On AI and energy: ‘Infrastructure is destiny‘

In the first panel of the Forum, “Thinking big and building bigger,” Global Energy Center (GEC) Senior Director and Morningstar Chair Landon Derentz led a conversation on meeting the energy demands needed to power AI. The discussion featured Mariam Almheiri, group chief executive officer of 2PointZero and chair of the international affairs office of the Presidential Court of the United Arab Emirates (UAE); Chris James, founder, chief investment officer, and chairman of Engine No. 1; Chris Lehane, OpenAI’s chief policy officer and vice president of global affairs; and Chase Lochmiller, co-founder, chief executive officer (CEO), and chairman of Crusoe. 

“AI and energy are inextricably linked,” began Derentz, outlining the challenge that industry and policymakers face in needing to “smash through the bottlenecks” to enable technological progress. Lehane reflected on the energy-related challenges OpenAI grappled with as it became the fastest digital platform in history to reach 100 million users. On lessons learned, Lehane stated that “infrastructure is destiny,” and that AI breakthroughs can only happen when providers are able to bring together “chips, data, talent, and energy” to facilitate this game-changing technology. Lochmiller suggested that AI can help unlock a “new era of abundance”—but before material abundance can be reached, energy abundance is needed to make that a reality.  

James continued by defining the obstacles in meeting AI’s energy demands. “Energy is a fairly linear system, but the demand for compute is exponential.” James advised that if policymakers and industry can overcome bottlenecks such as project permitting, outdated regulations, and credit availability, they can foster “an enormous amount of reindustrialization across the United States.”  

Almehri then contextualized the international trends that preceding speakers had identified. “When I think of creating AI clusters, there are certain elements that regions have to combine,” she said, ranging from their ability to channel strategic investments to having adequate infrastructure and energy. Citing the UAE’s relevant advantages, Almehri counseled that “for this AI megatransition, we need a transformation on the energy side”—to do that, she continued, requires partnerships. 

Derentz continued by asking panelists about the timelines, regulatory hurdles, and geopolitics associated with AI growth. “The age of intelligence is incredibly resource intensive,” noted Lehane, “and this resource intensity is where we’re seeing bottlenecks.” Lochmiller cited Crusoe’s work in Texas as showing not only that “every aspect of the economy is required,” to realize AI’s potential, but that “every aspect of the economy will benefit.” Regarding international AI rivalry, Almehri highlighted that while the UAE has “made it clear to everyone that we are partnering with the United States,” it is important for major players to cooperate on global tech governance and “work together to build standards.”  

Derentz concluded by asking participants the top of the policy wish list. They identified regulatory adaptability, innovative capital solutions, public-private partnerships, and international collaboration. Most fundamentally for the future of AI, is a change in perspective. “It’s a mindset,” said James. “This country is at its best when it thinks big, acts big, and builds big: we need to get back to that.” 

Pathways to industrial competitiveness and trade

The panel “Pathways to industrial competitiveness and trade,” moderated by Saphina Waters, director of stakeholder engagement and communication at the Oil and Gas Decarbonization Charter (OGDC), explored the complex intersection of trade, competitiveness, and climate policy—something panelists described as a puzzle with one thousand pieces. 

Emphasizing the urgent need to reshore US manufacturing, Sarah Stewart, CEO of Silverado Policy Accelerator, called for an aggressive agenda to “build, protect, and promote” that aligns policy tools with clear construction objectives.  

Sasha Mackler, senior vice president and head of strategic policy at ExxonMobil Low Carbon Solutions, noted that the company is focused on strengthening domestic manufacturing and expanding energy exports. He stressed that climate policy must evolve from being just a matter of regulation to one integral to business models. 

Participants criticized the absence of a clear, concise, and universally accepted carbon accounting system. Without that system, panelists said international collaboration is hindered and domestic implementation becomes more challenging and that a harmonized, interoperable framework would help simplify climate-related policy and economic planning. 

On the European Union’s Carbon Border Adjustment Mechanism (CBAM), Stewart expressed concerns about potential discriminatory effects. She argued that while identical systems are not necessary, interoperability is essential to ensure fairness and global cooperation. 

The panelists argued that creating a level playing field for US manufacturers is not just a climate issue—it is a matter of national and economic security. They held that ensuring American industries are not unfairly disadvantaged must be a policy priority. 

The makings of a manufacturing powerhouse

The panel “The makings of a manufacturing powerhouse: Legacy strength and new frontiers,” moderated by Neil Brown, nonresident senior fellow at the GEC and managing director of KKR Global, explored how manufacturers are navigating today’s complex geopolitical landscape, focusing on capital flows, project financing, and talent development. 

One of the central topics of discussion was the strategic role of emissions accounting. Karthik Ramanna, co-founder and principal investigator at the E-Liability Institute, suggested that when carbon accounting is viewed merely as a reporting requirement, it tends to become a burden. He argued, however, if reframed as a tool for product differentiation, it can become a source of value creation. Brandon Spencer, president of the motion business area at ABB, added that using emissions data in a strategic—not just operational—way can become a real competitive advantage for companies. 

Catherine Hunt Ryan, president of manufacturing and technology at Bechtel, presented a two-part framework for managing complexity: “what to continue” and “what to consider.” Companies should prioritize core competencies, she said, particularly in engineering and subject-matter expertise, while also identifying and managing critical supply chains and building data-driven execution models. At the same time, organizations must consider their ability to embrace change in a dynamic global environment. 

Looking ahead to the next decade, the panel discussed which regions are likely to emerge as manufacturing leaders in this new geopolitical context. Julian Mylchreest, executive vice chairman at Bank of America, remarked that the United States is well positioned to be among the winners. 

Leveling the global playing field

In a leadership spotlight moderated by Dan Brouillette, former US secretary of energy, Sen. Bill Cassidy (R-LA) emphasized that the world must adapt to new geopolitical realities. China has gained a competitive edge by not enforcing environmental or pollution standards, allowing it to strengthen both its economy and military. Meanwhile, the United States and European Union have adopted stringent climate regulations, putting their industries at a relative disadvantage. Cassidy also argued that differing regulatory regimes have created an unfair global marketplace. He proposed leveling the playing field with a US version of CBAM: a foreign pollution fee. This fee would apply to imports from countries that do not adhere to US environmental standards, helping to protect domestic industry and workers. 

Cassidy highlighted the strategic importance of producing natural gas domestically. He noted that natural gas supports manufacturing, replacing coal and thereby reducing emissions. Moreover, argued Cassidy, by producing gas domestically, the United States can support economic policies, which supports US working families. 

Unlocking energy abundance to enable equitable access

To wrap the first day’s panels, Phillip Cornell, GEC nonresident senior fellow and principal at the Economist Impact, moderated a discussion on creating abundant, affordable, and reliable energy to sustain economic growth, foster innovation, and promote national security. The panel featured Jude Kearney, member of the board of advisors at the African Energy Chamber; Tarik Hamane, CEO of Morocco’s National Office of Electricity and Drinking Water; Thomas R. Hardy, acting director of the US Trade and Development Agency (USTDA); and Bob Pérez, Baker Hughes’ vice president for strategic projects. 

Cornell framed achieving abundance as “one of the most consequential energy questions of our time.” With 800 million people across the globe still lacking access to electricity while technology-related demand grows rapidly, Cornell said it is crucial to “build systems that can deliver energy abundantly, equitably, and affordably.”  

Hardy discussed USTDA’s role in fostering energy abundance through international partnerships. While administrations change, Hardy noted, USTDA continues to work on projects that contribute to US security and prosperity, “working with our partners and meeting them where they are” to grow different forms of energy supply. 

Next, Kearney elaborated on Africa’s role in achieving abundance. Advising that access is key, he highlighted the need for an “abundance of thoughtfulness and good governance.” Pérez, offering a private sector view, added that the formula for abundance, ultimately, is rather simple: “I’ve never seen a good project not get money,” he said, “the question is how you get to a good project.”  

Finally, Hamane expanded on the theme of partnerships by sharing lessons from Morocco. The country has achieved near-universal rural electricity access, up from less than a quarter only three decades ago. As Morocco looks to build infrastructure that can connect its growing renewable production to new markets in Europe and Africa, Cornell concluded by lauding these projects as a “a physical manifestation of the integration needed to achieve abundance.”   

2PointZero, ABB, Baker Hughes, Bank of America and ExxonMobil are sponsors of the Atlantic Council’s Global Energy Forum. More information on Forum sponsors can be found here. 

Elena Benaim is a nonresident fellow with the Atlantic Council Global Energy Center.

Paddy Ryan is a former assistant director with the Atlantic Council Global Energy Center. He is a senior writer/editor at the University of California Institute on Global Conflict and Cooperation.

EnergySource

EnergySource is the Global Energy Center’s (GEC) online publication providing commentary and analysis on developments in the energy and climate sector from a wide-array of thought leaders, politicians, and experts.

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Elena Benaim

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Energy & Environment Energy Transitions

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MDBs must finance nuclear power—or Russia and China will

By Juzel Lloyd

The growing influence of Russia and China in global nuclear energy financing threatens to reshape the future of energy geopolitics. To address this, multilateral development banks must recognize nuclear energy as a vital tool for expanding energy access, and modernize outdated policies to support deployment.

China Energy & Environment

EnergySource Jun 16, 2025

US global leadership in the age of electricity

By Robert F. Ichord, Jr.

Amid shifting geopolitics and the emerging “age of electricity,” the United States has an opportunity to assert global leadership in energy and security. Through foreign policy, the Trump administration can leverage US strengths in natural gas, nuclear power, and emerging energy technologies to engage allies in building a secure and resilient global electricity system.

China Energy & Environment

EnergySource May 21, 2025

Replace the Inflation Reduction Act with FUEL-AI

By Joseph Webster

To compete in the global AI race, the United States must dramatically expand its power supply. Replacing the Inflation Reduction Act with the FUEL-AI Act would reorient energy policy toward national security, fast-tracking domestic energy production and infrastructure to power America’s AI future.

Energy & Environment Energy Transitions

The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

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The post The energy system is more complex than ever: navigating AI, competitiveness, and growth appeared first on Atlantic Council.

This paper draws on my professional experience working on energy and climate issues in the Eastern Mediterranean, as well as many conversations with policymakers, technical experts, and civil society stakeholders from Athens to Beirut and from Istanbul to Cairo. The renewable energy revolution offers both cleaner power and a practical foundation for cooperation through shared infrastructure and capital flows. The region’s energy future is as much about finance, diplomacy, and institutional trust as it is about technology. My aim here is to explore how financial mechanisms can bridge historic divides and support a shared energy transition. My hope is that this paper contributes to reimagining the Eastern Mediterranean not as a collection of competing interests, but as an interconnected energy community bound by mutual prosperity and resilience.

• Introduction
• Rising tides: Meeting the Mediterranean’s surging energy needs
• From pledge to power: Speeding the region’s renewable revolution
• Beyond borders, beyond banks: Innovative financing for regional energy
• Shared foundations: Creating a regional energy community
• Shared horizon: Finance and diplomacy for a unified Eastern Mediterranean energy landscape

Introduction

The Eastern Mediterranean region stands at a critical juncture in its energy development. Positioned as a geopolitical crossroads with significant renewable energy resources and strategic importance, the region encompassing Greece, Cyprus, Turkey, Syria, Lebanon, Israel, Palestine, Jordan, and Egypt has the potential to become a leader in sustainable energy while strengthening regional cooperation and economic integration.

This study examines how the Eastern Mediterranean can secure a sustainable energy future through a two-pronged approach: strategically financing next-generation grid technologies that leapfrog legacy infrastructure challenges, while simultaneously developing integrated financing mechanisms that foster cross-border cooperation. This dual strategy aligns technological innovation with regional stability and market integration needs, creating a framework for sustainable development that transcends political boundaries.

The Eastern Mediterranean’s abundant renewable energy potential, particularly in solar and wind resources, presents a transformative opportunity. The region could generate approximately 144 percent of its projected 2050 electricity demand through renewable energy sources.¹ Yet despite this potential, significant challenges persist. Aging and fragmented grid infrastructure, geopolitical tensions, and uneven regulatory frameworks hinder energy integration.

Additionally, ongoing political conflicts, geopolitical tensions, and maritime boundary threats in the region complicate the development of cross-border infrastructure, while the region remains heavily dependent on fossil fuels at a time when global climate commitments push for rapid energy transition.²

Meeting these challenges requires more than traditional approaches. This paper argues that innovative financing mechanisms can serve dual purposes: funding advanced infrastructure development while simultaneously functioning as instruments of regional cooperation. By strategically structuring financial tools that encourage cross-border collaboration, the Eastern Mediterranean can transform its energy landscape while creating economic interdependencies that help overcome historical political tensions.

The analysis unfolds in four parts. First, it examines the regional context—focusing on power demand trends, the state of grid infrastructure, and the region’s renewable energy potential. Second, it analyzes how COP28 commitments (made at the 2023 climate conference) intensify the need for rapid renewable integration and technological leapfrogging. Third, it evaluates the financing mechanisms available to fund this transition, from multilateral development banks and green bonds to Islamic finance and bilateral investment. Finally, it explores how these financing tools can support frameworks for regional collaboration, including physical infrastructure development, regulatory harmonization, energy diplomacy, and governance structures.

Rising tides: Meeting the Mediterranean’s surging energy needs

The region’s energy landscape is characterized by growing demand, aging infrastructure, and untapped renewable potential against a backdrop of complex geopolitical relationships. These interrelated factors explain why the strategies of technological leapfrogging and regional integration are necessary for sustainable energy development in the Eastern Mediterranean.

Regional power demand trajectory

Electricity demand across the Eastern Mediterranean is expected to grow substantially in the coming decades. Turkey, a pivotal economy in the region, saw its electricity consumption reach 348 terawatt hours (TWh) in 2024, marking a 3.8-percent increase from the previous year.³ Projections indicate a rise to 380 TWh in 2025, 455 TWh by 2030, and 510 TWh by 2035.⁴

This growth trajectory is mirrored in Egypt, Syria, and Lebanon, driven by population growth, urbanization, and economic development. Meeting this demand sustainably requires a massive expansion of renewable energy capacity and modernized infrastructure to support it.

Recognizing the potential and cost competitiveness of renewable energy systems, countries in the region have established ambitious renewable energy targets. Turkey aims to double its electricity capacity by 2035, with renewable energy providing nearly 65 percent of power.⁵ Egypt has set a target of renewable energy providing 42 percent of its power by 2030 and 58 percent by 2040, while Greece plans to cover at least 60 percent of its power needs with green electricity by 2030.⁶

Untapped renewable potential

The Eastern Mediterranean possesses immense renewable energy potential that remains largely untapped, though Turkey and Greece have made progress in this area. The whole Mediterranean basin’s current renewable capacities stand at 90 gigawatts (GW) for solar photovoltaic and 82 GW for wind energy, with a potential exceeding 3 TW for the whole basin—a figure that underscores the opportunity for rapid expansion.⁷

The Eastern Mediterranean’s total renewable energy capacity in 2023 was around 90 GW, with research suggesting that the region could potentially generate 144 percent of its projected 2050 electricity demand through renewable energy sources.⁸ Egypt could produce 188 percent of its demand from solar and wind energy, with 76 GW of surplus electricity production. Syria could produce 592 percent of its total demand, while Turkey and Greece could produce 105 percent and 96 percent, respectively, of their 2050 demand.⁹

According to the author’s estimates, if the pipeline of solar, wind, and hydropower projects in Egypt is fully implemented—including projects that are announced, planned, or under construction—its renewables generation capacity would grow twelvefold, in line with those of other North African nations. If the pipeline of solar, wind, and hydropower projects in Greece is fully implemented, this would result in a sevenfold increase in renewable energy generation capacity.¹⁰ These estimates are not just an opportunity to enhance energy security and accelerate the energy transition. They are also an economic opportunity with the potential to create jobs, stimulate investment, and position the region as a global leader in the growing clean energy sector.

The rapidly growing power demands across the Eastern Mediterranean necessitate expanding renewable energy capacity while also fundamentally rethinking how electricity is transmitted and shared. Addressing this challenge requires examining the current state of interconnection infrastructure and identifying opportunities to transform the region’s fragmented grid systems into an integrated network.

The interconnection imperative

Cross-border transmission grid interconnections are of cornerstone importance in the development of power systems. Grids that depend on intermittent renewable energy sources, such as solar and wind, benefit greatly from interconnections for balancing the intermittent nature of renewable sources. Because different countries have varying electricity demands throughout the day, spare capacities and shortfalls can be balanced between different grids.

The Eastern Mediterranean’s grid infrastructure presents a fragmented landscape in which cross-border electricity trade is limited. Northern countries such as Greece benefit from advanced energy grids, while southern and eastern regions lag behind. Across the whole Mediterranean, northern-shore countries have sufficient, albeit underutilized, interconnections, while southern-shore countries lack interconnection infrastructure and synchronization. ​Additionally, there are few north-south interconnections, with only a link from Spain to Morocco and another from Turkey to Syria.​¹¹ This disparity creates both a challenge and an opportunity for leapfrogging conventional development paths.

Eastern Mediterranean countries continue to prioritize energy self-sufficiency through domestic power generation rather than regional power trading. With the exception of the Palestinian territories, which import nearly all (99.4 percent) of their electricity due to minimal local generation capacity, several countries maintain exceptionally low power import levels—around 1 percent of their total consumption—including Cyprus (0 percent), Lebanon (0.078 to 3.61 percent), Jordan (0.29 to 2 percent), and Egypt (0.29 to 0.41 percent). Similarly, with the exception of Greece and its integration into the European electricity market, power exports remain negligible throughout the region, with most countries exporting less than 1 percent of their generated electricity. This self-contained approach stems from incompatible technical systems among national grids that impede synchronous operation, difficulties in maintaining grid stability across borders, and persistent political tensions that discourage deeper energy integration.¹²

Some interconnections exist in the Eastern Mediterranean but are underutilized or nonoperational. Many of the interconnections are used purely on an emergency basis to cover unexpected or scheduled outages, or are not in operation at all. Key connections such as Turkey-Syria (400 kilovolts (kV)), Jordan-Syria (400 kV), and Lebanon-Syria (400 kV, 220 kV, and 66 kV) are currently inactive, largely due to regional conflicts and technical incompatibilities between national grids, including different frequencies and control systems.¹³

Yet some progress toward greater regional integration is under way. A “super grid” is slowly emerging across the Mediterranean. The Mediterranean Master Plan 2022 outlines several Eastern Mediterranean interconnectors including: the Great Sea Interconnector between Greece, Cyprus, and Israel (1000 MW); the EuroAfrica interconnector to link Cyprus and Egypt (1000 MW), the Green Energy Interconnector (GREGY)  between Greece and Egypt (3000 MW of primarily renewable power); and a number of capacity-expansion proposals such as the ones between Egypt and Jordan (1100 MW), Jordan and Syria (800 MW), Syria and Turkey (600 MW), and Jordan and the Palestinian territories (100 MW).¹⁴

These projects are designed to enhance electrical integration, facilitate renewable energy exchange, and improve security of supply. The Great Sea Interconnector, which is under construction, is expected to be operational by 2030 with a capacity of up to 2 GW, while the GREGY project is expected to be completed by 2031.¹⁵ These developments have been planned for more than a decade. An older proposal, the Mediterranean Electricity Ring, aimed to connect Mediterranean countries via a circle of interconnections to facilitate cross-border power exchange. In the Eastern Mediterranean, this included connecting Egypt, Jordan, Syria, Lebanon, Turkey, and Greece.¹⁶

However, significant challenges remain. Tensions caused by maritime disputes between regional countries such as Greece, Turkey, and Cyprus, the unresolved Cyprus question, and the protracted Israel-Palestinian conflict, all impede the development of cross-border infrastructure.¹⁷

In addition, the geopolitical diversity, uneven political stability, and limited political trust among Eastern Mediterranean countries dampen some national governments’ interest in exploring partial reliance on external electricity. Reasons cited often include the potential for electricity being used as a geopolitical lever, the risk of disruption caused by internal conflict, infrastructure failure, governance breakdown propagating across borders, and concerns about expanding cybersecurity vulnerabilities by exposing national grids to transboundary breaches.

Additionally, many countries maintain vertical monopolies in their electricity sectors—e.g., utilities such as Electricité du Liban (EDL) in Lebanon, Israel Electric Corporation (IEC) in Israel, and, to some extent, various companies in Jordan—which enable them to control generation, transmission, and distribution, thus limiting market competition and cross-border electricity flow.

Technical barriers are equally significant, as systems have evolved separately with different standards and technologies. Alternating-current (AC) interconnections require high degrees of technical compatibility and operational coordination, creating stability risks when disturbances in one location impact other areas of the network. These challenges are compounded by insufficient regulatory frameworks and governance structures needed to support cross-border trading.¹⁸

From pledge to power: Speeding the region’s renewable revolution

Developing renewable energy capacity and establishing physical interconnections form the backbone of regional energy integration, and these efforts need to rapidly scale up due to the urgency of the climate crisis. Global climate commitments and obligations provide a framework for measuring progress and highlight the gap between current trajectories and required outcomes.

Meeting COP28 targets

The commitment at COP28 to triple the world’s installed renewable energy generation capacity by 2030 provides a clear imperative for action in the Eastern Mediterranean. Nations collectively committed to this target as part of the global stocktake of the 2015 Paris Agreement.¹⁹ In addition, 130 nations—including Greece, Cyprus, and Turkey—also joined the Global Renewables and Energy Efficiency Pledge, a voluntary coalition committing to triple their renewable energy capacity and double the rate of energy-efficiency improvement.²⁰ In September 2024, nine northern Mediterranean countries (often known as the MED9) agreed to collaborate on making the region a renewable energy hub, aligning with this global target.²¹

A growing grassroots initiative known as TeraMed is seeking to mobilize Mediterranean countries to triple their renewable energy capacity and reach 1 terawatt in combined generation capacity.²²

As of 2023, Eastern Mediterranean countries had an installed renewable power capacity of 90 GW, accounting for 42 percent of their total electricity generation.²³ To meet the COP28 target, the region must reach 405 GW of capacity by 2030, requiring a steep annual growth of 45 GW. Unsurprisingly, the region is not on track. With the exceptions of Greece and Egypt, all Eastern Mediterranean countries must accelerate their efforts if they are to meet the threefold-increase target.²⁴

In my view, meeting these ambitious renewable targets requires more than simply adding generation capacity. The Eastern Mediterranean needs advanced infrastructure solutions that can both accommodate the tripling of renewable energy and overcome existing grid fragmentation. Smart grid technologies represent the critical connective tissue that will enable this rapid transition.

Smart grid innovation: The digital backbone of renewable integration

To effectively integrate the growing share of renewables and enhance grid stability, the Eastern Mediterranean must leapfrog conventional infrastructure by investing in smart grids. In addition to interconnections, smart grid technologies enable better management of intermittent renewable sources, improve reliability, and reduce losses. These technologies include battery storage, advanced metering infrastructure, dynamic line rating, and other network automation, data management, and analytics technologies for real-time monitoring and control.

Battery storage is particularly crucial for managing the intermittency of renewable energy sources, ensuring grid stability as the share of renewables increases. However, large-scale battery storage projects are still nascent in the Eastern Mediterranean—with the exception of Turkey, which set a target for battery energy storage capacity to reach 7.5 GW by 2035.²⁵

Flexibility mechanisms, including demand response and renewable hydrogen production, further enhance grid stability. Technologies such as electrolysis using solar and wind electricity for hydrogen production are gaining traction. Turkey has plans to develop 5 GW of electrolyzer capacity for green hydrogen production by 2035, and to expand capacity to a staggering 70 GW by 2053.²⁶ Similar applications are being explored in Egypt, which plans to become a transit route for renewable hydrogen.²⁷

Smart meters also help manage the grid better through demand-side management. In the Eastern Mediterranean, Greece is leading on smart meters. It plans to roll out 3.12 million units by 2026, funded by the European Investment Bank, to enhance energy efficiency and support demand response.²⁸

Deploying advanced grid technologies across borders also requires moving beyond identifying technical requirements to addressing the fundamental question of funding this transition. Additionally, this paper argues that the financing challenge is not merely about capital mobilization but also the creation of financial structures that simultaneously enable technological leapfrogging and regional cooperation.

Beyond borders, beyond banks: Innovative financing for regional energy

The transition from technical requirements to financial realities necessitates examining the substantial capital investments needed to realize the Eastern Mediterranean’s energy transformation. While technological solutions provide the roadmap, financing mechanisms will determine the pace and scale of implementation, particularly when the magnitude of required investment exceeds traditional national budgetary capacities.

Quantifying the investment challenge

The Eastern Mediterranean’s energy transition demands significant capital to expand limited renewable energy capacity, modernize aging grids, and develop cross-border interconnections.

Renewable energy projects typically cost around $1 million per megawatt of installed capacity. Their costs are already competitive, and they are the cheapest form of new generation capacity across the region. Moreover, those costs are expected to continue falling and renewables are expected to be the cheapest source of electricity in most countries—including for storage—by 2027.²⁹

However, given the sheer scale of buildup required to meet COP28 commitments, the enormity of the financing required cannot be overstated. If the region is to build 45 GW of renewable energy capacity this year, this would require approximately $45 billion just for generation capacity at current costs, excluding transmission and storage infrastructure.³⁰

Transmission infrastructure is another challenge, especially given how its cost is often borne by grid operators rather than by private developers. The Great Sea Interconnector, for example, is estimated to cost approximately €1.9 billion ($2.08 billion).³¹

By 2030, the region’s total investment needs for sustainable energy transition could well exceed $300 billion. The magnitude of investment required highlights why ordinary national financing approaches are insufficient for the Eastern Mediterranean’s energy transformation. Instead, the region needs to scale finance beyond national resources and to explore financing instruments that mobilize capital at scale and also create structures for regional cooperation, serving as both financial tools and diplomatic instruments in a region where political tensions have historically impeded collaboration.

Financing the energy transition

The Eastern Mediterranean’s sustainable energy future will require mobilizing diverse financing sources and mechanisms. A mix of public and private funding sources—ranging from multilateral lenders and climate funds to innovative partnerships and financial instruments—can bridge the investment gap and accelerate the energy transition.

In developing countries within the Eastern Mediterranean, this challenge is made more difficult by the higher cost of capital, as investors demand high-risk premiums due to country, currency, or sector uncertainty.

This section outlines key financing sources and provides case studies and examples of how each source is being applied (or could be applied) in the Eastern Mediterranean. Each financing mechanism not only brings capital but can also serve as a catalyst for regional cooperation and innovation in energy infrastructure.

1. Multilateral development banks

Multilateral development banks (MDBs) provide a foundational source of capital and risk mitigation for large-scale energy projects in the region. Institutions such as the European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD), the Asian Infrastructure Investment Bank (AIIB), and the World Bank offer concessional loans, grants, guarantees, and technical assistance to support renewable energy and grid modernization. For example, the EBRD has invested more than €3.8 billion in renewable energy across emerging markets, supporting 119 projects totaling more than 6 GW of capacity.

In the Eastern Mediterranean, MDB financing often underpins ambitious projects. For example, the EBRD and partners launched a $500-million framework that helped finance sixteen solar plants (750 MW) in Egypt, including in the Benban solar park.

Another notable initiative with a renewable energy component is the Southern and Eastern Mediterranean Sustainable Energy Financing Facility (SEMED SEFF), a joint program of the EBRD, EIB, Agence Française de Développement, and KfW, a German state-owned bank. With a €141.7-million budget, SEMED SEFF catalyzed investments in Jordan and Morocco to cut more than 150,000 tons of carbon dioxide annually and boost renewables (25 percent of its funds went to renewable energy projects).³²

MDBs not only supply affordable long-term loans; they also crowd in other investors. In Egypt’s Benban project, for instance, the EBRD, the International Finance Corporation (IFC), the AIIB, and the African Development Bank (AfDB) cofinanced solar plants alongside private developers, dramatically lowering financing costs and risk.³³ By leveraging MDBs’ preferred creditor status and technical expertise, such involvement signals to markets that projects are bankable.

By providing concessional finance, convening power, and technical and policy assistance, MDBs help Eastern Mediterranean countries undertake projects that might otherwise be too costly or complex, from large wind and solar farms to regional grid interconnectors. Their financing comes with due diligence and policy guidance, encouraging reforms (such as market liberalization or improved procurement frameworks) that improve the overall investment climate. Going forward, scaling up MDB capital—including through their climate-focused funds and guarantees—will be crucial to meet the region’s renewable investment needs at the pace demanded by global climate commitments.

2. Green finance and investment

Green finance refers to capital raised for climate-friendly and sustainable projects through instruments such as green bonds, green loans, and ESG (environmental, social, governance) investments. In the Eastern Mediterranean, green bonds specifically are emerging as an important tool to tap global capital markets for renewable energy and low-carbon infrastructure. The global green bond market has expanded rapidly to more than $2.5 trillion outstanding by 2024.³⁴

Eastern Mediterranean nations have started to issue their own green bonds to fund clean energy, often with strong investor demand. Egypt was an early mover, launching a $750-million sovereign green bond in September 2020.³⁵ Cyprus followed in 2022, issuing a €1-billion green bond. In 2023, Israel and Turkey debuted their first sovereign green bonds, raising $2 billion and $2.5 billion, respectively.³⁶ Greece signaled plans to issue a sovereign green bond as well. While a national issuance expected for 2024 remains pending, the Bank of Greece issued a €500-million green bond in 2020.³⁷

Other private institutions have also issued green bonds, including banks and other businesses such as renewable energy companies. Lebanon’s Fransabank SAL issued its first green bond in 2018, valued at $60 million, with support from the IFC and EBRD. The proceeds were directed to support sustainable finance initiatives. Jordan’s Kuwait Bank followed in 2023 and, in collaboration with the IFC, issued its first green bond, valued at $50 million. The funds were allocated to renewable energy, low-carbon transport, and sustainable water and wastewater projects. ​ Additionally, Arab Bank in Jordan issued a $250-million sustainable bond in October 2023 to support green and sustainable initiatives.³⁸

However, the market remains nascent and fragmented. Strengthening regulatory frameworks, standardizing green taxonomies, and building technical capacity among issuers and investors will be key to unlocking green capital at scale. For instance, Turkey developed its own sustainable finance framework in 2021, while IFC support enabled Egypt to develop green bond guidelines and the Amman Stock Exchange to produce sustainability reporting guidelines.³⁹ The European Union recently introduced the European Green Bond Standard, a voluntary framework to ensure transparency and combat greenwashing, which could serve as a model to harmonize practices in the region.⁴⁰

3. International climate finance

International climate finance refers to dedicated funds and initiatives aimed at supporting climate change mitigation and adaptation in developing countries. For Eastern Mediterranean nations (many of which are middle-income or emerging economies), these funds are an important supplement to domestic resources. Key global climate funds include the Green Climate Fund (GCF), Climate Investment Funds (CIF) such as the Clean Technology Fund, and the Global Environment Facility (GEF). Historically, the Middle East and North Africa (MENA) region has underutilized these funds: MENA has received only about 6.6 percent of cumulative financing from the major global climate funds through 2023.⁴¹

Eastern Mediterranean countries are now working to improve their access to these pools of finance by developing strong project proposals and institutional capacity. Egypt has been notably successful in tapping climate funds, securing about one-third of all GCF resources allocated to MENA as of 2023. About 85 percent of Egypt’s GCF funding has been in the form of loans. Jordan has also received international climate finance, accounting for roughly 10 percent of GCF funding in MENA (with around half in loans). Meanwhile, Turkey has benefited from World Bank funding via the Türkiye Green Fund (TGF), receiving a $155-million loan for the greening of firms through equity financing, while Lebanon has benefited from GEF grants, receiving about 8 percent of GEF’s MENA allocations.⁴² These funds often work by blending with multilateral bank financing or by de-risking projects to attract private investors (through instruments like guarantees and concessional tranches).

4. Islamic finance

Islamic finance is a growing source of funding for the energy transition and is particularly relevant in the Muslim-majority countries of the Eastern Mediterranean. Islamic finance follows sharia principles, such as prohibition of interest, and typically uses profit-sharing or asset-backed structures.⁴³ Green sukuk (sharia-compliant bonds earmarked for environmental projects) have emerged as a key instrument to raise capital for renewables while tapping into Islamic investor pools. The global sukuk market has seen strong growth and greening in recent years. The first half of 2024 set a record, with $9.9 billion in green and sustainability sukuk issuances, indicating accelerating interest.⁴⁴

While most green sukuk so far have originated in Southeast Asia and the Gulf, Eastern Mediterranean nations are starting to consider them.⁴⁵ Egypt, for example, has been considering sukuk as a financing tool. It passed a Sovereign Sukuk Law in 2021 and could issue green sukuk to fund projects under its renewable energy and sustainable transport plans.⁴⁶

Importantly, major finance institutions are steering toward climate action. In 2021, Emlak Katılım issued the first green sukuk in Turkey with a total value of 51.8 million Turkish lira.⁴⁷ The Islamic Development Bank (IsDB) has also issued sukuk to raise funds for green projects. For example, in 2024 it issued a $2-billion benchmark sukuk earmarked partly for green development programs.⁴⁸

Beyond sukuk, Islamic finance can support renewable energy through Islamic banks and funds investing in project equity or providing sharia-compliant loans (such as profit-sharing and loss-sharing musharakah (a joint-venture structure) or lease-based Ijarah financing). Islamic finance also opens opportunities for waqf (endowment funds) or zakat (charitable contributions) to be structured for community-level clean energy access or climate resilience projects, although such models are still in experimental stages.

