Reconciling geopolitics and energy security with decarbonization

Author: Jun Arima, University of Tokyo

The Russian-Ukrainian war is a reminder of the vital importance of a stable, low-cost energy supply and the impact of geopolitics on securing it.

Europe, especially Germany, feels this keenly. Germany, which has pledged to phase out nuclear and coal, had encouraged the introduction of renewable energy sources such as wind power while using Russian natural gas to adapt to fluctuations in the production of renewable energy sources. The conflict in Ukraine has derailed plans for a new German-Russian gas pipeline, Nord Stream 2, and Germany now faces the threat of energy supply disruptions.

Energy policy in developed countries has been dominated by the political goal of decarbonization since the 2015 Paris Agreement. and fossil fuel investments will become stranded assets. This is why investments have been slow despite rising energy prices. These arguments jeopardize the stable supply of fossil fuels. The energy transition will not happen overnight. There is a need to recalibrate policies with energy security in mind. This must include fossil fuels.

Rising energy, commodity and food prices due to the Russian-Ukrainian war and the risk of a global economic slowdown could weaken the momentum for action against climate change. Of course, preventing global warming is a powerful political slogan, as evidenced by the leaders’ communiqué at the 2022 G7 summit, which reaffirmed a strong commitment to the Glasgow COP26 Climate Pact. The question is whether real action will accompany it.

Despite the ambitious language of the Glasgow Accord, countries have been forced to mitigate soaring energy prices. The Biden administration – which has called for decarbonization and renewable energy – releases oil reserves, asks the oil and gas industry to increase production, resumes oil imports from previously sanctioned Venezuela and freezes the federal tax on gasoline to curb soaring gasoline prices. Europe, the leader in decarbonisation, is increasing its coal imports due to high gas prices. In China and India, coal generation and coal-fired power generation have increased significantly. In Japan, gasoline subsidies have been introduced.

These actions go against the prevention of global warming but they are political realities. If soaring energy costs are having a negative impact on livelihoods and industry, the priority must be to secure low-cost energy supplies.

According to the United Nations Sustainable Development Goals Awareness Survey, the priority of climate action is ranked first in Sweden and third in Japan, but only fifteenth in China and ninth in Russia and Indonesia. It is not surprising that poverty, education, health and employment take priority over climate protection in developing countries. Now that the global economic situation is deteriorating and energy prices are skyrocketing, climate action in developing countries is even less of a priority.

The key to future trends in global energy demand and greenhouse gas emissions will be held by developing countries, particularly in Asia. Across Asia, coal dependence is 48%, compared to 12% in Europe and 9% in North America. If the Asian region lags behind in gas conversion due to soaring natural gas prices, it will be difficult to reduce greenhouse gas emissions.

Preventing global warming has been a focus of attention since the end of the Cold War, as international cooperation grew. But now a new Cold War-like confrontation is emerging. This will have a negative impact on action against climate change, which above all requires international cooperation. As military spending by developed countries increases, the funds available to help developing countries mitigate and adapt to global warming may decrease. Developing countries will have no choice but to slow down their response to climate change.

The Ukraine crisis poses various challenges to Japan’s energy security. Rising oil and natural gas prices and a weaker exchange rate are increasing Japan’s energy costs, which are already the highest of all developed countries. This is a major burden for the Japanese economy.

Japan faces a lack of domestic fossil fuel resources and interconnection lines with neighboring countries. Its terrain limits space for solar panels and the depths of the ocean make offshore wind energy expensive. Compared to resource-rich countries like the United States and Europe, where regions are connected by power grids and pipelines, Japan’s energy security suffers from a crushing disadvantage.

The argument that “it’s time to get rid of fossil fuels and nuclear power” ignores the desperate situation in which Japan finds itself. All available options should be used. A one-sided approach to renewable energy could lead to a repeat of the situation in Germany.

Accelerating the resumption of operation of nuclear power plants is an urgent matter. One nuclear power unit saves 1 million tons of liquefied natural gas (LNG). This would benefit Japan’s energy security and help alleviate the global LNG supply and demand crisis. The pressure on electricity supply and demand in summer and winter could be largely alleviated by speeding up the restart of a nuclear power plant. The restart of nuclear power plants and the construction of new plants are necessary to decarbonize.

The Ukraine crisis has reminded Japan of the risks to its energy security due to its proximity to China, Russia and North Korea. The review of the national and economic security system is an urgent task. Energy policies with a strong focus on decarbonization must also be rebalanced from an energy security perspective, the most fundamental requirement of all.

Jun Arima is a professor at the Graduate School of Public Policy at the University of Tokyo. He is a former Japanese civil servant and chief negotiator of the United Nations Framework Convention on Climate Change.