By Jessica Jewell, Research Scholar, IIASA Energy Program
How would action to mitigate climate change affect energy security for countries around the world? In two recent studies that I worked on with colleagues in IIASA’s Energy Program and three other European research centers, we explored this question under a range of different policy scenarios. We found that in the long term – 40 to 90 years from now – climate policies would actually benefit energy security. Our studies showed that policies to limit climate change would lead to lower oil and gas trade. Since both of these fuels are supplied by only a few countries, shifting to other fuels could alleviate concerns for countries which import these energy sources. Our research also shows that a climate-friendly energy system would be more resilient to energy supply and price shocks as well as economic and fossil resource uncertainty.
Taking action to slow climate change requires a massive change in how our society supplies and uses energy. But achieving a low-carbon energy system – one which releases less greenhouse gases – will only be possible if it doesn’t compromise national energy priorities. One of the main energy priorities for decision-makers is ensuring energy security – that is, the stability and resilience of energy supply and infrastructures.
In our studies, published in Energy Policy and Climatic Change we aimed to figure out whether phasing out fossil fuels would alleviate energy dependence concerns or if decarbonization would simply replace existing vulnerabilities with new ones. Intuitively, addressing climate change would mean increasing renewables and would clearly lead to lower energy dependence. After all, Putin doesn’t own the wind. But would climate policies lead to some unintended consequences? Would oil be phased out only to be replaced with biofuels and Brazil as the new fuel-exporting superpower? And what would happen without climate policies? Would energy trade naturally decline as oil and gas reserves are used up or would it continue to increase?
In our research we used a number of energy scenarios which depict:
- a world with an energy system which continues to develop in the same way it has developed over the last 50 years (i.e. business as usual)
- a world which implements ambitious policies to mitigate climate change and stabilize the climate at 2°C above pre-industrial levels (i.e. climate scenarios).
We looked at each type of world under a range of different policy choices: for example, phasing out nuclear energy or limiting the penetration of solar and wind energy, and including uncertainties such as different growth rates and fossil fuel availability over the long term.
We found that under a business as usual scenario global trade in oil, gas, and coal quadruples. Under a range of different climate-friendly scenarios, trade stabilizes at between half and twice the current level by 2030 and then falls throughout the rest of the century.
Falling trade would have significant implications for the interconnectedness of different world regions. In a business as usual scenario, the energy systems of all world regions remain interconnected, and becomes even more so. But under climate policies, regional energy systems diverge as each region gravitates to its own energy mix. This could decrease states’ investment in existing energy institutions and lead to a massive upheaval in the global energy governance landscape – thus rendering existing institutions obsolete.
Climate policies would affect not only the volume of energy trade but also how and where energy is exported and imported. Today, oil accounts for over 90% of transport demand and there are no real substitutes for fuel cars, trains and planes. Half of all countries in the world import more than 75% of their oil from only a few number of countries. That makes oil the most problematic fuel for energy security (for more on this see the Global Energy Assessment). Under the business-as-usual scenarios, these dynamics get worse over the next few decades.. However, under de-carbonization oil is phased out and no other fuel takes on similarly problematic dynamics.
It’s important to note though that over the short-term, climate policies could make oil even more of a problem: as cheap unconventional resources rise in price due to their carbon intensity, the geographical concentration of oil production would actually rise.
However, over the medium and long-term (three to four decades), climate action would make the energy system much more resilient compared to the business-as-usual case. Resilience, or the capacity for energy systems to respond to disruptions is just as important as avoiding risks such as decreasing energy dependence. Under climate scenarios, the diversity of energy options rises which means all our “energy eggs” would be distributed between different baskets. In addition, the energy system would become less sensitive to fluctuations in GDP, fossil resource assumptions, and energy intensity. This means that a low-carbon energy system would be less exposed to both price and supply shocks.
Jessica Jewell, Aleh Cherp, Keywan Riahi. (2014). Energy security under de-carbonization scenarios: An assessment framework and evaluation under different technology and policy choices. Energy Policy. Volume 65, February 2014, Pages 743–760 http://www.sciencedirect.com/science/article/pii/S0301421513010744
Aleh Cherp, Jessica Jewell, Vadim Vinichenko, Nico Bauer, Enrica De Cian. (2013). Global energy security under different climate policies, GDP growth rates and fossil resource availabilities. Climatic Change. November 2013. http://link.springer.com/article/10.1007%2Fs10584-013-0950-x
Note: This article gives the views of the author, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.