These numbers are similar to the results from last year’s survey, but one difference is worrying. In the survey conducted at the end of 2022, on average respondents thought that 1.4 new actors would have nuclear weapons within a decade. This has now risen to 1.7. Though this may seem like a small increase, it suggests that compared with 2022, experts now believe nuclear weapons will spread more quickly—about 21 percent more quickly, in fact.

When asked about which actors they expect to actually use a nuclear weapon within the next ten years, 20 percent of our experts said a terrorist group—up from just 3 percent last year. In this year’s survey we included terrorist groups explicitly among our multiple-choice options whereas in last year’s we included a more general “other state or a non-state actor” option, which may account for some of the year-over-year difference. But the fact that one in five respondents is forecasting such an alarming scenario is still noteworthy and concerning. Around 14 percent of respondents expect Russia to use a nuclear weapon by 2024, while roughly 15 percent forecast that North Korea will do so. But on a more positive note: More than 60 percent of respondents believe nuclear weapons won’t be used over the coming decade.

Even if international institutions were capable of restraining nuclear proliferation, our respondents see little demand for them to do so. Only 3 percent think that the greatest expansion of global cooperation over the next ten years will occur in the realm of nuclear nonproliferation.

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7. Neither Russia nor Ukraine is likely to achieve all its war aims, but many see a future for Ukraine in the European Union and NATO

Among Ukraine’s primary objectives in its war with Russia is to retake the territory in the eastern part of the country and the Crimean peninsula that Russia seized during its first incursion into the country in 2014 and second invasion in 2022. While only 12 percent of survey respondents expect Ukraine to regain control of its pre-2014 territory by 2034, just under half (48 percent) anticipate that it will reassert authority over the Ukrainian territory it held prior to Russia’s full-scale invasion in 2022.

As for Putin’s effort to subjugate Ukraine, the long-term outlook for Moscow doesn’t look good: A mere 6 percent of respondents think that Ukraine will end up dependent on Russia or otherwise in its orbit by 2034.

Ukraine’s goals also include joining NATO and the European Union as a means of integrating with the West and ensuring its future security. A slight majority of respondents (54 percent) expect to see Ukraine in the European Union in the next ten years—a process, in fact, that Kyiv and Brussels have already set in motion (though plenty of hurdles remain). Forty-four percent also anticipate that Ukraine will have joined NATO during this period, with this prospect likely to be debated at the Alliance’s upcoming summit in Washington, DC this summer. These expectations overlap with views about Ukraine’s future independence and territory in perhaps predictable ways. For example, among respondents who believe that Ukraine will be a sovereign, independent state a decade from now, 64 percent say that Ukraine will also be an EU member by that time, compared with 40 percent for other respondents.

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8. Climate change is the greatest threat to global prosperity—and a decline in emissions could still be far off

The single biggest threat to global prosperity over the coming decade is climate change, according to a plurality of respondents, with 37 percent selecting it as their main concern—significantly ahead of war between major powers (25 percent), the second-most-cited option. Climate change is also by far the most frequently cited field in which respondents expect the greatest expansion of global cooperation over the next ten years (49 percent), well ahead of technology governance and public health as the next-most-identified areas at roughly 14 percent each. Notably, when we asked this question in 2022 a significantly higher 25 percent of respondents picked public health. As the COVID-19 pandemic recedes, the priority placed on this domain may be lessening even though the risk of more pandemics, which climate change may exacerbate, hasn’t diminished.

Views on risk and response are connected. Those who see climate change as a more serious threat expect more growth in international collaboration to counteract it, with 63 percent of them identifying the issue as the one that will generate the greatest increase in global cooperation; the inverse is also true. In one interesting wrinkle in the data, respondents who work in the private sector, which will have to create or commercialize the technology needed to mitigate climate change, seem less concerned about the potential impact of climate change on global prosperity: Only 23 percent identify it as the top risk, relative to 32 percent who point to a major-power war.

The relative optimism about countries’ ability to work together to address climate change is tempered by relative pessimism about how much that cooperation will achieve in terms of reducing greenhouse gas emissions. Fifty-three percent of respondents do not believe that global greenhouse gas emissions will have peaked and begun to decline by 2034, compared with 44 percent who think they will. The Intergovernmental Panel on Climate Change says global greenhouse gas emissions need to peak before 2025 to limit global warming to 1.5 degrees Celsius above preindustrial levels. The later emissions peak, the more sharply they will need to fall if countries want to meet targets set in the 2015 Paris Agreement to limit warming to 2 degrees Celsius. Perhaps in recognition of these considerations, more than half of respondents think that by 2034 humans will have begun deliberate, large-scale geoengineering of the planet to reduce the impacts of climate change or achieve other goals.

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9. As social media continues its descent into toxicity, the AI age is dawning (with those under fifty markedly more concerned)

Here’s the big picture on our findings regarding technology: Respondents overall have a very negative view of social media and a somewhat positive view of artificial intelligence (AI). But zoom in and the picture gets more complicated.

The wariness of social media that experts expressed in last year’s survey is as widespread as ever: This year, eight in ten respondents (81 percent) say that social media will, on balance, have a negative impact on global affairs over the coming ten years.

As for AI, despite a year of high-profile speculation about today’s helpful chatbot becoming tomorrow’s superintelligent force beyond human control, respondents feel reasonably good. Fifty-one percent believe that AI will have a somewhat or very positive effect on global affairs in the next decade, relative to 38 percent who say the opposite.

Behind these numbers, however, are notable disagreements on AI within demographic groups. Men, for example, are more likely to envision AI having a positive impact (53 percent positive versus 36 percent negative), with women evenly split (44 percent for both positive and negative). Those who work in the private sector are much more positive about AI; all other respondents from employment groups with sufficient replies to analyze are negative or roughly evenly split.

More striking is the division between age groups, with the watershed at around fifty years old. Fifty-six percent of those over fifty forecast AI having good effects and 33 percent bad ones. The figures are almost exactly the reverse among those under fifty: Thirty-nine percent of younger respondents expect AI to have good effects over the next decade, while 52 percent expect bad effects.

Twenty-four percent of respondents under fifty also say that technology governance will be the area that experiences the greatest expansion of global cooperation over the next decade, underscoring the greater degree of concern among younger generations. Among older respondents, this figure drops to just 9 percent.

Why might this gap in perceptions between age groups exist? It’s not clear from the data, but it’s possible that digital natives are more able to see the dangers of new technology. Or perhaps since younger people tend to be at lower levels of seniority in the workplace, they may be more worried about automation jeopardizing their own employment opportunities.

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10. Experts are decidedly pessimistic about the decade ahead—no matter their age, gender, or country of citizenship

This year, for the first time, we posed a question that we hope to now ask on an annual basis as a means of tracking sentiment on the global outlook: “Generally speaking, do you think the world a decade from now will be better off or worse off than it is today?” Our baseline results reveal a pool of expert respondents who are more concerned than hopeful: Sixty percent say the world will be worse off while 40 percent expect it to be better off. This ratio is surprisingly widespread, with no statistically significant difference discernible when sorting the sample by gender, age, country of citizenship, or field of employment.

It’s a sobering assessment—and an indicator we’ll plan to monitor year after year to better understand which way the world is tending.

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Mary Kate Aylward, Publications Editor, Atlantic Council

Aylward was an editor at War on the Rocks and Army AL&T before joining the Council. She was previously a junior fellow at the Carnegie Endowment for International Peace.

Peter Engelke, Deputy Director, Scowcroft Strategy Initiative

Engelke is on the adjunct faculty at Georgetown University’s School of Continuing Studies and is a frequent lecturer to the US Department of State’s Foreign Service Institute. He was previously an executive-in-residence at the Geneva Centre for Security Policy, a Bosch fellow with the Robert Bosch Foundation in Stuttgart, Germany, and a visiting fellow at the Stimson Center in Washington, DC.

Uri Friedman, Senior Editorial Director, Atlantic Council

Friedman is also a contributing writer at The Atlantic, where he writes a regular column on international affairs. He was previously a senior staff writer at The Atlantic covering national security and global affairs, the editor of The Atlantic’s Global section, and the deputy managing editor of Foreign Policy magazine.

Paul Kielstra, Freelance Analyst

Kielstra is a freelance author who has published extensively in fields including business analysis, healthcare, energy policy, fraud control, international trade, and international relations. His work regularly includes the drafting and analysis of large surveys, along with desk research, expert interviews, and scenario building. His clients have included the Atlantic Council, the Economist Group, the Financial Times Group, the World Health Organization, and Kroll. Kielstra holds a doctorate in modern history from the University of Oxford, a graduate diploma in economics from the London School of Economics, and a bachelor of arts from the University of Toronto. He is also a published historian.

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A report by the Adrienne Arsht Latin America Center in partnership with the US Department of State. This readout was informed by multi-stakeholder dialogues focused on facilitating greater, constructive exchange among multi-sectoral thought leaders and government leaders as they work to implement Summit commitments.

Executive summary

The main challenges that Latin American and the Caribbean (LAC) countries are facing include infrastructure issues (weak and insufficient transmission lines), and limited uptake of new solar photovoltaic (PV) and wind technologies. Despite these challenges, LAC is on track to capitalize on emerging clean energy technologies, including production and export of green hydrogen (GH2), as well as play a role in supplying the global energy system with critical minerals needed for the energy transition, such as lithium and copper.

LAC countries are facing major challenges in their ability to develop renewable energy projects, expand low-emission energy systems, and fill existing technical and financing gaps that hinder regional energy security. A key takeaway to come out of the Summit Implementation Roundtable was that the US-Caribbean Partnership to Address the Climate Crisis 2030 (PACC 2030) has the potential to advance clean energy goals in the Caribbean and become a blueprint to address similar challenges in Latin America.

Recommendations for advancing the clean energy sector in the Americas:

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The post The future of clean energy in the Americas appeared first on Atlantic Council.

With the increase in size, COP’s center of gravity shifted away from the formal management structure of the convention. Instead, the focus was on disparate and scattered initiatives in which nonstate actors—including from the private sector—play a prominent role. There are several ways to interpret this conference: a holy pilgrimage for those who are devoutly green, a new Davos attended by executives of the same corporate giants who frequent the World Economic Forum gathering in Switzerland, a photocall of politicians from around the world, a theater with armies of lobbyists, a mix of consultants and media. “Inclusion” was an oft-repeated theme this year. And although it may seem provocative, the meeting’s most notable decision may have been to include the oil and gas sector, which had been previously sidelined—a decision that spotlighted a larger confrontation at COP28 between ideology and pragmatism.

A new energy era

Strategic ambitions have historically revolved around energy, a substantive battle in international relations. The nineteenth century can be understood as the era of coal, driving the development of the manufacturing industry and rail transportation. World War I marked the beginning of the era of oil. (Controversy surrounded Winston Churchill’s decision, as the civilian head of the British Royal Navy, to switch the fleet to this fuel in 1913.) The current century will witness an “energy transition” intended to move the world toward a sustainable future. However, as “green” ideologies have come to dominate public discourse, the concept of a “transition” is too often lost: specifically, the idea that it will extend over time and require overlap. Countries must invest in renewables while continuing to rely on fossil fuels, which currently represent around 80 percent of the global energy mix (a figure that has stubbornly persisted since the world began to monitor the consequences of anthropogenic greenhouse gases).