5. Bilateral investment

Financing and development support from one country to another plays a pivotal role in the Eastern Mediterranean’s energy landscape. Bilateral investment often comes either directly from foreign governments (through aid, export credits, or state-owned banks) or via government-backed companies and sovereign wealth funds pursuing projects abroad. In the push for renewables, several powerful bilateral actors have emerged: notably the Gulf states (such as the United Arab Emirates (UAE) and Saudi Arabia) and China. They view renewable energy projects not only as commercial opportunities but also as avenues to strengthen strategic ties and influence in the region.

The UAE and Saudi Arabia have invested significantly in Egypt’s renewable energy projects, using investors such as ACWA Power, Masdar, and AMEA Power to fund new wind and solar capacity.⁴⁹ For example, Masdar has partnered with Egyptian firms to develop a gigantic 10-GW onshore wind farm, one of the world’s largest, which it announced on the sidelines of COP27.⁵⁰

China is increasingly becoming a major bilateral financier in Eastern Mediterranean energy. Chinese state-owned enterprises and funds have targeted renewable energy acquisitions and projects, especially in economies where financing gaps exist. In Egypt, Chinese banks and companies have supported the Benban solar complex; for example, the AIIB provided $210 million in debt financing for eleven solar plants (totaling 490 MW) in Benban’s second phase.⁵¹ Chinese firms have also supplied solar panels and construction for many Benban projects. China also has energy investments in Turkey, Lebanon, and Greece. China’s Silk Road Fund has acquired a 49-percent stake in ACWA Power’s renewable energy portfolio.⁵² These investment patterns are part of the increasing “greening” of China’s Belt and Road Initiative (BRI) and reflect China’s willingness to invest in lower-income Eastern Mediterranean nations, though these investments often serve dual purposes of commercial returns and strategic positioning.⁵³

The European Union (EU) and its member states also act bilaterally through programs like the EU-funded Neighbourhood Investment Platform, which gives grants to complement loans for energy projects in the Mediterranean neighborhood.⁵⁴ Europe often emphasizes grid interconnections and market integration (e.g., funding studies for a EuroAfrica interconnector between Egypt and Greece), Gulf countries favor high-profile generation projects, and China is active across the value chain from generation to transmission.

Bilateral investments bring substantial capital and can fast-track projects, but they also entail geopolitical balancing as recipient countries in the Eastern Mediterranean navigate offers from multiple suitors. When managed well, bilateral financing can complement multilateral efforts. It also can foster regional cooperation. For instance, the UAE not only invests in Arab neighbors but has discussed energy deals involving Israel (such as solar facilities in Jordan exporting power to Israel as part of a desalinated water and solar energy swap between Israel and Jordan).⁵⁵

6. Debt financing

Debt financing (i.e., borrowing funds to be repaid with interest) is one of the predominant ways to fund energy infrastructure, including renewable projects, worldwide. In the Eastern Mediterranean, debt financing takes multiple forms: loans from commercial banks or international institutions, bonds issued in capital markets, export credits or supplier credits for equipment, and concessional and blended debt.

Given that debt is cheaper than equity, developers typically seek debt to cover most of the project costs. For investors and lenders, renewable energy projects can be attractive debt opportunities because they generally generate steady cash flows once operational.

Finance for regional cooperation

A comprehensive financing strategy leveraging all of the above mechanisms is crucial for the Eastern Mediterranean to realize its energy transition ambitions. Multilateral and climate funds provide scale and patient capital, green and Islamic finance tap new investor pools, and bilateral investments bring in strategic funding.

Additionally, financing structures such as project finance, public-private partnerships, power purchase agreements, and blended finance can help reduce risk. Green investment banks can help mobilize funding for green projects, while innovative tools like fintech and results-based financing fill niche gaps.

In my view, the region’s success in meeting COP28 goals hinges less on the availability of technology and more on the ability to align financial incentives across borders.

By structuring these financing approaches with regional cooperation as their foundation, these instruments create shared financial interests across borders, incentivizing collaboration and helping overcome entrenched political obstacles. Financial mechanisms explicitly requiring cross-border participation serve as powerful diplomatic tools in addition to their capital mobilization function.

For instance, multilateral investment funds that mandate co-investment from multiple Eastern Mediterranean countries establish joint ownership stakes in critical infrastructure, creating a financial incentive to maintain peaceful relations. Similarly, blended finance structures offering preferential terms for projects with cross-border components make cooperation economically advantageous compared to purely national approaches. For example, a Mediterranean renewable energy fund requiring participation from Greece, Turkey, and Cyprus could provide a neutral financial platform in which shared economic benefits supersede maritime disputes.

The strategic design of these mechanisms must include governance frameworks that span national boundaries, with representation requirements ensuring all stakeholders have meaningful input in investment decisions. Interconnection-specific project bonds co-issued by multiple countries can create shared liability structures in which default risks are mutually borne, fostering accountability across traditional divides.

When properly implemented, these tools can transform abstract diplomatic goals into concrete economic incentives. Countries with historical tensions can begin to view their neighbors not as competitors but as essential partners in accessing capital markets and achieving energy security. Countries that once viewed energy resources as potential flashpoints for conflict can instead develop economic interdependencies that make continued cooperation the most rational choice.

Shared foundations: Creating a regional energy community

While innovative financing mechanisms provide the tools for transformation, their successful implementation depends on creating supportive physical, institutional, and diplomatic frameworks. The mobilization of capital through green bonds, MDB funding, climate finance, and other financial instruments discussed above is necessary but insufficient on its own to achieve regional energy integration.

Having participated in several regional energy dialogues, I have observed that trust between regulators remains limited. Finance can be the tool that enables cooperation in more sensitive policy areas. Yet it must be paired with robust infrastructure development, harmonized regulatory environments, diplomatic initiatives that overcome historical tensions, and coordinated governance structures that span national boundaries. The implementation of regional energy integration requires establishing concrete structures for collaboration that can transform the Eastern Mediterranean’s abundant renewable resources into a shared, resilient energy architecture that benefits all participating nations. These efforts must include

• physical infrastructure development and grid integration;
• interconnected energy markets and regulatory alignment on grid codes, tariff structures, and cross-border trading;
• regional cooperation and diplomatic engagement; and
• regional governance frameworks.

Scaling cross-border initiatives for a connected grid

Cross-border energy cooperation in the Eastern Mediterranean is advancing through several key initiatives aimed at integrating renewable energy sources and enhancing grid connectivity. There are nine interconnection projects and proposals at different stages of development across the region. If implemented fully, they can help create a more unified energy market capable of efficiently distributing energy across the Mediterranean while addressing the intermittency challenges of solar and wind.

The Great Sea Interconnection, set to link Cyprus, Greece, and Israel, is perhaps the region’s flagship project and will facilitate the trade of renewable electricity across borders. Similarly, Egypt and Greece are exploring the GREGY interconnection. Beyond the Eastern Mediterranean, Italy and Tunisia are advancing the ELMED interconnection between them, which is expected to be operational by 2027.⁵⁶ Technologies already exist to manage some of the perceived risks of interconnections. Using high-voltage direct current (HVDC) transmission lines offer greater controllability and can be isolated more easily than traditional AC interconnections. Interconnections can also be directed to non-critical loads or areas in order to reduce risk to cross-border disruptions, while robust cybersecurity standards and protocols can help protect critical infrastructure.

Harmonizing regulations for seamless market operation

Achieving a fully integrated energy market in the Eastern Mediterranean requires harmonized regulations to ensure fair access to grids, promote investment, and reduce the cost of risk capital. Countries involved in interconnection projects need to have the regulatory framework in place to allow for successful entry of foreign electricity into domestic electricity markets and successful export of their electricity to foreign markets. This is especially difficult for countries in which electricity utilities hold vertical monopolies in all sectors of the economy. Turkey, Cyprus, Greece, and Egypt have unbundled or are on the way to unbundling their electricity markets; meanwhile, Jordan, Lebanon, and, to a lesser extent, Israel have electricity utilities that hold vertical monopolies and are responsible for generating and supplying electricity to all sectors in the economy.⁵⁷

The EU’s internal energy market policies are a model for regulatory convergence, emphasizing transmission ownership unbundling between electricity generation or supply companies and transmutation ones, consumer rights, and the role of regulatory actors such as the Agency for the Cooperation of Energy Regulators (ACER).⁵⁸ The EU’s Electricity Directive 2019/944 mandates nondiscriminatory access to transmission and distribution systems, a principle that could be adapted for the Eastern Mediterranean to attract private investment.⁵⁹

However, this EU model cannot be fully replicated in the Eastern Mediterranean due to different system maturity levels. The Association of Mediterranean Energy Regulators (MEDREG), comprising twenty-seven energy regulators from twenty-two countries, recommends that regulatory frameworks must be tailored to specific subregional contexts, and that Eastern Mediterranean countries need to develop more regulatory solutions independent from those of the EU.⁶⁰

Progress in regulatory harmonization could also increase infrastructure investments significantly in the Eastern Mediterranean. However, this progress is slow due to the region’s diverse regulatory environments, with countries such as Syria, Lebanon, Turkey, and Egypt maintaining state-controlled energy sectors, while others like Greece and Cyprus align with EU directives to liberalize the energy market. Overcoming these disparities will require sustained dialogue, capacity building, and incentives for alignment.

Energy diplomacy: Transforming geopolitical challenges into opportunities

Geopolitical tensions are another major barrier to cooperation in the Eastern Mediterranean. Political and security dynamics significantly influence energy cooperation in the region. Long-standing disputes—such as those between Greece, Turkey, and Cyprus over maritime boundaries, the Syrian civil war, the unresolved Cyprus question, the recently intensified Israeli-Palestinian conflict, and the Israel-Lebanon conflict—have all historically hindered regional collaboration and the development of cross-border infrastructure, particularly affecting projects like the EastMed Gas Pipeline.⁶¹ Overcoming these challenges will require financial resources as well as diplomatic engagement and innovative governance structures.

However, the shift toward renewable energy and the EU’s focus on a green energy economy present new opportunities for cooperation. Initiatives such as the East Mediterranean Gas Forum (EMGF)—established in 2019 as a platform focused on natural gas development, it includes Egypt, Greece, Cyprus, Israel, Jordan, and the Palestinian territories, along with France and Italy—can be both reformed to become more inclusive of all Eastern Mediterranean counties and expanded beyond natural gas to include renewable energy, power infrastructure, and advancing electricity interconnection and trading.⁶² Some energy policy experts have advocated for renaming the EMGF as the East Mediterranean Energy Forum (EMEF) to reflect this broader mandate.⁶³ Such a forum should include a regulatory platform, in which each country is represented by its national regulatory authority or electricity governing body, to jointly promote greater harmonization of regional energy markets and legislation.

Energy cooperation is increasingly recognized as a tool for regional stability and economic integration. The development of renewable energy projects and interconnectors can create shared economic interests, reducing the potential for conflict.⁶⁴ This approach transforms energy from a source of competition to a platform for collaboration, potentially easing long-standing tensions through mutual economic benefits and shared climate goals.

An increased shift toward renewable energy sources not only ensures long-term sustainability and economic benefits for the region, but also has higher potential than gas diplomacy. Unlike natural gas and other tradable commodities, renewable energy systems are an undisputed resource. Additionally, collaboration on renewable energy projects through interconnections provides synergies between partnering countries due to the benefits they provide to both grids.

Shared horizon: Finance and diplomacy for a unified Eastern Mediterranean energy landscape

The Eastern Mediterranean stands at the cusp of a transformative energy transition in which innovative financing can simultaneously advance technological leapfrogging, economic development, and regional cooperation. By strategically structuring investment mechanisms that require collaboration, the region can convert financial transactions into diplomatic bridges.

Financial innovation offers three distinct diplomatic dividends beyond its direct economic benefits.

First, joint financing creates structured engagement opportunities that maintain dialogue even during political tensions. When countries coinvest in renewable infrastructure through mechanisms such as regional green bonds or mixed-ownership projects, they establish technical and financial communication channels that persist through diplomatic fluctuations. These ongoing interactions build relationships among technical experts and financial officials that can later facilitate broader cooperation.

Second, shared financial liabilities transform political calculus by creating mutual dependencies. When neighboring countries with historical tensions become co-guarantors of infrastructure loans or joint issuers of project bonds, they develop a tangible economic interest in maintaining stable relations. The economic costs of diplomatic ruptures become quantifiable and immediately visible to stakeholders on all sides.

Third, financial innovation creates positive-sum narratives in a region often characterized by zero-sum competition. By enabling countries to collectively tap into previously inaccessible capital pools—such as global ESG funds seeking large-scale sustainable investments—regional financial mechanisms demonstrate that cooperation delivers benefits unattainable through individual action.

If the Eastern Mediterranean realizes this vision of financially driven integration, it could emerge as a global model for how innovative capital structures can overcome entrenched geopolitical challenges. The region’s abundant renewable resources, which have the potential to generate more electricity than its projected future demand, provide the natural foundation, while innovative financing creates the institutional architecture for a sustainable energy future that transcends historical divisions and creates shared prosperity across borders.

The path forward requires financial creativity, diplomatic persistence, and technical expertise—but the potential rewards extend far beyond renewable kilowatts to include a fundamental reconfiguration of regional relationships built on shared economic interests rather than historical grievances.

The Atlantic Council would like to extend special thanks to Limak Holding for its valuable support for this report.

Karim Elgendy
Executive Director,
Carboun Institute;
Associate Fellow,
Chatham House

Karim Elgendy is an expert on energy transition and climate policy in the Middle East and North Africa. His research examines the intersection of climate diplomacy, energy geopolitics, and sustainable development across the region. Elgendy investigates how countries navigate energy transitions and climate change impacts within shifting geopolitical landscapes, and analyzes how regional and global power dynamics influence climate action and policy implementation. He possesses deep expertise in energy and climate policies across the Eastern Mediterranean and Gulf Cooperation Council states, with particular focus on renewable energy, climate resilience, and diplomacy.

Elgendy has authored numerous articles and policy publications in leading journals and platforms. He has presented at over one hundred public speaking engagements and has delivered guest lectures at several prestigious universities. His expert analysis is regularly featured in broadcast, print, and digital media outlets, and he has appeared in most mainstream media outlets.

The Atlantic Council in Turkey aims to promote and strengthen transatlantic engagement with the region by providing a high-level forum and pursuing programming to address the most important issues on energy, economics, security, and defense.

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In the informal or artisanal and small-scale mining (ASM) sector, women’s participation is estimated at up to 50 percent. But despite their contributions, women across the region are subjected to discrimination—which results in fewer socioeconomic and professional opportunities—in addition to sexual and gender-based violence.

Today, the increasing demand for critical minerals has led global powers, including the United States, to consider critical-mineral deals globally in order to create stronger and more sustainable supply chains. African countries thus have a newfound opportunity to prioritize their development goals—but they first must address the discrimination and violence against women taking place across the industry.

For African countries to empower their women miners, they must tailor formalization pathways of women ASM miners and support grassroots organizations as operational partners, while deploying policies aimed at addressing gender biases in the industry and on a macro scale.

The reality for women miners

In the ASM sector, where working conditions are unsafe, women face gender-based discrimination and physical harm. Women miners are ninety times more at risk of death than their male counterparts, according to the World Bank. Women miners also face sexual violence, which is especially prevalent in conflict areas: For example, amid the ongoing conflict between Congolese armed forces and Rwanda-backed M23 rebels, women (both miners and not) reported 895 rapes in the last two weeks of February 2025, averaging sixty reports per day.

In the ASM sector and in large-scale mining (LSM), women have also been allocated fewer technical jobs in addition to unequal access to mining rights, tools, and financial resources, all diminishing their ability to achieve financial growth. Their restricted economic mobility often confines them to ancillary services such as preparing food and cleaning mineral ore. But regardless of the roles they take, women miners often receive lower wages than men for the same labor. Discrimination also results in women miners taking on a disproportionate burden of labor overall, as many are responsible for housework in addition to mining activities.

Legal infrastructures also reinforce discrimination against women miners: For example, the DRC’s Mining Code stipulates that pregnant women are not allowed to work in mining. Similarly, sections 55 and 56 of Nigeria’s 2004 Labor Act prohibit women from working in industrial undertakings, including mining, during nighttime hours and from doing any manual labor underground. These unequal legal measures can push more women to informal mining practices, making them more vulnerable to physical and gender-based harm.

Tapping the opportunity

African countries, for their development and economic growth, must address the challenges women in both ASM and LSM face, with policies that are tailored to the needs of local mining communities.

African countries must offer easily navigable pathways for ASM miners to formalize—and such pathways must be customized for local contexts. Formalization is particularly complex in regions with conflict and legal pluralism. There are frameworks available to guide African governments in this endeavor. For example, a nongovernmental organization called Pact has publicly put forth the model it uses to engage communities in formalization, tailoring the approach to the needs of local artisanal miners. Such a model includes stakeholder engagement and educational training for miners, in addition to support with securing licenses and land access and with addressing human rights and safety concerns.

African governments should also support local grassroots organizations in operationalizing these efforts to improve the well-being of women miners and their economic prospects. In the ASM sector in particular, these organizations are integral to reaching women miners, especially in spaces where governments lack reach. For example, Tanzania’s Women Miners Association economically empowers women miners through initiatives that organize savings and credit cooperative societies and support women as they work to acquire mining licenses and market access. An organization called IMPACT leads initiatives for women-led mining businesses to improve women miners’ safety and foster inclusion in global supply chains. IMPACT supported the building of at least fifty village savings and loans associations in the DRC and Burkina Faso, involving nearly three thousand women and men who saved more than $176,000.

In addressing women’s challenges in the mining sector—both ASM and LSM—more broadly, African governments must also deploy policies that are gender inclusive and women-centric in order to alleviate the gendered struggles of women in the mining sector. There are already positive examples of such policies on the African continent, some being South Africa’s programs to improve women’s participation in the LSM sector. In addition, the Rwanda Mines, Petroleum, and Gas Board implemented a gender strategy to improve awareness about the role of women in mining and to boost capacity building. Governments should also encourage women’s participation in mining governance.

Leveraging partnerships

Safeguarding and empowering women is essential for upholding human rights and fostering inclusive sustainable growth. While ensuring peace and stability, African countries need to leverage partnerships to advance their development goals.

As countries move forward on critical-minerals deals, they must do so ensuring that there will be mutual economic gains from such agreements. For example, the DRC must leverage its potential mineral deal—in which the United States would provide security against the Rwanda-backed M23 rebel attacks in exchange for access to DRC’s critical minerals—for community development. While signing any deal, governments should foster multistakeholder partnerships with grassroots organizations that can help reach women miners and advance development goals in Africa’s booming mining sector, for an inclusive and equitable future for all.

Neeraja Kulkarni is a researcher, writer, and development practitioner with experience in decarbonization, community resilience, and international development. The views expressed in this article are her own.

The post Empower women miners now for a just future in Africa appeared first on Atlantic Council.

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As AI and data centers expand demand for power, natural gas and coal alone can’t meet future needs, while current solar and battery supply chains carry security risks. To resolve these challenges, the United States should expand domestic manufacturing of advanced energy technologies while maintaining natural gas—and, possibly, coal—production in the near term.

To win the AI race against the Chinese government, US energy policy must shift from a climate-first lens to one that prioritizes national security and securing a growing supply of power. To do so, Congress should pass the Future Usable Energy Legislation—Artificial Intelligence (FUEL-AI) Act, which would prioritize key national security interests such as providing power for key AI hubs like Northern Virginia’s Data Center Alley, streamlining permitting, modernizing transmission and the grid, supporting domestic energy manufacturing, and incentivizing energy efficiency technologies.

Energy and the race for AI supremacy

Whether the AI race is a sprint or a marathon, both paths demand massive amounts of new electricity. Though energy is a small share of AI costs, it’s a critical operational constraint: data centers can’t run without power.

While acknowledging profound uncertainties, top forecasts project data centers and AI-driven electricity demand could reach 4.6–9.1 percent of total US consumption by 2030, up from 4 percent today. If the sprint scenario holds, only fast-to-deploy sources like solar and batteries can keep pace with demand.

Even in the marathon scenario of broad AI adoption, the United States will likely need large amounts of new electricity—fast. Relying on natural gas and coal alone to power AI won’t work. Natural gas turbine production is constrained, and no major coal plant has opened since 2013. Supply chain constraints, profound grassroots opposition, and investor reluctance make new coal capacity unlikely.

Even though gas and coal will play a major role in powering US AI, a gas and coal-only strategy won’t succeed. In the worst-case scenario, insufficient electricity generation could create shortages and necessitate persistent brownouts that were last seen in the United States in the 1970s. Even if those dire conditions don’t materialize, however, higher domestic natural gas prices would reduce the competitiveness of US liquefied natural gas and pipeline gas exports. But the impact of a natural gas and coal-only approach would be felt most acutely by consumers, since residential electricity prices are already outpacing inflation. 

Rural Americans would be hit hardest by rising electricity costs and poor reliability. They spend 4.4 percent of household income on energy—versus 3.1 percent in metropolitan areas—and face more outages.

Fueling AI with a summer peaking resource

In both AI sprint and marathon scenarios, solar and battery storage are highly suitable for meeting rising demand due to their speed, low cost, scalability, and geographic flexibility.

Solar is highly capable for matching data centers’ peak summer demand, especially in warm-weather markets. In Northern Virginia, home to 13 percent of all reported data center operational capacity globally, regional solar generation typically peaks in the summer—matching peaks for both commercial data centers’ cooling needs and residential consumers’ electricity consumption.  

Solar’s flexibility makes it ideal for data center clusters, as it requires minimal infrastructure and no resupply. China appears to recognize solar power’s strategic value, concentrating rooftop solar in coastal provinces and deploying at least 3,000 megawatts of capacity at the dual-use Shigatse Peace Airport near the Indian border.

Strengthening solar cybersecurity

China’s dominance of solar supply chains poses security risks, especially given solar power’s importance for AI. Reports of Chinese-made inverters with unexplained communication equipment underline the dangers, as such devices could destabilize the grid—a risk the US Department of Energy has long flagged.

However, inverter threats are just one among many. The Chinese government and other adversaries already have broad ability to target US and partner infrastructure. Cybercriminals operating in Russia attacked Colonial Pipeline, while China has been linked to  Mumbai’s 2021 blackout, malware found in US power and water systems, a still-unexplained transformer interdiction in Houston, and crypto mines operating near US military sites. Indeed, Chinese firms are estimated to own one-third of US crypto mining infrastructure and supply the vast majority of its machinery. Furthermore, ERCOT, the operator for most of the Texas grid, warns these high-load operations can worsen grid events, turning low-voltage issues into frequency control problems.

China’s role in software and hardware supply chains poses sabotage risks. Just as Russia weaponized energy in Ukraine, Beijing could exploit electricity systems in a Taiwan conflict. The United States should assess the inverter threat by reviewing installed units, ramping up inspections of Chinese-connected devices, and conducting other risk mitigation and software hygiene measures.

Instead of fruitlessly seeking to eliminate vulnerabilities and establish perfect security across pipelines, crypto mines, and inverters, however, the United States must rely on deterrence, threatening proportionate responses if China conducts electricity sector sabotage.

Replace the Inflation Reduction Act with FUEL-AI

The AI race with China carries immense stakes and uncertainty. To compete, the United States will need vast new electricity generation—regardless of whether the race is a sprint or a marathon. This requires an all-of-the-above energy approach: natural gas, coal, and advanced technologies like solar, batteries, advanced nuclear, and wind.

The United States should replace the Inflation Reduction Act with FUEL-AI, shifting focus from climate to national security. FUEL-AI would make it easier to build new energy infrastructure by streamlining permitting and modernizing transmission. Additionally, it would support domestic energy manufacturing for key national security technologies, such as transformers and advanced batteries; and prioritize power demand and supply measures at AI hubs like Northern Virginia’s Data Center Alley.

These reforms could attract bipartisan backing. Both parties oppose the Chinese government and support strategic technologies like nuclear power and transformers, while US advanced energy supply chains support hundreds of thousands of jobs and hundreds of billions of dollars in investment. Reorienting energy policy toward AI competitiveness can unite national security and economic priorities without abandoning the advanced energy technologies of the future.

Joseph Webster is a senior fellow at the Atlantic Council’s Global Energy Center and Indo-Pacific Security Initiative, and editor of the independent China-Russia Report. This article reflects his own personal opinion.

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Though a major and sustained trade spat between Beijing and Washington would undoubtedly inflict major damage on the global economy, it could also provide limited, discrete opportunities for other actors. For example, Brazil could increase exports of soybeans to the People’s Republic of China, while Taiwan and South Korea could find it economically useful and politically convenient to ramp up purchases of US soybeans. Meanwhile, the US battery-storage sector faces profound uncertainty due to the tariffs, but it could emerge stronger over the long term.

Imposing large tariffs on China carries undeniable risks—and any decoupling of the two massive economies will bring pain, especially in the short term. Yet the crisis also presents opportunities to draw the United States and its allies and partners closer on discrete issues, even as broader, US-driven uncertainty continues to persist.

US-China trade is unbalanced

The US-China trade war doesn’t come from nowhere. Due to China’s export promotion policies, including subsidies, and the United States’ low savings rate, the bilateral goods trade deficit has exploded in recent years, peaking at $418 billion in 2018.

In order to reduce the bilateral goods trade deficit, the United States has imposed several waves of tariffs on Chinese exports. In response, China has, among other measures, targeted specific goods, such as soybeans, which are a major import it receives from the United States. China is betting that targeting soybeans will be a pain point for the White House: US soybean farmers are an important political constituency, about half of all their production is shipped abroad every year, and China is the largest single purchaser.

At the same time, China cutting its soybean imports from the United States could also present opportunities for other buyers and markets. Brazil, already China’s largest source of soybeans, could expand its exports. On the other side, the European Union, South Korea, and Taiwan could make politically useful and showy purchases of US soybeans as a way of trying to earn favor with the White House before or during their own negotiations on trade or other issues. 

—Joseph Webster is a senior fellow at the Atlantic Council’s Global Energy Center and Indo-Pacific Security Initiative; he also edits the independent China-Russia Report. This article reflects his own personal opinions.

Storage battery markets

Just as the US-China trade war could curtail or even halt soybean trade, the US battery complex could face severe disruptions if the United States and China continue down the road of decoupling. China is, by far, the largest exporter of batteries to the United States, accounting for over 70 percent of the United States’ lithium-ion battery energy storage system imports in 2024. These batteries, a single module of which can be as big as a truck, store electricity from the grid (often solar) and discharge power during peak demand periods. 

If 145 percent US tariffs on Chinese goods remain in place, Chinese-produced lithium-ion batteries may be priced out of the market, especially since South Korean-made batteries are highly competitive and face only a 10 percent tariff (as of April 10). Accordingly, US tariffs may see a reorientation of storage-battery supply chains, with fewer imports from China and more from treaty allies such as South Korea, Japan, and Canada. 

Without commenting on the other disruptions of the trade war, the reshoring and friendshoring of battery supply chains would hold significant national security benefits. Advanced batteries are strategically important: in addition to commercial uses, they hold military applications for drones, electronic warfare systems, and submarines.

But it won’t be easy to shift battery supply chains, at least not in the near term. US allies have limited spare capacity. The international battery workforce disproportionately consists of Chinese nationals. China controls critical parts of the supply chain, such as graphite. And new factories—built in the United States or in friendly countries—will take years to complete. Significantly, the United States has no domestic manufacturing capacity for lithium iron phosphate batteries, which are highly suitable for grid-scale storage. It will take time for supply chains to reorient themselves. 

If the United States and China move forward with hard decoupling, the US battery-storage sector will face immediate pain. At the same time, higher tariffs on Chinese-made batteries would incentivize greater manufacturing capacity in the United States and its allies and friends. In order to compete with China, the United States should pair any tariffs on China with investments in research, development, and manufacturing for batteries and other dual-use, militarily relevant energy technologies.

—Joseph Webster

The post Want to understand the US-China trade war? Start with soybeans and batteries. appeared first on Atlantic Council.

As Turkey navigates a shifting global order, economic transformations, and regional conflicts, considering diverse perspectives from informed, visionary leaders—including women—will be crucial.

On March 6, the Atlantic Council Turkey Programs hosted a private roundtable to honor women’s leadership in Turkey in the days leading up to International Women’s Day. The event brought together women thought leaders, diplomats, and heads of businesses in Turkey to discuss global and regional developments, focusing on effective solutions to current challenges. These powerful women spoke under Chatham House Rule about their experiences navigating an increasingly complex world, and specifically about Turkey’s relations with the United States and European Union (EU), Turkey’s role in NATO and the Middle East, and the future of the Turkish economy.

US-Turkey relations amid a changing international order

Participants agreed that US President Donald Trump’s return to office has significantly altered the international order. Given its strategic geopolitical position, Turkey plays a key role in this shifting landscape, which presents Ankara with both challenges and opportunities, the participants said. Concerns were raised regarding the United States losing its status as a diplomatic reference point due to sudden foreign policy changes. Participants emphasized Turkey’s potential to become a full-fledged regional leader but warned against indecisiveness, drawing parallels to the start of the Syrian civil war in 2011, when some felt Turkey missed an opportunity to strengthen ties with the EU through its response to the migrant crisis.

Turkey’s increasing significance in the Middle East

Speakers emphasized Ankara’s evolving role in the Middle East and beyond. For example, as some participants pointed out, Turkey has managed to strengthen ties with Gulf nations while looking beyond their historical disagreements. One participant noted that Turkey has shifted from direct competition with Gulf states to a more utilitarian strategy, improving diplomatic relations across the region. Turkey’s position on Israel and regional security was also debated, with participants mentioning concerns over rising tensions since Hamas’s October 7, 2023 terrorist attacks on Israel. Additionally, Turkey’s influence in shaping the future of Syria was a critical point of discussion. Participants agreed on the difficulty of maintaining sway over the Damascus government without jeopardizing Syria’s legitimacy as an independent state.

EU-Turkey defense relations and implications for NATO

Participants welcomed signs of a more constructive EU-Turkey relationship in light of developments in Syria, cooperation in Ukraine, and the recent discussions of joint defense initiatives. However, skepticism remained regarding whether these bilateral ties can translate into broader EU-wide support for Turkey. The conversation highlighted Turkey’s strong relationships with key European nations such as Spain and Italy and also addressed the failure to leverage these relationships for more extensive regional backing. Some criticized the EU’s reluctance to deepen ties with Turkey due to Turkey’s historical tensions with France and Greece, urging Europe to recognize Turkey as an indispensable ally due to its military, geographic, and economic significance.

One participant underscored the necessity of rethinking NATO’s framework to better integrate Turkey’s interests and security concerns while addressing broader tensions between global powers. The participant reminded the roundtable that Turkey has historically been a bridge between the East and the West, and this role has only become more significant as global tensions rise. She said that Turkey has actively engaged with both Western allies and Russia, seeking to maintain a delicate balance in its foreign policy.

Turkey’s role in the new Syria

In discussing the future of Syrian refugees in Turkey, which currently hosts 3.1 million Syrians under temporary protection, participants noted how many Syrian immigrants have had opportunities in Turkey to establish their own businesses. This echoed the stories presented to the roundtable in a screening of an excerpt from the Atlantic Council Turkey Programs’ documentary, Do Seagulls Migrate?, which explores the experiences of four Syrian women refugees in Turkey.

Some speakers noted the social tensions prevalent in refugee-dense regions such as Kilis and neighborhoods in Istanbul, where the large influx of refugees has contributed to rising rents, decreased job availability, and strains on infrastructure. The discussion acknowledged that while refugees have played a significant role in certain sectors of the economy, the rapid demographic changes have also led to challenges for local populations. The women leaders emphasized the need for holistic policies to address these challenges.

Beyond economic repercussions, participants expressed caution regarding the leadership of Hayat Tahrir al-Sham, given its former ties to al-Qaeda, and acknowledged the apprehension many Syrian immigrants—especially women—feel about returning to an uncertain and potentially dangerous environment. The women leaders also raised concerns about long-term integration challenges; while many refugees have settled in Turkey and are unlikely to return to Syria, the refugees’ repatriation remains a key talking point for politicians. The discussion also highlighted the growing presence of a new generation of Syrian children raised in Turkey, underscoring the need to consider their future role and representation within Turkey’s democracy.

Trade, tariffs, and the economy

Several speakers noted that Turkey’s economic trajectory remains closely tied to Europe. One of the most critical concerns raised was the impact of US tariffs and sanctions, which can add to the pressure on Turkey’s economy. Additionally, the participants noted, new EU environmental regulations such as the Carbon Border Adjustment Mechanism could further strain Turkish exports. However, there was also a sense of cautious optimism, with some speakers pointing to the potential for increased trade volume between Turkey and the United States; in 2024, that trade volume was $32 billion. The participants argued that in the face of global economic shifts, Turkey’s ability to maintain a balanced foreign policy will be essential for safeguarding its economic stability and fostering long-term growth. Striking a careful equilibrium between the United States and Europe—and between these Western allies and regional partners—will be key in mitigating economic uncertainties and capitalizing on new trade opportunities, the participants added.

Investing in Turkey’s human capital

Speakers noted that Turkey has a strong private sector capable of cutting-edge innovation. However, they added that if Turkey wants to maintain and strengthen its relevance in an increasingly competitive global market dependent on new technologies, it should focus on developing a highly skilled workforce. Therefore, speakers at the roundtable extensively discussed the need for aligning educational initiatives with labor market demands, particularly in sectors such as digital innovation, renewable energy, and advanced manufacturing. Speakers noted that university partnerships and investments in vocational training will be crucial in ensuring the continuous development of Turkish human capital. On the other hand, concerns were also raised about the impact of brain drain on Turkey’s innovation potential, with many young professionals seeking opportunities abroad. As one speaker put it, Turkey must focus on developing a highly skilled workforce to maintain its economic relevance in an increasingly competitive global market.

