Energy Transition and Environmental Crisis

UDC 327,8
Publication date: 03.08.2021
International Journal of Professional Science №7-2021

Energy Transition and Environmental Crisis

Khlopov Oleg Anatolyevich
PhD, Political Science, Associate Professor,
Department of American Studies
Russian State University for the Humanities (Moscow)
Abstract: The article examines the key aspect of energy transition that deals with radical abandonment of hydrocarbons in favor of "clean" energy on the basis of technological breakthroughs in energy efficiency and decarbonization with the idea that the satisfaction of humanity's needs should be carried out without damage to the ecosystem. The author provides an analysis of key elements of global energy transition, energy policy of US and China as the main consumer of hydrocarbon resources in the worlds that have their own environmental plans in order to solve national environmental problems, and also emphasizes the need to implement a global strategy with various to combat climate change.
Keywords: energy transition, sustainable development, renewable energy security, climate change, USA, China.


            Today world economy is in a state of change: the development strategies of countries and global markets are being transformed, there is a transition to a new system of international economic relations. The shift in economic growth towards Asia implies a redistribution of energy transport flows towards the most attractive markets.  The role of Asian states has changed significantly both in the world economy and in the world energy sector, which is due to increased competition for markets, technologies, and energy resources. As for the post-industrial countries, where economic growth rates are lower, they are trying not to lose their leading positions.

            New we have the fourth energy transition in world history, but instead of one technological revolution, as was the case with steam, there is now a whole range of technological breakthroughs in energy efficiency and decarbonization. The first energy transition is associated with the transition from firewood to coal. The second, in turn, replaced coal-fired power generation with oil. And finally, the third energy transition has partially replaced liquid hydrocarbons with natural gas. Of course, this did not happen everywhere. But the main thing in this fourth energy transition is the idea that the satisfaction of humanity’s needs should be carried out without damage to the ecosystem.

            The benefits of energy transition are talked about solely in terms of combating global warming and reducing greenhouse emissions. However, the negative technological, social, geopolitical, investment and even environmental consequences of the energy transition are currently far from being fully assessed and can neutralize its positive components.

            The energy transition — the gradual abandonment of hydrocarbons in favor of «clean» energy — has already been recognized by even the most inveterate skeptics. Companies and states are racing to make plans to reduce the production and consumption of traditional energy carriers, increasing investments in solar and wind generation, hydrogen technologies, etc.

            In the 21st century, the environmental agenda is coming to the center of global economy. Today, the impact of environmental problems on the world economy is especially noticeable. The Paris Agreement on Climate Change adopted in 2015 sets long-term goals to guide all nations: substantially reduce global greenhouse gas emissions to limit the global temperature increase in this century to 2 degrees Celsius while pursuing efforts to limit the increase even further to 1.5 degrees; review countries’ commitments every five years; provide financing to developing countries to mitigate climate change, strengthen resilience and enhance abilities to adapt to climate impacts [1].

            At the same time, we have not yet reached a general agreement on environmental protection. Industry has become a driver of economic growth in many countries, which provide high rates of economic growth because of large consumption of energy resources, most of traditional types. With respect to post-industrial countries, a policy of increasing energy efficiency and energy saving is being pursued, with the help of which the growth rates of industrial production remain more moderate, and the focus of consumption is shifted to renewable energy sources.

The Key Elements of Global Energy Transition

            The widespread onset of the “green” agenda, it already considered its coverage and impact on an increasingly growing number of spheres of human activity a fait accompli, and the process itself has become irreversible.

            Some economists and political scientists have already (and not without reason) hastened to name the “green” agenda as one of the major drivers of the forthcoming Fourth Industrial Revolution. According to this agenda  low-carbon energy and industrial production should by 2050-2060  almost completely displace and replace traditional fossil energy sources and carbon-intensive processes and technologies in order to meet the requirements of the 2015 Paris Climate Agreement [2]. A number of “green” technologies, especially in using solar and wind energy Received an additional powerful impetus/

            The fourth industrial revolution implies an increase in the share of renewable energy sources and, a decrease in the consumption of traditional energy sources in the world energy balance, which is fully consistent with the theory of the Global Energy Transition.