The expectation of continued growth in demand through 2050 further complicates the global trilemma—ensuring a reliable energy supply at an affordable price while also accounting for the environmental dimension. Considering today’s technological framework, any solution to the equation likely involves replacing coal with gas—along with the return of nuclear—which is the most effective way to reduce emissions in situations where alternative sources are not conducive. Provided, of course, that “inclusive” and “equitable” are not just formulaic terms, and that “leaving no one behind” is more than a stylistic clause. In other words, Europe and other wealthy countries can afford to do away with coal or nuclear, or even to bet completely on renewables. But in the rest of the world, if a choice needs to be made between prosperity and the environment, the former will likely win out.

Today there is growing awareness of the urgency of the climate crisis. Far from being a technical dialogue among scholars, the climate conversation has permeated society; ordinary citizens around the world feel involved. Education has become not only positive but essential. Given that development, it is necessary to review the messages being sent; to reconsider the apparent dichotomy between renewable energies (presented as unquestionably good) and coal, oil, natural gas, and nuclear. These have been collectively condemned without considering their different contributions to what should be our only goal: combating the accumulation of greenhouse gases in the atmosphere.

The challenge ahead

The historic language enshrined in the final—although nonbinding—deal of the summit urging countries toward “transitioning away from fossil fuels” reflects a collective commitment to the energy transition that is taking shape. At the same time, there was progress in efforts to align hydrocarbons, and particularly gas, with sustainability goals, in recognition of their continued importance. Two initiatives stand out: a push to abate methane emissions, in particular from venting, flaring, and leaks; and a sharpening focus on the capture, storage, and eventual use of carbon dioxide throughout the gas value chain, starting with extraction. 

Equally transformative is the return of interest in nuclear power, following a long period of rejection that occurred despite it being one of the most efficient and reliable energy sources (even with the challenge of waste from current reactors). The deal reached two weeks ago has opened a horizon that, a year ago, would have been unimaginable: Twenty-two countries have committed to tripling their nuclear capacity by 2050. US climate envoy John Kerry has even emphasized that the world cannot achieve net zero by 2050 without some nuclear energy.

An initiative announced by European Commission President Ursula von der Leyen is also worth mentioning: More than a hundred countries have joined the Global Commitment on Renewable Energy and Energy Efficiency. It sets two goals: tripling installed renewable capacity and doubling the rate of improvements in energy efficiency, both by 2030. This effort must be accompanied by widespread electrification, a transformation that will require the rare earths and other critical minerals that have become indispensable in new energy technologies. Their concentration in certain areas presents a series of challenges, as does the almost monopolistic control of China over their extraction and processing. Currently, there is an effort to replace these minerals with more common, more abundant elements—although the necessary technology is still being developed.

The challenge coming out of COP28 is to consolidate a pragmatic vision, a global objective that values all three components of the energy trilemma. The vision must take into account the heightened energy demand that will accompany the global population growth expected in the next thirty years—an anticipated increase of two billion people—and must understand that for now fossil fuels inevitably will continue to play a significant role in meeting that demand.

The most pressing challenges of our century are clear: The world needs to multiply installed renewable capacity and advance electrification, along with its corollary of a constant supply of necessary critical minerals and rare earths. What’s also needed are efforts to develop a natural gas that is increasingly less polluting. And finally, nuclear skeptics need to make peace with nuclear energy.

A version of this article originally appeared in El Mundo. It has been translated from Spanish by the staff of Palacio y Asociados and is reprinted here with the author’s and publisher’s permission.

Ana Palacio is a former minister of foreign affairs of Spain and former senior vice president and general counsel of the World Bank Group. She is also a visiting professor at the Edmund E. Walsh School of Foreign Service at Georgetown University and a member of the Atlantic Council’s Board of Directors.

The post The takeaway from COP28: Gas and nuclear are part of the energy transition appeared first on Atlantic Council.

The “success” of COP28 was never going to be measured by unrealistic expectations around “phasing out” fossil fuels—a benchmark promoted by the European Union and small island nations severely at risk of global temperature rise. Despite over $3.5 trillion in financing for renewable energy over the past decade, oil, gas, and coal remain stubbornly anchored in the global energy mix, representing around 80 percent of energy consumed. The high reliance on conventional energy resources for their economic growth and political stability unequivocally placed China, India, and Saudi Arabia at the vanguard of a block of countries opposed to  any negotiated outcomes at COP28 that locked in a “phaseout” or “phasedown” of specific energy sources.

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Behind the scenes, however, the feverish and ultimately successful push for a diplomatic compromise temporarily overshadowed what COP28 has already accomplished—a global reduction in energy-related greenhouse gas emissions by 2030 of around 4 gigatonnes of CO₂ equivalent. This achievement is the product of around 130 countries signing up to triple global renewable power capacity by 2030 and double the annual rate of energy efficiency improvements every year to 2030, coupled with commitments by the oil and gas industry to zero-out methane emissions and eliminate routine flaring.

Admittedly, the potential emissions reductions achieved during COP28 fall short of the ambitions outlined in the Paris Agreement (the International Energy Agency assesses commitments at COP28 represent 30 percent of what is necessary to “keep 1.5 alive”), but the fabric of the United Nations Framework Convention on Climate Change process has been permanently altered. Attendance at the conference exploded, growing to nearly 100,000 at COP28—a far cry from the approximately 4,000 participants in 1995 during the first COP and a more than threefold increase since the Paris Agreement was reached in 2015. The vibrant business environment in Dubai represented a growing subtext to the formal climate negotiations and, while met with mixed reviews, the inclusion of industry hints at the fact that the economics of the energy transition are beginning to catch up to policy.   

As one senior European official expressed to me, COP is the “new Davos” for the energy transition. It took only one lap around Expo City Dubai, the venue for COP28, to confirm her intuition. COP28 was brimming with C-suite executives, technologists, financiers, and project developers—those who will have to deploy an estimated $150 trillion necessary to achieve the 1.5 degree Celsius goal by 2050 and whose support is critical in overcoming the infrastructure, regulatory, and workforce challenges inhibiting an accelerated energy transition.

The inclusivity on display at COP28 marks the beginning of a new phase for climate action. Industry has the resources, finance, and technical prowess to realize the ambitions set out by policymakers. By acclimating the private sector to civil society’s expectations for transforming our energy system, a new social license to operate is beginning to form.

There is little doubt that, like the UAE, President Ilham Aliyev will welcome industry to the conference when Azerbaijan hosts COP29 next year. The onus is on businesses to demonstrate their sincerity about addressing global emissions, starting by matching their commitments with investments and projects that signal they belong at the heart of global climate dialogue.

It took twenty-one COPs for countries to universally commit to reducing greenhouse gas emissions, and twenty-eight to bring along industry. My suspicion is that between now and when COP35 is hosted in 2030 we’ll make progress in closing that gap, starting next year in Baku.

Landon Derentz is the senior director and Richard Morningstar chair for global energy security of the Atlantic Council Global Energy Center

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After fourteen days in the desert, it ended with a “beginning.” On Wednesday, the 2023 United Nations Climate Conference in Dubai, also known as COP28, concluded with nearly two hundred countries agreeing to “transition” away from fossil fuels. UN Climate Change Executive Secretary Simon Stiell called the decision the “beginning of the end” of the fossil fuel era. But the agreement text was only one of many outcomes from the conference, including the activation of the loss and damage fund and pledges to abate methane emissions and triple renewable energy. Below, Atlantic Council experts who were on the ground in Dubai share their insights on the agreement and the road ahead.

• Jorge Gastelumendi (@Gasteluj): Director of global policy at the Adrienne Arsht-Rockefeller Foundation Resilience Center and former climate negotiator for the government of Peru

• Landon Derentz (@Landon_Derentz): Senior director of the Global Energy Center and former director for energy on the US National Security Council

• Aubrey Hruby (@aubreyhruby): Nonresident senior fellow at the Africa Center and co-founder of Tofino Capital

• Racha Helwa (@rachahelwa): Director of the empowerME Initiative

No ‘phase-down’ or ‘phaseout’

• The compromise agreement to transition away from fossil fuels was “commendable,” Jorge tells us, but the lack of a timeline for attaining this goal “puts the world at risk of crossing the 1.5 °C warming threshold, significantly increasing the risks and impacts of climate change.”

• At the same time, “the ‘success’ of COP28 was never going to be measured by unrealistic expectations around phasing out fossil fuels,” says Landon.

• Among the opponents of “phaseout” language were African nations. Aubrey points out that this is because they “need to be able to harness their fossil fuel resources, namely natural gas, in order to provide electricity to the six hundred million” people on the continent who lack reliable access.

• But for others, the compromise was a deep disappointment. The decision “evoked widespread frustration, notably among the small island developing states, indigenous communities, and climate activists,” Racha says.

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 Big wins

• The compromise over fossil fuel use overshadowed what COP28 had already accomplished, says Landon: pledges on renewable energy capacity expansion, energy efficiency, and methane reduction that add up to “a global reduction in energy-related greenhouse gas emissions by 2030 of around four gigatons of CO2 equivalent.”

• And in a larger sense, Landon adds, the cooperation of governments and businesses means that “the fabric” of these conferences “has been permanently altered.” A senior European official attending the conference told Landon that “COP is the ‘new Davos’ for the energy transition.”

• That spirit came in the increased climate commitments from industry. “We have seen at COP28 an unprecedented participation of the private sector not only in numbers but also in real leadership,” Jorge tells us, “taking on actions and measurable commitments in the energy, insurance, and banking sectors, among many others.”

• African countries were able to achieve most of their pre-COP checklist, Aubrey notes: These include the launch of the loss and damage fund, $175 million in pledges to the Alliance for Green Infrastructure in Africa, and the Declaration on Climate and Health.

Room for improvement

• But the agreement lacks quantifiable targets or substantial financial aid for adaptation, says Jorge, meaning it falls short of the “pivotal moment we need as a global community to bring climate adaptation from being a second-tier priority in the climate process” to being prioritized equally with mitigation.

• Protests throughout the conference, including that of twelve-year-old Indian climate activist Licypriya Kangujam, “highlighted concerns about the influence of oil businesses on climate equity and resilience,” and encapsulated “the perspective of the upcoming generation from the Global South regarding the outcomes of this COP,” writes Racha.

• Zooming out, the goal now for governments, activists, and industry should be to make sure that these promises don’t end up as just hot air. “Global meetings alone do little to change the economic and climate realities on the ground in African countries,” Aubrey tells us. “Pledges must become reality.”

The post The final report card for COP28 appeared first on Atlantic Council.

Dubai was established in the eighteenth century as a fishing village, where a good living could be made from trade and pearl diving. By the time the COP28 climate conference kicked off here, it had become one of the world’s richest cities, with the world’s tallest building and more five-star hotels than any city except London, the result of oil revenue, tourism, real estate, and sovereign investment.

Dubai was host to climate action over the past week, gathering almost one hundred thousand people from nearly two hundred countries. The public and private sectors drew closer than ever before to a consensus that addressing the perils of a warming planet was both a matter of urgency and business opportunity.

That does not fix the problem, but there is no solution without vast amounts of private-sector financing and investments in climate solutions from renewables to nuclear energy, and from decarbonization to green tech.

Many climate activists opposed opening the doors to industry, particularly those producing fossil fuels, but the result has been a flurry of unprecedented agreements that, if executed and sustained, have the potential for tens of billions of new dollars to address the climate crisis.

For example, there is the $700 million in loss and damage support for the Global South. There is also the $30 billion  “Alterra” fund, launched by the United Arab Emirates—and with private-sector giants Blackrock, Brookfield, and TPG—whose aim is to generate $250 billion of capital by 2030 for climate investments in the Global South.

