Most countries around the world could improve their energy security and reduce trade risks by shifting away from fossil fuels, according to a new study. The analysis suggests that achieving net-zero carbon emissions at a global scale would result in decreased trade risks for nearly 85% of the global population.
National governments are overwhelmingly concerned with achieving energy security, which means relying less on imported resources for the energy system, diversifying sources of imports, and sourcing imports from the most reliable suppliers.
Shifting from a fossil fuel-based economy to a green-energy economy will reorder global trade relationships, because the raw materials for low-carbon energy technologies are found in different places than fossil fuels. But the new study reveals that this reshuffling is actually an opportunity for most countries.
“National goals of energy security and decarbonization are in many cases aligned,” says study team member Steve Davis, director of the Sustainable Solutions Lab at Stanford University.
Davis and his collaborators built a country-by-country database of reserves of oil, gas, coal, uranium, and 16 raw materials (such as lithium, nickel, cobalt, copper, and rare earth minerals) that are critical for green energy technologies. They mapped the flows of these resources between countries, and calculated the amount of these resources that different countries would need to meet energy demand in each of 1,092 decarbonization scenarios. Finally, using a newly developed index, they calculated each country’s trade risk for the electricity, transportation, and overall energy sectors.
Nations with large deposits of materials needed for green-energy technologies, such as many Latin American countries, are likely to see the largest trade benefits from decarbonization. Countries in Eastern Europe that are currently heavily dependent on fossil fuel imports also see big increases in their energy security with a shift toward green energy. The results appear in the journal Nature Climate Change.
Petrostates such as Russia and Saudi Arabia are likely to see their trade risks grow in any decarbonization scenario (although even their worsened position leaves them with better energy security than 80% of countries). Yet decarbonization could still boost energy security for many countries with abundant fossil fuels and small deposits of raw materials for green technologies – countries like the United States – if those countries cultivate new trading partners.
“Given the commonly expressed concerns of growing dependence on imports of critical materials, we were surprised by how often countries’ energy security may nonetheless improve due to reduced dependence on imported fossil fuels,” Davis says.
In fact, expanded trade partnerships emerge as key to maximizing the energy security benefits of decarbonization. If all countries maintain their current trading networks, decarbonization would reduce trade-related risks to energy security by 19% on average, the analysis revealed. But if countries expand their trading networks, then decarbonization would cut trade-related risks in half.
The findings offer a lens on the consequences of the tariffs recently imposed by the Trump administration in the United States. “Open trade will always reduce risks of trade shocks, regardless of the type of energy commodities involved,” Davis says. “In the case of the new U.S. tariffs, such risks are mostly related to renewable energy technologies, since the U.S. has substantial fossil resources and at least for now the tariffs carve out oil and gas. Of course, the U.S. tariffs present an opportunity for other nations to strengthen their material supply chains and clean energy industries.”
Another strategy to reduce trade-related risks is to reduce the need for raw materials for green energy technologies, either by making things last longer, improving recycling rates, or redesigning technologies to be lighter or more material efficient. For example, quadrupling the current piddling recycling rates of critical minerals could reduce trade risks by 17% on average and by over 50% for the United States.
Source: Cheng J. et al. “Trade risks to energy security in net-zero emissions energy scenarios.” Nature Climate Change 2025.
Image: © Anthropocene Magazine.