Zeynep Egeli is the project assistant of the Atlantic Council Turkey Programs.

The post How women leaders envision Turkey navigating today’s complicated geopolitical environment appeared first on Atlantic Council.

In this Atlantic Council issue brief, authors Sachin S. Desai, Michael Y. Hua, Amy C. Roma, Jessica A. Bufford, Jacqueline E. Siebens, and J. Andrew Proffitt explore pathways to address regulation, nonproliferation, and export considerations for fusion technologies. They argue that fusion power plants should be regulated in a pathway that is separate from the regulatory pathways established for fission reactors, especially since the materials and processes involved in fusion power plants are significantly different from fission reactors.

Report Feb 24, 2025

Atoms for Appalachia: The role of nuclear energy in economic development

By Lauren Hughes

Advanced nuclear technologies can drive economic security and energy security within Appalachian states.

Economy & Business Energy & Environment

EnergySource Jan 15, 2025

Tripling global nuclear energy capacity is in reach—if the world seizes the moment

By Amy Drake

At COP28, nations and corporations committed to tripling global nuclear energy capacity by 2050, underscoring its essential role in achieving net-zero emissions. Looking ahead to COP30, global leaders must strengthen multilateral collaboration, engage the financial sector, and provide support for new partnerships with the nuclear industry to meet this goal.

Energy & Environment Nuclear Energy

Global Energy Agenda Feb 20, 2025

The small reactor revolution can transform African energy systems 

By Lassina Zerbo

Africa faces a dual challenge of ensuring reliable access to energy while contributing to global net-zero goals. Nuclear energy—and in particular small modular and micro reactors—can revolutionize the African energy landscape and promote sustainable development.

Africa Energy & Environment

Nuclear Energy Policy Initiative

The Atlantic Council’s dedicated home for the exploration of nuclear energy’s future.

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The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

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The post Building a path toward global deployment of fusion: Nonproliferation and export considerations appeared first on Atlantic Council.

Watch the full event

Public Event Thu, April 3, 2025 • 9:30 am ET

Europe’s Teresa Ribera on the EU’s clean transition and US-EU relations

AN #ACFRONTPAGE EVENT—Teresa Ribera, executive vice-president of the European Commission, shares her vision for the EU, the bloc’s competitiveness, and the US-EU relationship.

Digital Policy Economy & Business Energy & Environment Europe & Eurasia

US President Donald Trump’s sweeping tariffs, announced Wednesday, are “bad news for the whole world—including Americans,” said Teresa Ribera, executive vice-president of the European Commission for a clean, just, and competitive transition. 

“We will defend the Europeans,” from businesses to citizens, added Ribera at an Atlantic Council Front Page event Thursday. The European Union (EU) will first look to avoid a “big clash” with the United States. “We will remain firm and open,” and see if there are any avenues to “solve any type of misunderstanding and avoid conflict,” she said. 

As for what the US tariffs mean for the EU’s trade strategy, Ribera said that the bloc will “keep on developing and deepening the relationship with the rest of the world.”  

“The whole world is bigger, or larger, than the US market. So yes, of course, we will try to keep on building that,” she said. 

She added that it is “worth it to defend” the “multilateral-order-based rules,” including ones around trade, that the EU has built with its partners “during the last eighty years.” 

Below are more highlights from the conversation, moderated by Europe Center Distinguished Fellow Frances Burwell, which also touched upon the EU’s competitiveness agenda and green transition. 

All for one . . . 

• Ribera argued that in responding to the US tariffs, it will be important to have a “strong” EU that is “united” in a “common approach.”  

• “I say that we are boringly reliable, but I think that it is absolutely true,” Ribera said. She pointed to the EU remaining together against Russian President Vladimir Putin’s attempts to divide it. “This is one of the most important principles we need to stick [with],” she said. 

• She added that internal changes—such as removing barriers to trade within the European single market—could help offset losses incurred from US tariffs, seeing as internal trade barriers amount to the equivalent of a 45 percent tariff.  

• Ribera noted that the US-EU trade relationship has come to be a “story of success” in joint cooperation, so the two parties should not look to weaken the relationship, but to strengthen it. “It’s good to count on supply chains that work, markets that work and are predictable,” she said. 

• In order to address today’s challenges and address society’s demands, she said, “it is much [easier] to build bridges than to build barriers.” 

Guided by a new “Compass”

• Ribera will soon review the EU’s competition policy, which regulates mergers and acquisitions. She said the policy has been built on a global situation that “has changed” with the power of the West diminishing in its ability to set the terms of global markets. She said she will identify how the tools can actually help attain a more competitive environment, in line with the EU’s new Competitive Compass. 

• After US Federal Trade Commissioner Andrew Ferguson said that he was “suspicious” of the EU Digital Markets Act (which imposes restrictions on tech companies operating in Europe) and criticized laws that “get at American companies abroad,” Ribera argued that the act is “not intending to go against anyone.” She said, rather, it is intended to protect from the development of monopolies against new innovators in the EU market. 

Clean, green machine 

• In addressing criticism that the EU’s green push is getting in the way of achieving competitiveness priorities, Ribera said that the green framework can actually be a “main driver” of Europe’s future competitiveness. 

• Other countries have come to realize the value of the green transition and now “have a big share of the international market dealing with green equipments,” she said. “We don’t want to miss the train anymore.” 

• With the European Commission having proposed the Omnibus package of measures to simplify rules (such as those around sustainability reporting) for businesses, Ribera said that “simplification is very important.” She said she hears from businesses that they want simpler reporting obligations and more clarity from the EU to help them make the “right decisions” on investments. 

• The EU must show investors and the industrial community that it will not go “back to the past to solve the problems of today,” Ribera said. “This is clean, this is industrial, but this is a deal,” she added, explaining that the deal means the EU will be “paying attention to where the concerns may be and how we can . . . [better] bring better everybody together.” 

Katherine Golden is an associate director of editorial at the Atlantic Council.

Watch the event

The post The European Commission’s Teresa Ribera: ‘We will defend’ Europeans in the face of new US tariffs appeared first on Atlantic Council.

To ensure US AI leadership, the United States must harness all forms of energy–while also promoting energy efficiency—allow a level playing field, and remove red tape constraining the buildout of critical enablers, especially transmission lines and grid enhancing technologies. A “some of the above” energy approach could force the United States to compromise on not only AI leadership, but also affordable electricity and other economic priorities.

The competition with China in artificial intelligence may be the defining national security challenge of our time. While AI’s exact electricity needs remain uncertain, substantial power infrastructure expansion and efficiency improvements are needed. By building new generation capacity, including advanced energy technologies, enhancing transmission, and optimizing power consumption, the United States can maintain its competitive edge in AI development. If the United States adopts a “some of the above” approach to energy, however, it will be waging the century’s most important technological fight with China with one hand tied behind its back.

Staff

Joseph Webster

Senior Fellow, Global Energy Center

Global Energy Center Indo-Pacific Security Initiative

Central Asia China

EnergySource Mar 6, 2025

How shifting political leadership, war, and generative AI are shaping the energy outlook: Insights from the 2025 Global Energy Agenda

By Landon Derentz, Christine Suh, Bailee Mathews

Political shifts, heightened conflict, and the growth of generative AI are transforming the energy system. Leadership perspectives and survey results from the Atlantic Council’s 2025 Global Energy Agenda provide a valuable roadmap for adapting to the evolving energy landscape.

Energy & Environment Energy Markets & Governance

EnergySource Jan 27, 2025

DOGE should use AI to fix environmental review

By William Yancey Brown

The National Environmental Policy Act’s (NEPA) often lengthy process can delay crucial development projects and job creation. To address this, Trump’s newly established Department of Government Efficiency should leverage AI technologies to accelerate environmental reviews, modernizing the administration of NEPA.

Artificial Intelligence Energy & Environment

EnergySource Jan 22, 2025

China’s lithium-ion battery exports: Why are US prices so low?

By Joseph Webster

Export prices for Chinese batteries entering the US are lower than for any other market, suggesting that China may be engaging in anti-competitive behavior. As batteries grow in importance for commercial and military applications, the US should increase tariffs on Chinese battery imports to bolster US and allied manufacturing capabilities.

China Energy & Environment

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The post To win the AI race, the US needs an all-of-the-above energy strategy appeared first on Atlantic Council.

But while all countries should contribute to the global effort, they shouldn’t cut their emissions by the same proportions. Each country’s burden should be determined by their per capita emissions—not on rates of change in emissions. And the world’s poorest countries, including many in Africa, have not contributed anywhere near as much to climate change as industrialized nations.

Africa, specifically, is responsible for only 3.7 percent of carbon emissions from the burning of fossil fuels. Its per capita emissions are far lower than any other region. In addition, the African continent needs more plentiful and reliable energy supplies to fuel its development, both economic (as reliable energy supports manufacturing) and human (as energy allows children to do their homework in the evenings and medicines to be stored).

Meanwhile, industrialized countries are moving ahead with fossil fuel projects: The United States is looking to raise domestic oil production, while China has moved forward with building 94.5 gigawatts of new coal-fired power plants. In contrast, South Africa—which has the biggest installed generating capacity in Africa—has a total installed capacity of just 63.4 gigawatts. The International Energy Agency warned in 2021 that global climate goals may be missed if new fossil fuel projects proceed.

Before the international community asks African countries to leave undeveloped fossil fuel resources in the ground, it must make them an offer of clean energy financing—one substantial enough to fund Africa’s current and future appetite for electricity. Doing so would not only help reduce GHG emissions: It would also support Africa’s electrification and development goals.

A just energy transition

Slow progress on increasing electrification rates is already being made in Africa. Just over half of all Africans now have access to electricity at home for the first time, while twelve countries, including the Democratic Republic of Congo, Kenya, and Nigeria, published detailed plans in January 2025 to connect more people to their respective grids. Population growth is driving up demand, which will be further boosted by the uptake of technologies such as electric vehicles in the future.

Amid this growing access to and demand for energy, the international community must offer clean energy financing to African countries and companies to convince them to forego fossil fuel development. Offering this financing now, as energy infrastructure is being constructed from scratch, would allow Africa to build infrastructure and supply chains meant for clean energy, instead of building them up for fossil fuels and having to adapt them later—at greater financial cost. It would have the added benefit of promoting economic development and higher living standards in Africa, which would dampen security threats and ease long-term migration pressures.

Some argue that Africa, for the sake of its development, should be allowed time to use fossil fuels such as gas, which is seen by some as a bridging fuel and thus part of the climate solution. However, emissions from gas-fired plants are at least half as high as those from coal, making gas a driver of climate change.

Additionally, financing is already difficult for some fossil fuel projects. Landlocked Botswana, for example, has 212 billion tons of coal that is largely undeveloped because large-scale mining would require exports. Proposed coal railways from Botswana to ports in either Namibia or Mozambique have failed to secure funding because of reticence among banks and financial institutions about financing coal projects. At the same time, Botswana has a generating capacity of only 892 megawatts and relies on electricity imports. New coal plants would be an obvious option, but here too financing is challenging. Clean energy such as solar offers a more fundable option.

Some projects are managing to secure financing—but only just. For example, the five-billion-dollar East African Crude Oil Pipeline project that will funnel oil from Uganda to the Tanzanian port of Tanga has attracted a great deal of criticism from environmental organizations and the European Union among others, with some calling on banks to rescind their financing. This seems unlikely given that construction began in late 2024. However, Ugandan efforts to secure financing for an oil refinery have thus far failed, pushing the government and UAE partner Alpha MBM Investments to try to fund it themselves. The project will ultimately contribute to climate change, but Kampala argues it must focus on economic development.

Some efforts are being made to offer countries clean energy investment in return for a reduction in fossil fuel development. For example, a group of Western countries has set up Just Energy Transition Partnerships (JETPs) to mobilize public and private finance for low-carbon projects in return for commitments on renewables or energy sector emissions. However, progress has been far too slow, with just four JETPs signed since 2021. Those four include partnerships with Indonesia ($20 billion), Senegal ($2.6 billion), South Africa ($11.6 billion), and Vietnam ($15.5 billion). Funding on this scale should be agreed with every developing country. According to the International Energy Agency, Africa needs investment of $200 billion a year by 2030 to achieve universal access to electricity and meet climate change pledges.

Challenging but possible

Many will argue that putting together such huge funding packages is impossible at the current time because of profound global economic and political instability and high sovereign debt levels after the COVID-19 crisis. Yet governments found the money for mitigation measures during the pandemic. For example, the United States spent $4.6 trillion; the United Kingdom spent between $387 billion and $512 billion. The required finance can be made available in times of real crisis—and climate change is a monumental crisis.

The real stumbling block is political will. Gaining political support for funding on this scale would be difficult at any time, but an ongoing uptick in nationalism and protectionism makes it even more challenging. The United States and European powers would have to participate, and other countries should too, including China, Japan, South Korea, and the Gulf states. And when governments seem hesitant about participating—for example, the Trump administration currently views overseas aid in a dim light—actors in the private sector, from corporations to philanthropists, can help.

Whether this plan is implemented by beefing up the JETP program or via a new vehicle, apportioning the money will be difficult. Many African countries have little or no hydrocarbons or coal. Thus, a continent-wide approach may be needed to ensure that the financing makes the desired impact, both in terms of boosting clean energy access and reducing fossil fuel development. Such an approach can include an agreement, possibly made through the African Union, although this could agitate those countries actually giving up their fossil fuel resources.

In addition to financing, technical support and skills transfer would also be needed. North American and European grid operators and bureaucracies are still struggling to keep up with the pace of complicated permit and grid interconnection applications from renewable energy developers. Such bottlenecks can derail development, so African governments need technical support, while international solar, wind, and storage operators could help build up the operations and maintenance expertise needed to ensure assets remain operational.

Africa has vast clean energy potential—it is home to 60 percent of the world’s best solar resources. However, the continent hosts just 1 percent of global solar generating capacity, about the same amount as the not-particularly-sunny country of Belgium. If the international community truly wants African countries to turn away from fossil fuel development, it will need to give those countries the financing to harness that clean energy potential. The big question is whether the international community is really serious about it.

Neil Ford is a freelance consultant and journalist on African affairs and the global energy sector. He produces reports for a wide range of organizations and has a PhD in East African development.

The Africa Center works to promote dynamic geopolitical partnerships with African states and to redirect US and European policy priorities toward strengthening security and bolstering economic growth and prosperity on the continent.

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The post If the international community wants to curb fossil fuel emissions, it must make Africa a serious clean energy offer appeared first on Atlantic Council.

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Nonetheless, grassroots momentum could accelerate decarbonization throughout the Mediterranean basin. Increased renewable energy cooperation across the Mediterranean would not only help mitigate climate change, but it would also promise new economic opportunities, improved energy security, and enhanced regional ties.

To achieve the ambitious global goal of tripling renewable capacity, the Mediterranean region must overcome several challenges, including geopolitical tension and limited finance. But the target is eminently within reach if countries implement their existing renewable energy plans and increase their ambition while embracing the benefits of cross-border collaboration.

Common targets, divergent trajectories

Over the past decade, the region has significantly expanded its renewable energy portfolio, particularly in the east. As of 2022, installed renewable power capacity in Mediterranean countries was estimated at nearly 300,000 megawatts (MW), representing 43 percent of total generation capacity.

According to Climate Analytics, in order to align with the 1.5 degrees Celsius target set in the Paris Agreement, global renewable capacity needs to grow to 11.5 terawatts (TW) by 2030, 3.4 times higher than 2022 levels. For the Mediterranean to play its part, it would need to bring its capacity above 1 TW, 3.6 times 2022 levels. This would require annual growth of 97 gigawatts (GW)—adding the total generation capacity of Spain every year until 2030.

These goals are within reach if countries implement their current plans—and then some. The existing pipeline of solar, wind, and hydropower projects in the region, would nearly triple generation capacity to 780,000 MW. But this only brings the region 73 percent of the way toward the 1 TW goal.

Within the region, plans and aspirations vary widely. Last year, most Mediterranean countries signed the Global Renewables and Energy Efficiency Pledge, which aims to triple renewable energy capacity globally by 2030. Under existing plans, Greece, Egypt, Libya, Tunisia, Algeria, and Morocco would exceed three times their current renewables capacity, while others—including big consumers like France, Italy, Turkey, and Israel—would fall short.

Seizing the economic opportunity

The renewable energy transition presents distinct economic opportunities for both the northern and southern shores of the Mediterranean, reflecting their unique geographical, economic, and industrial contexts.

Solar photovoltaics (PV) and wind power are becoming increasingly competitive with fossil fuels.  In Egypt for example, the cost of solar energy dropped to 2 cents per kilowatt hour, while wind power stands at 2.4 cents. Mediterranean countries can meet their domestic energy needs with clean, locally sourced energy, and potentially become net exporters using interconnectors such as the one between Tunisia and Italy. Investing in renewable projects creates real economic benefits—clean energy accounted for 10 percent of global economic growth in 2023. Scaling up renewable deployment has the potential to create 30 million new jobs globally by 2030, although 13 million jobs in fossil fuel-related industries could be lost.

The Mediterranean’s extensive coastlines offer significant potential for offshore wind development. This emerging sector could create thousands of jobs in manufacturing, installation, and maintenance, especially in the north. Northern Mediterranean countries can also invest in smart-grid technologies and energy management systems that would improve domestic energy efficiency and create exportable expertise for grid integration of renewables.

Additionally, the southern Mediterranean can capitalize on its high solar irradiance and vast deserts to develop large-scale solar and wind projects. Countries like Morocco, Egypt, and Algeria can serve domestic needs and potentially export clean energy to Europe through interconnectors, such as that connecting Morocco and Spain, and one being planned between Tunisia and Italy. Abundant solar and wind resources across North Africa are ideal for green hydrogen production, creating new export opportunities serving energy-hungry European markets.

Financing the energy transition

Countries across the Mediterranean can position themselves as green finance hubs, facilitating investments in renewable projects throughout the region rather than chase dwindling investments in fossil fuels. Countries with developed financial markets, like France and Italy in the north, can leverage their existing expertise and infrastructure to accelerate renewable energy deployment. In the south which has often struggled with attracting investments on favorable terms, emerging markets such as Egypt and Morocco can capitalize on their growing financial sectors and strategic positions to attract renewable energy investments.

Southern Mediterranean countries can use instruments like Sharia-aligned sukuk, also known as Islamic bonds, that emphasize environmental stewardship. The success of green sukuk issuances by entities like the Islamic Development Bank has already demonstrated the potential of this approach. Governments can also offer tax incentives and develop national sustainable finance strategies.

Despite not explicitly referring to the Mediterranean region, the EU’s Clean Industrial Deal could also provide some support and resources, particularly in financing through the Clean Trade and Investment Partnerships, and its plans to mobilize €100 billion for clean manufacturing, simplifying state aid for renewables, and addressing energy prices and financing.

Overcoming geopolitical faultlines

Ultimately, the region needs to come together to push toward a collective goal. But doing so requires overcoming complex geopolitical relationships, recent history shows that energy cooperation can persist even amid political tensions.

Despite the economic opportunities presented by renewable energy collaboration, the Mediterranean region faces significant geopolitical challenges. Historical tensions and ongoing disputes create a complex landscape for cooperation, including between Morocco and Algeria over Western Sahara, strained relations between Algeria and France rooted in colonial history, periodic tensions between Morocco and Spain over migration and border disputes, and between Turkey-Greece-Cyprus over territorial and maritime issues.

However, these challenges haven’t completely hindered collaboration. Algeria and Italy have maintained strong energy partnerships despite Libya’s instability. Similarly, Morocco and Spain have successfully operated the Morocco-Spain power interconnector since 1997, and have recently agreed to study collaboration on green hydrogen transport.

Tripling renewables is an unmatched opportunity

By embracing the goal of tripling renewable energy capacity by 2030, countries across the Mediterranean have the opportunity to unlock a host of economic benefits. Achieving this ambitious target will require concerted efforts and collaboration among all stakeholders. Governments must take the lead in creating enabling policy frameworks, investing in infrastructure, and fostering regional cooperation. The private sector must also step up to drive innovation, mobilize capital, and build robust supply chains.

The time to act is now, and the Mediterranean must embrace this transformative journey with a spirit of regional cooperation. By seizing the economic potential of renewable energy, the region can address the pressing challenges of energy and climate change while laying the foundation for a more sustainable and inclusive future.

Karim Elgendy is an Associate Fellow at Chatham House and at the Middle East Institute in Washington.

EnergySource

EnergySource is the Global Energy Center’s (GEC) online publication providing commentary and analysis on developments in the energy and climate sector from a wide-array of thought leaders, politicians, and experts.

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EnergySource Mar 7, 2025

The US can reduce Russia’s nuclear energy—and geopolitical—influence

By Marina Lorenzini

As the Trump administration outlines its energy priorities, strengthening the US nuclear industry remains a point of bipartisan agreement. Revitalizing this sector will lead not only to domestic economic growth, but also a reduction in Russia’s dominance in global nuclear markets and its geopolitical leverage.

Energy & Environment Energy Markets & Governance

EnergySource Feb 27, 2025

Can the EU’s Clean Industrial Deal cut carbon and restore competitiveness? 

By Andrea Clabough, Andrei Covatariu, Elena Benaim, Carol Schaeffer

Atlantic Council experts share their analysis on the EU’s new industrial policy, its implications for European energy security, and how key partners may respond to the bloc’s evolving regulatory landscape.

Eastern Europe Energy & Environment

EnergySource Jan 15, 2025

Tripling global nuclear energy capacity is in reach—if the world seizes the moment

By Amy Drake

At COP28, nations and corporations committed to tripling global nuclear energy capacity by 2050, underscoring its essential role in achieving net-zero emissions. Looking ahead to COP30, global leaders must strengthen multilateral collaboration, engage the financial sector, and provide support for new partnerships with the nuclear industry to meet this goal.

Energy & Environment Nuclear Energy

The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

learn more

The post The Mediterranean must work collectively to harness the power of renewables appeared first on Atlantic Council.

Read the full report here.  

Sign up for PowerPlay, the Atlantic Council’s bimonthly newsletter keeping you up to date on all facets of the energy transition.

On balancing competing pressures 

In recognition of the complexity of the energy system, rising energy demand, and that every energy source has tradeoffs, Rick Muncrief, who just retired as CEO of Devon Energy, sums up the realities facing the sector this way: “We cannot prioritize clean energy over reliability and affordability, we cannot pursue reliability and affordability at the expense of the environment, and we cannot develop energy policies and systems that do not account for geopolitical risks domestically and abroad.”  

These geopolitical risks feature strongly in our survey results, with respondents citing conflict in the Middle East and Russia’s unjust war in Ukraine as the biggest concerns. These risks raised the alarm over the use of energy for geopolitical leverage and renewed determination among US business leaders and policymakers to ramp up innovation and manufacturing domestically.   

What will be the biggest risk in energy geopolitics in the coming year?

On seeking common ground 

But amid this competitive spirit, policymakers know that they cannot secure their respective energy systems alone. Dan Jørgensen, European Commissioner of energy and housing, identifies key areas, including supply chains, cybersecurity, liquefied natural gas, and nuclear energy, where US-EU partnership is critical for both to achieve energy security, writing: “In the face of challenges to come, it will be essential to find and reinforce our common connections, wherever they exist.”   

On advancing the energy transition 

Energy leaders also make clear in our Agenda that the momentum of the energy transition has taken on a life of its own. Andrés Rebolledo Smitmans, executive secretary of the Latin America Energy Organization (OLADE), notes that in Latin America and the Caribbean “the share of renewable energy in electricity generation increased from 53 percent to 68 percent in the past ten years, while greenhouse gas emissions were reduced by 26 percent.” Ramping up progress will “require investments in unprecedented volumes of materials, which must flow and materialize in relatively short periods.” 

This unprecedented amount of investment is perhaps why, out of all sectors we surveyed, those who work in finance predict the longest runway for reaching net-zero emissions. 

Median year estimated for achieving net zero (by sector and region/country)

However, progress toward advanced nuclear energy and greater regional cooperation will continue to move the world toward both decarbonization and development. 

As Lassina Zerbo, chair of the Rwanda Atomic Energy Board, writes, “Nuclear energy—and in particular small modular and micro reactors (SMRs)—can revolutionize the African energy landscape and promote sustainable development.” In Southeast Asia, Kok Keong Puah, chief executive of Singapore’s Energy Market Authority, emphasizes that interconnections are key to regional decarbonization, but also that a “stable, prosperous, and decarbonized Southeast Asia will not only benefit the region but also strengthen global supply chains, promote economic growth, and contribute to climate stability.” 

And one of the most intriguing advancements to watch in 2025 will be the promise of generative AI, which could lead to a game-changing acceleration toward net-zero targets.   

While acknowledging that energy demand for AI is currently growing, Josh Parker, senior director of corporate sustainability at Nvidia, writes, “AI is also proving to be a powerful tool for finding ways to save energy and may very well become the best tool we have for advancing sustainability worldwide.”  

EnergySource

EnergySource is the Global Energy Center’s (GEC) online publication providing commentary and analysis on developments in the energy and climate sector from a wide-array of thought leaders, politicians, and experts.

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Landon Derentz

Senior Director

Global Energy Center

Energy & Environment Middle East

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Christine Suh

Managing Editor, Global Energy Center

Global Energy Center

Energy & Environment French

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Bailee Mathews

Program Assistant

Global Energy Center

Energy & Environment Energy Transitions

Global Energy Agenda Feb 20, 2025

Energy realities require pragmatic solutions

By Rick Muncrief

Meeting the world’s growing energy demand requires balancing reliability, affordability, and sustainability while addressing geopolitical and economic security. Pragmatic policies that expand energy access, invest in diverse energy sources, and build resilient infrastructure are needed for a more secure and prosperous future.

Americas Energy & Environment

Global Energy Agenda Feb 20, 2025

The small reactor revolution can transform African energy systems 

By Lassina Zerbo

Africa faces a dual challenge of ensuring reliable access to energy while contributing to global net-zero goals. Nuclear energy—and in particular small modular and micro reactors—can revolutionize the African energy landscape and promote sustainable development.

Africa Energy & Environment

Global Energy Agenda Feb 20, 2025

Busting the top myths about AI and energy efficiency 

By Josh Parker

The rapid growth in AI and data centers in recent years has fueled concern that these systems will push the world toward an energy crisis. Advancements in this sector, however, should put this concern to rest.

Energy & Environment Energy Transitions

The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

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The post How shifting political leadership, war, and generative AI are shaping the energy outlook: Insights from the 2025 Global Energy Agenda appeared first on Atlantic Council.

Germany stands at a crossroads in its green transition. As political winds shift both in Berlin and beyond, the next government will need to decide whether to lean into the economic opportunities of clean energy or retreat in the face of short-term political obstacles.

Germany’s changing political landscape on climate

Political winds in Germany have indeed shifted. The environment was front and center in the September 2021 election that saw Olaf Scholz become chancellor. By mid-2022, the Greens were polling at 26 percent, rivaling the Social Democrats (SPD) and the Christian Democrats (CDU). But by 2023, backlash to a heat pump mandate—which in effect banned new oil and gas heating installations—contributed to decreasing support for Scholz’s government, with both the center-right CDU and the far-right Alternative for Germany (AfD) capitalizing on the unpopularity of environmental policies.

In the run-up to the election, Merz’s CDU signaled that it would retreat from key climate measures. The party backs a “true European Energy Union” but seeks to gut core aspects of the European Green Deal. (Ironically, the European Green Deal is championed by European Commissioner and CDU member Ursula von der Leyen.) In Brussels, the CDU and its allies in the European People’s Party are leading the charge to roll back regulations.

At home, Merz has pledged to weaken European Union (EU) emissions limits for cars and reverse the planned 2035 ban on combustion engines, favoring German automakers over climate commitments. With the EU poised to negotiate a 90 percent emissions reduction target for 2040, Germany could soon shift from climate leader to climate roadblock.

The economic and political case for staying the course

Critics of the green transition paint it as too expensive and bureaucratic. But the reality is quite the opposite—clean energy is an economic engine. Investing in the green transition means new industries, new jobs, and long-term growth that far outweighs the initial costs.

This isn’t just political rhetoric; it’s quickly becoming economic consensus. Former European Central Bank President Mario Draghi’s September 2024 landmark report makes it clear: the only path to Europe’s long-term competitiveness is shifting away from fossil fuels. As the Draghi report illustrates, clean technology is no longer just an environmental necessity—it’s an economic imperative.

The International Energy Agency estimates that the global clean energy market will triple, to two trillion dollars by 2035. That’s one-third of the US federal budget and four times Germany’s. If Germany slows down now, it risks forfeiting a once-in-a-generation economic opportunity.

Merz also should not overlook the political advantages to be gained from incorporating strengthened green initiatives into his program. Coming in behind the SPD, the Greens were the fourth-largest party, gaining nearly 12 percent of the vote. Although Merz no longer necessarily needs the Greens to form a coalition, this is only because the Free Democrats (FDP) and Bündnis Sahra Wagenknecht (BSW) narrowly missed the 5 percent parliamentary threshold. Looking ahead, Merz may very well end up needing the Greens on his side. In addition, priorities for green initiatives are often shared among much of the electorate for both the SPD and Die Linke, or the Left Party, as well. Taking those priorities seriously could go a long way toward building approval among the 36 percent of the German electorate who voted for leftist parties.

Energy security and the geopolitical stakes

Beyond economics, energy independence is a growing security concern. To speak in broad terms, Germany has three options:

1. Buy natural gas from a hostile Russia or a United States that seems increasingly unreliable toward Europe
2. Continue relying on coal, a finite and highly polluting resource
3. Pioneer renewable energy and solidify its position as a global leader

With transatlantic security ties under strain and Europe forced to take more responsibility for its defense, energy security is now national security. A centralized investment in energy independence is Germany’s best bet for maintaining economic strength and strategic autonomy.

A blueprint for German leadership

Germany doesn’t need to go it alone—it needs to double down on partnerships and innovation. Key policies to strengthen its role in the global green economy include:

• Using its influence in the EU to expand the bloc’s Net-Zero Industry Act to bring 40 percent of clean tech production back to Europe by 2030
• Scaling up investments in critical minerals mining and refinement with partners such as Canada and Australia
• Advancing green hydrogen projects, like those already underway in Namibia
• Focusing on high-value, specialized clean tech (offshore wind, hydrogen, advanced battery chemistries) rather than trying to outcompete China in mass production

Europe’s strategic advantage

While Germany and the EU may not be able to displace China in climate supply chains, they can out-innovate Beijing in key sectors. The future of the transatlantic alliance could be built on a clean energy partnership, not just military cooperation.

By investing where there is inevitable demand, Germany can secure its place as a leader in the twenty-first-century economy—strengthening both Europe’s geopolitical standing and its relationship with the United States in the process.

The choice is clear: cutting back on green policies would be an economic and strategic mistake. The incoming German government can either seize the momentum or let others lead the way.

Carol Schaeffer is a nonresident senior fellow with the Atlantic Council’s Europe Center and a policy fellow with the Jain Family Institute, focusing on decarbonization, the energy transition, and European policy.

The post How Merz can leverage Germany’s green transition for growth and security appeared first on Atlantic Council.

It is imperative that discussions of opportunities and costs of a potential new nuclear project consider local wants and needs. An integrated, localized approach to nuclear development will enable economic opportunities for first-mover states as well as an honest assessment of the challenges to advancing nuclear deployment. States that deploy advanced nuclear technologies will face common challenges, like projecting workforce needs and attracting talent to the energy workforce; these challenges present opportunities for interstate collaboration.

In this report, “Atoms for Appalachia: The role of advanced nuclear technologies in economic development,” Lauren Hughes discusses common throughlines between the state-centric discussions and examines the role of advanced nuclear technologies in facilitating clean manufacturing and stimulating local and regional economic opportunities.

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Lauren Hughes

Deputy Director, Nuclear Energy Policy Initiative

Global Energy Center Nuclear Energy Policy Initiative

EnergySource Jan 15, 2025

Tripling global nuclear energy capacity is in reach—if the world seizes the moment

By Amy Drake

At COP28, nations and corporations committed to tripling global nuclear energy capacity by 2050, underscoring its essential role in achieving net-zero emissions. Looking ahead to COP30, global leaders must strengthen multilateral collaboration, engage the financial sector, and provide support for new partnerships with the nuclear industry to meet this goal.

Energy & Environment Nuclear Energy

Global Energy Agenda Dec 5, 2023

A new generation of nuclear reactors is poised to set the United States—and the world—on the path to net zero

By John Wagner

Over the next decade, more than a dozen advanced reactor concepts will be demonstrated in the United States. Ensuring the advancement of this nuclear energy will be critical to securing security, prosperity, and environmental sustainability for future generations.

Climate Change & Climate Action Energy Transitions

EnergySource Aug 11, 2024

Japan’s economic revitalization requires nuclear energy

By Lauren Hughes, Maia Sparkman

Japan’s economy is recovering, with government efforts to boost population growth and expand energy-intensive industries like AI and semiconductors. However, current energy policies may not meet rising demand. Restarting nuclear reactors under enhanced safety measures is key to Japan’s energy security and climate goals. To sustain growth, Japan must continue restarting its nuclear fleet and invest in next-generation reactors, addressing workforce and supply chain challenges.

Japan Nuclear Energy

The Frontiers Project

The Frontiers Project efforts are dedicated to helping catalyze the industry, academic, and government partnerships in advanced nuclear energy first-mover states to secure United States leadership in the new frontier of global economic competition.

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The post Atoms for Appalachia: The role of nuclear energy in economic development appeared first on Atlantic Council.

Rick Muncrief is the president and CEO of Devon Energy. This essay is part of the Global Energy Agenda.