Some fifty oil and gas companies, including Saudi Aramco and twenty-nine national oil companies, agreed to reduce their emissions to zero by 2050 and to reduce methane emissions to zero by 2030. At other points of the convening, countries joined together in agreeing to triple renewables, also by 2030, and to triple emissions-free nuclear energy by 2050. Achieving both goals will require the participation of the private sector.

Negotiators are squabbling over the text of the final COP28 agreement. Politico reports that a draft it has seen has expanded to twenty-seven pages and includes five different options on how to manage disputes over “phasing down” or “phasing out” fossil fuels. The battle could get ugly before the conference closes on Tuesday.

Whatever the outcome, veterans of the UN climate process believe this year’s sharply increased level of private-sector engagement could be the game changer to address challenges beyond the capacity of governments alone. Says Jorge Gastelumendi, a veteran of sixteen COPs who runs the Atlantic Council’s Adrienne Arsht-Rockefeller Foundation Resilience Center: “After twenty-eight COPs, we have finally seen the private sector arrive in the climate space with full force and commitment. Without them, we will not be able to solve the climate crisis.”

Frederick Kempe is president and chief executive officer of the Atlantic Council. You can follow him on Twitter @FredKempe.

This edition is part of Frederick Kempe’s Inflection Points Today newsletter, a column of quick-hit insights on a world in transition. To receive this newsletter throughout the week, sign up here.

The post The private sector’s role in the climate crisis appeared first on Atlantic Council.

The world is at a critical juncture to address climate change. In accordance with Goal 13 of the United Nations (UN) Sustainable Development Goals, the 2015 UN Framework Convention on Climate Change (UNFCCC) COP21 summit in Paris set a cornerstone agreement in the global energy revolution, bringing 175 countries into a common cause to curb net carbon-dioxide (CO₂) emissions and limit global temperature rise to 2 degrees Celsius (°C).

This year, the United Arab Emirates (UAE) has the honor of hosting the COP28 summit and welcoming around two hundred nationalities to address today’s most important global challenge. To avert the worst impacts of climate change and preserve a livable planet, greenhouse-gas (GHG) emissions need to be reduced by 45 percent by 2030 and reach net zero by 2050. COP28 may be the last opportunity to turn national commitments into action and avoid risks of abrupt, unpredictable, and potentially irreversible changes in our habitat.

COP28’s success hinges on delivering stronger commitments to curb carbon emissions, expanding financial help to manage the green transition, and developing multilateral approaches on regional climate governance in the Middle East. However, observable exchanges between regions seldom happen; each country follows its own climate policies instead of creating much-needed cooperation. If current trends continue, many parts of the Middle East could become uninhabitable in this century. This report aims to break these silos and build on the momentum of growing economic ties between Turkey and the GCC that would bring collective gains in energy transition.

Achieving net-zero emissions requires all governments, especially the major emitters, to significantly enhance their Nationally Determined Contributions (NDCs) and take immediate, bold actions to reduce emissions. At a global level, the energy industry is the source of approximately 75 percent of GHG emissions and plays a crucial role in preventing the severe impacts of climate change.

Shifting away from coal, gas, and oil-based power and toward renewable sources such as wind or solar energy could significantly decrease carbon emissions. Despite the worldwide move toward cleaner energy, the Middle East is falling behind in its efforts to achieve net-zero emissions goals. Accelerating energy transition toward zero-carbon solutions is the key to building a more sustainable future in the region.

Technology diffusion is occurring at an unprecedented rate. Globalization helped to accelerate adoption of renewable-energy technologies at levels far higher than those of just ten years ago. The cost of solar power is now cheaper by 90 percent, and wind power by 60 percent. The International Energy Agency (IEA) estimates that 60 percent of energy investments globally in the next fifteen years will be in clean-energy sources. Annual clean-energy investment has risen at double the rate of investment in fossil fuels during 2021–2023. Although more than 90 percent of the increase in clean-energy investment has taken place in developed countries and China, the Gulf Cooperation Council (GCC) and Turkey are among the few bright spots in the Global South that placed special emphasis on renewables adoption.

Over time, the GCC countries demonstrated that it is economically, environmentally, and socially beneficial to invest in clean energy and other carbon-mitigation strategies, while Turkey fostered environmentally friendly, innovative policies to decarbonize energy through market liberalization, public-private partnerships, technology transfer, and financial assistance for green investments. Turkey and the GCC share significant opportunities for synergy in the adoption of clean energy, owing to their differences in energy resources and comparative advantages.

The GCC countries, with their vast financial capital, can invest in Turkey’s clean-energy projects. These investments can support the development of renewable infrastructure and technologies, fostering collaboration between the regions, while also diversifying the GCC’s portfolio of investments abroad. Turkey can share its technology know-how, adaptation roadmap, and energy-efficiency mechanisms with the GCC to advance the mutually beneficial partnership.

As TRENDS Research & Advisory and the Atlantic Council, it is our distinct pleasure to present this joint publication exploring prospects for deepening cooperation between Turkey and the GCC countries in pursuit of the clean-energy transition. This timely joint report delivers four articles from renowned experts in climate change, energy transition, and geopolitics of energy security that shed light on the most pressing challenges of our time.

In Cooperation in Energy Transition between the GCC and Turkey, Mouza Almarzooqi discusses how dedicating financial resources and efforts toward energy-efficient projects would lead to the adoption of carbon-free and green industries and infrastructure projects. In Turkish Energy Transition 3.0: Go Together!, Eser Özdil takes readers through a journey on Turkey’s energy transition and its approach to developing international cooperation in renewable investments. In Synergy Between Electric Mobility and Renewable Energy: Turkey’s Connection with GCC Nations, Melek Öztürk explores ambitious environmental targets set by Turkey and the GCC nations, and how they focus on renewable energy, electric vehicles (EV), and innovative technologies to drive sustainable practices. In Complementary Transitions: Turkey, GCC, and the Energy of Tomorrow, Karim Elgendy explores how Turkey and GCC countries can combine their unique expertise and resources to unlock greater energy security and sustainability for both regions.

We wish you enjoyable, enlightening reading!

Dr. Serhat S. Çubukçuoğlu

Senior Fellow in Strategic Studies

Trends Research & Advisory

The post An introduction to regional perspectives on climate change: Gulf Cooperation Council and Turkey appeared first on Atlantic Council.

Recently, countries have reached a point at which energy transition coincides with climate goals, economic growth, national interests, and sustainability. In the Gulf Cooperation Council (GCC) region, no country can self-achieve energy transition; thus, nations should plan on how to join forces for diversifying energy sources and reducing carbon footprints in the region. The prospects for cooperation for a sustainable future between the GCC and Turkey center on increasing adoption of renewable energy, offshore wind, solar energy, nuclear power, and clean hydrogen in agriculture, manufacturing, and transportation.

Cooperation in energy transition

The GCC countries and Turkey have a chance to cooperate in energy transition for a sustainable future by promoting international agreements based on mutual interests, as well as the principle of and belief in a just energy transition for all. Turkey has been an energy-dependent country and enjoys a constantly growing market. On the other hand, GCC economies have benefited from oil and gas exports for the past fifty years. There is an opportunity for these regional actors to work together, spearhead the region’s transition to clean energy, and make joint efforts toward meeting their climate goals. Nevertheless, each country in the region has unique challenges and opportunities. There is an opportunity to ensure an energy transition that is inclusive, responsive, flexible, rational, and digital. The aim here is for nations to reduce their reliance on fossil fuels and combat the adverse effects of climate change. These countries understand and appreciate the importance of adopting renewable energy, and they can do that by coming together to invest in feasible, productive projects.

Climate change and agriculture are another opportunity for cooperation between the GCC and Turkey in terms of the energy transition. Notably, the UAE and Turkey have embarked on multiple recent collaborations to address climate change and foster environmental sustainability. In February 2022, the two nations signed multiple agreements and memoranda of understanding (MoUs) aimed at promoting their cooperation and collaboration on climate and environmental issues. Such agreements demonstrate that the two nations have decided to work together to support the global transition to climate neutrality. Specifically, GCC countries and other actors should have a common vision of international cooperation in terms of sharing best practices in the energy transition and addressing their unique challenges to ensure a sustainable future. Cooperation can take many forms, one of which is a joint investment in research facilities and sharing scientific knowledge sources and collaborative projects that aim to improve existing technologies in the energy transition field. Also, promoting the exchange of experts and professionals that would enable knowledge-sharing and capacity building. Training programs can be established to facilitate the transfer of expertise with the focus on energy policy and efficiency.

Joint climate action in the GCC and Turkey

The Middle East is among the world’s most vulnerable regions to the accelerating impacts of human-caused climate change, due to effects ranging from heat waves to rising in sea levels and water scarcity. The Gulf nations face depleted freshwater resources within the next 50 years, while average temperatures are soaring at a rate that is two-to-seven times faster than the global average – it is no surprise that the region is home to 12 of the world’s 17 most “water stressed countries”. There is a huge opening for them to come together and adopt clean-energy sources that can signal a transition from fossil fuels to clean sources of energy.

Climate change has also adversely affected the countries’ economies and political stability. There is an enormous chance for the GCC, Turkey, and related actors to collaborate on future joint actions to address climate-change issues—including water and air pollution, sandstorms, and flooding—with the goal of preserving the nations’ economic stability and social resilience. Such countries should be driven by their strong commitment and goodwill toward ensuring economic diversification and phasing out of fossil fuels in order to ensure the preservation of stability and the attraction of foreign direct investment. For instance, Turkey and countries in the GCC—including the UAE, Bahrain, Qatar, Kuwait, and Oman—have a chance to use cooperation on climate action and the energy transition as the chief drivers for regional reconciliation.

GCC nations and Turkey can pledge to work jointly to implement lucrative projects in renewable energy. For instance, the UAE, Qatar, Saudi Arabia, and Turkey recently signed a strategic partnership and framework agreement in the area of green and natural resources. The “Zero Waste Blue Project,” aimed at keeping gas and water resources free from waste, is an area of prospective cooperation in the Middle East. Furthermore, the Arab-China Business Conference that was conducted in Riyadh concluded that $10 billion should be used in the construction of energy-transition projects in the GCC such as electrification of transport. Additionally, leading Emirati corporations have invested in projects that benefit both the GCC and Turkey, with AED1.8 billion ($490 million) committed toward the energy transition. Other collaborations in the GCC to mitigate climate change and its adverse consequences should take place in the areas of transport, commerce, and manufacturing such as expansion of smart buildings and paperless trading through digitization. These initiatives, when explored, would lead to the construction of carbon-free airports and green railway stations powered by wind and solar energy, and car factories powered using green initiatives.

Looking ahead for a just and sustainable transition

The GCC and Turkey have the opportunity to come together and dedicate resources to diversify energy sources and transition from the use of fossil fuels to the use of clean energy. In the field of agriculture, the Middle East region should cooperate to mitigate adverse effects of climate change, such as droughts, sandstorms, and floods that affect the growth and maturity of food crops. Moreover, in the areas of green and renewable resources, these nations can commit to dedicating financial resources and efforts toward energy-efficient projects that would lead to the adoption of carbon-free and green industries and infrastructural projects.

Mouza Almarzooqi is the Head of Economic Studies section at TRENDS Research and Advisory

The post Forging a collaborative energy transition between GCC and Turkey appeared first on Atlantic Council.

The Gulf Cooperation Council (GCC) and Turkey share mutual challenges posed by climate change while, at the same time, possessing important synergies in the energy sector that deserve further exploration from policymakers and the private sector.

