14th April 2021. Geopolitics | Asia
The geopolitics of renewables; Reading Chobani’s ‘Ghibli’ ad
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#1: The geopolitics of renewables
(A Chinese solar factory)
I wrote here yesterday about Adam Tooze’s article on financing the low-carbon transition. Helen Thompson’s recent article on the geopolitics of energy transition in Engelsberg Ideas has been getting a lot of love on my various feeds, and it deserves some attention here.
As it happens Tooze and Thompson talked about transition in a recent episode of Talking Politics.
It’s a commonplace that oil has shaped a lot of geopolitics over the last century. (There’s a great summary of this history in the article.) Thompson’s question is about what the geopolitics of renewables might look like.
Although one answer is that production of renewable energy becomes much more distributed, the renewable supply chain and its materiality gets locked into geopolitical considerations.
And our economies are currently completely dependent on the flow of oil. Between 1995 and 2019 the share of primary energy consumption accounted for by fossil fuels fell a whole two percentage points, from 86% to 84%. Declines in fossil fuels seem to be associated with slowing growth, although its not sure which way causality lies. BP estimates that in 2040 the world will still be using 80-100 million bpd. (It may not be a dispassionate observer, of course, and this doesn’t square with the investment exodus from the oil sector).
Thompson also makes a lot of Vaclav Smil’s observation that the coming energy transition is quantitatively different from previous energy transitions, because it involves a shift to a less dense energy source (wood to coal, then coal to oil, were transitions to denser energy sources). I think she makes too much of this, for two reasons. The first is that the density is only essential to some technologies, such as the plane; we could easily have had electric or steam cars as a dominant form a century ago, had technology pathways turned out differently. Cars ended up being designed for dense energy because there was a lot of it about.
The second reason is that the economics of energy are more determined by EROEI, the energy return on energy invested. This is currently plummeting for oil and increasing for renewables, at the same time as the cost performance of renewables is racing ahead.
This doesn’t change her geopolitical argument, however. However you look at it, China is central to this because of its global market position in the solar sector. We’re also going to see competition for essential battery components like lithium and cobalt, some of which comes from conflict zones.
So, immediately, we see faultlines in America’s relationship with China, which needs an effective trading relationship with China if Biden’s transition plan is to work. As far as Europe is concerned, it needs to keep China close for the same industrial reasons while looking away from democracy abuses in Hong Kong and China’s suppression of the Uighurs.
The other question is a question of domestic politics:
Merkel has observed that this attempted energy revolution ‘means turning our backs on our entire way of doing business and our entire way of life.’ In its 2019 ‘Clean Growth’ report, the House of Commons Science and Technology Committee noted ‘in the long-term, widespread personal vehicle ownership does not appear to be compatible with significant decarbonisation’.
Technically this is probably right. It’s not at all clear that we will have enough batteries to replace our current combustion engine car fleet with electric vehicles. And although our attachment to cars is waning—we tend to see them as functional vehicles rather than status symbols—that hasn’t stopped the market from chasing after large heavy SUVs to maintain margins.
The energy transition does challenge a century of assumptions about the access of individuals to mobility, from the Shell Guides onwards.
Thompson also sketches out a third challenge here. When we start to think about the energy basis of the prosperity of the rich world, and the costs that were involved in producing it, ethical issues emerge quickly. These won’t disappear in a renewable powered world.
As an aside she doesn’t mention the challenge of this energy origins story to Western ideas about innovation, progress, and so on, although it lies below the surface of her narrative.
Her conclusion is a tough one:
Western democracies need practical strategies to accelerate technological innovation in renewables, batteries, and carbon capture as well as to address the coming problems around the supply of oil. They also need political strategies to contain the distributional consequences of reduced long-term energy consumption. That what is necessary pulls in opposite directions is one of the great burdens of our times.
#2: Reading Chobani’s ‘Ghibli’ ad
I’ve been working with a client on a set of scenarios that includes an ‘Asia rising’ scenario. This often gets reduced to economics, demographics and geopolitics.
But people overlook the way in which culture is reshaped when new centres of power emerge. American culture was influential globally before it achieved global hegemony.
This made me think of the current 30” ad by the US yogurt company Chobani, which is part of a company push into a wider range of foods. (Thanks to my colleague Daniel Riveong for the link).
It’s made in the style of the Japanese animation studio Ghibli, with music by one of Ghibli’s long-term collaborators. It also tells a compact and attractive story of a preferred future. Anyone under 30 will get all of this in a heartbeat. That’s how cultural change happens.
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