Energy is the lifeblood of modern civilization, enhancing the lives of billions of people around the world. It is fundamental to human health, economic opportunity and prosperity, and global security.  

With over four decades of experience in the oil and natural gas industry, I am excited by the opportunity that is in front of us: how to grow the energy system, while making it cleaner and more resilient. As we look to the future, in a world that is becoming increasingly fragmented, it’s crucial to address the energy realities we collectively face.  

The world needs more energy, not less.  

The first reality is that the world needs exceedingly more energy, not less. According to the US Energy Information Administration, global energy demand is projected to grow more than 30 percent by 2050. This surge in demand is fueled not only by the meteoric rise of artificial intelligence and data centers, but also growth in manufacturing and transportation. In emerging economies, energy demand will continue to rise as populations grow and incomes increase, enabling billions of people to drive, access new goods and services, and power their homes.  

Despite significant progress in expanding energy access in the past decades, over one billion people still live in energy poverty, lacking reliable, affordable, productive power. More than two billion people still do not have access to clean cooking fuels or technologies, like natural gas or electricity. Every human being deserves access to the energy they need to thrive—the privileges that so many of us enjoy every day. 

Energy security underpins global security. 

The second reality is that energy security, economic security, and global security are intertwined and interdependent. Diverse, resilient energy systems are necessary to avoid economic disruptions, geopolitical instability, and the likelihood of conflict around the world. The European Union’s (EU) previous reliance on oil and natural gas supplies from Russia highlights the dangers of overweighted dependencies on rogue nations that have the power to weaponize energy to serve as political leverage or tools of coercion in foreign affairs. The devastating invasion of Ukraine and resulting energy supply constraints in the EU also highlight the importance of global energy leadership and international cooperation, as Russian gas supplies were replaced with other sources of energy, including liquefied natural gas (LNG) from the United States.  

Nations with access to diverse, reliable, and affordable energy sources and supply chain inputs—either domestically produced or sourced from exporting international allies around the world—can ensure their people and economies thrive.  

All sources of energy have tradeoffs.  

The third reality is that just as each source of energy has life-changing, transformative benefits that fuel human prosperity, each source also has tradeoffs and negative externalities that should be acknowledged and appropriately balanced in the development of sound public policy and in business.  

To meet growing global demand, we need to produce more energy from traditional and non-traditional sources—and we must produce it more responsibly tomorrow than we do today. For oil and natural gas development, this means committing to reducing carbon and methane emissions. For wind, solar, and battery development, this means minimizing land-use impact and diversifying supply chains. For all energy development, this means ensuring we keep our people and communities safe. We must also be reasonable about the pace, magnitude, and time required to scale new energy resources and enhance existing resources— and the tradeoffs for doing so. 

We cannot prioritize clean energy over reliability and affordability, we cannot pursue reliability and affordability at the expense of the environment, and we cannot develop energy policies and systems that do not account for geopolitical risks domestically and abroad.   

Clear eyes are critical to simultaneously growing energy systems without sacrificing reliability, affordability, or the environment. 

Energy has become a politically polarized flashpoint. It has become “good” versus “bad” and “you” versus “them,” at a time when we should all be coming together to solve the challenges and opportunities in front of us. Now more than ever, we need a pragmatic approach to removing barriers that prevent us from providing the energy access and security the world needs. This includes building infrastructure to move energy where it’s needed most—from oil and natural gas pipelines to transmission lines to LNG terminals to geothermal wells to carbon capture systems and everything in between. In the United States, we need common-sense policies to address meaningful permitting reform that unlocks our vast energy resources and bolsters not only our nation’s energy and economic security, but also those of our allies. While globalism may be receding, energy systems and markets should continue to be highly integrated. We must continue to invest in economic partnerships and trade policies that minimize supply chain disruptions, distort trade flows, slow growth, raise energy costs, and accelerate fragmentation.   

Energy is essential to the technological revolutions unfolding before our eyes and to bringing billions of people into a higher standard of living across the globe. Let us seize this moment to come together in the pursuit of pragmatic and durable policy, technology, and market solutions that grow our collective energy resources to meet the needs of today—and tomorrow.  

Devon Energy is a sponsor of the Global Energy Center. 

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The post Energy realities require pragmatic solutions appeared first on Atlantic Council.

Arshad Mansoor is the president and CEO of the Electric Power Research Institute. This essay is part of the Global Energy Agenda.

In 2017, Google published a groundbreaking paper titled “Attention Is All You Need.”¹ It not only revolutionized the field of artificial intelligence but also triggered a boom in the construction of data centers worldwide. This surge in data-center demand has had profound implications for global power consumption, presenting both challenges and opportunities for the transformation of the energy sector. 

Data centers’ impact on power demand 

The proliferation of data centers has led to a substantial rise in global power demand. According to projections by the Oak Ridge National Laboratory, the electricity requirements for these facilities are expected to grow exponentially. This trend is particularly pronounced in the United States: The Electric Power Research Institute (EPRI) estimates that American data centers could consume up to 9 percent of electricity generation by 2030—more than double the estimated 4 percent they consume today.“²

In addition to data centers, other factors such as the onshoring of manufacturing and the electrification of industry are further driving up power consumption. This escalating demand poses a challenge for regions that are already struggling with electricity reliability, leading to delays in the retirement of coal-fired plants and the addition of new natural gas-fired generation to ensure stable supply. 

High-tech commitments to low-carbon energy 

Despite these challenges, the high-tech industry has been a staunch advocate for the clean energy transition. Companies like Google have set ambitious goals to achieve net-zero emissions by 2030. The increasing power demand from their data centers, however, threatens to derail these targets.  

Google’s 2018 paper on 24/7 carbon-free energy (CFE)³ highlighted the limitations of relying solely on renewable energy certificates and emphasized the need for true carbon neutrality, where consumption is matched with zero-carbon energy production on a 24/7 basis. 

The paper laid the foundation for the current push toward 24/7 CFE, which aims to ensure that data centers and other high-tech facilities are powered entirely by low-carbon energy around the clock. While achieving this goal presents significant challenges, it also offers an opportunity for the high-tech and power industries to collaborate and drive the energy transition forward. 

Navigating the path to net zero 

In the short term, the increased reliance on natural gas and the delayed retirement of coal plants may seem like a setback for the clean energy transition. However, these measures are necessary to maintain grid reliability as we work toward a more sustainable energy future. The real challenge lies in accelerating the deployment of emerging carbon-free technologies such as advanced nuclear reactors, carbon capture and storage (CCS), and long-duration energy storage (LDES). 

Public-private partnerships, such as technology deployment hubs, can play a crucial role in this effort. These hubs would facilitate the phased deployment of advanced energy technologies, with specific targets for LDES, small modular reactors, new large nuclear plants, and gas with CCS. By sharing the financial, regulatory, and licensing risks associated with these technologies, these collaborations can help bring them to market more quickly and at scale. 

Technology deployment hubs 

The concept of technology deployment hubs involves a series of phased deployments, each building on the lessons learned from previous projects. Experience suggests that it takes decades and at least ten full-scale deployments for new technologies to achieve cost reductions and supply chain efficiencies.  

Just as early tech company commitments to renewable energy helped drive rapid cost decreases and widespread deployment, similar commitments today can accelerate progress on the new and emerging technologies needed to meet growing electricity demand. By adopting this phased approach, we can ensure that each deployment maximizes cost efficiencies and technological refinements, ultimately accelerating the clean energy transition. 

Relighting the spark 

The collaboration between the high-tech and power industries is essential for achieving our long-term clean energy goals. By working together, these sectors can drive the development and deployment of advanced energy technologies, supported by regulatory and policy frameworks that enable innovation and investment. This partnership has the potential to create a second spark in the energy transition, similar to the one ignited by Google’s early investments in renewable energy. 

While the next few years may see a temporary increase in natural gas use and extended coal plant operations, these measures are necessary to ensure grid reliability during the transition. The ultimate goal is to achieve a net-zero economy. The high-tech industry’s commitment to 24/7 CFE, combined with the power sector’s expertise in energy generation and distribution, can help us reach this target more quickly. 

The path to net zero is fraught with challenges, but it also presents significant opportunities for innovation and collaboration. By seizing the opportunity to accelerate the low-carbon transition through emerging partnerships between high-tech and power companies, we can ensure a sustainable and reliable energy future. Let’s not be distracted by short-term detours; instead, let’s focus on the long-term goal of achieving a net-zero economy and work together to make it a reality. 

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learn more

The post Tech and power sector partnerships can accelerate the energy transition appeared first on Atlantic Council.

Dan Jørgensen is the EU Commissioner for Energy and Housing. This essay is part of the Global Energy Agenda.

Looking from Europe to the United States, across the great span of the Atlantic Ocean, it is not always easy to find our common connections.

I discovered this first-hand when my academic pursuits brought me to Seattle. For instance, I realized early on that we certainly do not share the same definition of “football.” We also have different ideas on what constitutes a “large” portion size. A visit to a pastry shop shows that we even have different definitions of “Danish.”

But as I grew accustomed to life in the Emerald City, and, in particular, as I met neighbors and made friends, I came to recognize many of the same qualities that I admired among my own people: an appreciation for hard work, humility, and shared human values.

Many years later, as we begin the latest chapter in EU-US relations, some in Europe have looked across the Atlantic and speculated about potential differences and divisions. However, as I take on the role of European Commissioner for Energy and Housing, I see more ways in which our relationship is defined by our common interests.

First and foremost, we have a common interest in a stable, secure, and rules-based international order, in which freedoms are upheld and borders are respected. That is why we have committed our support and solidarity to the people of Ukraine. Since Russia began its illegal aggression, I have visited Ukraine twice. During these visits, I met people who have lost their families and their homes. I met people who have been living without basic necessities, such as electricity and heating. In fact, during the first two years of the war, Ukraine lost two-thirds of its overall electricity capacity due to brutal and relentless Russian attacks. The united support of the European Union and the United States, including through the Group of Seven Plus (G7+), offers Ukraine a crucial counterbalance to reinforce its energy security. Maintaining this cooperation in the coming years, to support the reconstruction and reform of Ukraine’s energy sector, will be equally essential.

Of course, in the context of geopolitical instability, we must also protect our own energy systems. Here, EU-US cooperation on cybersecurity will be important. Digitalization helps to make our energy systems more efficient, reliable, and sustainable. However, without proper precautions, it can also make our systems more vulnerable to malicious attacks, which are expanding in their reach and increasing in their frequency. We must tackle these threats together, for example, by maintaining our engagement via EU-US cyber dialogues and Group of Seven (G7) meetings on Cybersecurity for Digital Energy Infrastructure Systems.

Another priority shared across the Atlantic is to ensure strong and secure supplies of affordable energy. We want to bring down bills for our citizens and strengthen the competitiveness of our companies. In this regard, there are a number of areas where it is plainly in our common interest to cooperate. For example, liquefied natural gas (LNG) from the United States could continue to play a vital part in completing our REPowerEU objective to phase out Russian energy supplies to the EU.

A key aspect of this joint work will be to diversify our sources of energy. For instance, nuclear will continue to be an integrated part of our energy mix and an important part of the solution to decarbonize our energy systems. Continuing our long-standing cooperation with the United States in the nuclear sector is therefore a priority—in particular, to diversify nuclear fuel and fuel services, to spur investment in small modular reactors, and to foster EU-US leadership in advancing nuclear fusion.

Similarly, we must continue our cooperation in securing critical raw materials. EU-US collaboration enables us to source vital minerals for our energy systems, reduce vulnerabilities in our supply chains, and reward responsible economic actors by sharing the benefits of next-generation energy.

Taking a longer-term view of our energy security, the EU remains committed to pursuing sustainable energy and decarbonization. We do not pursue these objectives for ideological reasons, but for logical reasons. From a competitiveness point of view, the EU is a global leader in key clean tech segments such as wind and heat pumps. We are also leading on hydrogen—including electrolyzers. As a result of our work in these and other clean energy sectors, the share of renewables in our electricity mix increased from 36 percent in 2021 to 46 percent in 2024. As we continue our work to combine competitiveness, innovation, and decarbonization, this share will only increase, ensuring a strong, secure, and sustainable supply of affordable energy for our citizens.

The EU will never close its door on any international partner who is willing to share the path toward a global energy system that is fair, secure, and sustainable. We take this path not because it is easy, but because it is essential.

Similarly, in the face of challenges to come, it will be essential to find and reinforce our common connections, wherever they exist.

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The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

learn more

The post EU-US energy cooperation: Forging stronger connections in times of division appeared first on Atlantic Council.

Andrés Rebolledo Smitmans is the executive secretary of OLADE. This essay is part of the Global Energy Agenda.

Latin America and the Caribbean constitute a green region. It is home to the planet’s most significant natural lung: the Amazon rainforest. In addition, it has an energy matrix with the highest levels of renewable energy participation at 33 percent compared to a global average of 14 percent. This fact allows us to state with pride, but aware of our responsibility, that we are the greenest region on the Earth.  

At the same time, this highly renewable resources region suffers more than any other from the growing and visible impacts of climate change. Events of unprecedented magnitude and frequency, such as extreme and prolonged droughts, coupled with unprecedented floods and hurricanes that most frequently affect Caribbean countries, are causing damage to infrastructure and families, and seriously jeopardizing the security of energy supply. The situation is reaching extreme levels in some countries, with cases of rationing impacting their economies and populations. 

We live in a region with a great wealth of natural resources, especially renewable resources, all of which are waiting for adequate exploitation. We have used only 30 percent of the water, 12 percent of the wind, and 1 percent of the solar radiation available. Our energy transition industry also has large reserves of critical minerals. In other words, the enormous availability of energy resources also promotes us as one of the world’s major producers and suppliers of low-emission hydrogen. 

The region shows substantial progress in its energy transition toward more decarbonized economies. According to the latest data published by the Latin American Energy Organization (OLADE) in the 2024 Energy Outlook for Latin America and the Caribbean, the share of renewable energy in electricity generation increased from 53 percent to 68 percent in the past ten years, while greenhouse gas emissions were reduced by 26 percent. In addition, 77 percent of the new electricity generation capacity incorporated last year was renewable. 

In the social aspect, 97.4 percent of electricity service coverage was achieved. However, 17 million people still lack access to electricity, 180 million live in poverty, and 77 million do not have access to clean cooking systems, which primarily affects women. These facts compel us to seek alternatives and encourage the region to work together in the search for more robust, flexible, and resilient energy systems that can benefit all. Based on the region’s energy wealth, it is essential to generate local value chains through the development of sources that create jobs and wealth. 

In this context, there are increasingly demanding and pressing challenges. The energy transition and the decarbonization of economies require investments in unprecedented volumes of materials, which must flow and materialize in relatively short periods. This endeavor requires consolidated institutional schemes, with policy and regulatory frameworks that spread the signals of stability and security sought by investors while maintaining the flexibility required by a changing technological environment. 

The lessons learned by countries that have already made progress in their energy transition processes also show that it is just as important to diversify energy production as it is to strengthen transmission and distribution. Also, this goal requires significant investments and favorable environments for their development.  

There are, jointly with opportunities, relevant economic and social challenges. We are responsible for focusing our efforts on making energy a transversal axis of development, contributing to closing the poverty gaps afflicting our region with better levels of access to energy, healthy cooking systems, and access to information and, in short, creating conditions of equity in the broadest sense of the concept. 

The energy setting experienced currently by the world and our region reaffirms the urgency and shared responsibility to act against climate change and its effects, as well as the need to increase and strengthen collective action. In this regard, the region needs to advance energy integration. Significant progress has been made in this area, but there is still a long way to go in consolidating a regional market. Collective action involves dialogue at the intersection of all public- and private-sector actors, academia, international organizations, multilateral banks, and civil society.  

Beyond expressions of goodwill, OLADE, an intergovernmental organization that brings together twenty-seven countries in Latin America and the Caribbean, has been working hard to create the right conditions to deepen and fast-track the energy transition processes in these regions.  

The OLADE Meeting of Ministers is the highest governance structure of our organization, which brings together the highest energy authorities of its member countries. At its recent meeting in Asunción, Paraguay, it adopted a series of resolutions that mark the path to be followed by the region. These decisions seek to improve energy efficiency in all member countries, eliminate the use of coal for electricity generation, and institute a Regional Energy Planning Council, which aims to further advance progress on our common energy and climate goals. 

Our main commitment is to integrate the region’s energy as an instrument that will allow us collectively to better face the impacts of the current environment, plan our future, and build, with the support of all, a better world for future generations. 

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The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

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The post Latin America and the Caribbean: Leading the green energy transition amid climate challenges appeared first on Atlantic Council.

Josh Parker is the senior director of corporate sustainability at Nvidia. This essay is part of the Global Energy Agenda.

The rapid growth of AI in recent years has sparked an unprecedented rush of investment in data centers worldwide to develop the next generation of algorithms, fueling concerns that running these systems will push the world toward an energy crisis. 

However, to determine the true impact of AI on global energy consumption, consider the full picture:  

• AI computing still makes up a tiny slice of the world’s energy consumption. Data centers accounted for about 2 percent of energy-related carbon emissions in 2022, according to the International Energy Agency—and today, not all data centers run AI. 

• AI, powered by rapidly advancing accelerated computing technology, is becoming much more energy efficient every year. 

• AI delivers insights and results that can increase energy efficiency in the domains that use energy the most—including energy generation, manufacturing, transportation, and residential heating and cooling. 

Recent advancements in AI and accelerated computing have enabled developers to harness more computational capabilities while using less energy. Some—in climate science, financial services, and healthcare—already are. But to achieve widespread adoption, it’s critical to separate misconceptions from reality.  

To that end, here are the top myths around AI and energy efficiency, and the long-term perspectives and facts that dispel them.  

MYTH: The carbon footprint and energy consumption of data centers will grow at the same rate as computation.  

Growing demand for computing power does not result in an equivalent rise in energy consumption.  

Global data centers saw a 550 percent increase in compute instances—which are virtual machines—and a 2,500 percent jump in storage capacity between 2010 and 2018, while electricity use rose only 6 percent, noted a report from the Information Technology and Innovation Foundation, a Washington-based think tank.  

These initial energy savings were largely due to the effects of Moore’s Law, which predicted that the number of transistors on a chip would double approximately every two years, leading to a biannual doubling in computing power while maintaining similar energy consumption.  

However, by the mid-2010s, Moore’s Law began to slow as the physical limits of shrinking transistors became more challenging to overcome. This slowdown highlighted the need for new approaches to maintain and accelerate efficiency gains. Accelerated computing emerged as the solution, leveraging specialized hardware like graphics processing units (GPUs) to perform tasks more efficiently than central processing units (CPUs). 

Today, accelerated computing is transforming the world’s data centers, with GPUs and advanced networking technology replacing traditional CPU servers that struggle to keep pace with the rise in computing demand. The parallel computing capabilities of GPUs make them twenty times more energy-efficient than CPUs. If every data center shifted from CPU-based to GPU-based infrastructure, the world would save an estimated 40 terawatt-hours of energy, equivalent to the annual energy usage of five million US homes.  

MYTH: The computing processes required to run AI systems are much more resource intensive than previous methods.  

The demand for new AI models, and therefore compute demand, is growing exponentially. The result is that AI is currently demanding more energy faster than computing is getting more efficient. 

But both the performance and energy efficiency of accelerated computing increase with each GPU generation: meaning that with every advancement, developers and scientists can accomplish more compute work with less energy. Today’s most advanced AI chip matches the performance of supercomputers that were among the fastest in the world a decade ago.  

The newest GPUs deliver thirty times more compute performance with a twenty-five-fold increase in energy efficiency compared to those built just two years ago. This adds up to greater efficiency over several years by a factor of 45,000.  

MYTH: AI is consuming more energy than it will save.  

The rate of AI adoption today is resulting in short-term increases in energy usage, but one long-term view is optimistic.  

Claims of an “AI doomsday” often rely on extrapolations from published AI training statistics. But training predictive and generative AI models isn’t a goal in itself—the real goal is to use those models. The insights that an AI model provides during inference can save time and energy and reduce carbon emissions in resource-intensive domains such as agriculture, weather forecasting, transportation, manufacturing, and drug discovery.

Accelerated computing and AI can also power climate models that help global organizations more effectively predict weather patterns, manage natural disasters, build climate-resilient infrastructure, and save lives. 

It takes a holistic, longitudinal view to fully calculate the efficiencies that stem from AI adoption. While many AI initiatives are currently in the infrastructure building or training phases, with widespread implementation still to come, early adopters are already seeing benefits.  

Efforts to increase energy efficiency and decarbonize buildings across industries are one critical use case for AI. In the United States, buildings are responsible for 40 percent of total energy usage—and, according to the Environmental Protection Agency, 30 percent of energy used in commercial buildings is wasted.  

Peter Herweck, former CEO of Schneider Electric, has predicted that in the next few years AI could reduce energy consumption in buildings by up to 25 percent. Data collected by smart home devices and smart meters are producing data that could train AI models to find optimizations across residential and commercial buildings. 

For example, a pharmaceutical company worked with BrainBox AI, which helps customers optimize their buildings with AI, to boost equipment efficiency at its California campus, making improvements that resulted in annualized electricity savings of 156,000 kilowatt-hours.

Healthcare is energy intensive: The industry’s facilities account for close to 10 percent of commercial building energy consumption in the United States and about 4.6 percent of global greenhouse gas emissions. The life-saving research processed within them is also computationally demanding. 

Genome sequencing is one example. Sequencing the DNA of tumors and healthy tissues is crucial to understanding genetic drivers of cancer and identifying treatments. Using AI, the Wellcome Sanger Institute has significantly reduced the “runtime” (i.e., how long a program runs to execute its function) and energy consumption of genomic analysis—saving approximately 1,000 megawatt-hours annually and potentially reducing costs by $1 million compared to traditional CPU-based methods. 

MYTH: Electric grids can’t handle the energy load of growing AI use. 

AI models can be trained anywhere—and there’s a significant opportunity to build future data centers in parts of the world where there’s excess energy, such as near geothermal reservoirs, which act as 24/7 renewable energy sources, unaffected by weather conditions.  

Rather than placing every data center in urban areas that already have significant power demands, they could be built near these sources of renewable energy. Doing so minimizes transmission issues while simultaneously decreasing or eliminating operational carbon footprints. 

Once they’re trained, models can be deployed to GPUs, which are twenty times more efficient for AI inference tasks than CPUs. Beyond large data centers, lightweight models optimized for inference can run anywhere—on small embedded systems on a robot or other edge device, on desktop workstations, or on cloud servers located in any part of the world.   

AI is becoming an essential technology for businesses in nearly every industry to improve productivity and enable rapid new advancements and discoveries. And although AI’s direct energy footprint is certainly growing, AI is also proving to be a powerful tool for finding ways to save energy and may very well become the best tool we have for advancing sustainability worldwide.  

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The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

learn more

The post Busting the top myths about AI and energy efficiency  appeared first on Atlantic Council.

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Global Energy Agenda

Feb 20, 2025

The 2025 Global Energy Agenda

By Landon Derentz, Christine Suh, Paul Kielstra, Bailee Mathews (Editors)

The Atlantic Council is pleased to present its fifth Global Energy Agenda. As in prior years, this collection of essays is complemented by our in-depth analysis of the results of the Atlantic Council Global Energy Center’s annual global energy survey. 

Energy & Environment Geopolitics & Energy Security

The post Global Energy Agenda full survey results appeared first on Atlantic Council.

Jim Farley is the president and CEO of Ford Motor Company. This essay is part of the Global Energy Agenda.

Political and policy change are part of the American democratic experiment and integral to the business landscape. As the auto industry navigates its transformation, it’s important to keep the choices and needs of the customer front and center. Automakers must prioritize choice for our customers, listening to their preferences at every turn. That is our north star, and it is a valuable lesson for all of us in the automobile industry and for those who have a role in how we build our global energy future. We must put people first. 

It starts with listening to the people who use our products in a thousand ways, big and small, every day. Whether it’s dropping kids off at school or towing heavy equipment, a diverse vehicle lineup serves customers in unique ways. We want to give customers services and experiences they can’t live without. Automakers will continue to build iconic gas-powered vehicles that customers love. We’ll also innovate new forms of hybrid powertrains that fit the way that Americans work and play.  

And the industry will be making new electric cars, trucks, and vans with technological innovations to take the driving experience to new levels of performance. The next generation of electric vehicles will be even better and include features that customers haven’t yet imagined. 

It is imperative for the future of domestic manufacturing that the best electric cars in the world are made by American automakers. But domestic automakers face stiff international competition in this race. To win, our focus must be clear: The United States cannot cede energy, innovation, or manufacturing leadership to China, Europe, or other regions. If we want to maintain our competitive edge while securing our supply chains and shoring up our manufacturing capacity, we must invest in America’s auto industry. 

We can win this race because we have the road map. When it comes to history’s most pivotal achievements, Americans have led the way—from the moon landing to the microchip to artificial intelligence. US automaking history, like Ford’s, is entwined with America’s greatest moments of achievement: the moving assembly line, converting automobile factories to military factories in World War II, and retooling our operations to build lifesaving equipment during the COVID-19 pandemic. 

This is another moment of upheaval in our industry, and in the global economy as a whole. And if we are going to meet the demands of Americans and our future, we need to adopt the same kind of mindset that has always set our country apart. 

This is important because today, as we navigate winning the energy, technological, and manufacturing future, we have a burst of new innovations at our doorstep and increasingly intricate supply chains around the world. We face both uncertainty and great opportunity. 

We must build the necessary manufacturing plants and components—including the batteries and materials that will power our future—here on our shores. An America that controls its own supply chains, that invests in cutting-edge technology, and that brings innovation home is one that secures its future. Right now, Ford is doing that through industry-leading investments in multiple states, where we’re building vehicles Americans want today and making big bets on the high-tech vehicles of the future. 

We know that battery demand in the United States has grown and that China controls key sectors of our energy supply chain. It’s why US automakers have taken bold steps to scale our advanced battery manufacturing right here in America. Investments to onshore this battery technology are an essential part of improving affordability and availability of choice for Americans. It will take time and commitment to build up this capability in the United States, but the more we delay, the greater our reliance on foreign materials will be and the farther behind American auto companies will fall. If American companies don’t do this, those in other nations will. 

Onshoring our manufacturing also protects us from geopolitical conflicts, pain points, and uncertainty. Last year, we saw escalations of war and conflict around energy-producing countries. When we invest in American facilities, there is less risk to the American people. 

I am confident that we can step up to the task at hand. The US auto industry will be working with policymakers to prioritize American manufacturing and energy security. We’ll collaborate to ensure America sets the terms in the great energy race, so that our auto industry and manufacturing sector continue to lead the world. And we’ll make smarter decisions for our country if we keep the choices and needs of Americans front and center. 

The United States was built for moments like this, and we will continue to usher the auto industry into a new era by investing in our team, our customers, our country, and our future. 

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By Jim Farley

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The US must assure its energy-secure future

By Meredith Berger

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By Daniel Yergin and Madeline Jowdy

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By Kok Keong Puah

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By Rick Muncrief

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By Arshad Mansoor

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By Dan Jørgensen

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By Andrés Rebolledo Smitmans

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By Josh Parker

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The small reactor revolution can transform African energy systems 

By Lassina Zerbo

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The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

learn more

The post Ushering the US auto industry into a new energy era appeared first on Atlantic Council.

Meredith Berger is the former assistant secretary of the US Department of the Navy for energy, installations, and environment. This essay is part of the Global Energy Agenda.

Energy is both a tool and a weapon. At the US Department of the Navy, energy security is mission assurance, and unless we meet this critical requirement, we cannot protect our national interests. It is the responsibility of the Navy and Marine Corps, and the civilians who serve the department, to make sure that we are ready—that we have what we need for whatever comes our way, regardless of time or task, to defend our nation. 

Our 2022 National Security Strategy acknowledges and prioritizes this energy requirement, calling upon the country to start an energy revolution: to accelerate our diversified, reliable, redundant, independent energy portfolio; to advance technology and talent; and to generate renewable and clean energy sources that reduce climate threat and conflict, as well as emissions and waste. Energy security provides warfighting advantage, deterrence, economic benefit, a healthy, safe environment, and geopolitical stability. Our sailors and Marines are the world’s first responders; dangerous changes to the physical environment put them at heightened risk. 

During my tenure as assistant secretary of the Navy for energy, installations, and environment, I have focused on energy security as a critical driver of mission success: a catalyst for climate action, a defense for critical infrastructure, and a source of resilience for our communities, our homeland.  

On climate action  

Reliable, clean, resilient, independent energy allows us to keep mission first, so we are prepared to fight and win in any environment. Climate change generates extremes: floods, droughts, temperatures, stronger storms, and fewer resources. These are the conflict generators that make the world a more volatile place.  

A more volatile world increases exponentially the demands on the Navy and Marine Corps, while simultaneously decreasing their ability to respond to those demands. In the Department of the Navy, climate readiness is mission readiness, and energy reliability and resilience are critical to mission success. Reliable, resilient energy ensures that our forces are trained, equipped, and ready so that at a moment’s notice, they can launch, fight, and win. As we focus on this decisive decade, we are mindful of the pacing threat that shapes our mission, and the climate threat that shapes how we operate and execute our mission. By advancing and diversifying our energy sources, technology, and supplies, we reduce our emissions, logistics tails and vulnerabilities, and increase readiness and adaptability. 

On critical infrastructure  

The means to our ends—our ports, roads, runways, depots, barracks, and utilities—they connect us, sustain us, prepare us, and ultimately, they protect us. Our installations in the United States and abroad are essential platforms from which we project our military power, and we need reliable, uninterruptable energy to assure physical and cyber protection of this infrastructure. As we confront the new truth that the homeland is no longer a sanctuary, we must continue to defend against a key vulnerability: inadequately protected, aging energy infrastructure that often lacks redundancy, leaving military mission, commerce, health, safety, livelihood, and lives at risk. 

On communities  

This is our homeland: shared spaces between installations and town halls, not divided by a fence line, but instead united by values, traditions, and resources. They are the ecosystems that allow us to thrive, succeed, and achieve. Communities are also connected by vulnerabilities, and when it comes to utilities such as energy, single sources and dependencies yield a comprehensive threat, whether it is the Department of the Navy’s national security mission or the community mission of health, safety, and welfare.  

Energy is life or death: We learned that lesson the hard way in the Department of the Navy. During a three-month period in Afghanistan in early 2010, the United States suffered a Marine casualty for every fifty convoys of fuel. Seven years earlier, then-Major General James Mattis, while serving as commanding general of the First Marine Division in Iraq, and who later served as Secretary of Defense, pleaded with leadership to “unleash us from the tether of fuel.” He knew that single reliance is a single point of failure, and, despite his warning, we saw the cost of inaction paid in young Marines’ lives. 

As we execute our energy future, we cannot afford a single point of failure, and we cannot compromise our own position. My job every day has been to make sure that when Marines and sailors raise their hands and volunteer for our defense, willing to make the ultimate sacrifice for our nation, values, and freedoms, I take on every known threat, prepare for every contingency, and clear a path toward mission success. For energy security, we have done that at the Department of the Navy through integrated, advanced investments in renewable, reliable energy; we’ve taken actions that question the status quo, and increase mission success and quality of life for our forces, bases, and surrounding communities. The US needs to take that same approach for the nation: build an energy portfolio for the future we anticipate and defend against the threats we know so that we can face the ones we don’t see coming. Energy is a matter where everyone has a strong stake in our collective security: defense, finance, environment, climate, health, and safety. Through our energy revolution, we must be ready as a nation to assure our most critical missions no matter what form they take.  

Ushering the auto industry into a new energy era

By Jim Farley

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By Volodymyr Kudrytskyi

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The US must assure its energy-secure future

By Meredith Berger

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By Daniel Yergin and Madeline Jowdy

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By Kok Keong Puah

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By Rick Muncrief

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By Arshad Mansoor

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Forging stronger transatlantic energy cooperation

By Dan Jørgensen

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By Andrés Rebolledo Smitmans

Read more

Busting the top myths about AI and energy efficiency 

By Josh Parker

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The small reactor revolution can transform African energy systems 

By Lassina Zerbo

Read more

The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

learn more

The post The US must assure its energy-secure future appeared first on Atlantic Council.

Daniel Yergin is vice chairman of S&P Global, and author of The Prize and The New Map. 

Madeline Jowdy is head of Global LNG Consulting at S&P Global.  

Both are among co-authors of A Major New U.S. Export Industry at a Crossroads. conducted with the US Chamber of Commerce. This essay is part of the Global Energy Agenda.

The emergence of US liquefied natural gas (LNG) is a remarkable story. In less than a decade, the United States has gone from zero exports to being the world’s largest exporter. Moreover, US LNG is at the nexus of the global energy transition, providing affordable and freely traded gas in a global market of some fifty importing countries. This flow promotes security of supply for regions such as Europe and East Asia, supports trade balances with China and India, and serves as a substitute for higher carbon-intensive energy sources in Southeast Asia and elsewhere.   

The geopolitical importance and strategic urgency of the industry were demonstrated when Vladimir Putin cut pipeline gas to Europe in an effort to undermine the European economy and shatter the coalition supporting Ukraine. He miscalculated, failing to recognize the potential of US LNG to play a significant role in filling the gap. US LNG replaced 40 percent of the missing Russian pipeline gas. And the Trump administration is looking to US LNG exports to help rebalance trade with other countries. 

The critical role of US LNG is significant both for the domestic economy and on the international stage. For the continued growth of US LNG exports, it is essential that the United States demonstrate, day in and day out, that it is a supplier on which other countries can rely. As US exports are projected to double in the coming decade, the influence of US LNG is expected to grow. However, despite a more favorable policy climate with the new administration, further success is not guaranteed due to substantial federal and state regulatory, political, and environmental challenges facing the industry, which will need to be addressed. 