            The term “energy transition” was proposed by V. Smil, one of the most famous economists in the world from the University of Manitoba in Canada,  and is used to describe a change in the structure of primary energy consumption and a gradual transition from the existing energy supply scheme to a new state of the energy system [3]. This transformation implies four elements, energy efficiency and the “three Ds”: decarbonization, decentralization and digitalization. The transition to carbon-free energy resources, the development of distributed energy and the use of digital technologies are the main directions of changes in the global energy markets. Vaclav Smil considers the unresolved problems of wind and solar generation, including ensuring continuity or even the very possibility of their use in different parts of the planet, as a signal, that the energy transition will not be rapid and the transition from coal and oil to wind and solar energy is not a question of several decades, but a question of generations.

            The energy transition that is taking place today is the fourth shift in the structural transformation of the global energy sector. The essence of the energy transition is a reorientation to the widespread use of renewable energy sources that will supplant fossil fuels [4].

            The driver of the fourth transition is not only the attractiveness of new energy sources, but also decarbonization and the fight against global climate change. Objectively, energy transition trends affect the modern politics of many states. In particular, low-carbon energy dictates the need to minimize the human impact on the climate, which implies a decrease in CO2 emissions into the atmosphere, an increase in the energy efficiency of production, which can be realized only through completely new technological solutions and innovations that can change the energy sector. Within the framework of energy security, states set the goal of reducing dependence on imports of hydrocarbons and increasing the supply of their own efficient low-carbon sources.

            The development of new technological solutions in the energy sector has varied results. First, energy sources are becoming more affordable, which makes the supply diversified. Second, new conditions for the use and competition of energy resources are being developed. Third, thanks to technological solutions, the nature of consumption becomes more energy efficient, which leads to a decrease in demand for energy resources. Fourth, the decentralization of energy is developing, as new energy supply mechanisms are being created. Fifth, inter-fuel competition develops, which reduces the “exclusivity” of one type of fuel for a particular sector [5].

            If we consider the transport sector, which is dominated by petroleum products, the process of transition to electricity is rapidly underway. The use of electric vehicles is growing against the background of a radical reduction in their cost, and the use of fuel cell vehicles, which are based on hydrogen or hydrogen-containing fuels, is increasing. At the same time, many countries directly support the increase in using electric vehicles with direct government subsidies and tax incentives. The growth in the number of electric vehicles will limit the growth in demand for oil and lead to a decrease in its prices. Thus, technological progress is gradually displacing oil products from the transport sector, replacing them with other diverse sources.

            In industry, due to the long-term trend of increasing the energy efficiency of industrial equipment, production has become less energy intensive, which has reduced the share of this sector in global energy consumption. We use electricity more and more — the most versatile source, which is increasingly used in industry and reduces dependence on a certain energy resource.

            Unlike the oil market, for the gas market, the sped up development of energy technologies, combined with socio-economic trends, does not lead to a peak in consumption and a decrease in demand, but the operating conditions for the gas market will change. During the forecast period, almost 85% of the world’s net gas exports will come from just a dozen countries, which, besides Russia, will include Qatar, Australia and the United States. Regarding African countries, they will also increase gas exports: Nigeria, Mozambique, Tanzania.

            In terms of overall import trends, there has been a shift in trade flows to the Asia-Pacific region, namely to South and Southeast Asia. Despite the constantly growing number of natural gas importing countries, about 70% of gas volumes in 2040 will be accounted for by a dozen countries, including the 5 largest gas importers — China, India, Japan, Germany and South Korea.

            European countries will continue to increase their gas imports as their own production declines. However, the growth rate of imports will decline as the peak in gas demand in this region passes.

            The increase in the number of LNG consumers and the expansion of the territory of its supply, especially to markets remote from the centers of gas production, will contribute to the growth of the importance of LNG in the global gas trade.

            Considering the solid fuel market, currently about 38% of all electricity generated in the world is generated from coal. Currently, the main leaders in the world production of traded coal are China (46.4%), USA (9.8%), India (7.8%), Indonesia (7.2%), Australia (7.9%), South Africa, Colombia and Russia (5.5%).

            Despite the conflicting consequences of coal consumption, this energy resource remains a priority for the economic growth of many countries, as it is one of the cheapest and most accessible sources of energy. Nevertheless, under the influence of energy transition instruments, which include the development of renewable energy sources, storage of electricity, distributed energy resources, etc., countries with developed economies and technological potential are setting the task of gradually reducing the share of coal in the energy balance, pursuing the goals of the modern climate agenda and reducing harmful air emissions.

