AS CLIMATE CHANGE BECOMES AN EXISTENTIAL THREAT TO HUMANITY, GOVERNMENTS ACROSS THE GLOBE ARE TRANSITIONING INTO A MORE GREEN ECONOMY. HERE'S HOW.
The COVID-19 pandemic showed us that if nature had its way, humans would stand no chance. Climate Change too accelerated. We had the hottest year ever. The governments around the globe have stepped up to the occasion. All the nations are getting ready for a new green world.
SETTING THE FOUNDATION
Economies across the globe are setting ambitious targets to "greenify their economy" by shifting to renewable energy, creating employment opportunities in the green sector & gunning for sustainable development. President-elect Joe Biden had unveiled a mammoth Green New Deal which encompasses transforming America into a zero-carbon nation by 2050 with 100% power generation from renewable & net carbon sources. It also aims for a more eco-friendly public infrastructure & digitized power grid while also focusing on social issues like income inequality & racial discrimination. Biden envisions the United States to lead the global charge against climate change. The EU, being the radical & forward-looking organisation that it is, was the first to set such a carbon-neutral goal by 2060. China followed by setting the same objective in this year's UNGA virtual meet. Surprisingly, developing nations like India have lead the race & overachieved the targets set by the Paris Climate Deal. Such vigorous foresight bodes well for the future.
IS THIS TRANSITION ECONOMY FRIENDLY?
The impact of this green transition on the economy would be unprecedented. There would be a perceptible change in energy sources on a macro level. Jobs related to mining, oil drilling and petroleum would be lost. However, higher skilled & better paid jobs would emerge in the renewable sphere related to solar, EVs, urban planning & bioenergy. On the other hand, increased involvement of the private sector in nations across the world would reduce a major burden of power distribution from the government as it would be more efficient & modern especially in developing countries. Another major impact would be on foreign exchange reserves. The need to import petroleum & natural gas would be negligible when a nation would be carbon neutral. This would lift a heavy burden from the foreign exchange reserves.
FACTORING IN THE GEOPOLITICAL EQUATIONS
As in the case of every disruption, there would be winners & losers due to this development. Economies having the resource curse (over-reliance of the economy on natural resources leading to non-diversification) would be crippled. This is where nations like Saudi Arabia, Iran, UAE & Russia would face an imminent crisis. On the other side of the coin, countries like Norway & Qatar have done well to start their sovereign wealth funds & mitigate future risk. It will be interesting to see how these future insecurities translate to aggressive actions in their international dealings. For example, Russia is pivoting towards China due to the red dragon's penchant for non-renewable energy and UAE's American appeasement through the Abraham Accords.
I hope this article gave you a new perspective of Green Energy dynamics. Such disruptive changes have an impact not only the environment but also on the economy & foreign policy.
Comments