As the US LNG sector re-emerges after a year of stagnation caused by the Biden administration’s pause on LNG export authorizations, it is important to recognize the industry’s overall contribution to US GDP, economic influence, and global LNG trade innovation. In our new study Major New US Industry at a Crossroads: A US LNG Impact Study, conducted with the US Chamber of Commerce, we found that the US LNG industry is valued at $34 billion and has contributed more than $400 billion to US GDP since 2016, when the first LNG cargoes were shipped from Sabine Pass, Louisiana.¹ The industry has created an average of 273,000 skilled jobs annually since 2016. Its impact penetrates deep into the heartland where gas is produced and transported, and supports supply chain and manufacturing communities in the Northeast, Midwest, and Southeast. What really brings home the industry’s impact is its comparison with other US industries. The value of LNG exports is more than that of soya beans and double those of Hollywood and entertainment exports. It is currently half that of semiconductors, but within a few years, could equal the value of all semiconductor exports. 

What has made this unprecedented growth possible is the vast resource base developed during the US shale revolution, compounded by entrepreneurial energy, infrastructure, and industrial skill. Despite a 13 billion cubic feet per day (Bcf/d) growth in LNG feedgas requirements since 2016, domestic wholesale gas prices have continued their downward trend, with only temporary interruptions due to rapid post-COVID growth and geopolitical events such as Russia’s full-scale invasion of Ukraine in 2022. 

While US LNG exports account for only 12 percent of the domestic gas market, they supply nearly a quarter of global LNG supplies, making the United States the world’s largest LNG supplier. This outsized role in the international gas market is supported by the flexibility and reliability of US LNG, which is traded with fewer restrictions on destinations, volumes, or pricing compared to much of the global LNG market. Additionally, US LNG has significantly contributed to emissions reductions in countries that have replaced more carbon-intensive coal and fuel oil with LNG. 

In terms of trade, US LNG helps offset trade deficits with both Europe and China. In Europe, US LNG is viewed as a reliable and strategic supply mechanism, while in China, it helps mitigate the United States’ largest single trade deficit. US LNG exports to Japan, South Korea, and Taiwan also support energy security for these key allies. 

Growth projections for US LNG, as analyzed by S&P Global, align with a global energy system transitioning to lower carbon-intensive modes of production and consumption. With more favorable conditions under the new administration, US LNG exports are forecast to double by 2030, with projects currently under construction accounting for approximately 60 percent of that projected growth.  

With this anticipated growth, our LNG study projects that  US LNG industry is poised to contribute approximately $1.3 trillion to GDP by 2040 and create an annual average of 500,000 jobs. On the global front, the US share of the LNG market is expected to exceed one quarter by 2040, supporting a large and liquid gas market that might not exist otherwise.²

However, there is a big “if”:  if domestic regulatory, legal, and environmental barriers persist, the United States risks losing over 100,000 jobs annually and more than $250 billion in GDP. Moreover, it appears that 85 percent of the resulting energy gap in the rest of the world would be filled by fossil fuels sourced from outside of the United States. This jeopardizes US geopolitical influence and its reputation as a reliable and affordable energy supplier to allies and trading partners. 

As the global energy transition progresses, US LNG will have a crucial role in reducing carbon emissions. The transition from coal to natural gas in the US power sector has already driven a 40 percent reduction in carbon emissions since 2000. In the medium term, US LNG will be a vital substitute for higher carbon-intensive coal and oil products, especially in the developing world. Long term, it will support reliable and resilient energy systems as renewable energy sources become more prevalent. 

This is not a one-way street; the United States needs the commitment of its allies and other global trading partners to secure long-term supplies of US LNG and avoid an extended halt in development. This nascent industry was advanced over the last decade in part by financial commitments by Japan and other allies. Future growth will likely rely on a diverse array of European and Asian partners, compensating for lost Russian pipeline gas and LNG, while benefiting from this important new export industry that enables the United States to deliver a clean, reliable supply of natural gas to the global economy. 

Ushering the auto industry into a new energy era

By Jim Farley

Read more

Ukraine can unleash energy investment even amid war

By Volodymyr Kudrytskyi

Read more

The US must assure its energy-secure future

By Meredith Berger

Read more

The importance of US LNG for economic growth and the global energy transition

By Daniel Yergin and Madeline Jowdy

Read more

Southeast Asia aims for sustainability through connectivity

By Kok Keong Puah

Read more

Energy realities require pragmatic solutions

By Rick Muncrief

Read more

Tech and power sector partnerships can accelerate the energy transition

By Arshad Mansoor

Read more

Forging stronger transatlantic energy cooperation

By Dan Jørgensen

Read more

Latin America and the Caribbean are leading the green energy transition

By Andrés Rebolledo Smitmans

Read more

Busting the top myths about AI and energy efficiency 

By Josh Parker

Read more

The small reactor revolution can transform African energy systems 

By Lassina Zerbo

Read more

The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

learn more

The post The importance of US LNG for economic growth and the global energy transition  appeared first on Atlantic Council.

Kok Keong Puah is the chief executive of Singapore’s Energy Market Authority. 

Southeast Asia’s energy transition stands at an inflection point. As the region’s energy demand accelerates—spurred by both rapid economic growth and a growing population—the stakes are higher than ever. The ASEAN Centre for Energy (ACE) estimates that Southeast Asia’s energy demand will more than double from 2022 levels by 2050. By that year, the International Energy Agency predicts that the region’s energy demand will surpass the European Union’s.  

This growth presents an enormous challenge: How can we ensure energy security, meet climate ambitions, and address the needs of a growing population at the same time? Yet there is a silver lining: Southeast Asia has the potential to lead the way in the global energy transition. 

ACE estimates suggest that renewable energy could meet more than two-thirds of the region’s energy needs by 2050. However, unlocking this potential is far from straightforward. Large upfront capital investments, profitability concerns, and a lack of adequate grid infrastructure all stand in the way.  

The solution? A more connected Southeast Asia.  

Regional interconnectivity is key to unlocking Southeast Asia’s decarbonized future. The ASEAN Power Grid (APG) vision aims to connect power grids, creating a borderless network throughout Southeast Asia that links regions rich in renewable energy to demand centers. A connected system would lay the foundation for a robust and integrated regional energy market. It would allow countries to diversify their energy sources and strengthen resilience by drawing upon mutual support from neighboring nations. 

Through the APG, countries could establish long-term power purchase agreements for renewable energy projects that improve project bankability and attract high-quality investments. For example, The Business Times in Singapore reported that planned electricity export projects from Indonesia to Singapore could bring as much as $20 billion in investments to Indonesia. The APG would also increase access to electricity in exporting countries as domestic grid infrastructure is strengthened to support cross-border trade. Domestic manufacturing and related economic activities would likely see an uptick as developers source parts and services locally.   

Southeast Asia is already taking strides toward realizing the APG vision. Pathfinding projects, such as the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project, have proven the feasibility of multilateral cross-border power trade among multiple Southeast Asian countries. Its success has paved the way for further initiatives such as the Brunei-Indonesia-Malaysia-Philippines Power Integration Project.  

These efforts are laying the groundwork for an interconnected regional grid. But significant investment and infrastructure development are still needed. 

Singapore is supporting projects from Australia, Cambodia, Indonesia, and Vietnam to provide a total of 7.35 gigawatts of low-carbon electricity imports to Singapore. Doing so has allowed us to kick-start discussions within the region on how we can collaborate to realize the APG vision.  

Collaboration beyond the Association of Southeast Asian Nations (ASEAN) is essential. No one country can realize the APG alone. ASEAN has collaborated with dialogue partners such as Australia, Japan, and the United States on renewable energy technologies and regional power integration. These partnerships not only bring financial support, but also a wealth of expertise to accelerate the sustainable energy transition.  

An example of such collaboration is the joint feasibility study between Singapore and the United States on regional energy connectivity. The first phase demonstrated the technical feasibility and socioeconomic benefits of regional connectivity, while the second phase will focus on studying the necessary legal and financial frameworks to support it.  

Southeast Asia’s renewable energy resources make the region an ideal testing ground for emerging low-carbon technologies. Hydrogen, geothermal energy, and carbon capture and storage (CCS) hold immense potential. Singapore, in collaboration with ExxonMobil and Shell through the S Hub consortium, is studying cross-border CCS projects to enhance the region’s climate resilience.  

The inaugural Singapore-US Forum, co-hosted with the US Department of Commerce at the 2024 Singapore International Energy Week (SIEW), brought together government and industry leaders to discuss strategies to accelerate the development of hydrogen in Asia. These partnerships are critical for driving innovation and ensuring that Southeast Asia remains at the forefront of the global energy transition. 

Similarly, organizations like the Atlantic Council play a key role in driving the region’s decarbonization by facilitating important discussions that shape energy transition narratives. As our strategic insights partner for SIEW, the Atlantic Council’s advocacy efforts on energy security have helped to build mindshare among participants on the benefits of regional interconnectivity, renewables, and low-carbon energy technologies.  

The energy transition in Southeast Asia has global implications. A stable, prosperous, and decarbonized Southeast Asia will not only benefit the region but also strengthen global supply chains, promote economic growth, and contribute to climate stability. Through our continued partnerships with the United States and other global partners, we will build a connected and sustainable world for all. 

Ushering the auto industry into a new energy era

By Jim Farley

Read more

Ukraine can unleash energy investment even amid war

By Volodymyr Kudrytskyi

Read more

The US must assure its energy-secure future

By Meredith Berger

Read more

The importance of US LNG for economic growth and the global energy transition

By Daniel Yergin and Madeline Jowdy

Read more

Southeast Asia aims for sustainability through connectivity

By Kok Keong Puah

Read more

Energy realities require pragmatic solutions

By Rick Muncrief

Read more

Tech and power sector partnerships can accelerate the energy transition

By Arshad Mansoor

Read more

Forging stronger transatlantic energy cooperation

By Dan Jørgensen

Read more

Latin America and the Caribbean are leading the green energy transition

By Andrés Rebolledo Smitmans

Read more

Busting the top myths about AI and energy efficiency 

By Josh Parker

Read more

The small reactor revolution can transform African energy systems 

By Lassina Zerbo

Read more

The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

learn more

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Unlike in 2022, when Russia manufactured an abrupt gas supply shortage, today’s energy threats are more gradual in nature. For example, undersea electricity and energy cables are being cut, and the suspected vessels are often part of Russia’s shadow fleet. Such attacks should still be taken seriously by the European Union (EU) and its partners both for the real damage they cause and because Russia could ramp up such attacks on short notice. In addition, kinetic and cyberattacks on the electricity grid, remaining gas supply issues and chokepoints, and high energy prices compound the danger.  

However, it is possible for Europeans to address these threats to their energy security and mitigate potential damage to their societies and economies. It is reassuring, too, that the message that came out of Munich was one of unity and a desire to act. But now that leaders and policymakers have decamped from the Bavarian capital and returned home, what will happen next? Will Europeans sleep through these issues or take action? What should Europe do, and should member states or the EU take the reins?  

Brussels and beyond 

Over the past several decades, EU funding has enabled a massive build-out of grid and pipeline infrastructure on the continent. Considering the cross-border nature, risk, and scale of these projects, EU engagement was vital. It was also vital during the 2022 energy crisis, during which the EU increased its work on energy security. Today, too, current threats would be partially curtailed by the EU building additional infrastructure. However, as the European energy system goes through unprecedented transformation—electrification, digitalization, market interconnection, artificial intelligence integration, and further supply diversification—Brussels should not act alone. A multi-pronged approach is required to create and secure the energy system of tomorrow. 

One reason a multi-pronged approach is needed is because of because of budget constraints. The COVID-19 pandemic and Russia’s intentional energy blackmail scheme, which cost Europe one trillion dollars, has left the EU coffers and many national budgets in a tight spot. There is still no vision around a shared borrowing scheme. European countries and other allies are rightfully prioritizing borrowing money to provide Ukraine with a significant influx of military support. This is especially the case following recent remarks from US President Donald Trump and Vice President JD Vance that suggest the United States will decrease its support for Ukraine and, potentially, for Europe as a whole.  

However, the lack of funding is not the only barrier. Another frequently mentioned concern at the MSC was the challenging regulatory environment in Europe, as some member states take a more stringent approach to interpreting EU regulations at the national level. This difficulty is further compounded by geopolitical uncertainty. Thousands of companies operating in Europe are impacted by the sweeping environmental and societal disclosure mandates from the Corporate Sustainability Reporting Directive, the Corporate Sustainability Due Diligence Directive, and methane regulations.  

All aboard the omnibus  

The new EU leadership should be commended for responding to these calls by focusing on the promising omnibus legislation and sending a strong message with its competitiveness compass—a roadmap for boosting European competitiveness. The European Commission is expected to unveil the omnibus, intended to streamline the EU’s sustainability reporting, in late February or March.  

There is plenty of irony in reducing regulations by rolling out another regulation, but the omnibus a tangible, timely, and thoughtful solution. If done right, it could provide needed certainty for investors and developers. The EU could accomplish this by outlining the scope of the existing and incoming regulations and by reducing costs for non-value-added certification, measurements, and verifications. Most important, the EU should make it easier for the private sector to reach common-sense objectives in a reasonable timeline, with eyes on the end goals rather than on processes and paperwork. This could also help create a more coordinated regulatory environment across the EU member states.  

By simplifying its rules, the EU could encourage member states to harmonize their implementation of the regulations. Differences in implementation can create confusion and additional expenses for companies looking to deploy projects across multiple EU countries.  

Reducing regulatory burdens by getting rid of non-value-added bureaucratic steps could also invite more US private sector partnerships, while transatlantic geopolitical and trade tensions settle. The European Commission’s new leadership does not need to sacrifice its carbon emissions reduction and environmental integrity efforts to address incoming energy sector threats. The omnibus could be the first step—and an impactful one.   

Olga Khakova is the deputy director for European energy security at the Atlantic Council’s Global Energy Center. 

The post Make Europe more energy secure by reforming EU regulations   appeared first on Atlantic Council.

The potential for geothermal energy in particular to seize this opportunity has greatly improved due to advancements in geothermal systems. While conventional geothermal and hydrothermal systems have historically faced opposition for their limited geographical accessibility and high upfront costs, the emergence of enhanced systems has significantly augmented the viability of widescale geothermal deployment to support a cleaner, more affordable, and strategically advantageous energy sector. Enhanced geothermal systems (EGS) use directional drilling tools and technologies developed by the oil and gas industry as well as hydraulic fracturing to overcome geographic barriers and reduce costs. EGS thus unlocks the potential for widespread deployment across the United States, offering a cleaner, more affordable, and strategically advantageous energy solution. 

Public Event Thu, February 20, 2025 • 10:00 am ET

Geothermal: Unlocking America’s untapped energy potential

Governor Jared Polis of Colorado and a panel of experts discuss opportunities to advance US energy security and economic competitiveness through next-generation geothermal energy.

Energy & Environment United States and Canada

EGS offers a myriad of additional benefits, ranging from environmental sustainability to economic competitiveness. Not only does it provide emissions-free electricity generation, it also enhances energy security by offering a reliable 24/7 clean power alternative for emissions-heavy sectors. Coupled with reduced operational costs over time and increased scalability, this positions EGS as a key driver for US decarbonization efforts while maintaining productivity and global competitiveness.

Despite its promise, EGS faces obstacles in attracting investment and achieving widespread commercialization. Efforts to address these barriers must focus on streamlining permitting processes, mitigating upfront capital costs, and creating a conducive political and business environment. Government support through legislation and funding, coupled with industry-led initiatives such as joint ventures and community engagement, will be crucial in accelerating the adoption of EGS and unlocking its full potential in the United States’ energy landscape.

Staff

Chase Thalheimer

Assistant Director

Global Energy Center

Arabic Geopolitics & Energy Security

Staff

Reed Blakemore

Director, Research and Programs

Global Energy Center

Geopolitics & Energy Security Energy Transitions

New Atlanticist Aug 15, 2024

The IRA two years on: A signpost of the new economic policy consensus

By William Tobin

Signed in August 2022, the Inflation Reduction Act has prompted global competition among governments to make public investments in emerging industries and technologies.

Economy & Business International Markets

Report Mar 17, 2022

Unearthing potential: The value of geothermal energy to US decarbonization

By Zachary Strauss

Achieving US climate goals requires the development and widespread deployment of all available clean energy solutions. Geothermal energy, while currently only a marginal component of the US energy economy, can contribute significantly to the climate action effort.

Energy & Environment Energy Transitions

The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

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The post Unlocking America’s untapped energy potential through enhanced geothermal systems appeared first on Atlantic Council.

By Peter Engelke, Greg Lindsay, and Paul Saffo

Welcome to three possible worlds in the year 2035. As resident and non-resident senior fellows in the Atlantic Council’s foresight practice, we produced these scenarios by assessing how current trends and uncertainties across a variety of categories—including geopolitics, the economy, demography, the environment, technology, and society—might interact with one another in the years to come. 

These are not forecasts or predictions of what the future will bring. Instead, these scenarios are intended to inspire imagination and spur readers to consider possible futures, including future worlds that do not align with the readers’ expectations. To paraphrase a sentiment often expressed by the physicist and futurist Herman Kahn, the point of working with future scenarios is to find out what you don’t know and should know but that you didn’t even know you didn’t know. 

We invite readers to interpret these scenarios in that spirit. Consider the interplay among the cause-and-effect elements that lead to each of the potential future worlds, as well as the myriad other possible scenarios that could emerge in the years to come.

Perhaps the world of 2035 might vaguely resemble one of the three scenarios presented here, but that is not the central purpose of this exercise. The primary reason why we crafted these scenarios is to generate deeper insights into how today’s actions and inactions might create a better or worse world ten years from now.

The reluctant international order

Global governance has never been more complicated than it is in 2035. But although the problems are complex, thus far the governance landscape is proving capable of containing at least some of them, as occurred several years ago when we endured a near-miss catastrophe from a bioweapon-fueled pandemic.  

We might not be experiencing the halcyon days of a revitalized multilateralism, but thankfully we’re also not inhabiting a kill-or-be-killed nihilistic hellscape. We seem to be living through what some commentators are now calling the “Reluctant International Order.” 

Let’s begin with what has not happened: neither the much-feared collapse nor the much-hoped-for revitalization of what often is called the rules-based international order (we’ll use the acronym “RBIO”). Which means that neither the 1930s nor the 1990s have returned.  

The international order that the United States and its allies created and maintained after 1945 delivered benefits for decades—benefits that were admittedly partial and often uneven but nonetheless real. Embedded within the RBIO are norms, such as non-aggression toward other countries and respect for human rights, that are laudable ideals. And at its core are multilateral institutions, including the United Nations (UN), World Bank, and World Health Organization (WHO), which were designed to contain conflict, assist with economic development, anticipate and then manage crises of various kinds, and provide some governance in an otherwise anarchic world. The whole order is premised on the notion that international cooperation, combined with the open exchange of ideas and goods, will lead to a better and more peaceful world. 

Yet there has long been dissatisfaction with the RBIO. Today, as before, many countries are unhappy with the RBIO and seek to upend or reform it. China and Russia, the two most powerful and vocal of these states, have remained steadfast in their opposition to at least parts of this order, although it also has become clear that their ends are not identical. A decade ago, both began to join with North Korea and Iran to form a grouping that was labeled an “axis of aggressors” because of widespread concern about those countries coordinating to directly challenge the West and the international order, militarily and otherwise. Numerous other countries, often middle and emerging powers in the so-called Global South have sought, at a minimum, to modify the RBIO. These states—with India and Brazil the most prominent examples—have accused the RBIO of being unrepresentative and its defenders of being hypocritical because of their selective application of the order’s underpinning norms. Even the core group of democratic nations that historically defended the order, including the United States, often have acted against the RBIO when it suited their interests. 

Resilient rules

Despite all this, the various challenges to the RBIO have never been powerful enough to destroy it. Neither the axis of aggressors nor the partnership between China and Russia ever amounted to real military alliances, reflecting weak rather than strong bonds among them. These revisionist states have acted in disjointed fashion, as a result of their divergent interests, and never staged a coordinated attempt to directly confront the West. Partly for that reason, there has been no global war and thus no wholesale shock that reset the global governance system, as occurred after World War II.  

Russia emerged from its war against Ukraine (which ended in a negotiated peace in 2026) far weaker than it was when the conflict began, and it has yet to sufficiently recover to mount another similar challenge westward in Europe. China has made no overt move to seize control of Taiwan either. Evidently, Chinese President Xi Jinping has decided he does not want to gamble his country’s future in a confrontation with the United States, which after all remains a great economic and military power with a formidable nuclear deterrent. (The United States’ increased investment in defense of the Western Pacific also appears to have influenced Xi’s calculations.) It does not help China that Russia is a much-debilitated junior partner. 

The case of Taiwan is important for another reason. It underscores that, so far, China and the United States have decided that coexistence is the preferable direction for their relationship, which has prevented the international system from collapsing altogether. Their rivalry has been channeled through other pathways short of war, including diplomatic efforts to curry favor abroad and support for various minilateral and multilateral institutions. And they’ve found, more than occasionally, that their interests actually intersect. In the realm of nuclear nonproliferation, for example, both China and the United States have continued working in tandem to prevent Iran from developing a nuclear weapon, albeit by utilizing very different mechanisms and forms of leverage. 

But while the RBIO has not collapsed—meaning there has been no repeat of the era between World War I and World War II—it also has not been revitalized. There has been no return to a triumphalist end of history, no 1990s-style heyday wherein major and middle powers mostly work in concordance with one another toward peaceful and prosperous coexistence within what they perceive as a benign set of global norms and institutions. Hence the increasing references to a “Reluctant International Order,” if meant in jest. 

What has happened instead has been an evolution rather than a revolution, characterized more by experimentation and incrementalism than by some jarring disruption. This has occurred because the world’s problems demand coordinated responses even for countries reluctant to do so and because those countries recognize that the opportunity costs of not engaging are so high.  

Today, the outward institutional trappings of the RBIO remain in place. The UN continues its work as before, partially because China does not want to destroy it. (The UN’s embrace of state sovereignty, for example, appeals to China’s interests.) Global trade is still growing, despite the tariff wars of the mid-to-late 2020s, owing in part to technological developments that have continued to lower the cost of trade. And the norms underpinning the RBIO haven’t disappeared, either, since many around the world—national and sub-national governments, civil-society and non-profit organizations, grassroots groups and ordinary citizens—want to preserve them and continue to see value in cooperative approaches to transnational problems. 

Trading places

Consider trade. More than a decade ago, many nations began curtailing their exposure to global trade flows out of justifiable concern that trade was having detrimental impacts on their security, economies, and societies. Yet despite extensive anti-globalization rhetoric and policies (with the tariff wars the best example), the prevailing perception is that the benefits of trade continue to outweigh the costs. China and the United States, for instance, still have one of the largest bilateral trade relationships of any two countries in the world, despite their now lengthy history of trade disputes, including tariffs and a range of trade restrictions in sensitive technologies.  

The leaders of many countries have realized that they have a compelling interest in remaining engaged in trade and talks to increase trade. This has resulted in the creation, maintenance, or expansion of a number of regional free-trade agreements. Several of these efforts have proven quite successful, perhaps best illustrated by the African Continental Free Trade Area (AfCFTA). Over the past fifteen years, African states have joined with the African Union to extend and deepen AfCFTA and, in so doing, to realize several of its longer-term objectives such as the reduction of intra-continental tariffs and loosening of visa restrictions. The case of AfCFTA and others like it—for instance, strengthened trade agreements between the Gulf Cooperation Council countries and Asian countries—underscore that while global trade volume has grown since the mid-2020s, the geography of trade continues to shift.   

Nonstate actors have been critical to the maintenance of this system. Multinational companies around the world have made their support for trade well-known, which has helped compel countries to continue defining their interests in pro-trade terms. 

Bioweapon-inspired cooperation

Nothing underscored both the value of cooperation and the powers (positive and negative) of nonstate actors like the 2029 bioweapon scare.  

That year, a shadowy, transnational doomsday cult—akin to Aum Shinrikyo, which terrorized Japan with sarin gas in 1995—used an artificial intelligence (AI)-enhanced synthetic biology (“SynBio”) process to develop a deadlier and more easily transmissible strain of smallpox. Because the cult’s plot to release it was foiled at the last minute, owing to frantic collaboration among national intelligence services and INTERPOL, the world narrowly avoided a pandemic that would have been far worse than the COVID-19 pandemic.  

Horrified by this close call, most of the world’s governments—including the United States, China, and Russia—grasped for solutions. Since pandemics do not respect boundaries, world leaders recognized that there was an upper limit on how much they could protect their people on their own. In response, they quickly sought to deepen collaboration with one another and with leading multilateral public-health institutions such as the WHO, multinational corporations including companies that develop major AI platforms, and the global scientific community that sets standards and runs laboratories. The mandate was clear: Determine how to monitor and regulate the biotechnology space more effectively—or risk perhaps hundreds of millions dying in an AI-enhanced, SynBio-caused (“AIxBio”) pandemic along the lines that the doomsday cult had almost willed into existence.  

One of this new coalition’s proposals, which was quickly funded and implemented, was to create an institution similar to the International Atomic Energy Agency but focused on AIxBio. Its formal membership is based on a novel multi-stakeholder model that includes national governments, big-tech firms, and scientific organizations.  

The smallpox bioweapon scare vividly illustrated, even for adversarial major powers, the intolerably high risk of countries not engaging with one another through international institutions and on international norms to address the world’s greatest challenges—and on the enduring relevance and value of the RBIO ninety years after its creation. Halting progress in some areas of the international system doesn’t qualify as a renaissance. But even a Reluctant International Order is better than retreat. 

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China ascendant

Welcome to 2035, and a world whose center of gravity has shifted decisively toward Beijing.  

China now has more influence on world affairs than does any other country, including the United States. It is ascendant on every metric of power—diplomatic, military, economic, and technological. That power has enabled Beijing to begin remaking the world to its liking. It has been busy recasting the global system, including multilateral institutions such as the United Nations (UN), in its preferred image, and is in the process of dismantling the democratic norms that have animated the international order since 1945.  

China has arrived at this ascendant position in part because the United States has not done much to stand in its way. At the turn of this century, such an outcome would have been impossible to imagine. Even a decade ago, when Washington’s commitment to the rules-based international order showed initial signs of wavering, such an outcome would have been difficult to forecast. But US leaders have been consumed by the challenges of dealing with the country’s weakening economy, fraying societal bonds, and unrelentingly harsh domestic politics. These dynamics have eliminated the longstanding bipartisan consensus around defending the global order that the United States, along with its many allies and partners, had built and maintained for decades.  

The result has been that the United States no longer has an unwavering commitment to its allies and partners, the core multilateral institutions at the center of the order that it built, and the norms and principles that it stood behind all those years. Instead, the United States has definitively turned inward. By nearly every metric, the United States remains a major power. But it no longer has much interest in maintaining its leadership role in the world. It has ceded that ground to others, especially to China. 

Taiwan-style tipping points

The impact of the US withdrawal from global affairs is evident in various flashpoints around the world, including in Taiwan. While the prevailing fear in the 2010s and early 2020s was of a devastating clash between the United States and China over the island, the Taiwan issue was resolved without firing a shot. China subordinated Taiwan by applying intense pressure—via sabotage, cyber operations, propaganda campaigns, overt and covert influence campaigns within Taiwan, espionage, murky hybrid operations on the island and around its waters—to influence Taiwanese domestic politics toward a cross-Straits settlement with the People’s Republic of China. Its efforts to shape domestic politics within Taiwan succeeded. In 2030, Taiwan’s government agreed to (among other things) such a settlement, which included ceasing defense cooperation with foreign governments and reducing Taiwan’s direct engagement with foreign officials. The United States, which did not respond to China’s various forms of pressure against Taiwan, ultimately could not prevent the cross-Straits agreement, given the Taiwanese government’s support for it. None of China’s individual provocations were dramatic enough for an already hesitant United States to risk a direct military confrontation with China over it.  

What happened in Taiwan has also played out on a global scale. There was no one exceptional event or even set of events that triggered a transformation of the international system—no explosion that China engineered to blow up the global order. Thus, there never was a single focal point for China’s rivals—especially the United States—to rally their citizens around and respond to in a coordinated and decisive way. Rather, there has been a gradual and now inexorable shift away from the US-led order and toward a Chinese-led one. This shift resulted from decisions made by both US and Chinese leaders: inward-looking in the case of the former, outward-looking in the case of the latter. It was, in short, a slow-motion fait accompli. 

China has positioned itself as the world’s inevitable leader, seizing on its strengths to curry favor with other countries and on the opportunity presented by the United States’ implosion to diminish its rival. Take the performance of the two countries’ economies as an example. A decade ago, the economic outlook was bleaker for China than it was for the United States. But over the past ten years, that script has flipped. In the mid-2020s, Chinese President Xi Jinping managed to right China’s sputtering economy, stabilizing it and returning it to steady growth (if less spectacular growth than during the country’s long boom). He did so by successfully transitioning the country to what many are now calling “an innovation system with Chinese characteristics,” striking a balance of rewarding innovation and entrepreneurialism while maintaining the Chinese Communist Party’s control over the nation’s political apparatus.  

All this has enabled China to return to selling itself and its economic rebound on the one hand, plus the United States’ economic stagnation (due to dysfunctional politics) on the other, as a compelling reason why the United States is both unreliable and a poor economic model for the rest of the world, and by extension why China represents a better model. That message has even more resonance around the world now than it did ten years ago.  

Because of the pull of China’s growing economy, which remains integrated within global trade flows, plus the relative weakness of the US economy, foreign governments have become more willing to sign onto China’s various economic diplomacy efforts, such as the Global Development Initiative. Beijing now hosts a robust schedule of international economic forums that position it at the center of the economic universe, and thus as the destination for intergovernmental bargaining and influence on issues such as trade and investment. To outside observers, the economic pull of Beijing has eclipsed that of Washington and, for that matter, of Brussels, London, Paris, Seoul, or Tokyo.  

As a result, China’s influence has grown in many parts of the world. In the Global South, lower- and middle-income countries in Africa, Latin America, and South Asia (where China remains engaged with India in a long-running contest for influence) have been even more eager to trade with and receive investment from China than they were in the 2020s. This outcome is the product of years (in some cases decades) of aggressive economic diplomacy by China and disinterest from the US government. It also stemmed from reform to China’s overseas lending and investment vehicles, which China recognized needed fine-tuning to make them more palatable abroad and deflect rising criticism of the unsustainable debt and other problems they engendered. Thus far, these policy shifts appear to have worked. China has also become the world’s largest trading nation for both imports and exports, ahead of the United States. Shifting trade in goods also has accelerated movement away from trade denominated in US dollars and toward trade denominated in renminbi—a sure sign of the relative strengths of the two economies.  

For China, the advantages are enormous: more wealth at home and influence abroad. China’s diplomatic ties with major materials exporters such as Brazil (soybeans and other crops), the Gulf Cooperation Council states (oil), and the Democratic Republic of the Congo (critical minerals such as cobalt) have increased. For the United States, the reverse has been true. For the average American, wages and incomes have stagnated, and imported goods are more expensive. Abroad, US goods are less competitive in foreign markets than Chinese goods are.   

Allies hedging 

The United States still has numerous allies and partners, but the bonds that held them together are weaker now than they were in the past owing to the rise of China and the self-induced retreat of the United States. 

In Asia, nervous US allies including Japan, South Korea, Australia, and the Philippines are hedging between China and the United States in more ways than they were in the 2020s. But now, having witnessed what happened in Taiwan, these countries are even more concerned about the security guarantee that the United States has provided to them. Both Japan and South Korea have admitted that they are exploring options to acquire nuclear weapons in order to deter China and North Korea, and most analysts expect both to become nuclear-weapons states by 2040. Various forms of US-led minilateral diplomacy in the Asia-Pacific such as the Quad have died slow deaths, the result of both US indifference and Asian countries’ doubts about the value of these efforts to counter and contain a rising China. India, for example, believes it can achieve more through its own bilateral actions to check Chinese influence than it can by working through such forums.  

Also contributing to the deep unease of US allies is the growth of China’s military in size and capabilities, and its increasing forward presence in the Asia-Pacific and elsewhere around the world. China has been steadily increasing its number of basing agreements globally to the point where, just as US intelligence services feared a decade ago, China now has bases in Africa, South Asia, the Caribbean, the Middle East, and the islands in the Pacific and Indian oceans.  

A similar story is playing out in Europe, albeit focused on a different threat. There, European NATO members are arming themselves rapidly, spending well above the 2 percent of gross domestic product threshold for defense spending that Washington had been requesting for decades. Although that amounts to a victory of sorts for US foreign policy, it really is a defeat because the spending is an expression of serious doubt about the United States’ commitment to NATO and the Alliance’s Article 5 collective-defense pledge should war come again to the continent. Although the previous war in Ukraine ended in a negotiated stalemate, most European observers believe that it is only a matter of time before a rearmed and resurgent Russia decides to test NATO, likely through a long-feared invasion focused on the Baltics.  

In this climate, many are pinning their hopes on Beijing rather than Washington, believing that China will restrain Russia, its junior partner, from going on the offensive in Europe. Partly for this reason, and the fact that China is now Europe’s largest trading partner (having surpassed the United States in the early 2030s), European leaders have muted their criticisms of China’s record on human rights, including privacy rights, and have eased China’s access to the common market despite ongoing concerns about dumping, intellectual-property theft, and other such practices.  

Institutional shifts 

In part because China never has been interested in tearing down the entire international system and replacing it with something else entirely, few Western leaders have paid much attention to how China has been busy recasting these institutions in its image. And indeed, the UN system and the Bretton Woods institutions (the World Bank and International Monetary Fund) continue, with China maintaining its representation in them as it has for decades.  