With the shared goals of reducing carbon emissions, ensuring energy security, and stimulating economic growth in perspective, TRENDS Research & Advisory and the Atlantic Council in Turkey are proud to present our joint publication on Prospects for Cooperation in Energy Transition for a Sustainable Future: GCC, Turkey, and Regional Perspectives. We hope this publication will contribute to the important discussion of the need for international and regional cooperation to accelerate the adoption of clean energy and address climate change. Our joint publication represents a starting point and roadmap for future cooperation.

Diversifying the energy mix through clean energy enhances energy security for both regions. By reducing reliance on fossil fuels, the GCC and Turkey can shield themselves from geopolitical uncertainties and price fluctuations in the global oil and gas markets. By sharing knowledge and best practices, they can accelerate climate adaptation, making the transition more efficient and cost-effective. Collaboration in clean energy projects can also promote regional stability at this critical time of uncertainty by fostering economic ties and mutual interests.

The joint publication explores prospects for partnership between the GCC countries and Turkey to accelerate energy transition and clean-energy deployment. The goal is to diagnose the current state of renewables adoption in Turkey and the GCC, identify potential areas for cooperation in aligning their net-zero emissions targets, and produce a set of policy recommendations to accelerate the transition. The publication underscores the imperative of shared efforts, knowledge exchange, and sustainable initiatives to fortify regional stability and contribute to a resilient, low-carbon future.

May our joint efforts to address the challenges of climate change and foster clean-energy cooperation serve as a testament to the power of regional partnerships in shaping a more secure, resilient, and interconnected world.

In cooperation with

Public Event Sat, December 9, 2023 • 3:30 am ET

Prospects for cooperation in energy transition for a sustainable future: GCC, Türkiye, and regional perspectives

An in-person discussion and publication launch taking place at COP28, on Türkiye-GCC prospects for cooperation in energy transition.

Energy & Environment Energy Transitions Geopolitics & Energy Security Middle East

The Atlantic Council in Turkey, which is in charge of the Turkey program, aims to promote and strengthen transatlantic engagement with the region by providing a high-level forum and pursuing programming to address the most important issues on energy, economics, security, and defense.

Learn more

The post Prospects for cooperation in energy transition for a sustainable future: GCC, Turkey, and regional perspectives appeared first on Atlantic Council.

“The stark contrast to me is that energy companies are actually here, and two COPs ago at Glasgow, there were CEOs of oil companies who were told they were not permitted to attend,” said HIF Global Executive Director Meg Gentle, adding that energy company executives’ voices are sorely needed in these conversations about fighting climate change.

“It’s getting better, but policymakers don’t really listen to industry leaders,” said Gentle, whose company makes synthetic fuels from renewable energy. “And they underestimate how long it takes to build these projects. We’re futzing around with getting things perfect, rather than getting things moving.”

That urgency was felt across the panel. Gentle was joined by Jon Mitchell, chief sustainability officer at Canadian energy company Suncor; Naser Al Hajri, deputy chief operating officer of Abu Dhabi-based Mubadala Energy; and Fareed Yasseen, climate envoy and advisor to the prime minister of the Republic of Iraq.

See more highlights below from their discussion, which was moderated by Cody Combs, future editor for the National.

Energy innovation at work

• Gentle said that e-fuels, which are made from green fuel and recycled molecules of carbon dioxide, already have significant promise in addressing the climate challenge. While they are still more expensive than producing fossil fuels, they are chemically identical to what’s being put in car and jet fuel: “What we need to do is create the policy and the market mechanisms that can extend and accept e-fuels into the market and use it in existing infrastructure,” she said, describing it as a public policy and economic challenge more than a technological one.
  
• In Chile, HIF Global is producing an e-methanol that can be used for the shipping sector and synthesized into gasoline. Chile can start reducing fossil fuel dependence by blending that e-methanol with other fuels, which adds only “a couple cents’ increase in the cost,” Gentle said, proving that the world can start creating “different market mechanisms where pricing can be spread over large markets.”

• Mitchell said that Suncor has started taking more of a focus on the demand side of the energy technology equation. “We’re in a situation where we need significantly more energy with significantly less emissions. And so how are we going to do that?” Mitchell said. “Demand’s been a bit absent from the conversation. And I think we need to spend a little bit more time on that.”
  
• There are numerous questions about whether noncombustible uses of fossil fuels and hydrocarbons can provide an alternative product mix for energy companies. Al Hajri gave the example of a geothermal project that Mubadala Energy recently conducted with Chevron to provide sustainable energy to a town in Indonesia. “All forms of energy will be required,” he said.
  
• Yasseen argued that nuclear technology needs to get more attention. “We can’t have just one arrow in our quiver. We really have to broaden what we do,” he said. “There are significant developments that make nuclear reasonable and achievable and safe within our lifetimes,” he added. Those developments include novel ways to yield nuclear ashes with one hundred-year lifetimes instead of one thousand-year ones, making it possible to solve the challenge of nuclear waste, and fusion advances that have made commercial solutions a possibility by 2035 or 2040.

Changing the clean energy conversation

• Many on the panel observed a marked shift in the conversations at COP28 compared to past years. “For years we’ve been pushing a rock up a hill trying to get people to understand, notice, pay attention to this issue,” Mitchell said. “It feels to me like we’ve crested that hill. The rock is now rolling down the other side, and now we have to harness the momentum on where we want to take it,” he said, noting that there were almost one hundred thousand people in attendance this year, more than double last year’s attendance. “I think COP28 can do, for the energy sector, what Glasgow did for the financial sector,” he said.
  
• In order to reach 2030 sustainable development goals, the multi-year projects required to build novel energy technology facilities need to get started now, Naser argued. “In my industry, it can take five, six, seven years sometimes to get the projects ongoing,” he said. “Everyone is talking about the long target, but I think what we need is a short-term and medium target.”
  
• Gentle described an e-fuels facility HIF Global is building in Texas, where the construction process will take at least four years.“ So the longer we wait on policy to allow these projects to start,” she said, “the lower probability we have of delivering solutions before 2030.”

New technologies confront new realities

• Yasseen said that taking action should put ethics first. “The driver to everything that we do should be equity,” he said. “You can’t, for example, force people to switch to new technologies if it’s very costly to them. You have to take circumstances into account,” he said. “So the focus now, for example, in Iraq, is not on carbon capture and storage, but on stopping flaring.” It’s not about hydrogen, he said, “but it’s about taking account of methane.”
  
• Asked about whether Iraq had the political will to resolve some of these issues, Yasseen said that the prime minister recently told a friend in a private conversation that the biggest thing that kept him up at night was flaring. “In Iraq, it is a health hazard to people,” he said. “Frankly, it’s money that we’re wasting, huge amounts. And it’s bad for the planet.”
  
• The Global Methane Pledge, Al Hajri said, will “provide us a dynamic to work with vendors, to work with partners, operators, different sectors, and to try to see what kind of technology that we can implement in our facilities.” Globally, there are lots of opportunities to use existing facilities to help in the long term too, Mitchell added, noting that the same storage infrastructure used to decarbonize oil production can be used to store carbon dioxide with carbon capture and storage technologies as they advance.

Nick Fouriezos is a writer with more than a decade of journalism experience around the globe.

Note: Mubadala Energy and HIF Global are sponsors of the Atlantic Council’s Global Energy Forum. More information on Forum sponsors can be found here.

Watch the full event

The post Technology leaders warn that 2030 climate aims are at risk without accelerated support for innovation appeared first on Atlantic Council.

According to Caribbean Development Bank President Hyginus Leon, who spoke at the Atlantic Council’s Global Energy Forum in Dubai on Thursday, the Global North has long benefitted from being the destination for flows of goods, money, and people from the south. “Now,” he explained, “you need a reversal” to “generate equity” and “allow the Global South to grow.”

Herbert Krapa, Ghana’s deputy minister of energy, explained that despite African countries being the source of both fossil fuels and vast critical mineral deposits—both crucial for meeting energy demand—the continent hasn’t been able to leverage them for its own development. “A just transition,” he explained, will require “taking advantage of these resources.”

But for the sake of the climate, he added, it will also require “significant financing” for renewable energy.

Ultimately, Leon explained, the Global South must have a larger voice on the world stage. Otherwise “we are not going to make progress” toward climate goals.

Fahad al-Dhubaib of the Saudi national oil company Aramco argued that Global North countries pinning their hopes on keeping global warming below 1.5 degrees Celsius should focus on the Global South now: “This is our opportunity [to curtail] the potential growth and emissions we could be seeing going forward.”

Below are more highlights from the conversation on energy security among leaders from the Global South, moderated by Jason Marczak, vice president and senior director of the Atlantic Council’s Adrienne Arsht Latin America Center.

A secure energy future

• “The energy transition needs to go as fast as it can,” said Pietro Sampaio Mendes, Brazil’s secretary for oil, natural gas, and biofuels. However, he added, “we will not stop the production of gas . . . we are increasing the production.” Krapa similarly said that while Ghana understands that it will need to transition, it is an expensive endeavor: “We have oil and gas in significant quantities, and will continue to explore that . . . side by side with our transition plan to move more to renewables.”
• Al-Dhubaib noted that the bulk of energy demand in the future will come from the Global South, where the gross domestic product per capita is just shy of seven thousand dollars. So “we shouldn’t take affordability and reliability lightly in the Global South,” he said. 
• He explained that since Russia invaded Ukraine in 2022, gas prices and coal demand have skyrocketed, making energy more expensive and less reliable. “Time is not working in our advantage,” he said. When it comes to energy supplies, he argued, “we need everything going forward.” Sampaio Mendes added that in the battle for the climate, “our enemy is the carbon; it is not any technology or the pathway.”
• And according to Marcelino Madrigal, head of the Inter-American Development Bank’s Energy Division, the question about the future of energy security is “more complex” than whether to pursue renewables or fossil fuels. For him, it is also about securing ample energy-production capacity that is accessible to all in the long run.

There will be costs

• Al-Dhubaib argued that as the world switches from oil and gas to renewables, energy “resilience will be quite challenged,” as renewable energy can’t be stored as long and renewable-energy technologies are more expensive upfront—with smaller returns.
• Leon asked: “What good is it to have a high return, and that high return means it only yields our ultimate death?” He continued, “We cannot be arguing that there’s a higher cost to financing something in the realm of renewable energy that saves the planet . . . and then say we cannot do it because the cost is too high.” Madrigal added that, while the energy transition will spread benefits, “there are also costs.”
• Madrigal noted that countries will also need to invest “a lot,” and not just money: In particular, he said that Latin America will need to invest in better rule of law, regulatory instruments, and institutions to create a better environment for private investment. The world’s mission to slow global warming is “a huge opportunity for Latin America,” he explained.

The Global South’s take on COP

• The speakers, all in Dubai for the United Nations climate change conference known as COP28, reflected on the breakthroughs they’ve seen come out of the convening thus far. Leon said that he sees COP as “a process” that leaders “advance as we go along each year,” achieving “pieces along the way.”
• Pointing to a new push to triple renewables and double energy efficiency, Leon cautioned that for that to happen, more finance is needed. While a new thirty-billion-dollar fund from the United Arab Emirates and the loss and damage fund are “welcome,” he said, “the actual investment need is . . . in the range of twenty trillion [dollars]. So there is a humungous gap that is still to be filled.”
• “Those are essentially seed funds,” Krapa added. “The amount of financing that needs to go into remodeling energy systems and energy infrastructure” across Africa is much higher, he warned, adding that the new funds amount to “a drop in the ocean.”
• Krapa said that he is keeping an eye on the global stocktake—an assessment of global climate progress (or lack thereof) that is expected to be completed at COP28. “I think we should be very clear in the outcomes of the stock,” he said, “in terms of the progress or the little progress that has been made . . . we should be bold to confront the truth that the pledges and commitments have not come through.”

