Columnists

How the new Cold War is upsetting global energy and climate systems

407727-01-02

Russian soldiers walk along a street in Mariupol. PHOTO | AFP

The Cold War as we knew it in the 1960s-80s is firmly back with the same alliances, the West (Europe/USA) and the East (Russia/China) with both currently wooing non-aligned nations through diplomacy, economic deals, and membership of economic and defence blocks.

The re-emergence of the Cold War which had ended in 1991 was catalysed by the February 2022 Russian invasion of Ukraine.

A major manifestation of the new Cold War is the apparent challenge by the East of the mandated authority of global bodies like the UN and Bretton Woods institutions whose influence on global issues is visibly weakened.

A good example is the loss of unanimity on global climate mitigation action, and departure from synchronised global energy transition, with each nation now guided by its own economic interests.

In the ensuing confusion, oil companies and countries are now setting their own energy strategies outside global climate guidelines.

With key oil-producing nations (Saudi Arabia, UEA, and Iran ) joining the East-driven economic bloc BRICS (Brazil, Russia, India, China and South Africa), control of global energy markets will definitely be with the expanded Eastern geopolitical bloc, with climate protocols relegated to lower priority. Whichever Cold War side that controls global energy supply chains has a major geopolitical edge.

Russia and Saudi Arabia are among the top three world oil producers, and their main interest remains maximising value from fossil fuel resources. China and India are key global industrial nations intent on securing affordable energy supplies.

China is additionally a global leader in renewable energy transition minerals, technologies and manufacturing and has an upper hand in control of global supply chains. Indeed, nearly every country in the West is striving to have a share of Chinese and Indian economic success.

Brazil is a fast-growing global oil exporter, while South Africa has coal supporting its economic and industrial engines. UAE is a major oil economy, whose chairmanship of the COP28 climate forum later this year may be compromised by its vested interests in oil.

As the East and specifically BRICS continue to solidify their geoeconomic and geopolitical advantage in the ongoing cold war, the USA remains handicapped by polarised domestic party politics especially as the country moves into presidential elections next year.

Europe is preoccupied with recoveries from weakened economies and energy insecurities caused by the Russia-Ukraine war.

As for Kenya, it is proper that we pragmatically maximise national economic benefits from both sides, while avoiding obvious direct alignment.

George Wachira, Petroleum consultant, [email protected]