The Bali Roadmap on Climate Change was drawn up in a drama of agony and ecstasy about Planet Earth and North-South responsibilities. Yet the familiar TV images of threatened polar bears and smoke-belching factories hide tectonic shifts in geo-economics and geo-politics that are quietly re-shaping the world.
Though timely, the feeble Bali Roadmap is no guarantee of deliverance from fossil fuel addiction. Notwithstanding recent dramatic strides in renewable energies, the West is likely to rely mainly on fossil fuel to maintain a mobile individualistic lifestyle. Likewise, the newly industrializing and urbanizing countries will continue to depend on it for sufficient manufacturing jobs to maintain economic progress and political stability. China alone has to generate at least 24 million jobs a year to stay even. India, set to overtake China as the world’s most populous country in about four decades, cannot rely on IT services alone to employ her teeming millions.
Unlike previous Industrial Revolutions, populations across the developing world are industrializing all at once. They are rightly wary of restraints on their long-awaited development opportunities. Their Western counterparts are equally unenthusiastic about restrictions of their preferred lifestyle. Until a viable alternative energy source is found on a global scale, there will be increasing concerns about energy security, scrambles for fossil resources and shifts in the world’s economic and geopolitical landscape, set against the background of Climate Change.
There are five drivers at work.
First, rapidly rising energy prices have dramatically boosted the confidence and international influence of countries rich in fossil energy. Some of these countries, such as Russia, Iran and Venezuela, are flexing their energy muscles to gain geopolitical space. Others, especially the petrodollar countries, are making their mighty financial presence felt across the globe. For example, the Abu Dhabi Investment Authority has acquired 7.5% of Carlyle Group for US$1.35 billion and 5% of Citigroup for US$7.5 billion. This was outdone by the Kuwait Investment Authority, which bought a US$14.5 billion stake in the Citigroup, along with Saudi Prince Alwaleed bin Talal and Singapore’s Temasek. Saudi Arabia, a gigantis inter paris amongst the Gulf Cooperation Council (GCC) states, has a domestic investment fund of US$600 billion with projects in the pipeline over 20 years. There are talks of a GCC Monetary Union for 2010. The attitude of OPEC countries on what currencies in which to keep their oil wealth would have a major impact on the US dollar and global financial stability.
Second, we are seeing new energy geopolitics and geo-economics re-defining relationships in Central Asia, as in the case of the Shanghai Cooperation Organization. (See my article of 17 June, 2006‘What the Shanghai Cooperation Organization means for the global order’ under Publications). We are seeing them in Australia, which is fast emerging as a major provider of much sought-after mineral resources, including uranium for the world’s resurging nuclear energy programmes. We are seeing them also in resource-rich countries in South America, such as Venezuela and Brazil. In particular, Brazil is the world’s leading exporter of ethanol, produced from her abundance of sugar cane. As some 65% of Brazil’s cars already use bio-fuels, the Brazilian experience is a well-fitted laboratory for the world’s business-savvy auto giants on cue to revolutionize the world’s future car industry with green energy cars.
Third, insatiable global energy demand has given Africa a new-found dynamism, putting her in the spotlight of global geopolitical attention. At the recent EU/Africa Summit in Lisbon, the cool reaction to the EU’s bilateral economic partnership overtures is a sign of rising African pride, nationalism, and solidarity. This display of African strength reflects an awareness that an energy and resource-hungry world seems to be competing in a new courtship of Africa. China’s pervasive and ideology-free investments are seen in the context of her geopolitical influence in this resource-rich and strife-ridden continent. While the EU is redoubling her efforts to engage Africa, the US is considering relocation of her African strategic command from Frankfurt to Africa.
Fourth, energy security has come up on top of many countries’ political agenda. In his last State of the Union Addresses, President Bush re-emphasized the reduction of gasoline usage by 20% over the next 10 years in order to achieve the target of reducing Middle East oil import by 75%. He set great store on renewable energies and bio-fuels as well as technologies for plug-in and hybrid vehicles. Similar calculations of energy security inform the EU’s energy policy, ever conscious of the long arm of Russia’s energy reach. China is well aware of her own conundrum. Internally, she has to take the pollution together with the world’s outsourced energy-intensive manufacturing. Externally, she has to contend with the world’s competitive energy geopolitics. Accordingly, she has mandated sustainable development together with emission and energy input reduction targets in her 11th Five Year Plan (2006-10). (See my article of 8 August, 2006 ‘Energy Security and Countering Climate Chaos: China’s Approach and Global Impact’ under Publications). That’s why China, along with India, played an enthusiastic and constructive role in the negotiations for the Bali Roadmap.
Last and definitely not least, a recent study by Trausti Valsson (How the world will change with Global Warming, University of Iceland Press, 2006) shows how the momentum of global warming may change the balance of the world’s economic gravity dramatically towards the Artic. We are already witnessing a flurry of active interests (including Russia) in staking territorial claims on the Artic’s cornucopia of oil, gas and mineral deposits. Over the next few decades, the melting of Artic ice is set to open up much shorter shipping lanes connecting the North Pacific with the North Atlantic through the Bering Straits and the Canadian archipelago. The Davis Strait, the Denmark Strait, the passage between Iceland and Norway, and the so-called GIUK (Greenland, Iceland and UK) sea lanes are also likely to gain commercial and geopolitical importance, along with the position of Alaska, the Kamchatka Peninsula, the Sea of Okhotsk, and the Aleutian Islands. In an extreme scenario, if global warming persists at its current pace past 2100, the centre of the world’s economic gravity is projected to shift towards the Northern Hemisphere near the Artic (thought to be virtually ice-free by then) while the world’s current temperate zones may become overheated and the Southern Hemisphere relatively marginalized. Even if this extreme case does not materialize, the on-going geopolitical and geo-economic implications for countries with existing Artic territorial claims such as Russia, Canada, the Nordic countries and the US would demand serious attention. The same goes for the implications for countries such as China and India without direct and ready Artic access.
Needless to say, the above implications are over and above the threatening projections of rising sea-levels, disrupted Gulf Stream flows, methane release by melting permafrost in the Siberian tundra, and other looming ecosystem dislocations.
Before the Bali Roadmap has a chance to re-shape the world’s climatic order, the global geopolitical and geo-economic landscape is poised to change almost beyond recognition in the 21st century.
Andrew K P Leung, SBS, FRSA
www.andrewleunginternationalconsultants.com
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