Katherine Walla is an associate director on the editorial team at the Atlantic Council.

The post What the Global South needs for a just energy transition appeared first on Atlantic Council.

Flagship Event Tue, December 5, 2023 • 5:00 am ET

Global Energy Forum at COP28

The eighth Forum will be held in Dubai as energy and climate decision-makers converge for COP28.

Energy & Environment Energy Markets & Governance Energy Transitions Geopolitics & Energy Security

Event transcript

Uncorrected transcript: Check against delivery

Speaker

Amos Hochstein
Senior Advisor to the President for Energy and Investment
Executive Office of the President

Moderator

Frederick Kempe
President and CEO, Atlantic Council

FREDERICK KEMPE: So it is such a pleasure to have this conversation with Amos, senior advisor to the president of the United States for energy and investment. I had to read it here because you’ve had so many titles since you came—and so many titles in your career, so many titles. You’re a person who’s worn a lot of hats in your—you’re one of the most impressive, resourceful, and capable public servants I know. And we’ve known each other a long time, Amos—a personal friend and former board member of the Atlantic Council.

We’ve got a packed house. People are always interested in hearing what you have to say. So I think we’ll get started.

Like a lot of people of great capability and capacity, you keep taking on more tasks and you keep—and so let’s start by talking about your relatively new job and about the importance of global connectivity for economic growth and enabling the transition to clean energy. I talked to Amos about what we could talk about and he says, well, you can ask whatever you want to ask, but I’m going to answer whatever I want to answer. And so this will be an interesting conversation. 

But he’s been involved in the situation with Israel in Gaza. He was involved in the situation in Ukraine, particularly the energy elements of this, where Vladimir Putin has done a lot of harm to the world but one of the things he did was accelerate the energy transition of Europe.

But let’s get started with, first of all, talking about your role. It seems to have evolved from a focus on the security of energy and supply management toward a more holistic approach which is inclusive of energy infrastructure and economic interconnectivity. So, first of all, has this sort of job ever existed in the White House before? A little bit of history on how it came about and what you see as your primary priorities, and then we’ll get into some of the—some of the details.

AMOS HOCHSTEIN: Yeah. First, Fred, thank you, and for taking our private conversation before and broadcasting it. But—so I’ll talk about something completely different. 

Look, I think I should start by the—it’s amazing to me, Landon, you said this is the eighth. It feels to me like it’s the—it’s the, you know, fifteenth. There’s just so much going on that the Atlantic Council has done, and the partnership of doing it here in UAE, in Abu Dhabi and now in Dubai, has really transformed what this event has always been. But it’s—and I’m glad that you took a minute to recognize Ambassador Dick Morningstar’s extremely productive contribution to the concept of energy security in the context of American government and diplomacy, and bringing energy into diplomacy and national security, which is not a given. And it’s flourished since then, but in—just about fifteen years ago nobody thought there should be a conversation of energy in the national security space in Washington. The rest of the world figured it out about thirty years earlier, but—and Washington didn’t get it. So I’m really grateful that you, first of all, named something after Dick Morningstar and recognized him here. I think this is probably one of the first ones that he has not attended, so I’m really grateful for you for doing that.

Look, this role, no, it has not existed before in the White House, and it demonstrates what the president—how much the president is emphasizing the holistic approach to the focus on what is our work on climate change and responding to a climate emergency. And I’ll take a minute just to say what I think that—in my mind, what I think that means.

When we want to look at—we’re here at COP, where we originally talked about things—about COP in the context of what is it communicating and what are the NDCs, what are countries agreeing to as far as what are the—setting the longer-term goal and then setting some milestones on the way to that goal so that we don’t just talk about 2050 without saying, OK, but what’s going to happen in 2030, and then 2035, and 2040. If you just leave it at 2050, it becomes a little bit pointless.

So that really was the main aspect of what COP’s about. And what it’s transformed into is looking at COP is really how do we get to that kind of a world where, now that we see that it’s possible to reach net-zero but it also suddenly dawn on us, we caught the bus, right, as far as convincing the world that this is what we have to do. Now it’s really, how do you do it? And the energy system is a really complicated system—global system that it’s not so simple to just simply unplug from one system and just say, oh, it’ll take twenty years. We’ll just—it’ll take twenty years.

It actually is really complicated. And one of the things that makes it really difficult is how do you do it across the board regardless of income level? And it’s one thing that you can do things in the United States, in the UAE, in Germany, in Denmark, in China. It’s another to do it in countries that can’t afford to do the same thing. So how do we have a holistic approach to say that the work we have to do, one, has to be across the board, two, it doesn’t have to be just focusing on deployment of renewable energy and storage? 

But, rather, what are the other pieces of infrastructure that need to be built in order to enable that kind of investment? Because if you don’t have the rail, and the transmission, and the ports, and dry ports, and how to connect the cities to the rural areas—all those things have to be connected. And, by the way, if you don’t have the connectivity, the 5G, and have the telecommunication side of it so that you can use and utilize the advancement in technology that the new energy system has, if you can’t implement that in places that don’t have the digital connectivity, then you’re not going to be able to reach that goal.

So how do you look at all these pieces? And what the president has asked me to do is to say, OK, how do we bring a holistic approach? How do we bring our G7 partners together, which is where we launched a lot of this new kind of effort, and then bring more and more partners as we go along? And I think it culminates in what the UAE announced here on Friday, which is Alterra. Which is, I think, OK, we got to put the money towards this goal of net zero, but it has to be invested in a broader—to a broader set of locations. And it has to have a cost of capital that enables the investment in countries where right now the cost of capital is what prohibits the investment itself.

So these are all the—a lot of different pieces. And if we’re going to be successful, the thought was that we would have—that I would try to see if I can bring the different parts of the US government, the different agencies that are all doing great work, and to all coordinate towards one goal, while doing the same thing with our friends and allies around the world.

FREDERICK KEMPE: And I guess two things. In this effort, what do you think success will look like? And over what period of time will we see it? And in that context, how does this COP28 fit in? You’ve seen the various media controversies about this. Some have called it a divisive COP because of the issue of fossil fuels and climate. Others have called it an inclusive COP, that you can’t get to the solutions we want to get unless you bring all of these actors together. So two things, what does—in your own role what does success look like over time? And then, secondarily, how do you think this COP28 will be remembered, if you don’t think it’s too early to talk about that?

AMOS HOCHSTEIN: Think what success looks like, is if we took—you know, this is the stocktake COP. If we have a stocktake that doesn’t have to be announced as a stock but we keep taking stock as we should, and then as we move forward we see that the percentage of invested dollars are distributed more equally around the world, one; two, that we’re actually building infrastructure that will enable investment, whether that’s hard infrastructure or it’s the deployment of actual energy infrastructure; and if we’ve been able to do those two things over the next few years, then I think that will be—for me that will be seen as success. 

If we—if as a result of that we’re actually narrowing the gap between developed and developing economies on both deployment and viewpoint and a feel that everybody is in this together so I think that will—for me that will be the success. 

I’ll add one aspect to that that I haven’t mentioned before, and that is Landon talks—and, Fred, you really started this at the Atlantic Council on energy security. And it used to be—a few years ago somebody said to me, well, energy security is the—is code word for fossil fuels. So there’s the climate world of energy and there’s the energy security. 

To me, if we’re still doing that today that’s not a success. That’s a failure, because energy security is as true in the era of climate change and battling climate change as it was in the era of fossil fuels and security of supply and making sure that it is available, affordable, and diversified is not something that we only talk about in the context of Russia and Europe on gas. It has to be the same for EVs and lithium and panels and—solar panels and turbines.

And so the entire supply chain can’t be dominated by one country. It has to be—or—and I’m saying not China and not the United States. It has to have a diversified set of investment into the infrastructure that’s necessary from mining to processing to manufacturing and distribution. All of that has—we have to—we can’t have single points of failure and the world has to have competition in this world so that prices can continue to come down. 

As far as this COP, look, I think there’s a lot we’ll have to judge. You know, you can only judge certain things in the middle. You’ll have to wait to the end to see how things turned out. But I think Dr. Sultan has done a very good job, and the team around UAE, of putting together, one, a beautiful COP and efficient and effective from a facilities and location and it’s really run very smoothly. 

I think we’ve had some very important successes that before COP we talked about were going to be the failure points potentially and that is the loss and damage, whether we would be able to get something on an agreement of the fossil fuel companies on methane leakage and reducing methane. 

So we’ve had already some successes of bringing people together. I think there are some things that are always difficult to achieve at COP because they require such broad consensus or, rather, consensus from such a broad and diverse viewpoint around the world and that’s what makes it so difficult and that—we’ll see how that develops. 

Some of those never get agreed to early and we’ll have to see where we get to. But I think—I want to just respond to one thing that you said, which is, is this going to be an inclusion COP or is this a divisive?

The thing that bothers me the most in this debate not just here at COP is that we push worlds into their corners and we create echo chambers, and I can name the conferences that I would go to where they’re all 90/10, right. Ninety percent is fossil fuel companies and fossil fuel financiers and you get a certain view of what 2050 really will look like in reality—a certain skeptical view—and then you come to COP or you go to a different conference and it’s, you know, we can do it tomorrow and there’s a 90/10 in the other direction. 

That’s not going to get us there and I think what the—what we’re trying to do here, what I think the government of the UAE is doing and the presidency here, is bringing everybody together. And I think it’s OK to have disagreements. I don’t think that we should expect that if somebody came here and didn’t agree then that’s a failure. 

I think that’s a success that we’re having the conversation. We should let people views change, and the only way to change that is by having everybody there together because this is, again, the energy system. If you really want to change the energy system, you really want this to be a net zero world, you can’t do it by just wishing and willing. 

You have to bring everybody together and say, here’s the reasons why we can create a market-based—working with market-based solutions, government, MDBs, philanthropies, of how do you bring everybody together to make this investable and then maybe the fossil fuel companies will say, OK, I need to start investing more into this part of it because that’s not just investing in my disruption but it’s investing in where the future is going to be. 

And that’s where—that’s when we get to success, when everybody’s going—rowing in the same direction. We won’t get there right away. I think that’s OK. But I think bringing everybody together to have the hard conversation is better than separate echo chambers.

FREDERICK KEMPE: That’s just a terrific answer and I’m really proud also over the eight years of this forum that we have never been 90/10 in either direction. We’ve always had the full conversation and I’m really proud of that. 

So CIA Director Bill Burns talks about climate as the problem without borders. But then he talks about what’s going on in the rest of the world which is the problem that has borders which is a war in Ukraine, a terrorist attack on Israel, Hamas—the war in Gaza that’s followed.

How did October 7 change your job? You’ve been playing a lot of—you’ve been spending a lot of time on that issue as well. And I think a lot of people in this audience know this but if you don’t, Amos was instrumental in bringing about the Israel-Lebanon maritime deal and in that context is—you know, that deal would be almost impossible to do right now, at a guess. 

But how does something like that stand up? So the problems that are going on right now in Israel and the Middle East how does this affect your job and what you’re trying to do and what you’ve already achieved with Israel and Lebanon?

