In particular, the transition itself will drive power shifts away from those controlling and exporting fossil fuels, and toward those mastering the green technologies of the future. For example, phasing out fossil fuels will significantly improve the EU’s strategic position, not least by reducing its reliance on energy imports. In 2019, 87% of our oil and 74% of our gas came from abroad, requiring us to import more than Euro 320 billion ($386 billion) worth of fossil-fuel products that year.
Moreover, with the green transition, the old strategic choke points – starting with the Strait of Hormuz – will become less relevant, and thus less dangerous. These seaborne passages have preoccupied military strategists for decades. But as the oil age passes, they will be less subject to competition for access and control by regional and global powers.
Phasing out energy imports will also help to reduce the income and geopolitical power of countries like Russia, which currently relies heavily on the EU market. Of course, the loss of this key source of Russian revenue could lead to instability in the near term, particularly if the Kremlin sees it as an invitation to adventurism. In the long term, though, a world run on clean energy could also be a world of cleaner government, because traditional fossil-fuel exporters will need to diversify their economies and free themselves from the “oil curse” and the corruption it so often fosters.
At the same time, however, the green transition itself will require scarce raw materials, some of which are concentrated in countries that have already shown a willingness to use natural resources as foreign-policy tools. This growing vulnerability will need to be addressed in two ways: by recycling more of these key resources, and by forging broader alliances with exporting countries.
Moreover, as long as other countries’ climate commitments are not on par with our own, there will be a risk of “carbon leakage.” That is why the EU is working on a carbon border adjustment mechanism (CBAM). We know that some countries, even among our allies, are concerned about this. But we want to be clear: setting a price on imported carbon-intensive goods is not meant to be punitive or protectionist.
In addition to ensuring that our plans are compliant with World Trade Organization rules, we will engage with our international partners early on to explain what we have in mind. Our goal is to facilitate cooperation and help others reach their climate targets. The CBAM, we hope, will trigger a race to the top.