But there have been important changes within the UN system. Recently, for instance, China has been far more successful than it was in previous decades at getting its appointees installed within various technical standard-setting bodies such as the UN’s International Telecommunication Union—a function of China’s unrelenting focus on these specialized bureaucracies plus its rising economic, scientific, and technological prowess.  

Or consider the UN’s historic role in maintaining peace and security. China was long willing to support UN peacekeeping operations around the world by providing troops and funds, at least to an extent. Yet with the United States and its democratic allies among the UN Security Council’s five permanent members—France and the United Kingdom—now far less willing to spearhead these operations, China has yet to pick up the leadership mantle. China remains willing to contribute to peacekeeping but generally not to lead large-scale efforts, whether in terms of the Security Council’s broad peacekeeping mandates or the financial, human, and technical resources necessary to build them. The result has been fewer such operations and weaker ones as well, leaving more of the world’s conflicts to devolve and even in some cases metastasize.  

Perhaps the most worrisome change has to do with the norms and principles that underpin the global system—both within the UN and more generally as well. Although China expresses support for some of the system’s principles—for example, the UN’s emphasis on state sovereignty and territorial integrity—it manifestly does not support others and especially those based upon democratic values. As a result, serious emphasis on human rights and related norms, as well as global oversight of them, has collapsed within multilateral institutions, including the UN.  

These developments are having real, on-the-ground impact. China has successfully built a more robust surveillance apparatus globally that includes more sophisticated cyber-espionage operations capable of tracking the communications of ordinary people around the world, along with a major expansion of China’s overseas police stations. The Chinese government claims that these stations are designed only to service the Chinese diaspora, but their true purpose seems to be to keep track of and pressure both the diaspora and China’s external critics as well.   

The erosion of global human-rights enforcement speaks to a broader trend: The so-called democratic recession that has been plaguing the world since the early 2000s is now bordering on a depression. With China ascendant, the world’s autocratic leaders are acting with greater confidence at home and abroad. Midway through the 2030s, the long-running contest between democratic and authoritarian systems appears to be resolving—in favor of the latter. 

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Climate of fear

In 2035, the Earth’s climate is hotter and less stable than it’s ever been in human history. This instability is causing people to turn on one another—and politics to become more abrasive than it was a decade ago. Climate-driven turbulence is making nearly every other problem—be it geopolitical or conflict-related—harder to solve. These challenges transcend national boundaries and afflict every country, whether rich or poor, to the north or south. Numerous local conflicts and one tense regional standoff (in South Asia) have been fueled by the consequences of a changing climate. 

These trends have produced some positive outcomes as well, but in the 2030s it’s difficult to foresee a bright future. As a result, many are looking to radical solutions to get humanity out of its predicament. 

Ecological crisis

There is almost no good news to be found in the natural world. A range of climate-induced problems are all worse than they were a decade ago. Observable, on-the-ground environmental changes have consistently outpaced scientists’ predictions from twenty or even ten years ago.  

The data indicates that several climate tipping points—including the drying of the Amazon rainforest, the melting of the West Antarctic ice sheet, and the ongoing slowing of the Atlantic Meridional Overturning Circulation system, which regulates temperatures and precipitation in Europe, Africa, and elsewhere—are nearer than we previously thought. Scientists’ modeling, based on real-world data in the 2030s, now points even more strongly toward one or more of these or other critical systems collapsing in the next few decades. When these systems begin to collapse, there will be no practical way back from truly horrific ecological disasters.  

Even short of such disasters, the world today lacks the capacity to adjust quickly enough to the climate impacts that are here already. Chronic heat is a problem nearly everywhere in the world, with lengthy heat waves now routine on every continent—including on Antarctica, where record highs, well above freezing, are increasingly common. Most frightening is the rapid increase in “wet bulb” days in some regions near the equator, where high heat plus high humidity make it impossible for humans to survive for long outdoors. Massive storms—flash flooding in the wake of record-breaking torrential rainfall, for example, or hurricanes and cyclones that strike well inland—are commonplace now as well. Several coastal cities around the world, including Bangkok, Miami, and Jakarta, regularly flood, even more frequently than they did a decade ago. In 2029, China’s low-lying Pearl River Delta was hit by a massive typhoon that crippled the region’s manufacturing output for months, disrupting global supply chains. 

These developments have numerous second- and third-order consequences. The world’s forests, for example, have become tinderboxes, which means that firefighting has become a significant part of national-security planning for an ever-lengthening list of the world’s governments. 

(Geo)political upheaval

Politics and geopolitics are changing with the natural world, largely for the worse. Climate change has weakened the world’s democracies, which already had suffered through decades of decline. From Spain and Greece to South Africa, Nepal, and Panama, storms and suffocating heat waves have disrupted elections by making it harder for some voters to cast their ballots. Such events have also affected who participates in elections in the first place, given how they have influenced the outflows and inflows of people through cities and countries, and the voter registration and verification problems that have followed.  

Many years ago, when climate-driven migration was first hypothesized in the scientific literature, few paid attention. Not so today, as fears about the consequences of so-called climate migrants or climate refugees have generated real policies involving real people. These fears often have been based on lurid imagination about crime and chaos rather than on facts.

In 2035, there are an estimated 150 million migrants worldwide who are either temporarily displaced or permanently on the move because of climate impacts, although no one knows the true number because migration is such a complex, multifaceted phenomenon. Yet everyone agrees that more migrants are coming.  

Most climate-driven migration remains within national boundaries, often coming in the form of rural-to-urban migration into cities such as Bogotá and Karachi. Or it is intra-regional migration within areas such as Sub-Saharan Africa, the Middle East and North Africa, and South Asia. Such trends are also occurring within wealthy regions and countries such as the United States.  

These migration patterns have reminded many of the Syrian crisis of the early 2010s, which was preceded by drought-stressed migrants fleeing the countryside for the cities. Although that internal migration likely was only an indirect cause of the subsequent uprising against the Assad regime—which lasted well over a decade and ultimately resulted in the regime’s overthrow—many now see repetition of that past. They point to how climate-fueled internal displacements have increased recruitment into armed nonstate groups. They note the increasing number of communities around the world where climate impacts have exacerbated preexisting vulnerabilities to cause local conflicts, too many of which have started to become deadly. And they cite the increasing number of failed and failing states resulting in part from climate-driven disasters such as intense, multi-year drought. 

Governments have responded through pull-up-the-drawbridges measures—and not just in Europe or the United States, where one might expect that to happen, but around the world, including within the Global South. Border walls designed to keep migrants out were already widespread ten years ago. They are everywhere now.  

India, for example, has clamped down on its borders with Bangladesh and Myanmar, heavily fortifying them with more personnel, fencing, sophisticated electronic-surveillance systems, and autonomous enforcement technologies such as drones. Numerous critics, both within India and outside of it, have voiced objections, but the Indian government insists that it is only doing what its voters want. This has led to a volatile diplomatic situation in South Asia. Pakistan, which long ago patched up its relations with Bangladesh, has joined Bangladesh and Myanmar in loudly and publicly pushing India to reverse its border policies, to no avail. The region is not at war, nor is there an immediate risk of one. But it is at a knife’s edge, with climate-driven migration having become one of the biggest sources of friction. 

Turbulence-induced transformations

There are some bright spots in this otherwise discouraging picture. Renewables are now firmly established as the world’s dominant sources of energy, reflecting both their market competitiveness and the rapid electrification of the global economy. And nuclear energy has begun making a comeback in much of the world, with the latest reactor designs now seen as safely providing reliable, zero-emission electricity. (New power plants, however, remain rare.) In addition, green-technology markets are expanding rapidly across many industries such as food, water, energy, transportation, and consumer goods. Nearly a third of the world’s stock of cars and trucks is fully electric. 

The challenge lies in the rate at which decarbonization is occurring—a pace that simply has not been fast enough. Although global greenhouse-gas emissions finally peaked in the late 2020s, humankind nonetheless surpassed the carbon budget required to stay within the target of keeping global warming above pre-industrial levels to 1.5 degrees Celsius, as laid out in the 2015 Paris Agreement. Scientists had prioritized staying below this target to limit the worst impacts of climate change.  

One of the factors contributing to this challenge is that much of the world’s legacy energy infrastructure remains in place. Decommissioning such infrastructure, particularly coal and natural-gas plants, is expensive. Too many of the world’s high-carbon plants still exist, especially coal-fired power plants concentrated in China.  

Behind all this is global energy consumption, which has continued to rise fast, consistently outstripping renewables’ capacity to fully meet the demand. (A challenge here is that interest rates for borrowing in riskier storm-affected regions have increased, constraining the expansion of capital-intensive renewables such as offshore wind farms.) There are many drivers of this increasing demand, including technological developments such as advances in artificial intelligence (AI). As was feared in the mid-2020s, the infrastructure necessary to support AI’s growth—in the form of computing power and data centers—boosted global energy demand. Although tech companies have greened their models, the problem is about scale: AI’s ubiquity translates into a massive source of energy usage. Some tech companies have become players in the nuclear-energy space for this reason. 

As they navigate this turbulence, and as already foreshadowed in the 2020s, both right- and left-wing populist governments are no longer reflexively hostile to policies to combat climate change like they once were. There is renewed interest in accelerating decarbonization efforts, including revitalizing the moribund United Nations-led process for mitigating climate change.  

Another response to the unsustainable status quo has been the embrace of more radical solutions. Geoengineering—and specifically solar radiation modification (SRM), which refers to atmospheric and even space-based efforts to reduce warming by reflecting sunlight back into space—has rapidly gone from a scientific curiosity to a subject of serious research. Although SRM engineering is complex, compared with other approaches it is straightforward and inexpensive. As a result, already in 2035 both state and nonstate actors are experimenting with SRM in the atmosphere. There is great fear that the implementation of these new approaches will be a nightmare, as for-profit companies, tech billionaires, and rogue states initiate their own unilateral solutions, while countries fight over the expected (but dimly understood) impacts on their regions. Although the scientific community is warning that SRM’s consequences aren’t yet sufficiently understood, there is a growing sentiment among many (though not all) politicians that it should be tried at scale. But everyone is asking whether effective geoengineering is even possible without some sort of global governance and regulatory regime.  

Meanwhile, the clock is ticking and the climate is changing. Humankind’s efforts to master the natural world during the post-industrial era produced the climate crisis. Now, in 2035, the Earth increasingly seems the master of human affairs rather than the other way around.  

⏎ Return to top

Peter Engelke, Senior Fellow, GeoStrategy Initiative

Engelke is on the adjunct faculty at Georgetown University’s School of Continuing Studies and is a frequent lecturer to the US Department of State’s Foreign Service Institute. He was previously a member of the World Economic Forum’s Global Future Council on Complex Risks, an executive-in-residence at the Geneva Centre for Security Policy, a Bosch fellow with the Robert Bosch Foundation, and a visiting fellow at the Stimson Center.

Greg Lindsay, Nonresident Senior Fellow, GeoStrategy Initiative

Lindsay is a nonresident senior fellow with the Scowcroft Center for Strategy and Security’s GeoStrategy Initiative, as well as a nonresident senior fellow of the Arizona State University Threatcasting Lab and the MIT Future Urban Collectives Lab.

Paul Saffo, Nonresident Senior Fellow, GeoStrategy Initiative

Saffo is a nonresident senior fellow with the Scowcroft Center for Strategy and Security’s GeoStrategy Initiative and co-editor of Futures Research Methodologies, which will be released later this year.

Global Foresight 2025

In this year’s Global Foresight edition, our experts share findings from our survey of global strategists on how human affairs could unfold over the next decade. Our team of next-generation scholars spot “snow leopards” that could have major unexpected impacts in 2025 and beyond. And our foresight practitioners imagine three different scenarios for the next decade.

Learn More Full Survey

Atlantic Council Strategy Paper Series Feb 12, 2025

Welcome to 2035: What the world could look like in ten years, according to more than 350 experts

In the fall of 2024 after the outcome of the US presidential election, the Atlantic Council’s Scowcroft Center for Strategy and Security surveyed the future, asking leading global strategists and foresight practitioners around the world to answer our most burning questions about the biggest drivers of change over the next ten years. Here are the full results.

Read More

Atlantic Council Strategy Paper Series Feb 12, 2025

Six ‘snow leopards’ to watch for in 2025

By Emily Milliken, Imran Bayoumi, Ginger Matchett, Srujan Palkar, Sydney Sherry

Atlantic Council foresight experts spot the underappreciated phenomena that could have outsized impact on the world, driving global change and shaping the future.

Civil Society Climate Change & Climate Action

Atlantic Council Strategy Paper Series Feb 12, 2025

Three worlds in 2035: Imagining scenarios for how the world could be transformed over the next decade

2024 was marked by increased climate shocks and collaboration of autocratic adversaries. What will the world look like in the next decade? The Atlantic Council’s top experts brought their globe-spanning expertise to the task of forecasting three different scenarios for the future.

Africa China

The post Three worlds in 2035: Imagining scenarios for how the world could be transformed over the next decade appeared first on Atlantic Council.

Consider the snow leopard. Panthera uncia sports some of the most effective camouflage in the animal kingdom, its white coat with gray and black spots blending in perfectly with the rocky, snowy Himalayan landscape it inhabits. It’s known as “the ghost of the mountains,” seeming to appear out of thin air on the rare occasions it is seen in the wild. 

There’s an equivalent phenomenon in global affairs: under-the-radar trends and events that elude even the most seasoned observer. When their effect on world affairs eventually becomes apparent, they may seem to have come out of nowhere. But these “snow leopards” were there all along. Trends slowly gathering momentum while the crisis du jour dominates headlines, technological developments whose real-world application is still theoretical, known but underrated risks—all of these phenomena have the power to reshape the future. Some already are. 

Any forecast of the future needs to account for these snow leopards. As we brought together experts across the Atlantic Council for our annual look into the future, our next-generation staff took on the challenge of spotting the hard to spot. They surveyed the world around them for overlooked risks, trawled scientific journals and the websites of obscure government departments, and came up with a list of potentially world-changing trends and developments. 

In the year to come and beyond, keep an eye on these six snow leopards. 

When you send a message on WhatsApp to a friend in Colombia or share a video call with family in India, the data—images, text, and video—gets broken down into packets and travels along undersea cables that connect continents in fractions of a second. Nearly 99 percent of international data passes through these cables, including terabytes of sensitive data sent by the US military to command posts overseas as well as an estimated ten trillion dollars transferred every day through the global financial system. In an increasingly interconnected world, nonstate actors pose a serious threat to this critical digital infrastructure, which often lies in shallow waters where it is vulnerable to everything from cyber threats to explosive devices to dragging anchors. 

It doesn’t take advanced equipment like submarines to damage these undersea cables. In 2013, for instance, Egyptian authorities arrested three divers who had used underwater explosives to slice through the South East Asia-Middle East-West Europe 4 internet cable, which runs for 12,500 miles and connects three continents. This incident came five years after a similar attack on the same cables and three years after terrorists in the Philippines successfully cut cable lines near the Filipino city of Cagayan de Oro. While the possible involvement of China and Russia in recent cord-cutting incidents has drawn international scrutiny, these prior incidents indicate that nonstate actors also perceive these cables as an opportune target.  

In late 2023, a Telegram channel affiliated with Yemen’s Houthi rebels threatened this vital underwater infrastructure by posting a map showing the subsea communications cables in the Mediterranean Sea, the Red Sea, the Arabian Sea, and the Persian Gulf. An ominous message accompanied the map: “There are maps of international cables connecting all regions of the world through the sea. It seems that Yemen is in a strategic location, as internet lines that connect entire continents—not only countries—pass near it.” Of note, the Houthis possess an arsenal of underwater mines, and Houthi militants have reportedly undergone combat diver training in the Red Sea.  

The Houthis’ bold assertion could inspire other nonstate actors to put undersea cables in their crosshairs, expanding the threat to this vital infrastructure beyond the region. The same day the Telegram post appeared, a Hezbollah-affiliated Telegram channel shared a similar message and questioned whether the Houthi statement was a “veiled message to the Western coalition.” 

Since these cables facilitate financial transactions and are the only hardware capable of accommodating the huge volumes of military sensor data that inform ongoing operations, terrorist groups may see them as high-value targets that can be attacked at a relatively low cost. Furthermore, non-state actors with growing cyber capabilities could exploit vulnerabilities in these networks, potentially disrupting services or stealing sensitive data. This confluence of high-tech and low-tech threats should sound alarms about the future security of global communication networks. 

Emily Milliken is an analyst focusing on Gulf security issues, and the associate director of media and communications for the N7 Initiative at the Atlantic Council’s Middle East Programs. 

In 2023, the United States produced more oil in a single year than any other country in history—largely due to fracking, which injects fluid under high pressure into rocks, cracking them open to access oil stored within them. The same technique can be used to draw cleaner sources of energy—such as the heat trapped in the earth’s crust—to the surface and send it out to homes across the United States. Geothermal energy harnesses that heat and constitutes a low-carbon energy source. With new technology on the horizon that could make it easier to utilize geothermal energy in more parts of the country, the United States is poised to unlock a major source of energy.  

Geothermal-power extraction is currently confined to traditional hydrothermal regions, mostly in the western continental United States plus Hawaii and Alaska. In these regions, conventional geothermal systems tap into the naturally occurring hot water or steam from the earth to drive turbines that generate electricity.  

Through enhanced geothermal systems (EGS), geothermal-energy production could be expanded far beyond traditional hydrothermal regions. According to the US Department of Energy, by replicating the physical dynamics present in these regions, EGS has the potential to power more than 65 million homes—a little under half of all American homes. EGS is similar to fracking in that it involves injecting fluid into the ground to create new fractures or reopen old ones, resulting in increased permeability. The hot fluid is then pumped to the surface, where it is used to generate electricity. This method works in areas where the ground is hot enough but there may not be enough naturally occurring fluid or permeability to make geothermal power viable without the addition of EGS. 

Currently, the United States has utilized less than 0.7 percent of its geothermal-electricity resources, with the remaining potential expected to become available via EGS. The Department of Energy has started to recognize the potential of EGS, funding projects in Nevada, California, and Utah. The department’s Enhanced Geothermal Shot initiative seeks to reduce the cost of EGS by 90 percent by 2035 to $45 per megawatt hour. It’s an ambitious goal, but one that, if successful, would dramatically increase access to this low- or no-carbon energy source across the United States.  

That could help address an urgent need. One analysis estimates that power demand in the United States will grow 4.7 percent over the next five years, outpacing the 0.5 percent growth in annual demand over the last decade. Though not a silver bullet, expanding access to geothermal power could help meet this demand in a clean, predictable, and relatively cheap way. 

Imran Bayoumi is an associate director at the Scowcroft Center for Strategy and Security.

Given the political and technical difficulties of getting countries to reduce the amount of greenhouse gases they pump into the air, the quest for technologies that can remove these gases has grown ever more important. One such technology, direct air capture (DAC), involves pulling carbon dioxide (CO2) out of the air and permanently storing it somewhere else, usually deep underground in rock formations. Because current methods of direct air capture are costly and energy-intensive, they have made only a marginal contribution to meeting global climate goals.  

Yet carbon capture might be poised for a transformation thanks to a yellow powder. DAC technologies are expensive to scale because they use substantial amounts of water and energy and are designed to capture concentrated sources of carbon such as the exhaust from a power plant. A new CO2-absorbing material called COF-999, created by a University of California at Berkeley-led team of scientists, could collect CO2 far more cheaply, using substantially less water and energy, than current DAC processes. Utilizing a covalent organic framework—involving the strongest chemical bonds in nature—the material promises to be dependable and sustainable. The powder is less likely to be damaged by humidity, reaches half its capacity in only eighteen minutes, is reusable (it can be used through one hundred cycles of the carbon-removal process, with minimal capacity loss), and might effectively pull CO2 out of the air around us, which has far lower concentrations of carbon than, for example, power-plant exhaust. 

Current carbon-capture technology, according to some estimates, could account for 14 percent of the global-emissions reductions needed to meet climate targets by 2050. The market is already expected to rapidly expand, with a projected compound annual growth rate of 6.2 percent over the next five years and estimated value of four trillion dollars by 2050. The invention of COF-999 could supercharge these numbers. It could be easily implemented in existing carbon-capture systems, or scientists could experiment with ways to take advantage of its ability to clean ambient air. “We took a powder of this material, put it in a tube, and we passed Berkeley air—just outdoor air—into the material to see how it would perform … It cleaned the air entirely of CO2,” said Omar Yaghi, a Berkeley chemistry professor who worked on the study. As atmospheric CO2 levels hit record highs, and extreme heat waves, wildfires, floods, and hurricanes increase in frequency, the yellow-powder breakthrough is one example of the creative science needed to counter inaction on rising global emissions.

Ginger Matchett is a program assistant with the GeoStrategy Initiative in the Atlantic Council’s Scowcroft Center for Strategy and Security. 

If you have fifteen million dollars to spare, an unused ancestral estate, or even a small plot of land in need of transformation, you too can get in on the hot new trend of rewilding—or the process of rebuilding natural ecosystems on landscapes disrupted by humans. The concept represents a fundamental shift in the way governments, ecologists, and ordinary people view conservation. It focuses on restoring to health native environments—including their balance of plants and animals—rather than on trying to protect scarce undisturbed areas such as wilderness (only 3 percent of the Earth’s land surface is ecologically intact). The idea first took off in North America and has spread like kudzu, including to the estates of the ultra-wealthy. Although rewilding remains a niche solution to various conservation problems, it may be on the verge of an explosion, with major consequences for the global climate. 

Some estimates already put the global total of land available for rewilding at a billion acres, which is roughly half the area of the Australian landmass—and even more is set to become available over the course of this century as a combination of factors reduce pressure for the intensive use of land. Some two-thirds of humanity is projected to live in cities by 2050, and the world’s total population (urban and rural) is expected to peak by the mid-2080s. At the same time, agricultural productivity is increasing, technology and innovation are decoupling food output from land input, and alternative proteins, which are far less land- and carbon-intensive than animal-based proteins, are becoming increasingly popular. 

A 2024 study found that a quarter of land in Europe is suitable for rewilding, with Scandinavian countries, Scotland, Ireland, Spain, and Portugal at the top of the list. A lot of land is viable for rewilding beyond Europe, too, including in Japan and North America. In the United States alone, around thirty million acres of cropland has been abandoned since the 1980s.  

Rewilding may help the environment by absorbing carbon and reversing biodiversity loss. Recent declines in biodiversity around the world, including a 73 percent decrease in wildlife populations over the last fifty years and one million species on the verge of extinction, are linked to accelerated climate change and the spread of infectious diseases. There could be economic benefits as well. Nature tourism is responsible for $600 billion in revenue globally and twenty-two million jobs; revitalized natural spaces and the reintroduction of large animals into them can help raise those numbers. Restoration and rewilding can also increase farming yields, the availability of water, and global fish populations, while also reducing the degradation of agricultural land. Mangroves, coastal wetlands, and coral reefs can lessen flood risk. Putting large herbivores back into their native areas can lower wildfire risk. 

Just as the potential benefits of rewilding are becoming clearer, so too are its possible costs. Some experts fear that rewilding efforts may, like some net-zero carbon pledges, allow governments and industry to sidestep decarbonization efforts in favor of carbon offsets, which are unregulated and can be reversed. The reintroduction of animals and plants, particularly large predators, can also induce a public backlash, which may harm rewilding and restoration. Restoration of ecosystems might increase the risks of tick- and other vector-borne diseases as well. As the world grows hotter, it could prove difficult to reintroduce some desired species. 

Nevertheless, if the land resources and financial incentives for ecological restoration combine with messaging and public sentiment in favor of individual and community action, rewilding may become a movement capable of restoring wide swathes of land to their original states. In so doing, it might open a new route to address the effects of a changing climate.

John Cookson is the editor of the Atlantic Council’s New Atlanticist.  

Sydney Sherry is an assistant director with the GeoStrategy Initiative in the Atlantic Council’s Scowcroft Center for Strategy and Security. 

In 2019, scientists Akira Yoshino, M. Stanley Whittingham, and John B. Goodenough won the Nobel Prize in chemistry for their development of the rechargeable, renewable lithium-ion battery. The committee commended the trio for having “laid the foundation of a wireless, fossil fuel-free society.” Since their debut in the 1990s, batteries have become ubiquitous in all kinds of electronics. But there’s something even better on the horizon, and not a moment too soon: quantum batteries. 

These novel batteries store energy by drawing on quantum mechanics (the study of physics on a microscopic scale) and particularly quantum chemistry, which is crucial to battery research and allows scientists to understand the chemical structure and reaction of atoms at significantly quicker speeds than current models. It’s a promising emerging technology to watch amid a broader exploration of alternative battery chemistries that could offer the energy density and stability to perform better than lithium-ion batteries for certain functions. 

One application is medical devices. About 26 percent of the US adult population has some type of disability that requires a medical device—such as cochlear implants or a pacemaker—and these devices rely on lithium-ion, lithium, or lithium-iodine batteries for energy. Supply of such batteries isn’t guaranteed; beginning in 2022, for instance, a lithium-ion battery shortage upended electric-vehicle and medical-device supply chains in the United States. These batteries also often require recharging or a replacement, which can necessitate additional surgeries if the medical device that uses them is implanted.

Since quantum batteries could have higher energy density, quantum devices could provide more efficient and long-lasting performance than lithium-based options, reducing the number of battery exchanges that put patients at risk. The energy stored in quantum batteries also could power medical facilities and electric vehicles, improving emergency services in vulnerable and remote areas—a crucial concern worldwide, as climate change brings stronger storms along with longer and more intense heat waves, which not only raise health risks but also strain power grids. During power outages, most hospitals today rely on fossil-fuel and battery-system generators, which often experience complications. In the future, quantum batteries could power these facilities instead. Additionally, since quantum batteries could accelerate charging times for electric vehicles from the current thirty minutes to seconds at high-speed stations (and from about ten hours to a few minutes at home), electrically powered ambulances and medical devices could be charged and ready to go in seconds—a unit of time that can make all the difference for first responders.  

Tatevik Khachatryan is an assistant director for events at the Atlantic Council.

Picture someone falling for an online hoax. If an elderly internet user came to mind, think again. A recent study from Cambridge University revealed that the generation that grew up with the internet—and that reported in the study spending the most time online—had a hard time telling real headlines from fake ones. 

Though they tend to be tech savvy and certainly are not the only generation vulnerable to inaccurate information, members of Generation Z (those born in the late 1990s and early 2000s) are more susceptible to mis- and disinformation than widely assumed. Often relying on social media as a primary news source, digital natives are vulnerable to manipulation. In the Cambridge study, as well as in research conducted by the Center for Countering Digital Hate, they demonstrated a propensity to believe in conspiracy theories. Gen Z might be conscious of the threat posed by biased feeds and manipulated media, but its members continue to scroll and share—and their amplification of mis- and disinformation will be a serious challenge in the future.

Social media is a central fact of life for the vast majority of Gen Zers in the developed world, and it has become an indispensable informational tool for those in developing countries as well. In 2024, a report surveying nearly 4,500 individuals across the United States, Canada, the United Kingdom, Ireland, and Australia found that 91 percent of Gen Z social media users are on Instagram and 86 percent are on TikTok. Gen Z is forming judgments based on the content appearing on their social media feeds—often curated by algorithms that privilege content with higher engagement levels regardless of whether it is true or false—and circulating it to their digital communities. Their decisions about who to follow on social media are not necessarily rooted in the authenticity or credibility of those figures. Instead their social media consumption is often parasocial: They tend to follow media streams and engage with the causes of individuals who they don’t know personally, be they influencers or politicians. 

A generation growing up with seemingly unlimited access to information and extensive knowledge about what digital technologies like algorithms do, but with limited ability to verify that information, represents a significant sociological change. As members of Gen Z proceed in their careers and assume more powerful positions, there is a real risk that they have been left ill-prepared to navigate the overwhelming scale of online information ecosystems. The mis- and disinformation surrounding global challenges ranging from war to migration to climate change may also make Gen Zers more mistrustful of both institutions and other individuals, rendering them less capable of addressing these challenges. Collaborative efforts between Gen Z and older generations—engaging private companies, governments, and individuals—are needed to manage a transformed information landscape and prevent subsequent generations from growing up in an era of misinformation or falling for online hoaxes. 

Ginger Matchett is a program assistant with the GeoStrategy Initiative in the Atlantic Council’s Scowcroft Center for Strategy and Security. 

Srujan Palkar is a Global India fellow and assistant director with the Scowcroft Middle East Security Initiative in the Atlantic Council’s Middle East Programs.

Global Foresight 2025

In this year’s Global Foresight edition, our experts share findings from our survey of global strategists on how human affairs could unfold over the next decade. Our team of next-generation scholars spot “snow leopards” that could have major unexpected impacts in 2025 and beyond. And our foresight practitioners imagine three different scenarios for the next decade.

Learn More Full Survey

Atlantic Council Strategy Paper Series Feb 12, 2025

Welcome to 2035: What the world could look like in ten years, according to more than 350 experts

In the fall of 2024 after the outcome of the US presidential election, the Atlantic Council’s Scowcroft Center for Strategy and Security surveyed the future, asking leading global strategists and foresight practitioners around the world to answer our most burning questions about the biggest drivers of change over the next ten years. Here are the full results.

Read More

Atlantic Council Strategy Paper Series Feb 12, 2025

Six ‘snow leopards’ to watch for in 2025

By Emily Milliken, Imran Bayoumi, Ginger Matchett, Srujan Palkar, Sydney Sherry

Atlantic Council foresight experts spot the underappreciated phenomena that could have outsized impact on the world, driving global change and shaping the future.

Civil Society Climate Change & Climate Action

Atlantic Council Strategy Paper Series Feb 12, 2025

Three worlds in 2035: Imagining scenarios for how the world could be transformed over the next decade

2024 was marked by increased climate shocks and collaboration of autocratic adversaries. What will the world look like in the next decade? The Atlantic Council’s top experts brought their globe-spanning expertise to the task of forecasting three different scenarios for the future.

Africa China

The post Six ‘snow leopards’ to watch for in 2025 appeared first on Atlantic Council.

Russia’s invasion has highlighted the need for Europe to pursue greater energy flexibility and connectivity. With sufficient support from the country’s European partners, Ukraine can potentially make an important contribution toward achieving these goals, especially using the three Three Seas Initiative, a political, infrastructural, and commercially driven platform for improving connectivity between the Baltic, Adriatic, and Black seas.

As the world watches the Russian invasion of Ukraine unfold, UkraineAlert delivers the best Atlantic Council expert insight and analysis on Ukraine twice a week directly to your inbox.

Europe’s energy ecosystem is currently undergoing major changes. At the start of 2025, decades of Russian gas transit through Ukraine came to an end after Kyiv chose not to renew an expiring five-year agreement with the Kremlin’s flagship energy company Gazprom. The loss of gas transit via Ukraine has had a negative impact on the Russian economy at a time when Moscow’s gas export volumes were already far below pre-war levels.

So far, the ending of gas deliveries through Ukraine’s pipeline system has not led to dramatic rises in gas prices for European consumers. Nevertheless, Kyiv’s decision to end transit has caused considerable tension with some of the country’s neighbours.

Slovakia and Hungary rely heavily on Russia for gas supplies and have voiced their displeasure over Ukraine’s stance. Both countries were given ample warning of the impending end of transit deliveries but chose not to act. In contrast, Austrian energy giant OMV used the past two years to prepare for potential supply disruptions and has therefore proved far more resilient, despite being even more dependent on Russian gas at the start of the invasion.

Since 2022, Ukraine’s efforts to limit Russian influence in the energy sphere have continued despite wartime conditions in the country. This has included decoupling the national power grid from the Russian system and joining Europe’s ENTSO-E network.

This historic move has given Ukraine more options in the energy sector and has helped the country to address the challenges created by frequent Russian attacks on the Ukrainian power grid. Ukraine has benefited from enhanced connectivity to the European network, making it possible to import more electricity from the country’s EU neighbours, while also exporting in the opposite direction during periods of power surpluses.

Kyiv has also succeeded in accessing new sources of energy. Following an intensive Russian bombing campaign targeting Ukrainian power stations in spring 2024, Ukraine was able to receive LNG from the United States for the first time via Greece. A number of European countries including Greece, Bulgaria, Romania, Hungary, Moldova, Slovakia, and Ukraine are now looking to develop a vertical gas corridor to facilitate bidirectional gas flows between Greece’s LNG terminal and Ukraine.

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Drones, defense, and diplomacy: Negotiations and the battlefield in Ukraine

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While there are positive signs that Europe is responding constructively to recent developments in the energy sector, it is clear that more infrastructure innovations, flexibility, and connectivity are needed in order to prepare for possible future crises and address the rise of new energy sources. For example, the advance of green energy requires the right mix of baseload supply options to avoid imbalances and blackouts. This will require a more integrated approach to European energy security and efficiency.

In the coming years, Ukraine can play a key role in efforts to improve European energy security and connectivity. The country is thought to have the second highest gas reserves in Europe. It also has the continent’s largest gas storage facilities and an extensive pipeline system for oil and gas transit. In order to make the most of this potential, Ukraine should look to establish multifunctional energy production and transportation hubs capable of integrating with global LNG, hydrogen, and green ammonia infrastructure.

Improving the connectivity between Ukraine’s energy infrastructure and the European Union, United Kingdom, and United States would strengthen overall energy security and make the European energy system considerably more robust. Needless to say, this requires security and an end to hostilities in Ukraine. Many of the advantages a more integrated Ukraine can offer would depend on the secure passage of ships to the country’s Black Sea ports, for example, while Russia has repeatedly targeted Ukrainian gas storage facilities in the west of the country.