AMOS HOCHSTEIN: I think October 7 affected the whole world and waking up to the really horrific attack—and the more time goes by the more we learn about how horrific that day was—and now we find ourselves in a place where nobody, I think, wanted to be in. Nobody in this room and no one in the civilized world wanted to see this war in Gaza and where so many innocent people and children from every—from across both sides are suffering. 

And Israel has the right to defend itself. We want to be able to see what—a stable and peaceful existence. But nobody wants to be here. This is a horrific place for all of us regardless of where you fall and how you see it. There is—this is—everything changed on October 7 and it was not in a good direction. 

I think that where, as you said, we negotiated the—we helped the sides negotiate a maritime agreement that for the very first time exactly a year ago we got a real boundary between Israel and Lebanon.

Israel and Lebanon have never had an agreement on any kind of boundary ever and the idea that these two neighbors since their independence have never agreed but finally agreed, yes, it was in the maritime so there were certain things that made it easier but it was still fairly difficult, and it was fourteen years of multiple envoys from different countries trying to get there and we finally got there. 

I think my success was based on the fact that I was one of those failed attempts in the past. So sometimes when you fail something you come back and you learn from that. But I think that we’re—we have to learn—what we’re trying to do is learn from what went right there and the countries—Lebanon did not—

FREDERICK KEMPE: Could you talk about that? What did go right there?

AMOS HOCHSTEIN: Well, I think there were wins for both sides. The idea was not—when you walk into these negotiations oftentimes is a zero-sum game of—the first conversation I would have with both sides was, well, but what are they going to get, and I said, forget what they’re going to get or not get. Don’t worry about that. Tell me, what do you want out of this? What’s in it for you? 

It sounds simple in this room but I promise you that over several years we could not get the answer to that. Neither side can actually answer that question. It was much more important to delineate and describe what the other side should get or should not get or what was fair or what happened twenty years ago and fifty years ago.

Once we can get past that part of the conversation and say—I can—we were able to show and see that what they actually want their number-one priorities did not clash. There was no—it suddenly wasn’t a zero-sum game. Both sides can get their number one, two, and three most important piece that they needed—economic security, physical security, et cetera. So I think that and sort of making—understanding what the red lines were, both sides, was enabled.

I think that what we have wanted since October 7, since that morning, was to make sure that, as bad as the situation is in Gaza, in this war, that we can keep it contained there, that it does not—we do not want to see this war expand across other borders. Now, it has to some degree. There has been an exchange of fire on almost a daily basis, except for the pause, between Israel and Hezbollah and some of other Palestinian armed groups—terrorist groups in—housed in Lebanon. But keeping it at a certain level of violence, but—which is—again, stating the obvious, that is not an acceptable situation, but it’s a—it’s a reality. But trying to lower the flame there, trying to get to a much more peaceful existence, and to see what is it that we can do to get to a solution that provides more security for people in Israel who live in the north at the border and for people in Lebanon to live peacefully in the south and to have economic prosperity.

The thing that I learned the most from what we did in the maritime agreement and other agreements around the world that I’ve been involved in is there is a key element of economic prosperity that we—that we have to integrate. And I’m a believer not just in energy security being part of national security, but economic prosperity has to be part of national security, because the more there’s physical interconnection and integration, the more there is a codependency and the more that there is what to lose. And I think that there—it’s important as much to have what to win for, what to look forward to, and to know what you lose when you walk away from it.

And so I think that as we hopefully get to the other side of this conflict as soon as humanly possible, and while achieving what is necessary to secure the future, we have to look at something that’s viable for the Lebanese state to get stronger, to return to economic growth, and to have a security along the border or along the line—the Blue Line between Israel and Lebanon.

FREDERICK KEMPE: Thank you for that. I think this is now working, so you can hang onto that microphone. Maybe yours is as well.

So you’ve been a champion in the White House for normalization with Israel through the Abraham Accords, something that the Atlantic Council has spent a lot of time on. In fact, the week of the terrorist attack we had to bring our team out of Israel. Ministers from the normalization states were on their way to Israel for a conference that we were holding that would have been focused on economic integration. President Netanyahu would have been part of it. Ministers from the region would have been part of it. So this—there are some real human victims, but this is also a victim of this. You know, and our Middle East Program, working with the Jeffrey Talpins Foundation, led by Will Wexner, has done a lot of work on this.

You were also involved in an effort for—that seemed to be growing closer with Israeli-Saudi normalization. You said you hope you get there. What is the path back to that? Is there a path back to that? How much damage has this situation done for all of that hope?

AMOS HOCHSTEIN: Look, we have had—we’ve had examples of what is positive momentum and the kind of future that this region can have. And I think that in the previous administration, the great work that was done on the Abraham Accords and the remarkable decisions that were made by the government here in the UAE and Bahrain and Morocco to take a step towards a different kind of future, and to understand that if we want to focus on the real existential crises of the day of climate change and economic disparities around the world, that’s what we should all work on together. And the vision that President Biden has insisted on since the day he came into office is to focus on a regional integration. It has to be the path, and strengthening what was done in the Abraham Accords and expanding, and looking at what other kind of agreements we can make.

I think that the United States has always wanted to see throughout multiple generations and administrations a normalization of relations between Saudi Arabia and Israel. It’s no secret that that’s something that President Biden has wanted to see. He’s talked about it a lot. His trip to Saudi came as a—part of a two-stop trip between, first, in Israel, and then to Saudi on a direct flight from Jerusalem to Saudi Arabia. And all the work that was done since then was to see and explore what is possible.

Clearly, we’re right now in a moment of conflict that we all have to focus on getting to the other side of. But I don’t think that we lose the hope, the vision, and we’re going to continue to work towards that. I think that not every road is a straight road, and sometimes it goes in—we have to go in different directions first. But the goal is still the same. And we remain as committed to that goal of regional integration. And it’s not just about Saudi Arabia and Israel. It’s as broad as—it has to be much broader than that. 

If we all can focus on those kinds of solutions that also use that momentum to then support what—how we can better the lives of Palestinians in the West Bank and Gaza, how do we use that momentum to create an atmosphere that is the opposite of where we’re going now, of increasing hate speech and increasing demonization of the other side, and get back to starting to talk about what brings us together, what unites us, and the same fears, hopes, and dreams that people on all sides of this region have, that are no different than they are in the United States, Europe, South America, or everywhere. We want to have a better life for our—for our families. 

And I think that all has to be together. So I don’t think that we have—we’re changing directions. I don’t think this conflict should do that. In fact, this conflict should be a doubling down on reminding us that if we don’t go towards regional integration, peace, and security, this is this—this is the alternative. These are the two options that the world is facing, and this region faces. And I think it’s an overwhelming choice to choose the path of integration, peace, security, and prosperity.

FREDERICK KEMPE: That’s a very powerful answer, thank you, Amos.

Let’s try to get a couple of questions in, in the time that we’ve got left. Let’s pivot back to energy. President Biden talks about inflection points quite a bit. And I wonder if you can talk about the energy inflection point we’re in, and the relationship between energy interconnectivity and energy security, and the emerging energy system. And how does it shape US energy security priorities moving forward? As you said, for a while energy security—that term almost went off our screens. And they came back pretty powerfully with the war in Ukraine—Putin’s war in Ukraine. And you’ve said in an interview that the US should learn from what we went through in the oil and gas energy space as we transition to an energy market. What do you mean by that?

AMOS HOCHSTEIN: Well, I think I had this conversation with Helima here in January. I got a little bit of trouble afterwards. But there’s a—so we’ll try to do that again. Look, I think that the lessons that—we have to—you can’t just say it’s a new world. You have to learn from how we got here. And I think that the twentieth century taught us a lot of lessons about energy security and security of supply. And it started in the 1970s with OPEC, and it—and then in—and then we saw what happened in Europe and the dependency on gas that for most people started—kind of came on the national—on the international media stage in—as the invasion into Ukraine happened.

But in reality, we were—this is what—the pipeline wars of the 1990s, the direction of where hydrocarbons were going to go, in which direction, they were all about geopolitics. And so we have to learn the lesson. The lesson is not—I’ve said this in Europe a lot—the lesson from the dependency on Russia is not I shouldn’t depend on Russia for all my gas. That’s the wrong lesson. The lesson is I shouldn’t depend all my energy on a single source, or majority of it, on a single source, and I shouldn’t have a single point of failure in my supply chain. And that was true on oil. And it was true on gas. And it is now true on renewables. And it’s true on nuclear fuel for a—I’m happy to see a new enthusiasm for nuclear power with new technology. But my nuclear fuel has to be in that conversation. And in my electric vehicles and my critical minerals and my—the entire supply chain.

The lesson from the twentieth century is, build a well-diversified world and economic structure. And I think we have such an amazing opportunity because you’re building something new. So why would we slip right into the same bad habits of, it’s a little bit cheaper to do this, and I’ll buy what’s cheaper, and I won’t invest in what may be a little bit more expensive, but it will actually be something that is more secure. And I think that’s where—that is good money to spend. The question becomes, who should spend that money? And I get that, because why should a company say to its shareholders, I’m going to spend more money and I can’t really articulate what the amortization is of that extra cost? And when I go to the investment committee, they’re going to say, no, that piece is cheaper. Buy the cheaper one we’ll let the government figure out the other stuff.

So we have to come together as governments and say, no, we’re on the ground floor. It may not feel that way, but we’re on the ground floor of the energy transition. And how do we come together, the wealthier countries together with MDBs and philanthropies and sovereign wealth funds, and say: This is our moment to make these investments. Together with the business community, put our money into the capital stack so that they are—so we de-risk these investments. And that we come out of it’s on the other side with a stronger, more diversified supply chain in the clean energy space, that will actually enable both growth and equity and security. And that’s the energy security—the concept of energy security of the future is in that space.

FREDERICK KEMPE: And I don’t think that answer will get you into any trouble. That was a brilliant answer. So we’re running out of time, we’ve run out of time. But I’d like to end this with a question that is always one of my favorite questions for someone like you, who has to deal with risks and opportunities. And that is, as you—as you look out at the world you’re dealing with day-to-day, what gives you the biggest concern? What keeps you up late at night? And, conversely, what do you see as the biggest opportunity? What gives you your biggest hope?

AMOS HOCHSTEIN: There’s so much that keeps me up at night these days. I don’t think I really get to sleep with what’s the last few months.

FREDERICK KEMPE: That’s the world we’re in right now.

AMOS HOCHSTEIN: And that’s the world we’re in. So, look, I think I would break it down. On the concern side is the physical security of people’s lives and their ability to protect their families in a world where we are in two active wars in Ukraine and here in the Middle East. So that keeps me up at night. The piece—the second piece is, how do you both bring them to a close in a way that’s not about just ending the war, that’s—it’s easy to say, just end it. But how do you end it in a way that actually defeats what started it, and making sure that the next phase is actually longer-term security? And so those are the things that really, how do you—how do you do that?

The next piece is really what keeps me up at night, but it also is what I feel is the best hope and opportunity, is the ability to rebuild and reshape a world. And what we’ve—what I’m grateful that President Biden has allowed me to do is to implement that vision. And to—so while I’m here in the Middle East, you know, I’ve been to Angola and DRC and Zambia, and the president of Angola was just in the White House last week. And that’s because there’s such an opportunity to do investment in a different way, that’s development is really important but it doesn’t replace investment. And that’s what we’ve done wrong. And so the idea that we can recognize we did that wrong, let’s do this better, and we can keep our development agenda and add into the component of actual investment, so that the infrastructure we build, we don’t come back to it ten years later and there was because it was just development without investment it meant that there was no money for maintenance, there was no money for running it efficiently, and now we have these big pieces of infrastructure that are not working.

