Green Hope

The European Union, which lost the digital race, should look for leadership in clean energy.

The world has begun down a path of no return. The rise in average global temperature and the high occurrence of adverse weather episodes is prompting a search for answers as to how we can stop climate change. Dozens of governments are doing the math in order to reach a medium-term objective of net zero greenhouse gas emissions, and the vast majority of countries—including the U.S., which has returned after the frightening previous administration— are part of the Paris Agreement, whose objective is to contain the increase in global temperatures this century to below 2 degrees Celsius with respect to preindustrial levels. The will to change things is an essential first step, but now comes the part which is no less complicated: efficiently mobilizing the huge amount of resources required for energy transition. Some studies indicate that decarbonization will require $4 trillion a year in investment worldwide.

This race against the clock will redistribute wealth and power among countries and regions. That’s why leading the green crusade is a priority for the great powers. There are three routes to playing a leading role in the new environmental paradigm. The first is having the capacity to create and export electricity or sustainable fuels. It will also be key to have access to essential raw materials. And finally, it will be necessary to have the capacity to develop the appropriate technology to carry out renewable projects. Energy control has always been an influential instrument in foreign policy, as history shows for countries that are rich in hydrocarbons. In this new phase, where solar and wind energy are universal, draft movements will occur on the geopolitical board.

The United States has lost four precious years due to denialism under the Donald Trump administration. Despite having an innovative business ecosystem and important financial and technological resources, the greatest economic power has been surpassed by China on many fronts. China is still one of the countries that is most reliant on fossil fuels, but it has put the pedal to the metal in terms of renewable energy through financial incentives and soft credits. In addition, China has managed to weave a network of alliances in Africa and Latin America after making strong investments, which will guarantee access to essential raw materials such as lithium, copper and other raw materials.

Europe is the third contender to head the energetic transition. This issue is of enormous strategic importance for the EU. The 27 member nations find themselves lagging behind the U.S. and China in the digital race. However, in the green race, they are competitive. Eight out of the 10 most important businesses in green technology are European. The continent cannot lose this momentum. In play are its energetic independence, the creation of many jobs, and control of globally important technology. In addition, green leadership may be a signal that the EU is a moral reference point, an intangible, but relevant, asset. Some 30% of the 750 billion euros that will move from the European source, Next Generation EU, is marked for climate projects. It’s a good starting point, but we will need many more measures to ensure success. Hesitation is not an option.