For now, the ongoing Russian invasion places severe limitations on Ukraine’s ability to contribute to improved European energy flexibility and connectivity. However, the country’s huge potential should be taken into consideration as European leaders prepare for the postwar period and explore options to strengthen the continent’s long-term energy resilience.

Nataliya Katser-Buchkovska is the founder of the Green Resilience Facility and a former member of the Ukrainian Parliament (2014-19).

Further reading

UkraineAlert Jan 15, 2025

Appeasement will only fuel Vladimir Putin’s imperial ambitions in Ukraine

By Anastasiia Marushevska

Vladimir Putin’s invasion of Ukraine is an old-fashioned colonial war rooted in centuries of Russian imperial history that cannot be ended by limited territorial concessions or other attempts at appeasement, writes Anastasiia Marushevska.

Conflict Disinformation

UkraineAlert Dec 19, 2024

Five things Russia’s invasion has taught the world about Ukraine

By Peter Dickinson

Vladimir Putin’s brutal invasion of Ukraine has thrust the country into the global spotlight and transformed international perceptions of Ukraine in ways that will resonate for decades to come, writes Peter Dickinson.

Defense Technologies Disinformation

UkraineAlert Feb 4, 2025

Russia’s war against the West will continue until Putin tastes defeat

By Andriy Zagorodnyuk

Russia’s invasion of Ukraine is part of a far larger war against the West. If he succeeds in Ukraine, Putin aims to destroy the existing rules-based world order and usher in a new era dominated by a handful of great powers, writes Andriy Zagorodnyuk.

Conflict Economic Sanctions

The views expressed in UkraineAlert are solely those of the authors and do not necessarily reflect the views of the Atlantic Council, its staff, or its supporters.

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UkraineAlert is a comprehensive online publication that provides regular news and analysis on developments in Ukraine’s politics, economy, civil society, and culture.

The Eurasia Center’s mission is to enhance transatlantic cooperation in promoting stability, democratic values and prosperity in Eurasia, from Eastern Europe and Turkey in the West to the Caucasus, Russia and Central Asia in the East.

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Evolution of freedom

In order to adequately assess Peru’s performance in the Freedom and Prosperity Indexes, it is important to note the extremely difficult situation in the country during the late 1980s and early 1990s, immediately before the period covered by the Indexes. The extreme episode of hyperinflation that began in 1988 and peaked in 1990, with an annual inflation rate above 7,000 percent, and the intensification of the internal violent conflict generated by the Shining Path (Sendero Luminoso), a Maoist guerrilla group, are two examples of the challenges Peru faced in the decade before 1995. The Freedom Index coverage begins in the middle of Alberto Fujimori’s presidency, once most of his economic reforms were already in place, and when some of his authoritarian tendencies were evident. Thus, the economic subindex score in 1995 is relatively high compared to the regional average, while the political subindex is significantly lower, thirty points below the mean for Latin America. The return to free elections in 2001 is reflected in the large jump in the political subindex in that year. 

Before discussing the Freedom Index evolution, it must be noted that many of its constituent components reflect the country’s written laws, not their actual implementation and enforcement. The potential gap between the situation de jure versus de facto is a typical issue with many indexes that try to assess politico-institutional variables, and it is often more pronounced in emerging and developing countries. This is crucial because we should expect institutional reforms to produce significant effects on prosperity only when they are effectively implemented. Peru is probably one of the clearest examples of this difficulty, with a set of written laws and regulations comparable to the most advanced countries of the world, but a level of implementation and enforcement that is far from such standards. Therefore, the picture portrayed by the Freedom Index may be too generous, especially in components such as women’s economic freedom and judicial independence and effectiveness. With this important caution in mind, it is possible to analyze the Peruvian experience as captured by the three different freedom subindexes. 

The economic subindex level and trend since 1995 are explained by two main factors. First, Peru’s relatively high score compared to the regional average at the beginning of the period is the product of the large body of economic reforms implemented in the 1990s, in particular in terms of trade and f inancial openness. In the last thirty years, Peru has had very low tariffs on imports, including no tariffs on capital goods, and has entered into a number of free trade agreements worldwide. Moreover, it has imposed very limited restrictions on capital movement within and across borders. From a purely de jure perspective, capital account openness in Peru is comparable to the most open countries of the world. The Chinn-Ito index of financial openness has assigned the highest possible score to Peru since 1997, and the Fraser Institute’s Economic Freedom of the World Index gives the country a perfect score in its financial openness sub-area since the year 2000. However, Peru loses points due to the regulatory uncertainty and bureaucratic burdens that create constraints on investors, especially foreign investors; these barriers are considered in the investment freedom component. Reflecting a large increase in regulatory uncertainty during the election period of 2006, the investment freedom score abruptly fell twenty points, recovering in subsequent years as investors’ fears of strong government intervention in private sector affairs ultimately did not materialize. 

Second, the overall positive trend since 1995, with a total increase of more than ten points in the 1995–2023 period, is to a great extent driven by the thirty-point improvement in the component measuring women’s economic opportunities. This is a good example of the legislation–practice gap. It would be hard to find a specific legal norm that includes any form of discriminatory treatment based on gender, especially in economic matters. But the actual situation is not so optimistic. Think for example about the so-called “child penalty,” the impact in terms of labor outcomes when a worker has a child. Forty-one percent of women in Peru quit their jobs when becoming mothers, while men barely see any change in their labor force participation. Moreover, recent research shows that only 51 percent of working age women participate in the labor market, and there is also a 25 percent pay gap with men.

The property rights component remains at very low levels. This is largely explained by significant problems with land titling, bureaucratic inefficiencies, and corruption in the judicial system; all of which translate into significant constraints for safeguarding and formalizing property ownership. The lack of clarity on property rights regarding land ownership disincentivizes investment and severely limits the ability of small enterprises, particularly in rural areas, to access credit, as land cannot be used as collateral for loans. 

My impression regarding economic reforms in Peru is that, since the late 1990s, progress has been slow and limited. The various administrations since 2000 have not managed to implement a new wave of comprehensive structural reforms that could serve as an engine of sustained growth. There have been reforms, but they have been partial or hindered by significant implementation challenges. Fortunately, sound macroeconomic policies have been maintained in the last two decades providing economic and financial stability. But while macroeconomic stability is certainly necessary, it is not sufficient to drive sustainable growth. The period of Peru’s highest economic growth, from 2004 to 2014, was clearly facilitated by the global commodity boom, as the country is a significant producer of copper and other raw materials. However, when external growth engines slowed, the inaction of several governments in implementing essential economic structural reforms left the country without the much-needed internal drivers for sustained growth. 

Turning now to the political side, I am skeptical about the very favorable assessment of the political system illustrated by the political subindex and its four components. Although declining in recent years, Peru’s political subindex is at a similar level to the average of the Organisation for Economic Cooperation and Development (OECD) countries, scoring around ninety out of one hundred since the end of Fujimori’s presidency. This does not capture the actual functioning of the Peruvian political system, which is far from that of well-established liberal democracies in Europe and North America, or even the most advanced countries of Latin America such as Chile or Costa Rica. 

Source: Freedom and Prosperity Indexes, Atlantic Council (2024).

One of the most evident recent political problems in Peru is the lack of a deep-rooted party system. With few well-established political parties, the political spectrum is plagued with small and not very institutionalized political parties that appear and disappear in every electoral cycle, whose leaders often lack political experience and are prone to populist rhetoric and tactics. This political fragmentation is making it extremely hard for any government to pass substantial legislation or implement its policy agenda. A good example of the extremely dysfunctional political environment is the evident weaponization of the Constitution during the last decade, regarding the respective powers of the presidency and parliament. The Constitution enables Congress to denounce the president as incompetent and remove him from office, and also grants the president the power to dissolve Congress, under certain circumstances. Although this system was intended to create a balance between the legislative and executive branches, it has been used recklessly since 2016, leading to Peru having six different presidents in eight years, with only one of them staying in power for more than two years. To some extent, these developments are reflected in the decline in the legislative constraints on the executive component. 

The general citizenry is very aware of the political situation of the country. Public opinion is strongly negative toward politicians and political parties. Recent waves of the Latinobarometer opinion survey clearly show that Peruvians are among the populations that have least confidence in the potential economic and development benefits of a free political system. This is worrying; once citizens become skeptical about the capacity of democratic institutions to deliver for all, the road to populism and authoritarianism is paved. 

In the legal subindex, the judicial independence and effectiveness component faces the same criticism. The sharp rise in this component’s score, along with the improvement in the clarity of the law component, drive the clear discontinuity observed in the year 2000, which virtually closes the gap with the rest of the region. In the last twenty years, the legal subindex score for Peru has been relatively close to that of neighboring countries such as Colombia, and the gap with respect to the top performers in the region is moderate. However, I have doubts about whether this captures the real situation regarding enforcement of the law. A comparison with the World Bank’s Worldwide Governance Indicator’s (WGI) rule of law measure can be enlightening here, as the latter captures to a much greater extent the actual enforcement of the law. Figure 1 compares Peru to Chile and Costa Rica. The difference between Peru and Costa Rica is substantial, with Costa Rica’s score around twice Peru’s for all years since 2000. The gap with Chile is even wider. Figure 2 shows a similar picture when looking at another related variable of the WGI, namely government effectiveness. That is, when using a measure of actual practice and enforcement of the law, Peru falls considerably behind the top scorers of the region, not to mention developed countries in Europe or North America. 

Finally, the prevalence of informal labor and production relations in Peru is among the highest in the region, with some estimates reaching close to 70 percent of the total labor force. The World Bank estimates that the share of gross domestic product (GDP) contributed by informal production is around 50 to 70 percent higher in Peru than Mexico or Colombia, which are by no means the region’s best performers in Evolution of Prosperity this metric. The improvement captured in the informality component from the early 2000s is most likely a by-product of the commodity boom, a period of high economic growth that benefited employment and workers’ formalization, although some labor market reforms also supported this outcome. Nonetheless, informality is still a pressing issue for Peru, and a strong constraint on the future development of the country. 

Evolution of prosperity

The poor quality and effectiveness of Peruvian institutions stand in sharp contrast to the relatively stable macroeconomic situation in the country, and the favorable perception of Peru’s economic performance and prospects among the international community. This is a paradox, as similar levels of political instability have produced very volatile macroeconomic environments in other emerging market economies, plagued with sudden stops in financial f lows, high levels of inflation, and default episodes. Many commentators attribute Peru’s macroeconomic stability to the deep scars the hyperinflation of 1988–90 left among the population and the political elites. The dramatic consequences of this event, with empty stores, lack of basic goods and services, and a rapidly impoverished middle class, are very much embedded in the citizens’ minds, and avoiding its repetition has been an absolute priority for all subsequent governments. 

This fear has generated an implicit consensus, and politicians across the ideological spectrum have left management of the macroeconomic situation out of the political debate. The functioning of the Central Reserve Bank of Peru is the paradigmatic case of this arrangement, as illustrated by the fact that the Bank’s chairman has held this position since 2006, under eight different presidents. As a consequence, Peru’s macroeconomic performance in the last twenty-five years has been truly impressive, with a very credible commitment to a low inflation target, low levels of public debt to GDP (around 33 percent in 2023) and controlled government deficits, which granted the country’s public debt the investment grade in 2007. 

The evolution of the Prosperity Index reflects this situation, showing an increase of almost fifteen points in the 1995–2019 period, eliminating the gap with the rest of the region. The income component largely follows the same pattern as the overall index. Nonetheless, a careful analysis of this trend reveals an evident slowdown of economic growth, especially since the end of the commodity boom. In my view, this stagnation is the direct consequence of a combination of weak institutional quality and a f lawed political environment. As a result, it is likely to persist unless a new and comprehensive reform process is undertaken. 

The inequality component shows an impressive improvement in the last two decades, but it is important to take into account the really low level of this indicator in the early 2000s. The commodity boom undoubtedly helped reduce income inequality by pulling large numbers of workers into the formal sector and expanding the middle class. Although poverty- and inequality-reducing policies are in place across the country, and have played a role in supporting reductions in inequality, the limited capacity of many sub-national governments often means inefficient implementation and inadequate provision and quality of public services. As a result, regional inequality is a pressing problem in Peru. For example, according to a recent report by the World Bank, although more than half of urban households have access to piped water, sanitation, electricity and the internet, only 6 percent of rural households have access to these four services. Regional inequalities are also seen. For instance, residents in Loreto, a region in the Amazon, have eight hours a day of water access, in comparison with the country average of almost eighteen hours. There is extensive research showing that regional inequality is a serious issue, and some regions are noticeably being left behind.

I am somewhat critical of the education component, which is based on measurements of “quantity” of education, such as the expected and mean years of schooling, but does not take “quality” into account. The period of rapid growth enabled an increase in the government’s education budget, resulting in a significant rise in the percentage of children completing elementary, primary, and secondary education. However, while there have been advances, the quality of education remains a serious concern. For example, Peru was in the lowest quartile of the PISA global rankings. In the most recent PISA results, almost no students in Peru were top performers in mathematics, and only 34 percent attained at least a basic level of proficiency in mathematics, significantly less than the average across OECD countries (69 percent).¹An educational reform introduced in 2012, building on the reform of 2007, aimed to improve teacher quality and student learning outcomes. A key goal was to transition from a system that allows hiring and promotion of teachers based on political connections to one based on merit. A major obstacle, however, has been political. The teachers’ union protested against elements of the reform, such as evaluations that could lead to job losses for underperforming teachers. The insufficient educational quality in Peru is a major constraint on long-term growth, as it limits the accumulation of human capital, essential for sustained economic progress. Many graduates lack the skills necessary to succeed in the labor market and are limited to low-paying jobs in the informal sector. 

There is also a lack of quality measures in the health component. In particular, the indicator does not capture the large deficiencies in health infrastructure and the resulting shortcomings in patient care. For instance, studies conducted before the COVID-19 pandemic revealed that more than half of the establishments offering primary healthcare lacked a single doctor and were staffed only by nurses or technicians. The pandemic exposed serious deficiencies with the healthcare system, with devastating consequences. Peru reported the highest number of deaths per million inhabitants globally. Unsurprisingly, the country’s health score fell twice as much as the average for the region. 

The very significant improvement in the environment component is almost exclusively driven by one of the variables used in its construction, namely the share of the population with access to clean cooking technologies, which has increased from 40 percent to more than 85 percent in the 2000–20 period. This is certainly good news, but there is still significant room for improvement in both indoor and outdoor air quality, as well as other environmental challenges. Examples of environmental challenges include illegal mining, especially in the Madre de Dios region, which leads to deforestation, mercury contamination and loss of biodiversity. Water contamination from untreated sewage and industrial waste is another major issue and there is a lack of effective waste disposal in many cities, contributing to plastic pollution, especially in urban areas along the coast. In addition, Peru is highly vulnerable to natural disasters exacerbated by climate change, such as extreme weather events and rising sea levels that affect the coastal area and fishing. 

As reflected in the relatively low score assigned to the minorities component, protection against discrimination based on gender, race, sexual orientation, and other characteristics is relatively weak in Peru, falling significantly below the regional The Path Forward average, with the gap widening in recent years. Although there have been improvements, cultural and social norms continue to limit advances on this front. Another pressing issue is gender-based violence. A recent World Bank report highlights that the institutions responsible for protecting women and girls, including the police, the judiciary, and health providers, do not effectively protect them from abuse. Consequently, there is widespread mistrust among women toward government institutions in Peru. 

The path forward

Peru’s prospects for prosperity are at a critical juncture. The previous discussion highlights that deficiencies in the capacity of the state to deliver public goods and services, including ensuring security and enforcement of the law, significantly constrain the country’s potential for regaining economic growth and overall prosperity. The weakness of institutions and governance, reflected in excessive bureaucracy, corruption, and a weak and inefficient judiciary, hampers domestic and foreign private sector investment. While maintaining a stable macroeconomic framework is key, it is not sufficient to provide the certainty and security investors need for long-term and productive investments. 

A major challenge in implementing state reforms is political fragmentation, which prevents reaching consensus. Currently, ten political parties are represented in Congress and the number of parties may rise in the lead-up to the April 2026 presidential elections. This fragmentation is partially explained by weak legal requirements for forming political parties, which allow small groups to establish a party. The decline of traditional World Bank, Rising Strong: Peru Poverty and Equity Assessment. parties, such as Alianza Popular Revolucionaria Americana, and Acción Popular, has left a vacuum. This decline is another reflection of the population’s mistrust in institutions, which fuels the rise of new political movements, often led by charismatic but inexperienced leaders seeking to capitalize on widespread discontent. 

How can much-needed pro-growth and inclusive structural reforms occur in this fragmented context? Fortunately, there is a promising opportunity for Peru in the coming decade: the green transition. Peru is rich in copper, lithium and other natural resources that are essential for clean energy technologies, which can position it as a crucial partner for the rest of the world. Additionally, its diverse geography provides significant renewable energy potential, especially in hydropower, solar and wind, which can reduce dependence on fossil fuels, create jobs, attract foreign investment, and improve energy security. 

I am hopeful that recognizing the potential benefits of a comprehensive green transition strategy—such as growth, poverty reduction and equity improvements—can catalyze consensus even in a fragmented and polarized political climate. The increasing global push for environmental initiatives, along with efforts in other Latin American countries, could incentivize policy actions in Peru. If even partial consensus around this agenda is achieved, three areas of reform must be prioritized. 

First, major investments in infrastructure and other projects are necessary to support the green transition. Improving the public sector’s capacity to execute these projects requires a systematic effort to build the technical capacity of subnational governments. This includes providing technical assistance and facilitating the hiring of trained personnel, including from abroad. Ideally, a comprehensive reform of subnational governments would involve consolidation of local and even regional governments, as some are currently too small to function efficiently. Yet while this reform needs to remain a long-term goal to improve efficiency, in the short term, in the context of high political polarization, this type of proposal could be weaponized, further increasing resistance to reform. 

Second, to develop value chains related to the green transition—such as green manufacturing, renewable energy and eco-tourism—it is essential to facilitate the formalization of firms and workers. This requires significant labor market reform. Liliana Rojas-Suarez Currently, the very high costs of hiring, firing, and non-wage labor costs, above the region’s average, reduce incentives for firms to hire workers and for small and medium-sized firms to formalize. A more f lexible labor market would allow Peru to compete globally in emerging industries linked to the green transition. 

Third, human capital development is crucial. The workforce needs to be equipped with the necessary technical skills to meet the demands of the green transition. Given the pace of technological change, workers must not only be prepared for current jobs but also possess the ability to adapt and learn. That means that serious improvements in the education and health systems are necessary. This will require sustained efforts across multiple government administrations to bear fruit. 

Notwithstanding, if political consensus is achieved around the goal of advancing Peru’s role in the green transition, there is hope that political parties can form a common front to improve the quality of Peru’s future labor force. Sustained prosperity will then follow. 

Liliana Rojas-Suarez is the director of the Latin American Initiative and a senior fellow at the Center for Global Development. Rojas-Suarez also serves as president of the Latin American Committee on Macroeconomic and Financial Issues. Rojas-Suarez has held senior roles in the private sector and at multilateral organizations, including Deutsche Bank, the International Monetary Fund, and the Inter-American Development Bank. In 2022, Forbes named her one of the fifty most influential women in Peru. 

The Atlantic Council and its staff, fellows, and directors generate their own ideas and programming, consistent with the Council’s mission, their related body of work, and the independent records of the participating team members. The Council as an organization does not adopt or advocate positions on particular matters. The Council’s publications always represent the views of the author(s) rather than those of the institution.

2024 Atlas: Freedom and Prosperity Around the World

Twenty leading economists and government officials from eighteen countries contributed to this comprehensive volume, which serves as a roadmap for navigating the complexities of contemporary governance. 

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Jun 15, 2023

Freedom and Prosperity Indexes

The indexes rank 164 countries around the world according to their levels of freedom and prosperity. Use our site to explore twenty-eight years of data, compare countries and regions, and examine the sub-indexes and indicators that comprise our indexes.

The Freedom and Prosperity Center aims to increase the prosperity of the poor and marginalized in developing countries and to explore the nature of the relationship between freedom and prosperity in both developing and developed nations.

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This puts Europe at a crossroads. Russia had succeeded in fostering a narrative that Europe’s economic prosperity hinges on cheap Russian energy sources by strategically monopolizing the European gas market with discounted prices. This myth was busted when Europe paid a trillion dollars in 2022 to mitigate the energy crisis manufactured by Moscow to blackmail Europe to abandon Ukraine. Europe now has two main options. It can put an end to Russian piped gas in perpetuity and build a secure, resilient economy with alternative supplies. Or it can cave under economic pressures and backslide into dependency through a patchwork of deals with short-term discounts.

Traders across Europe could ignore the lessons from the last three years and find creative ways to bring back some Russian gas. Proposals to mask Russian gas as Azeri to make the deal more politically palatable are being explored as well. The Baltics and Poland have diversified their energy sources beyond the point of no return, while other European nations, particularly areas hardest hit by high energy prices, are at risk of returning to deals with Moscow unless the European Union (EU) sets in a clear, legally binding deadline for Russian piped gas in its mandate on the future of Russian energy sources. Landlocked countries such as Slovakia, Hungary, the Czech Republic, and Austria now have access to liquefied natural gas (LNG) terminals, but the lure of discounted prices remains.  

Securing short-term, smaller-volume spot market deals through Ukraine could be feasible if third parties could work with Moscow and Kyiv separately to negotiate a new transit fee and transmission system operations logistics, complete technical upgrades, and—most importantly—ensure the geopolitical appetite in Kyiv for future flows. Another variable to consider is that Gazprom is drowning in ongoing litigation and several multibillion-euro arbitration rulings against it. Gazprom didn’t deliver on the take-or-pay condition of its now-expired contract with Ukraine, only paying Ukraine for the 15 bcm of gas delivered rather than the minimum amount of 40 bcm. In any other sector, European businesses would avoid any future dealings with such a company. While the prospect of continuing to purchase Russian gas provides an illusion of short-term economic reprieve, it would be a costly and dangerous choice down the road. 

Although Europe’s energy security, competitiveness, and decarbonization trilemma has no easy, cheap, or quick solutions, this historic decoupling is an unprecedented opportunity to forge a secure, resilient economy independent of Russian reliance and threats. The timing is opportune, as well: as the new competitiveness and innovation-focused European Commission takes the helm, Europe is poised for bold actions and a decisive policy on the future of Russian energy sources. There is no better time to sanction Gazprom’s piped gas to create certainty for other suppliers and send a strong message to European traders. Sanctions would also put an end to the 15 bcm of Russian piped gas deliveries through the TurkStream pipeline—cutting off all piped Russian gas deliveries to the EU. At the same time, an EU ban on Russian LNG, which has grown in export volumes to the EU, would not make much of an impact on Russia, as LNG is a fungible commodity with multiple alternative global routes, unlike piped gas. Instead, the EU and its allies should expand sanctions on Russia’s LNG projects, financing, and ships, as well as imposing additional technology export restrictions to curb LNG revenues and project expansion. 

Most importantly, energy will be at the core of transatlantic trade negotiations with US President-elect Donald Trump. Goodwill messaging aside, the EU can’t commit to buying more LNG, since these transactions are handled by the free market. But the EU can create a predictable investment environment and clarity about future demand by sanctioning Russian piped gas—likely leading to the EU buying more gas from the United States, which would be music to Trump’s ears. Moreover, Moscow’s depleted revenues and new sanctions would put Ukraine in a stronger negotiating position regardless of how the war progresses. Europe must act now to protect its future economic prosperity from the whims of Putin’s geopolitical agenda.  

Olga Khakova is the deputy director for European energy security at the Atlantic Council’s Global Energy Center. 

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This pledge reflects the United States’ heightened focus on securing supply chains for critical minerals, resources that play a pivotal role in the development of technologies from electric vehicles to solar panels to defense systems.

But Biden’s visit to Angola also underscores a bigger shift for the United States: both in its engagement with African nations and in its approach to the geopolitical competition for critical minerals unfolding in Africa. The Lobito Corridor exemplifies an approach to US engagement with Africa that prioritizes collaborative and equitable partnerships over exploitative models.

A new engagement strategy with Africa

The Lobito Corridor project is the United States’ largest effort to counter China’s presence in Africa.

China went on a notable buying and investment spree—solidifying its footprint in Africa’s mining sector by the early 2000s, particularly in the Copperbelt region in Central Africa. China owns or has a stake in fifteen of the DRC’s nineteen cobalt mines and has also made substantial investments in lithium production in Zimbabwe, giving China a significant advantage in the production of batteries and renewable energy technologies. Since China launched the Belt and Road Initiative (BRI) in 2013, Beijing has established significant economic inroads in many African nations through investments in transportation, infrastructure, and energy.

While US interest in African mining slowed for decades, the United States is increasingly working with and investing in African countries to develop the continent’s vast mineral resources.

In 2022, the Biden administration and several partner countries, along with the European Commission, launched the Minerals Security Partnership (MSP). This partnership aims to develop sustainable, transparent, and secure supply chains for critical minerals, with an emphasis on environmental, social, and governance standards.

Then in May 2023, the Group of Seven’s (G7’s) Partnership for Global Infrastructure and Investment (PGII) took up the Lobito Corridor project; in September of that year, the United States and the European Union announced that they would be co-leading the project. The proposed rail project involves the construction of approximately 350 miles of new rail line in Zambia that will connect its northwest region to the southern part of the DRC. This line will ultimately link to track in Angola and grant Zambia access to the Atlantic Ocean. The project also entails constructing hundreds of miles of feeder roads along the corridor and renovating the 120-year-old Benguela railway.  

When completed, the Lobito Corridor will provide greater access to the global market for these critical mineral-rich economies by expanding export possibilities, boosting regional trade, and reducing the time it takes to transport minerals and other goods. Its construction will advance the United States’ economic interests by unlocking investment opportunities, thereby creating avenues for US businesses to diversify supply chains, establish partnerships, and contribute to the economic diversification of the region—as well as offer African countries a more collaborative and transparent alternative to the BRI. Additionally, the corridor will help facilitate westward trade flows of critical minerals needed for the energy transition via the Atlantic, whereas previously many mineral exports have tended to flow eastward for export out of Tanzania’s Dar es Salaam port.

Overall, the United States’ increasing work with and investment in Africa, particularly through the Lobito Corridor and the MSP, demonstrates a US commitment to fostering infrastructure that supports shared economic growth and strives for more equitable access to resources.

Who is involved in this ambitious infrastructure project?

The PGII’s Lobito Corridor project stems from the Lobito Corridor Transit Transport Facilitation Agency Agreement, which was signed by the governments of Zambia, Angola, and the DRC in January 2023 to advance the growth of domestic and cross-border trade along the Lobito Corridor. Then solely a regional effort, its development has been bolstered by international cooperation with the United States, the European Commission, the African Development Bank (AfDB), and the Africa Finance Corporation (AFC).

In October 2023, the United States signed a memorandum of understanding (MOU) with Zambia, Angola, the DRC, and the European Commission to kickstart the project. The MOU named the AFC as the lead developer of the rail line, and the AfDB also signed on—contributing $500 million and committing to help raise $1.6 billion in additional financing.

In February 2024, more than 250 business and government leaders from the DRC, Angola, Zambia, the European Union, and the United States—together with international investors and industry leaders—convened at the PGII Lobito Corridor Private Sector Investor Forum in the Zambian capital of Lusaka. This forum highlighted the importance of public-private partnerships for the project. These kinds of partnerships have the potential to foster mutual prosperity for US investors and African economies. Additional funding commitments to the Lobito Corridor project were made at the gathering. Perhaps most notably, the US International Development Finance Corporation (DFC) announced a $250 million loan to the AFC to help support its efforts to develop and strengthen infrastructure across the African continent.

Most recently, at the 2024 United Nations Climate Change Conference (COP29) in Baku, Azerbaijan, in November, the DFC’s board approved a loan of up to $553 million to the Lobito Atlantic Railway in Angola for the upgrades and rehabilitation needed to help make the transport of critical minerals more reliable. The DFC also committed $3.4 million in technical assistance to Pensana—a rare-earths processing hub located in the United Kingdom—to explore the possibility of a rare-earth mine and refining facility in the Lobito Corridor.

The Lobito Corridor project today

Within eighteen months of the United States’ initial commitment in September 2023, PGII partners had already allocated more than three billion dollars to advancing the Lobito Corridor, including investments in diverse sectors such as clean energy, transportation and logistics, agriculture, healthcare, and digital infrastructure. By leveraging both public and private financing—and committing to anti-corruption, transparency, and good governance—the Lobito Corridor project is designed to create employment opportunities, facilitate regional and global trade, and spur investments in clean energy, as well as agriculture, digital connectivity, and food security.

This significant investment has already catalyzed additional developments. In September, the AFC signed concession agreements with Angola and Zambia to support the railway project. The AFC was also awarded two million dollars in grant funding by the US Trade and Development Agency to complete the preliminary environmental and social studies for the project and ensure that the Lobito railway aligns with environmental standards and international best practices. These agreements lay the foundation for the subsequent, more ambitious phases of the project centered around rail lines that connect Angola to the DRC and extend the corridor into Zambia.

A model for future investment in Africa

The Lobito Corridor project underscores a growing recognition of Africa’s pivotal role in the global energy transition and marks a notable shift in how the United States engages with the continent.

The new model offered by the Lobito Corridor’s funding structure—which relies on a mix of public-private partnerships, grants, and concessional financing—differs significantly from state-led investments in infrastructure through China’s BRI, which has often drawn criticism for saddling African nations with unsustainable debt through opaque and unaffordable loan agreements. The Lobito Corridor, by contrast, is designed to minimize financial risk to participating African nations.

But the opportunity to lean into this shift in how the United States works with Africa could be missed once the new US administration and Congress take office in January 2025. President-elect Donald Trump’s policy record would suggest a more transactional approach to critical minerals development and infrastructure investment, with less focus on multilateral cooperation. In contrast, the Biden administration has emphasized partnerships with African governments and international bodies. But there is a chance that Trump might pursue more bold infrastructure projects like the Lobito Corridor, albeit with a stronger emphasis on advancing the United States’ strategic priorities, in line with his heavy emphasis on “America first” policies and his transactional approach to trade relationships.

The Lobito Corridor’s success depends on several factors, chief among them equity in partnerships, transparency, and the outcomes of the broader geopolitical dynamics at play. But if effectively implemented, the project could demonstrate the possibility of successful development strategies that promote collaboration, sustainability, and mutually beneficial outcomes—and thus redefine how the United States and other international actors engage in Africa.

Sarah Way is a graduate of the University of Colorado Boulder’s International Affairs Program with a specialization in Africa and the Middle East. Her research centers on the intersection of natural resources and development, with a specific focus on extractive minerals in Africa.

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This report was updated on January 31, 2025

With its success in nickel production, Indonesia has become a model for those seeking to harness “resource nationalism” for domestic benefit. Substantial foreign investment, particularly from China, has been a key variable for Indonesia to become a globally relevant industrial center for nickel processing. While there are insightful lessons that policymakers from mineral-resource-rich African countries can learn from Indonesia, there must be caution in implementing some of Indonesia’s policies, especially export bans as they have had mixed results and depend heavily on external factors.

Africa holds a third of the world’s mineral reserves, including critical minerals essential to the green energy transition. Yet, the continent remains underexplored, underdeveloped, and underfunded, receiving just 8–10% of global exploration and investment. Global demand for minerals like copper, nickel, cobalt, and lithium is expected to generate $16 trillion over the next 25 years, with sub-Saharan Africa potentially capturing $2 trillion. However, to realize this potential, Africa must shift from raw extraction to value-added processing. Developing local processing industries would boost economic diversification, job creation, tax revenues, and technological advancements while reducing dependency on raw-material exports.

To achieve this, African governments must prioritize coherent, forward-looking policies that emphasize value creation. Commissioning technoeconomic studies to identify key supply chain opportunities will help guide investments. Establishing Special Economic Zones for critical minerals can attract international investors and foster industrial hubs. Leveraging the African Continental Free Trade Area to create robust commodity markets would position Africa as a competitive player. Additionally, streamlining regulatory processes, supporting carbon-free power projects, and advancing infrastructure investments through global initiatives such as the US PGI and EU Global Gateway can facilitate critical mineral processing and transport networks.

Export bans, though well-intentioned, often backfire. Historically, they have reduced exports, weakened global trade positions, and worsened infrastructure challenges in energy, transportation, and logistics. Without effective governance and political stability, such policies risk stalling economic growth rather than stimulating it.

By focusing on industrial infrastructure, value-added processing, and policies that promote long-term diversification, African countries can move beyond the limitations of raw extraction. With transparent governance and strategic investments, the continent can transform its mineral wealth into a driver of sustainable economic development.

This report is the second in a series on the critical minerals sector in Africa, and is part of the Africa Center’s Critical Mineral Task Force.

Report Jul 1, 2024

From greenfield projects to green supply chains: Critical minerals in Africa as an investment challenge

By Aubrey Hruby

This report provides a snapshot of Africa’s mineral wealth and mining industries, draws out the similarities between the mining and infrastructure investment attraction challenges, describes the competitive landscape African nations find themselves in, and makes innovative recommendations—namely to the US government—to rapidly accelerate investment in sustainable mining industries in African markets.

Africa Economy & Business

AfricaSource Nov 26, 2024

The US won’t gain a lead in the competition for Africa’s critical minerals without innovation

By Chris Moorman

If the United States wants to differentiate itself from competitors in the critical mineral sector, it will need to form partnerships with African countries that are economically feasible, environmentally sustainable, and ethical.