But now we’ve actually cracked the code and been able to launch projects that the president talks about all the time. Even during these two wars, President Biden talks all the time about building a railroad from Angola to Tanzania, across all of Africa, and doing it in a commercial way. And why? Because that enables critical minerals and lowering corruption; because that enables food security, investment; because if you can have a landlocked country that has good water and good soil and good weather but it doesn’t have a connection to any market, then nobody’s going to invest in it, but now you can if you do that, and you can get fiber-optic connectivity so that small businesses can be there.

All of these things, connecting those dots is—it keeps me up at night that we’re not working fast enough, but the hope and opportunity, I can’t tell you how thrilling it is to work on these projects, or the one that we did with the United Arab Emirates and Saudi Arabia and the European Union and India of getting a logistics operation—IMEC—the corridor from India to the Middle East, through the Middle East to Europe that will be energy, electricity, hydrogen, fiber-optic cables, and lowering the cost of shipping products and materials across the world. These are the kinds of things, Fred, that we can actually do by working together with other countries that literally transform the world, and that is—that is the fun part about this job.

FREDERICK KEMPE: Amos, thank you so much for that. I don’t think in my lifetime I’ve ever seen a world where the risks are so pronounced and the opportunities are so pronounced, both at the same time. It makes me feel better that you’re in a position of responsibility during this really tricky time. So join me, please, in thanking Amos.

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Mansoor Mohamed Al Hamed is CEO of Mubadala Energy. Mubadala Energy is a sponsor of the 2023 Atlantic Council Global Energy Forum. This essay is part of the Global Energy Agenda.

Societies and economies have come to depend upon access to reliable, affordable, secure, and sustainable energy. To provide this access, a complex and intricate system has emerged. 

But energy systems are changing fast, shaped by many factors and diverse actors. Chief among these drivers is the need to transition to a lower-carbon future. This assessment is almost universally accepted. The question requiring consensus, however, is how do the world’s leaders accelerate the transition while ensuring communities do not suffer, and that people maintain access to the energy they need in order to develop and grow. 

As Fatih Birol, head of the International Energy Agency, has said, “No energy company will be unaffected by clean energy transitions. Every part of the industry needs to consider how to respond. Doing nothing is simply not an option.”

How then can the energy sector ensure it contributes to the transition while also ensuring its long-term viability and that it meets the needs of consumers?

At its core, this question asks: Should today’s oil and gas companies be viewed as part of the problem, or could they be crucial to solving it?

Part of the solution

At its core, this question asks: Should today’s oil and gas companies be viewed as part of the problem, or could they be crucial to solving it?

In addressing this question, three considerations provide the boundaries for the debate. 

First, demand for the services that energy provides is increasing due to a growing global population—some of whom remain without access to modern energy—and an expanding global economy. Take Southeast Asia as an example. According to analysts, gas demand is set to increase by 88 percent by 2050, driven by growth in countries such as Indonesia, where the population is expected to rise from 274 million to 325 million by 2045.

Second, the vision of the future must recognize that oil and natural gas play critical roles in today’s energy and economic systems, and that affordable, reliable supplies of liquids and gases (of different types) are necessary to sustain energy access and expand it.

Indeed, gas will be key to the transition and will likely remain an important part of the energy mix for many decades, not least because it produces 50 percent less CO₂ for power generation than coal. Natural gas is also abundant and provides a vital back-up power supply for renewables.  

And last but far from least, setting the terms of oil and gas’s role in the transition is imperative to reduce energy-related emissions in line with international climate targets as set out in the Paris Agreement.

Energy companies are acutely aware of the need to navigate the energy trilemma of affordability, security, and sustainability, while being part of the transition. To achieve these goals, the energy sector has to be part of the solution.

Accelerating the transition in partnership with energy producers

The question the world faces is therefore not whether to transition, but at what pace it can achieve the change while balancing the complex factors and challenges at play.

What is patently true, however, is that without the engagement and focus of the energy sector, together with the scale, capabilities, and capital the industry can deploy, progress will be slower, more expensive, and more difficult. 

How then can global leaders ensure energy companies are empowered to accelerate progress?

Decision makers must remember that energy is a system not a sector. All parties must align on common goals, regulations, and systems to enable an accelerated transition. This is a hugely complex task, but without regulatory frameworks in areas such as carbon credits and the nascent hydrogen market, investments won’t be incentivized. The energy system needs collective action and global frameworks.

Additionally, national governments must set out clear visions that frame how the energy ecosystem must evolve. They must commit to net-zero emissions by 2050 and set interim targets for reducing carbon emissions. Achieving these targets requires significant investments in renewable and nuclear energy projects.

Industry must also play a key role by expanding the technology, innovation, and problem-solving capacity that is essential to finding solutions and accelerating progress. What’s more, the solutions can be a win-win.

As an industry, we cannot shy away from the facts. As of today, 15 percent of global energy-related GHG emissions come from the process of getting oil and gas out of the ground and to consumers. But reducing emissions intensity of oil and gas scope one greenhouse gases is possible through portfolio rebalancing and exploring technologies that support the optimization of the business. 

More can be done, however. For instance, reducing methane leaks to the atmosphere is the single most important way for the industry to bring down emissions. And measures adopted to tackle methane emissions will generate revenues of about $45 billion from the sale of captured methane. 

Oil and gas companies must also invest in low-carbon and renewables business outside their core operations—such investments are currently less than 5 percent of total capital expenditures. Ramping up investment is a critical factor in accelerating change.

The transformation of the energy system will happen with or without the oil and gas sector, but if energy companies are not fully engaged and committed, it will be slower and more expensive. The world cannot afford for the legacy energy companies to sit on the sidelines, and in the long-term these companies cannot afford it either. 

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The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

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The post Partner perspective: Energy companies are essential to global climate solutions appeared first on Atlantic Council.

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Flagship Event Tue, December 5, 2023 • 5:00 am ET

Global Energy Forum at COP28

The eighth Forum will be held in Dubai as energy and climate decision-makers converge for COP28.

Energy & Environment Energy Markets & Governance Energy Transitions Geopolitics & Energy Security

US Special Presidential Envoy for Climate John Kerry on Tuesday announced a new strategy for international cooperation on the development of nuclear fusion, which he said would be—alongside other energy sources, such as wind, solar, and nuclear fission—”a critical piece of our energy future.” The strategy, Kerry explained at the Atlantic Council’s Global Energy Forum at COP28, focuses on research and development, supply-chain improvements, regulation, workforce development, and education.

If “all of our countries are threatened, and they are, [and if] all life is threatened, and it is, then we need to pull ourselves together with every strength we have,” Kerry said. “We cannot realize this grand ambition—perhaps not at all, but certainly not at the pace we need to—doing it alone.”

The need for alternative fuels such as fusion is apparent because “science clearly tells us, without any question whatsoever, that the cause of this crisis… [is] emissions. It’s the way we burn fossil fuels,” Kerry said.

Kerry noted that “we’ve had a little debate in the last few days about what the evidence shows or doesn’t show,” a reference to controversies during the United Nations Climate Change Conference in Dubai over what role oil and gas will play in the global energy future.

“We have two options,” Kerry explained. “Either capture the emissions or don’t burn [fossil fuels].”

Kerry explained that the evidence of warming across the planet makes it “clear” that the world needs to “move faster” to limit global temperature rise. “We need to figure out what we’re going to do at a critical pace,” Kerry warned.

Below are more highlights from Kerry’s remarks and the panel that followed, which touched upon the role fusion can play and how best to foster international collaboration on it.

The huge potential

• Kerry recounted having heard, as a senator for Massachusetts, that nuclear fusion—which joins two atoms together, producing energy—would be thirty years away, only to talk with scientists a decade later and be told that it was still thirty years away. But “the cadence of new and exciting fusion announcements has obviously increased over time,” he added.

• Now, he said, “there is potential in fusion to revolutionize our world and to change all of the options that are in front of us” for providing abundant clean energy to the world.

• Former US Secretary of Energy Ernest Moniz, who moderated the panel that followed Kerry’s remarks, said that “in this decade, there is a very high probability that… the conditions for sustained fusion will be demonstrated.” This, he added, “is truly a game changer—assuming this all comes to pass.”

• Designer Gabriela Hearst, former creative director of fashion house Chloé, noted the environmental impact caused by the garment industry. “We really need to focus on moving away from the fossil fuel addiction that we have,” she said. At Chloé, she explained, she had designed a collection inspired by visits to fusion labs. Fusion, she said, could help “the survival of our species.”

The accelerating pace

• Several speakers pointed out how new technologies and materials are helping realize the commercialization of fusion at a faster pace than expected. Bob Mumgaard, chief executive officer of the commercial startup Commonwealth Fusion Systems, explained that new technologies are “accelerating innovation.”

• “It’s just going faster and faster” with the help of technologies such as artificial intelligence and machine learning, Mumgaard explained. “In the last five years, it’s unrecognizable.”

• Six decades of government research and development has helped too, explained the White House’s Costa Samaras. “Now,” he added, “the challenge here is [that] energy technologies have long taken decades to get from the starting place to the market; and we do not have decades.”

• “International collaboration,” Samaras argued, will “supercharge” fusion energy development and quicken the pace toward establishing a commercial fusion plant. “That enables the advancement of fusion power… along the timeline that we need to deal with climate change.”

The remaining challenges

• Michelle Patron, senior director of global sustainability policy at Microsoft, noted that in order to meet growing energy demand, and to do it in a decarbonized way, “we need a multi-technology approach” that includes fusion and other renewable energy sources, including wind, solar, and geothermal. She added that electricity grids are local, so the mix of energy sources that countries deploy will depend on local political, economic, and social circumstances.

• Youth Survival Organization Chairman Humphrey Mrema, who is from Tanzania, said that if he were an African leader approached about supporting fusion development, he would “say no.” That’s because fusion is “hard to start” and “difficult to maintain” with the financial architecture across the continent, which has invested heavily in fossil fuels, he explained.

• In Africa, “we have to change the investment and channel it to renewables,” Mrema said. In addition, for Africa to pursue fusion, he explained, it will need technology, capacity building, and more financial resources.

• For Hearst, part of the challenge is awareness. “We live in a silo community,” she explained. “The science community has this information” about fusion’s potential, “but not the fashion community or other communities. So it’s time to cross-pollinate information to bring more hope.”

Katherine Walla is an assistant director on the editorial team at the Atlantic Council.

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The post John Kerry unveils a ‘critical’ new US strategy to expand fusion energy appeared first on Atlantic Council.

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Flagship Event Tue, December 5, 2023 • 5:00 am ET

Global Energy Forum at COP28

The eighth Forum will be held in Dubai as energy and climate decision-makers converge for COP28.

Energy & Environment Energy Markets & Governance Energy Transitions Geopolitics & Energy Security

A day after more than fifty oil and gas companies pledged to cut methane emissions to nearly zero by 2030, key leaders of the Net-Zero Producers Forum laid out a significant collaborative vision from some of the world’s largest energy exporters for making significant progress on the world’s sustainability goals.

“We have a lot of what we need to make the progress that is essential,” Rachel McCormick, director general of International and Intergovernmental Affairs at Natural Resources Canada, said at the Atlantic Council’s Global Energy Forum at COP28.

“My hope is that the next time we’re together on this stage, we’ll say that we’ve gotten where we want to go: to 75 percent reduction. That there is no question on whether or not we’re on that pathway [to net-zero emissions] by 2030.”