            Today, the development of the coal industry is greatly influenced by environmental restrictions. Their tightening leads to an increase in costs in coal-fired generation through introducing measures to suppress harmful emissions with environmental payments. The reduction in the cost of alternative sources and introducing “carbon” payments reduce the profitability of coal generation. Moreover, an increase in the share of renewable energy sources creates technical challenges, since the coal industry must also become technically advanced and maneuverable. As a result, “clean coal” technologies are now being developed: modern coal plants have very low emissions. If we consider them at the level of gas, then they are very effective.

            Thus, the trends in the development of world energy are due to the ongoing energy transition, which also sets the directions for the energy policy of modern states. The widespread use of renewable energy sources and the decline in the share of fossil fuels are what is happening in the global energy market today [6]. Therefore, states must adjust their development strategies to global changes in order to implement national energy interests and strengthen energy security.

            The Essence of Energy Security and Environmental Plans of USA and China

            Currently, the image of the world energy is shaped by political factors: economic and political sanctions, local conflicts and wars, coups d’etat. They determine the state of the regional and global energy markets. Energy is an integral part of politics, often its motive and goal. The growing link between political ambition and the need for energy makes it increasingly difficult to ensure the uninterrupted supply of fuel and energy [7].

            We should note that the growing importance of energy resources, combined with modern trends in energy development, shows the interdependence of the foreign policy of world players and energy security. States enter a competitive struggle, where the major component is rivalry for control over territories rich in natural resources, sales markets, transit infrastructure, etc. them and the preservation of energy security. At the same time, the limited availability of certain energy resources, infrastructure and technologies comes to the fore, which creates threats to the stable provision of the economy and state security. The energy industry has a significant impact on the political activities of states [8].

            First, the first factor is the rapid and highly uneven growth in energy demand across countries and regions of the world. Today, China is the world’s largest consumer of electricity, followed by the United States, India and Russia.

            Second, energy resources, in particular oil and gas, are unevenly distributed around the world, which leads to a decrease in energy independence and a corresponding foreign policy course.

            Third, if a country depends on external supplies, then the process of ensuring their continuity becomes an object of state security, which determines the political motivations of the leading powers.

            Fourth, in the XXI century energy has become one of the most technology-rich and innovative areas. Today, new energy technologies are a strategically valuable resource that allows not only expanding the resource base of the energy sector, but also increases its energy efficiency. Therefore, today there is global competition in the energy markets, where the “technology race” has become the goal and instrument of foreign policy of many states.

            In order to ensure energy security, any state seeks to find a balance in the “energy triangle”, which is also called the “energy trilemma”. To build an efficient and safe energy sector, it is important to maintain a balance between economic growth, environmental sustainability, energy security — the three components of each corner of the “triangle”. The essence of the “energy trilemma” is the need to ensure the availability of energy in sufficient quantities at affordable prices and without harming the environment.

            Energy is increasingly becoming one of the key elements of geopolitics, and political interests influence trends in the energy industry. The energy security of states directly depends not only on the situation in the world energy markets but also on the results of climate change and the solution of environmental problems.

Floods, droughts, hurricanes are already causing multibillion-dollar damage to the economies of countries, but if climate changes continue at the same pace, natural disasters will become more frequent and even more destructive. A warmer climate, as well as some other external factors, will lead to changes in the demand for energy resources. There will be a shift in priorities from oil and coal to gas and renewable energy, as households and other elements of urban infrastructure will have to strengthen their air conditioning and cooling systems. If global warming continues at the same rate, it will attract significant sea level rise, as well as more destructive and powerful hurricanes on the Atlantic and Mexican coasts.

            For example, drought in certain areas of the United States will cause changes in the structure of the energy sector. The drought will limit the use of hydroelectric power plants, and as a result will lead to a crisis in the electricity sector, since the share of hydropower accounts for 6 to 10% of all energy produced in the country. Sectors of the economy, such as tourism, agriculture, real estate and construction, and the insurance market for adverse weather conditions are highly affected by natural disasters and changes. Various measures and instruments of environmental policy should compensate for the negative impact that a polluted environment has on economic growth [9].

            Climate change, as well as air pollution, impact the quality of life and health of people. As the air temperature rises, so will the concentration of ozone in the atmosphere. The increased amount of impurities of harmful substances in the air is the reason for the increase in the number of people suffering from various congenital and gained respiratory diseases, such as asthma, lung cancer and others. In addition, a significant excess of ozone concentrations in the atmosphere causes premature death in adults, as well as an increase in the number of children suffering from asthma since birth.

            The report, released in August 2021 in Geneva by the United Nations agency’s Intergovernmental Panel on Climate Change, emphasizes that the increase in greenhouse gases in the atmosphere is “clearly caused by human activity.” In 2019, the concentration of carbon dioxide was the highest in at least the last 2 million years [10].The debates on geopolitics and the environment have emerged as part of a broader discourse on environmental security. [11].