McCormick wasn’t alone in that belief. She was joined at the Global Energy Forum in Dubai by Andrew Light, assistant secretary of International Affairs at the US Department of Energy, and Khalid al-Mehaid, chief negotiator for the climate agreements for the Kingdom of Saudi Arabia.

Their nations, plus Norway, Qatar, and the United Arab Emirates, comprise the Net-Zero Producers Forum, a not-yet-three-year-old collaboration of six nations that collectively represent more than 40 percent of global oil and gas production. The group is designed to work together on pragmatic net-zero emission solutions—everything from methane abatement to clean-energy and carbon capture/storage technologies to advancing the circular carbon economy approach.

Their work is particularly meaningful in light of Monday’s launch of the COP28 Global Methane Pledge Ministerial, which announced more than one billion dollars in new grant funding for methane action (more than triple current levels of spending). plus new data tools and new membership that grew participation to 155 governments worldwide.

Read on for more highlights from their conversation with Angela Wilkinson, secretary general and chief executive officer of the World Energy Council.

The challenge and opportunity of tackling methane

• Light said that the pledges made at the ministerial wouldn’t have been possible without the relationships built through the Net-Zero Producers Forum, which forged unlikely partnership opportunities between the six energy-exporting nations. “Bringing our countries together was a necessary condition for something like that making it over the finish line just a few years later.”

• One of the key efforts of the Net-Zero Producers Forum, originally launched at US President Joe Biden’s first Climate Leaders Summit in April 2021, has been the creation of the Upstream Methane Abatement Toolbox. The toolbox provides information on measures taken so far, and lessons learned, in implementing methane-abatement technologies and policies, creating a roadmap for others to follow.

• Establishing a global framework around addressing methane emissions is particularly difficult. Past initiatives to curb extreme pollutants were plugged into ready-made global frameworks, such as the efforts to eliminate hydrofluorocarbons (HFCs): “There we were very lucky because we had the [1987] Montreal Protocol that was already tailor-made,” Light said. “Reducing methane is a way you can get near-term relief on global warming, but… we don’t have a working agreement, and so it’s much more difficult to take on from a global political perspective.”

Weighing economic competitiveness against net-zero goals

• The stakes around sustainable energy couldn’t be higher, Light said: “If we get it right, then we get a solution to the biggest problem that we all face today. We get the creation of hundreds of thousands, if not over a million, new jobs. We get a cleaner planet. We get a more sustainable future.” And if they get it wrong? “We lose everything we have gained. We lose all developmental gains we’ve had since World War II.”

• Particularly when it comes to major energy-exporting economies, it’s important to craft widely inclusive climate change strategies. “If it wasn’t for the way that the Paris Agreement was inclusive enough and wide enough for all of us to manage our national circumstances, we wouldn’t have been party to that dream,” al-Mehaid, the Saudi Arabian chief negotiator, said.

• Saudi Arabia and other oil-rich nations like it have adopted broad diversification strategies that innovate how oil and gas are used, including diverting those resources into noncombustion-focused products, such as replacements for cement and aluminum. “It gives you a long-term hedge,” al-Mehaid said, against the uncertain energy economy that a net-zero future could bring.

Other advances for fighting global warming

• Canada has passed tax credits and other financial incentives for companies willing to reduce their emissions, from a carbon price set across its entire economy to 65 percent expenditures returned for carbon-dioxide removal (CDR) efforts and 35 percent returned for energy-efficient transportation and other measures. “Carbon capture is really important because we know it works, we just need to scale it,” McCormick said.

• She added that it was important for the Net-Zero Producers Forum to consider its strengths when working together, rather than trying to tackle every climate-related challenge all at once. “There is a reason these countries came together. You don’t want to do everything. You want to do what is special to you. What are the results that can drive actions [and] send signals to the international market? The fact that we are all net exporters is important.”

• That mindset is one reason why all the countries in the Net-Zero Producers Forum have agreed to support direct air capture initiatives that extract CO2 from the atmosphere, but may not necessarily work together on proposing nature-based solutions, such as protecting forests or wetlands—particularly since the six nations have significant geographic and environmental differences. “Everything that comes together has to justify itself in this incredibly crowded landscape we see now on cooperation. The virtue here is that we have a similar approach,” Light said.

Nick Fouriezos is a writer with more than a decade of journalism experience around the globe.

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The post The world’s biggest energy exporters plot out the next steps toward net zero appeared first on Atlantic Council.

John Wagner is the director of Idaho National Laboratory, the US Department of Energy’s center for nuclear-energy research and development. This essay is part of the Global Energy Agenda.

Nearly seventy-five years ago, the US Atomic Energy Commission set out to prove that nuclear power could be harnessed to produce electricity for peaceful applications. To do so, it created the National Reactor Testing Station in Idaho. The station, now known as Idaho National Laboratory (INL), fulfilled the commission’s promise. With public and private sector partners, the initiative achieved many firsts, including the first nuclear electricity, the first city powered by nuclear, the first demonstration of the principle of breeding (producing more fuel than is consumed in a reactor), the first submarine reactor, and the first mobile nuclear power plant. Fifty-two unique test reactors were designed, built, and operated, giving birth to the US Nuclear Navy and the global, commercial nuclear energy industry. This rich legacy of achievement has made the world safer, cleaner, more prosperous, secure, and resilient.

And yet, it might surprise some to learn that although there are four remaining test reactors operating at INL, the US Department of Energy’s laboratory for nuclear energy research and development, it has been fifty years since a new, unique reactor began operations on the site. That’s about to change.

Over the next decade, more than a dozen advanced reactor concepts will be demonstrated in the United States, including microreactors, small modular reactors, and university test reactors. 

Ten years ago, this timeline would have been unthinkable. What has changed is a growing awareness about climate change and the imperative to combat its devastating impacts by producing clean, secure, flexible, and resilient energy.

This requires more nuclear energy—a lot more. Earlier this year, a DOE “Liftoff” report identified the potential for nuclear to scale to 300 gigawatts (GW) by 2050 to address the broader need in the United States for approximately 550–770 GW of additional clean, firm capacity to reach net-zero emissions.

Over the next decade, more than a dozen advanced reactor concepts will be demonstrated in the United States, including microreactors, small modular reactors, and university test reactors.

This is consistent with what the US-based Nuclear Energy Institute (NEI) found when it polled member utilities. NEI utilities see a role for nearly 100 GW of new nuclear electricity by 2050 to support their decarbonization goals—more than double the current US nuclear electricity capacity. Analyses from the Intergovernmental Panel on Climate Change points toward the need to materially increase global nuclear capacity by 2050.

This represents a profound challenge, but also an opportunity for nuclear power to address the global need for clean, firm, secure, and flexible energy in the next few decades. 

INL’s strategy—coordinated with numerous partners—is to start small. This means making systems that are simple and inexpensive as compared to current generation power reactors. To do this and to enable the successful scale-up in size, complexity, and capacity of nuclear power, the United States needs to do the following: build supply chains for advanced nuclear technologies, including a domestic supply of fuel; develop a knowledgeable and capable workforce; and revamp its regulatory system to enable timely deployment of advanced technologies.

At INL, that strategy (see figure below) begins with MARVEL, an 85-kilowatt thermal DOE test reactor that will provide a research-and-development platform for researchers and industry to understand the use of microreactors for a wide variety of potential applications, while providing information to support licensing, environmental assessments, improved performance, and deployment.  MARVEL will also advance US capabilities to support subsequent reactor projects. 

Next up will be Project Pele, a partnership between DOE, INL, the US Department of Defense, and BWXT that will help US armed forces reduce their dependence on diesel fuel. Pele will pave the way for small, advanced reactors for other military applications, as well as private sector applications.

Following Pele, INL, working with Southern Company and TerraPower, will conduct the Molten Chloride Reactor Experiment (MCRE), which will be the world’s first fast-spectrum salt system to achieve criticality—meaning it will be able to sustain a fission chain reaction. Additionally, the Oklo Aurora microreactor could be demonstrated on the INL site as early as 2027. 

A key aspect of INL’s strategy is to use decommissioned reactor facilities as test beds, via the National Reactor Innovation Center. The decommissioned Experimental Breeder Reactor-II, which is being repurposed for Demonstration and Operation of Microreactor Experiments (DOME), is scheduled to be completed by 2025. Another test bed, LOTUS, which will host MCRE, is scheduled to be operational by 2027. These test beds will streamline testing of advanced reactor technologies, strengthening the relationship between the national labs and the private sector, and supporting the ultimate objective of deploying advanced reactors into the global market.

As shown in the figure, many reactor projects are planned to follow, demonstrating technologies for a variety of applications. These include the TerraPower Natrium reactor in Wyoming, which will repower a coal generation site and the X-Energy reactor in Texas, which will support decarbonization of the energy-intensive industrial sector. Note that the figure is not all-inclusive, as the situation is dynamic and numerous additional reactor demonstration projects in the United States and beyond are working toward demonstration.

Over seven decades, the nation has made incredible progress advancing nuclear energy to its current state. It’s time to take the next step. With the combined efforts of government, industry, and academic partners, it’s time for the United States to honor its rich legacy of achievement by providing the research foundation to deploy the advanced nuclear technologies the world desperately needs to power a clean and prosperous future.

At INL, we approach each day as though the world depends on our success. Failure is not an option. Not this time. Not if we want to offer our children, grandchildren, and future generations their best opportunity for security, prosperity, and environmental sustainability.

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The post A new generation of nuclear reactors is poised to set the United States—and the world—on the path to net zero appeared first on Atlantic Council.

H.E. Leila Benali is the minister of energy transition and sustainable development of Morocco and president of the UN Assembly for Environment. This essay is part of the Global Energy Agenda.

Describing the recent crush of global crises, a wise man said, “We faced a century’s worth of tragedies in less than two years.” Our health systems might have emerged more resilient following the COVID-19 pandemic, but our economies and financial systems are still struggling at a time when emerging markets, like Morocco, want to escape the middle-income trap of 3 percent GDP growth.

The Russia-Ukraine war added to the unprecedented disturbance in already dislocated commodities supply chains, threatening nations’ energy security and triggering global inflationary pressure. It is not the first time humanity faces such continuous accumulation of upheavals , but it is the first time it does so at such record levels of global debt—238 percent of global GDP in 2022. This does not leave much room to tackle the triple planetary crisis of our time: climate change, environmental degradation, and biodiversity loss.

We are more often reminded of the fragility of our environment, with extreme weather events or natural disasters. A quarter of the United Nations’ membership, mostly Small Island Developing States, is at risk of disappearing by the end of the century because of rising sea levels. Humanity will face climate-triggered questions over sovereignty and national identity for the first time. Is our post-World War II world order, including our Bretton Woods institutions, equipped to answer?

Humanity will face climate-triggered questions over sovereignty and national identity for the first time. Is our post-World War II world order, including our Bretton Woods institutions, equipped to answer?

Part of the answer is already known: decarbonization of emitting sectors and acceleration of the energy transition would soften the worst impacts of climate change. And maybe, in the twenty-first century, some countries should show the way despite low historic responsibility for causing planetary warming. Morocco has a longstanding commitment toward sustainability despite its negligible emissions. It was one of the first countries to target a reduction of its greenhouse gas emissions by 45.5 percent by 2030 in its Nationally Determined Contribution.

To achieve necessary emissions cuts, pragmatism and inclusiveness are key. When affordability, as well as economic and social development are nonnegotiable, there is no room for ideology in technology and fuel taxonomies. We must leave the traditional energy transition narrative, driven by divisions, in the twentieth century, and embrace twenty-first century narratives.