            Today, the United States is the largest source of carbon dioxide emissions into the atmosphere, as of 2016, they reached 6,870 million metric tons. In 2017 D.Trump radical changed environmental policy of the United States. He abolished many environmental standards had been adopted by the B.Obama government [12] and USA pulled out of the Paris Climate Agreement [13].

            However, under the Biden administration, the United States returned to the Paris climate agreement and ecology returned to the agenda of national policy. Joe Biden has canceled the Keystone XL pipeline, which is only part of the already operating Keystone pipeline, which started operating in 2010 [14]. Its starting point is in Canada, at the Athabasca tar sands field. The pipeline was supposed to deliver “black gold” from the Canadian province of Alberta to refineries in the US, Texas, on the shores of the Gulf of Mexico, and also suspended the issuance of drilling licenses on federal lands, and also proposed to increase taxes for oil and gas companies.

            The most important element of Biden’s climate strategy was to connect it to revitalizing the American economy. Decarbonizing the energy system can create a lower-priced and cheaper form of energy. Rather than taxing carbon and raising energy prices, Biden wants to subsidize renewables and lower energy prices.

Previous climate initiatives focused on reducing greenhouse gasses by regulating fossil fuel emissions through a carbon tax, command and control regulation, or through a cap-and-trade system. Biden’s policies will work with utilities and other greenhouse gas emitters and help directly fund the transition to renewables. There are emission-reduction targets, but they are coupled with a realistic understanding of the need to help utilities and industry fund the capital costs of the transition.

            President Biden directed the federal government to develop a climate change risk mitigation strategy for public and private financial assets in the United States.

The move is part of the Biden administration’s long-term program to halve U.S. greenhouse gas emissions by 2030 and move to a zero-emission economy by mid-century, while limiting the damage that climate change causes to all sectors of the economy. The situation is similar in the European Union, Japan, South Korea, Canada, which approved the strategic goal — zero net emissions” by 2050, and China — by 2060.

            The energy policy of the China is aimed at solving the following problems: a shortage of its own energy resources, an imbalance in the structure of energy supply and energy consumption, low energy efficiency, an environmental crisis, and the country’s growing dependence on imports of oil and gas. At the internal level, emphasis is placed on the modernization of the sectors of production and consumption of energy, increasing energy efficiency and energy saving, which is caused by the need to overcome the environmental challenges that accompany the rapid economic development of the country. Reducing greenhouse gas emissions into the atmosphere, increasing consumption of natural gas and renewable energy sources, ratification of the Paris Climate Agreement — all of this today refers to the energy policy of China. At the external level of China the state faces such challenges in the energy sector as weak diversification of sources of energy imports, irrationality of the energy structure. The 13th five-year plan sets goals to overcome these challenges both at the internal and external levels: the economy-energy-ecology link is decisive and affects not only the development within the country, but also the state’s capabilities in the international arena [15].


            In accordance with the Address of the President of the Russian Federation to the Federal Assembly in 2021, among the technological priorities of the Russian energy sector, the development of nuclear and hydrogen energy, as well as energy storage, is highlighted, which is largely due to the significant impact of climate and green problems on world energy and politics. These areas presuppose the intensification of international cooperation, which is especially important at the present time, when the world faces an exacerbation of geopolitical confrontation at the global and regional levels.

            Thus, the modern world energy is changing under the influence of the development of new technologies, the world is entering the stage of the 4th energy transition, which implies the use of renewable energy sources and a decrease in the consumption of fossil fuels. This transformation creates qualitatively new conditions for the development of energy strategies of states. The low-carbon energy dictates the need to reduce carbon dioxide emissions and increase the energy efficiency of production. Moreover, within the framework of energy security, states set the goal of reducing dependence on imports of hydrocarbons and increasing supplies from their own efficient low-carbon sources.

            The ideal option is to develop and implement a global strategy aligned with the national strategies of each country. Today international organizations, including the UN, are gradually moving towards the creation of such a strategy, implementing various environmental initiatives and initiatives to combat climate change. However, it is still difficult to call today’s agreements a full-fledged completed strategy — too large-scale task has to be solved and too different starting conditions for many countries. The complexity of the problem requires extensive study, detailed scenario analysis, and the involvement of specialists of various profiles. At the same time, the energy transition offers opportunities for creating long-term competitive advantage.


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