Africa China

AfricaSource Aug 14, 2024

Critical minerals investment must avoid the mistakes of the past in African mining

By Rama Yade, Sibi Nyaoga

By getting mining investment right, the United States can set a new precedent for its collaboration with African countries in other areas, such as health, security, and technology.

Africa Energy Transitions

The Africa Center works to promote dynamic geopolitical partnerships with African states and to redirect US and European policy priorities toward strengthening security and bolstering economic growth and prosperity on the continent.

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A low-carbon vision meets untold natural resource wealth

Guyana had embarked on an ambitious journey toward sustainable development long before ExxonMobil’s massive oil discoveries off its coast in 2015. In 2009, recognizing the value of its vast rainforests in the fight against climate change, Guyana launched its pioneering Low Carbon Development Strategy (LCDS). This wasn’t merely an environmental policy; it represented a fundamental rethinking of how a developing nation could approach economic growth.

The strategy’s origins lay in a holistic understanding of Guyana’s natural wealth. The country’s rainforests, covering roughly two thirds of its territory, store an estimated 19.5 billion tons of carbon dioxide equivalent. Rather than viewing these forests as obstacles to development, Guyana recognized them as vital assets in the global fight against climate change.

An early partnership with Norway—which pledged up to $250 million to help preserve Guyana’s rainforests—established the LCDS’s credibility. It provided vital seed funding, helping Guyana develop the institutional capacity and technical frameworks necessary for environmental asset management on a national scale.

The 2015 oil discoveries placed Guyana at a crucial decision point—over 11 billion barrels of oil equivalent were enough to transform the nation’s economic trajectory overnight. Many nations might have abandoned their environmental commitments in the face of such wealth. Instead, Guyana chose to update and strengthen its low-carbon strategy, creating LCDS 2030.

The balancing act of LCDS 2030

Guyana’s approach reflects a sophisticated understanding of its natural capital. Rather than treating environmental protection and resource extraction as mutually exclusive, Guyana developed parallel value streams from its natural assets.

The country’s forests, for instance, generate revenue through both sustainable forestry and carbon credits, which monetize environmental stewardship. In 2022, Guyana made history by becoming the first nation to receive private sector validation for forest conservation-based jurisdictional carbon credits, leading to a landmark $750 million agreement with Hess Corporation.

The groundbreaking deal involves the sale of 37.5 million carbon credits (about 30 percent of Guyana’s credit issuance) between 2022-32, with increasing minimum prices from $15 to $25 per ton and a 60 percent revenue share for Guyana if market prices exceed these floors. The credits are independently verified under the United Nations (UN) ART TREES standard and meet UN social and environmental safeguards.

The country has further pushed boundaries by launching a Global Biodiversity Alliance aiming to develop a biodiversity credits system that extends beyond carbon, creating a comprehensive framework for valuing ecosystem services. By combining carbon credits, biodiversity credits, and sustainable forestry income, Guyana’s sustainable finance approach offers a new paradigm for how developing nations can maximize the value of their natural assets while preserving them for future generations.

Similarly, rather than treating petroleum wealth as an end in itself, Guyana views it as a means to finance its climate transition. Oil revenues are channeled into renewable energy projects, climate-resilient agriculture, coastal protection, and green job training. For example, the government has invested 12 percent of the nation’s gross domestic product in upgrading drainage and irrigation networks and expanding rehabilitation of sea and river defense structures at critical locations. These investments are complemented by planned water treatment facilities and comprehensive flood management programs.

By 2027, Guyana is projected to produce 1.2 million barrels of oil per day, rivaling some OPEC members. But unlike many oil producers, this production surge is balanced with concrete environmental commitments.

The power of inclusion

The most innovative aspect of Guyana’s approach lies in its governance framework. The Multi-Stakeholder Steering Committee overseeing the LCDS represents a comprehensive model of inclusive decision-making, drawing representatives from government, civil society, Indigenous organizations, the private sector, and academia. Specifically, Indigenous communities—traditional stewards of the forests—are integrated through village-level consultations, dedicated representation in decision-making, and capacity-building programs, ensuring they play a central role in shaping Guyana’s national sustainable development strategy.

Guyana’s global leadership

The strength of Guyana’s commitment to this balanced approach was powerfully articulated at the 16th Conference of the Parties to the UN Convention on Biological Diversity in 2024. There, Vickram Bharrat, Guyana’s minister of natural resources, presented his nation’s journey not as a compromise, but as a pioneering model for development:

“As a developing, oil-producing nation with ambitious infrastructure projects, we face the challenge of balancing economic growth with environmental preservation. However, through the Low Carbon Development Strategy 2030, we are committed to ensuring that development proceeds without compromising our natural capital. Our forests will continue to serve as vital carbon sinks and biodiversity hotspots, supporting both climate action and ecosystem resilience.”

The minister’s words were backed by one of the most ambitious conservation commitments globally: expanding Guyana’s protected areas from 9 to 30 percent of its land mass by 2030.  At COP29 in Azerbaijan, Guyana further demonstrated its leadership by receiving the Transparency Award and co-chairing the Forest and Climate Leaders’ Partnership. Bharrat’s call to move beyond theoretical debates to “measurable, accountable action” underscored Guyana’s role as a practical innovator in global climate solutions.

Lessons for a world in transition

Guyana’s ability to transform potential contradictions into complementary strengths offers a compelling model for managing the energy transition. The same government that oversees a rapidly expanding oil sector is also pioneering biodiversity credits and expanding protected areas. This isn’t coincidental—it reflects a nuanced understanding that modern development requires balancing multiple priorities and revenue streams.

The strategy treats oil wealth not as an end goal, but as a bridge to a sustainable future. Oil revenues are systematically channeled into building the infrastructure, institutions, and human capital needed for a low-carbon economy. This approach recognizes that the oil boom, while significant, is temporary. The benefits of preserved forests and biodiversity, however, are permanent.

For other oil producers, particularly those in the developing world, Guyana offers a template that could be adapted to local conditions. The success of this model is already providing compelling evidence that developing nations need not choose between economic development and environmental stewardship. Instead, they can pursue a more balanced path that recognizes and monetizes the value of all their natural assets and builds toward a more sustainable future.

Liliana Diaz is a nonresident senior fellow with the Atlantic Council Global Energy Center and an adjunct professor of energy, climate policy, and markets in the Americas at the Paul H. Nitze School of Advanced International Studies at Johns Hopkins University.

EnergySource

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Liliana Diaz

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New Atlanticist Nov 15, 2024

Following COP16, can Latin America and the Caribbean lead the creation of biodiversity markets?

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By developing robust biodiversity credit markets, countries in the region will not only safeguard invaluable ecosystems but also set a global standard in climate finance.

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EnergySource Nov 6, 2024

Tackling the energy-water challenge at COP29

By Robert F. Ichord, Jr.

Energy and water have a complex and inextricable relationship, especially as growing populations, expanding cities, and the changing climate strain resources around the globe. Leaders at COP29 must come together in Baku to promote policies, strategies, and investments to meet the water and energy challenge.

Climate Change & Climate Action Energy & Environment

EnergySource Nov 16, 2023

Six steps Guyana can take to avoid the resource curse

By David L. Goldwyn

Guyana is on a rapid path to potentially becoming the fourth largest oil producer in the world. Now, the government has an opportunity to show the world how to do resource development right.

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Underwhelming COP29

Participants at COP29 managed to reach an agreement on international carbon market standards, a key step to establishing such a market under the United Nations (UN), as envisioned in Article 6.4 of the 2015 Paris Agreement. However, COP29 became stuck on the key objective of the meeting: producing a new collective quantified goal (NCQG) as a new climate finance target for the next ten to fifteen years. This is meant to replace the current $100 billion annual figure—a pledge of financial aid to developing countries made by developed countries in 2009, but viewed as totally inadequate.

The most important issue to be settled is the quantum of the NCQG. Participating countries have disparate expectations, which are unlikely to be bridged. Developing countries have coalesced around the target of $1.3 trillion a year of international climate finance aid, based on a report by the High Level Expert Group on Climate Finance. Developed countries spearheaded by the European Union (EU) have reportedly toyed with a range of $200-300 billion, but are reportedly leaning toward $200 billion and a 2035 deadline.

The issue of the contributor base has also been important. Developing countries want to stick to the Paris Agreement, which calls for developed countries to provide climate finance to developing countries. Developed countries want to widen the contributor base to include rapidly growing emerging market countries. These countries, such as China and the Gulf countries, are able to contribute and should do so because of their high levels of emissions. Many developing countries, in particular China, have strongly objected to these demands. As part of the debate, China announced that it has voluntarily provided 177 billion yuan ($24 billion) in project financing to help other developing countries deal with climate change since 2016. This statement highlights China’s preferences for a bilateral approach. China is using climate finance as a tool to further its geopolitical agenda, instead of contributing funds to multilateral efforts. If other countries decide to follow a similar bilateral approach, they could strike another blow against the unraveling multilateral world order.

A day after the COP29 officially ended, an agreement on NCQG was reached, calling for developed countries to provide $300 billion a year by 2035 to help developing countries in their climate efforts. No one is happy with the agreement. Developing countries have criticized it as  too little. Developed countries have tried to lower expectations about official aid, emphasizing that the funding would have to come from a wide variety of sources, including the private sector. In any event, the agreements concluded at the COP29 will be overshadowed by the fact that Trump would most likely pull the United States out of the 2015 Paris Agreement for a second time—and could even withdraw from the 1992 UN Treaty that provides the framework for the COP process. This time around, Argentina could follow suit and quit the Paris Agreement. President Milei already recalled his negotiators midway through the COP29 meetings. Without the US and possibly Argentina, the rest of the world would have to struggle to come up with meaningful nationally determined commitments to achieve net zero emissions and to mobilize climate finance to help developing countries. This outlook does not augur well for the COP30 to be hosted by Brazil in 2025.

A divided G20 Summit

The G20 Summit in Rio de Janeiro has been described by media reports as chaotic and divided. Nevertheless, it managed to produce a Leaders’ Declaration, even though the debate about wording was cut short by Brazil’s President Lula—leaving a bitter taste among Western leaders. The Declaration contains watered-down language on practically all agenda items. A major result is the Global Alliance Against Hunger and Poverty, Lula’s signature project, which gathered support and was launched.

However, the facade of cooperation has been rocked by Argentina’s statement that while Milei did not want to prevent other leaders from signing the declaration, he strongly criticized key elements of the agenda. His targets included anything to do with the UN 2030 Sustainable Development Goals and strengthening the role of governments in fighting global hunger (which according to Milei should be promoted by removing the involvement of governments). At the same time, Milei stressed that he would prioritize economic development over environmental protection, having dissolved Argentina’s Environment Ministry after taking office. These arguments are in line with Trump’s views. They will likely be advanced more forcefully in future G20 meetings, undermining the chance of agreements for joint actions and weakening the G20 itself.

Prospects for international cooperation: more turbulence

President Trump will likely reverse or ignore many of Biden’s environmental and climate change initiatives. However, as several red states have seen job creation thanks to IRA programs, he may continue some programs on a case-by-case basis. Overall, Trump’s approach would weaken environmental protection home and disengage from international climate efforts.

In the vacuum created by the United States and Argentina, China has already stepped in to champion international climate efforts under the Paris Agreement and open trade, as Xi Jinping claimed in his speech at the Rio G20 Summit. China has appealed to the EU to “collaborate effectively on the COP29 agenda…(to) establish a strong foundation for re-aligning their broad green and economic initiatives and improve their bilateral relationship.” China’s approach may appeal to the EU when it’s confronted with Trump’s denial of climate change and his protectionist unilateralism. However, if the EU were to cooperate with China on climate and trade issues, it would find itself at greater odds with a Trump administration already unhappy with the EU for free riding the US security umbrella while posting a trade surplus with the United States. The EU would be in a very difficult position, as it still very much depends on Washington for security, especially against a revanchist Russia emboldened by its successes in Ukraine.

The rest of the world can find ways to deal with climate change without the US federal government, as it did during Trump’s first presidential term—including working with US states and cities still keen to promote a green agenda. But the whole exercise would be inefficient and more difficult, especially when mobilizing climate finance.

As summarized by Bloomberg, the Rio G20 Summit has shown “how quickly the guardrails are coming off the international rule-based order…(as) the looming return of Trump hung over the proceedings like the proverbial sword of Damocles.” Expect more of the same, at future summits—starting with the 2025 G20 under the presidency of South Africa.

Hung Tran is a nonresident senior fellow at the Atlantic Council’s GeoEconomics Center, a former executive managing director at the Institute of International Finance and a former deputy director at the International Monetary Fund.

At the intersection of economics, finance, and foreign policy, the GeoEconomics Center is a translation hub with the goal of helping shape a better global economic future.

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The E3 model would offer the United States an advantage because of how starkly it contrasts with China’s method of partnership. China has been criticized for making usurious loans for infrastructure projects and demanding long-term commodity offtakes in the face of predictable defaults.

Despite China’s method of partnership, its offer of readily available, speedily deployed financing—for needed infrastructure and for to bolster foreign currency reserves—has appealed to African countries. Countries, including Chad, Angola, and the Republic of the Congo have formed such partnerships, fallen into deeper debt, and have over the past decade restructured their commodity-backed loans to China.

A key component of China’s model is its exploitation of the continent, which is well documented. With China’s practices—from low wages and unpaid overtime to unsafe working conditions to a lack of formal employment contracts—African workers find themselves without recourse, and debt traps reduce national autonomy. An E3 model, focused on value creation and equitable distribution of revenues, offers an alternative to neo-serfdom.

China’s rise—and the United States’ fall

Through its deals, China has managed to gain control over 60 percent of the mining and 85 percent of the processing of rare earths—an important subset of critical minerals used in technologies such as magnets and batteries.

China’s dominance of global rare earths has been achieved by design. In 1987, then Chinese leader Deng Xiaoping announced to the world that “the Middle East has oil, but China has rare earths,” a reflection of China’s early understanding  that the coming boom in the electrified economy would open up the opportunity to gain leverage and control within a then nascent market.  

Then in the 1990s, Chinese state-owned firms started going on a buying spree globally, across rare earth elements and critical minerals more broadly. By 2022, Chinese firms had a stake in or owned fifteen of nineteen cobalt mines in the Democratic Republic of the Congo (DRC), which produces over 70 percent of the world’s cobalt. In one notable deal—signed in 2007—China pledged roughly three billion dollars to infrastructure development and, in exchange, secured mining rights for Chinese firms, giving them access to deposits valued at $93 billion in the DRC’s south.

As this buying spree unfolded, US involvement in the mining and processing of critical minerals declined—most substantially seen in rare earths. For example, the Mountain Pass rare-earth mine in California (formerly the producer of a majority of global rare earths) closed in 2002 after a toxic waste spill, leading to a large decline in the share of US rare-earth processing that has not been recovered. In 1995, General Motors sold Indiana-based neo magnet producer Magnequench to several entities including two Chinese firms. The plant eventually closed, making the United States more dependent on importing magnets for use in technology and defense tools. And over the mid-1990s, the US National Defense Stockpile sold off most of its stockpiles of rare earths, and its funds were reallocated to other defense priorities over several National Defense Authorization Acts. Altogether, these events effectively extinguished the United States’ rare-earth element business. Meanwhile China, in less than ten years, built more than one hundred permanent magnet manufacturers by 2007. 

The loss of share in the rare-earths market shows how the United States must use targeted and precise policies to form partnerships—focused on rare earths but also critical minerals more broadly—with countries on the African continent, which is home to 30 percent of the world’s known critical minerals.

In forming these partnerships, the United States should harness innovations—and their economic, sustainability, and ethical advantages—to push forward a different model of partnership than China’s, with a focus on long-term strategic value creation.

Innovation for impact

In working together on critical minerals, deploying innovations can help ensure that African countries benefit from critical-minerals partnerships just as much as the United States does. Deploying refining capabilities to the continent can both drive down costs (economic and environmental) while affording the United States multiple sources of these critical minerals for a domestic manufacturing base. Doing so can also help align the continent, which has the world’s youngest population, with the rules-based international order.

Innovative practices in the recovery and refining of critical minerals include chromatography (which my company, ReElement Technologies, specializes in), a refining process in which minerals are separated and purified, requiring fewer chemicals and generating less waste. But there are also other technologies that show the United States’ capacity for innovating in this space: For example, there are electrochemical processes that can extract lithium from saltwater brines, using assets left over from oil and gas production. Ion-exchange-based technologies similarly extract lithium from brines with less impact on the environment. There are also emerging modeling systems using gravity and magnetic data processing as well as artificial intelligence to expedite the discovery of critical minerals. By harnessing technological innovation in African critical-minerals projects, the United States can reduce the inputs needed to power the modern economy, limit the impact of production on the environment, and make projects more cost efficient.

Africa on board?

A rising generation of African leaders is looking warily upon current partnerships, with some countries restricting the export of raw minerals and asking that firms invest in domestic value-added processing. For example, Zimbabwe (in 2022) and Namibia (in 2023) placed bans on exports of raw critical minerals. By promoting the E3 model, policymakers must assist with financing, political risk insurance, and free trade agreements, but private enterprise must lead in developing frameworks that are both economically viable and mutually beneficial.

There is a golden opportunity for the United States to reach out with an innovation-based approach. Sustainable trade beats occasional aid every time.

Chris Moorman is the chief commercial officer of the ReElement Technologies Corporation.

The post The US won’t gain a lead in the competition for Africa’s critical minerals without innovation appeared first on Atlantic Council.

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Speaking at an Atlantic Council Global Energy Center’s event on November 13 on the sidelines of COP29 in Baku, Azerbaijan, Neto and Landon Derentz, senior director and Morningstar Chair for Energy Security of the Global Energy Center, noted that Brazil and the United States are natural partners for strengthening cooperation given both countries’ historic leadership in innovation and research and development. Brazil’s robust biofuels sector and mature wind turbine manufacturing capacities demonstrate the country’s ability to drive energy sector transformation while meeting energy security needs.

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Both Brazil and the United States also understand that innovation is a key aspect of energy security. Looking ahead, both countries are well positioned to partner on enduring issues such as securing the supply chains central to energy security needs and energy transition efforts.

Following Neto and Derentz’s conversation, Cassia Carvalho, the executive director of the Brazil-US Business Council, moderated a panel with Allyson Book, the chief sustainability officer of Baker Hughes, Leonardo Botelho, the head of international and investor relations at the Brazilian Development Bank (BNDES), Jake Oster, the director of sustainability policy at Amazon Web Services, Owen Herrnstadt, a member of the board of directors at the Export-Import Bank of the United States (EXIM), and Anna Shpitsberg, the chief climate officer at the US Development Finance Corporation (DFC).

Unlocking climate and energy finance

Hernstadt of EXIM and BNDES’ Botelho emphasized that their institutions and DFC will continue to play critical roles in de-risking projects and promoting competitive markets. 

In Brazil specifically, where DFC just opened its first Latin America office this past March, Shpitsberg was optimistic about the level of opportunity she sees in the country. In October, DFC signed a cooperation framework arrangement with BNDES to enhance co-investment opportunities in a number of energy and climate sectors such as innovation, infrastructure, mining, biofuels, decarbonization, and green hydrogen. 

Private sector investment in the energy transition

Industry has a key role in developing and deploying the technology necessary for accelerating the energy transition. One area of opportunity in particular is in methane abatement. Baker Hughes’ Book said that not enough is being done to address this potent greenhouse gas, but this creates an opportunity. Investors must look closely at the tools necessary to tackle methane emissions in Brazil and elsewhere in the coming year. 

Amazon’s Oster noted that technology companies are also in a position to lead on investments in renewable energy and sustainable practices.

Looking ahead: strengthening collaboration

On public investments, Brazil and the US are both looking to strengthen partnerships. Shpitsberg and Botelho both expressed optimism for future collaboration between their organizations, noting that the opportunity to drive investments in Brazil is still large. Working together will be crucial to ensuring that future investments lead to energy sector innovation efficiently and effectively. 

Similarly, Book and Oster said the private sector will also focus on building partnerships across industry to advance energy and climate goals. This means using a range of finance instruments and expanding cooperation on clean energy technologies, including geothermal, hydrogen, and carbon capture, utilization, and storage.

The discussion in Baku signals that industry, finance, and government are continuing to push forward investments in clean energy and build coalitions in the year ahead with an eye toward COP30 in Brazil. 

Bailee Mathews is a program assistant with the Atlantic Council Global Energy Center.

EnergySource

EnergySource is the Global Energy Center’s (GEC) online publication providing commentary and analysis on developments in the energy and climate sector from a wide-array of thought leaders, politicians, and experts.

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Bailee Mathews

Program Assistant

Global Energy Center

Energy & Environment Energy Transitions

EnergySource Nov 6, 2024

Tackling the energy-water challenge at COP29

By Robert F. Ichord, Jr.

Energy and water have a complex and inextricable relationship, especially as growing populations, expanding cities, and the changing climate strain resources around the globe. Leaders at COP29 must come together in Baku to promote policies, strategies, and investments to meet the water and energy challenge.

Climate Change & Climate Action Energy & Environment

EnergySource Oct 15, 2024

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By Robert Cekuta

Increasing funds for addressing climate and energy needs in developing countries is a COP29 priority. But it is important to remember that market conditions in recipient countries are critical in determining the success of such efforts.

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EnergySource Jun 4, 2024

Brazil is buying lots of Chinese EVs. Will that continue?

By William Tobin

Brazilian imports of Chinese battery electric vehicles (BEVs) surged in 2023 as Chinese automakers sought—and continue to seek— global markets for their BEV surpluses. However, increasing protectionism in Brazil may force China to find new welcoming markets in other Latin American and Asian countries.

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Maintaining economic competitiveness is a pressing issue for Ursula von der Leyen as she begins her second term as president of the European Commission. President von der Leyen has promised to put forward a new Clean Industrial Deal in the first one hundred days of the new mandate to “channel investment in infrastructure and industry, in particular for energy-intensive sectors.” But energy supply challenges and geopolitical hurdles risk undermining plans to restore Europe’s industrial competitiveness.

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The roots of Europe’s industrial crisis

The state of European industry is nuanced, but the trends are increasingly alarming.

The European Union’s share of the global industrial sector, measured by gross value added, decreased from 21 percent in 2000 to 14.5 percent in 2021, numbers similar to the United States’. Manufacturing still accounts for 15 percent of the bloc’s gross domestic product (GDP). But amid the impacts of COVID-19 and the 2022 energy crisis, the EU industrial sector has lost 850,000 jobs since 2019.

Experts question the EU’s preparedness for increasingly strategic industrial activities, such as defense, clean energy technologies, and chips. Moreover, the bloc’s reliance on imported energy commodities and technologies leaves its industrial sector vulnerable to external shocks. This vulnerability was exposed during Russia’s full-scale invasion of Ukraine, as the Kremlin took advantage of the EU’s reliance on Russia for 43 percent of its natural gas imports.

By contrast, the EU’s industrial competitors benefit from cheaper energy. The United States enjoys abundant oil and gas and is producing at world-record levels—a trend that the incoming Trump administration would like to continue—and is witnessing a boom in renewable generation. China continues to use domestic coal while increasing imports of Russia’s price-capped oil.

The International Energy Agency estimates that electricity prices for the European Union’s energy-intensive industries were double those in China and the United States in 2023, making it almost impossible for Europe to compete due to high energy costs in production. Complex regulatory frameworks, lengthy permitting processes, expensive labor, and limited innovation are also weakening the EU’s competitiveness.

How the Clean Industrial Deal can help

The stakes are high for European industry. Europe has been proactive in addressing its energy supply vulnerabilities, developing important initiatives such as the Net Zero Industry Act and Critical Raw Materials Act. Now, the Clean Industrial Deal provides the opportunity to address key energy-related competitiveness challenges.

First, the proposal needs to address vulnerabilities in the energy supply chain. This starts with diversifying the sourcing for critical raw materials needed for domestic clean energy production—many of which Europe is reliant on China for.

Despite low public support for such projects, de-risking supply chains should involve domestic mining and processing—which may happen in Germany, the Czech Republic, and Sweden, as well as in a still-controversial mining project in EU candidate state Serbia. But Europe cannot be fully self-sufficient in critical raw materials, and must also enhance supply chain cooperation with the United States and partners in the Global South. Nevertheless, the lead times required to source sufficient critical raw materials domestically or from like-minded partners are considerable. For now, the majority of EU demand will likely continue to be met by imports from China.

In addition, Europe’s industrial transition requires electrification to reduce energy consumption and thus costs. To do this, the EU needs to strengthen the backbone of its energy system: the power grid. This requires investment, accelerated permitting processes, and dynamic regulation that can reduce uncertainty for grid developers, investors, and operators.

As emphasized by former Italian Prime Minister Enrico Letta in his Much more than a market report issued this spring, the EU’s internal fragmentation also poses a threat to industrial efficiency. Harmonizing regulations across member states and finalizing the EU’s single market are crucial steps toward creating a more predictable business environment, fostering investment, and encouraging innovation. Coordinated public spending at the EU level, particularly on large-scale projects like cross-border energy infrastructure, is essential.

Enhancing existing external strategic partnerships should also be foundational to the EU’s industrial plans. This includes collaboration on protecting energy infrastructure from physical and digital threats, securing access to critical raw materials, and coordinating climate efforts at the multilateral level.

What could go wrong?

The geopolitics of energy will play a significant role in shaping the EU’s industrial revival plan.

On the one hand, the EU’s approach to managing its reliance on China for cleantech needs to assess the costs and benefits of de-risking. Europe’s aspirations to expand its clean manufacturing sector could potentially backfire—if Europe makes progress in developing domestic clean manufacturing it will gradually acquire fewer technologies from China, which might hedge this risk by cutting off access or increasing prices for EU-bound exports. By doing so, China could weaken Europe’s financial capacity for investing in its industrial sector—keeping the continent reliant on imports. China’s 2023 export restrictions on gallium and germanium could be a sign of such a risk.

It is often overlooked that EU exports to China have increased more than sevenfold over the last two decades, and China is the EU’s third-largest external market, after the United States and the United Kingdom. A trade war would be damaging to both sides.

On the other hand, the Clean Industrial Deal comes as US elections have concluded, raising concerns on whether the EU and the United States will pursue a clean industrial partnership or potentially move toward rivalry. The transatlantic partnership plays a crucial role in the EU’s ability to stabilize its exposure to energy commodities, as demonstrated by Europe’s increased US LNG imports since 2022.

For the United States, this cooperation is also of great benefit, not only for fostering exports in LNG, critical raw materials, and nuclear energy technology, but also for finding synergies in research and development and for reinforcing geopolitical stability. However, potential trade barriers, such as the EU’s Carbon Border Adjustment Mechanism (CBAM), may heighten the risk of a trade war. The future of this partnership could significantly influence global economic and security dynamics.

Much depends on what will happen in the new Commission’s first one hundred days—on both sides of the Atlantic.

Andrei Covatariu is a Brussels-based energy expert. He is a senior research associate at Energy Policy Group (EPG) and a research fellow at the Centre on Regulation in Europe (CERRE). This article reflects his personal opinion.

EnergySource

EnergySource is the Global Energy Center’s (GEC) online publication providing commentary and analysis on developments in the energy and climate sector from a wide-array of thought leaders, politicians, and experts.

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EnergySource Oct 8, 2024

A new European Commission faces three key issues at the heart of the clean energy transition

By Michał Kurtyka

As the European Commission takes shape, it faces three critical issues that it must address to meet energy demand and restore Europe’s climate credibility: inadequate funding for the green transition, dependence on foreign energy imports, and declining economic competitiveness. The EU must take bold action to survive in a changing world.

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EnergySource Jul 24, 2024

European energy security requires stronger power grids

By Andrei Covatariu

Russia’s invasion of Ukraine has highlighted the urgency of strengthening Europe’s power grid to meet the interrelated demands of energy security and decarbonization. Europe can build a resilient energy future by improving regional connectivity, increasing digitalization, investing in grid infrastructure, and reforming unwieldy regulations.

Energy & Environment Energy Transitions

EnergySource May 23, 2024

Without tariffs, the EU faces a flood of Chinese imports of the ‘new three’

By Joseph Webster

Europe faces a surge in Chinese cleantech imports following recent US tariffs. This should prompt Brussels to selectively impose its own tariffs while also strengthening domestic industries to protect its economic and strategic interests.

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The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

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The post Europe’s new industrial plan faces formidable obstacles appeared first on Atlantic Council.

On the campaign trail, Trump made his climate plans clear—and they are not currently aligned with global goals and targets. Instead, he has stated that he will again withdraw from the Paris Agreement and end many of the climate policies launched during the Biden administration. 

His “America first” approach doesn’t align with the scientific reality of climate change. While Trump has signaled that his administration will put boundaries on its international commitments, the consequences of climate change do not recognize national boundaries.

With the looming threat of reduced climate commitments from the world’s largest economy (in terms of nominal gross domestic product), the negotiations at COP29 will take on a new significance. In 2016, when Trump was last elected, US negotiators were unable to make strong commitments at COP22 in Marrakesh. While they participated in these negotiations, they were encouraged to avoid any legally binding commitments until the next administration came into office. As the United States begins another transition from one administration to another, the same expectations could be placed on US negotiators this year.

Notably, the outcomes on the New Collective Quantified Goal (NCQG) on Climate Finance will bear the consequences of those expectations. The goal was mandated under the Paris Agreement and officially set at COP15, where developed countries agreed to mobilize $100 billion annually to enable climate action in developing countries. Now, the world is revisiting that $100 billion benchmark since the scope of the climate crisis has dramatically increased since 2009. 

With a noncommittal United States, there are two likely scenarios. The first scenario is that the decision on the NCQG is deferred to next year’s COP in Brazil. The second scenario is a new, nonbinding goal that is less ambitious and that will lack a mechanism to enforce it.

In short, the wording will matter. Instead of words like “commit,” the second scenario could result in a new finance goal with more ambiguous language. Nevertheless, it would serve as an important political signal. It could be a reference point that emphasizes the value of the process and the need to accelerate climate finance. It would keep the pressure on governments, ensuring that they recognize their responsibility to mobilize financial resources toward reducing emissions and protecting people from the impacts of climate change. In its ability to set a precedent, the agreement itself can inspire action not only in the public sector but also the private sector. COP negotiators should therefore seek to make the wording that sets this financing goal as strong as possible.

In recent years, the rising costs of global warming have become increasingly and painfully clear. It is in every country’s interest—including the United States’—to increase international financial commitments. After all, every one dollar invested in prevention saves sixteen dollars in disaster response.

As COP29 begins and the world looks ahead to COP30 where substantial commitments are expected, the value of US leadership cannot be overstated. This is not just a moral responsibility, but a survival mechanism. Climate change is a global issue. If the United States refuses to cut emissions further and ends the policies and investments launched under the Biden administration, the Trump administration would put even more Americans’ health, finances, and safety at risk as they face the rapidly intensifying consequences of climate inaction.

Jorge Gastelumendi is the senior director of the Atlantic Council’s Climate Resilience Center.

The post What Trump’s return as president means for COP29 appeared first on Atlantic Council.

The post Tobin quoted in Kallanish Power Materials on Trump’s potential impact on EVs, hydrogen, and green goals appeared first on Atlantic Council.

On November 7th, 2024, Global China Hub nonresident senior fellow Michael Schuman spoke to Politico’s E&E News about how how the second Trump administration may approach trade with China, and how this could impact American clean energy manufacturers.

The post Global China Hub Nonresident Senior Fellow Michael Schuman in Politico appeared first on Atlantic Council.

Despite recent advances in policy and financial, technical, and regulatory support for low-carbon energy deployment in the United States, the pathway to deep decarbonization for core industrial sectors remains unclear. Federal and state efforts have created a favorable environment for clean energy development, but execution has been hindered by inflation, permitting delays, uncertain federal guidelines, and volatile energy demand trends. These challenges have been particularly problematic for industrial decarbonization, where key sectors are considered “hard to abate” using current low-carbon technologies.

This study, conducted with expert stakeholders, addresses how high-emitting industrial sectors, essential to the United States and global economy, can decarbonize using emerging and costly technologies in a potentially constrained fiscal environment ahead. Three key challenges were identified: uncertainty over policy consistency and the durability of incentives, a misalignment between the long timeframes required by investors and the shorter political cycles, and inconsistent price signals and demand generation for industrial decarbonization technologies.

As the first phase of a broader study, this analysis aims to identify the conditions necessary to accelerate industrial decarbonization, especially in light of new political leadership and a shifting fiscal landscape. While future reports will offer more detailed recommendations, four initial focus areas have emerged:

• Assessing the current emissions and carbon intensities of US industry.
• Promoting voluntary industrial standards.
• Leveraging clean electricity and fuel standards for stability and incentives.
• Developing a national carbon management strategy.

Fellow

David L. Goldwyn

Nonresident Senior Fellow

Adrienne Arsht Latin America Center Global Energy Center

Caribbean Climate Change & Climate Action

Fellow

Andrea Clabough

Nonresident Fellow

Global Energy Center

Climate Change & Climate Action Energy & Environment

EnergySource Jul 11, 2024

Chevron deference is dead—and US climate action hangs in the balance

By David L. Goldwyn, Andrea Clabough

The US Supreme Court’s seismic decision to overturn Chevron deference ends decades of federal agencies’ regulatory authority to interpret laws’ where there is ambiguity. While not specifically about climate or energy, the change is deeply consequential for the current—and next—administration’s ability to act on these issues according to its agenda.

Energy & Environment Energy Markets & Governance

Enabling net-zero solutions Dec 7, 2023

Partner perspective: Energy companies are essential to global climate solutions

By Mansoor Mohamed Al Hamed

The transformation of the energy system will happen with or without the oil and gas sector; Oil and gas companies must invest in low-carbon and renewables business outside their core operations.

Climate Change & Climate Action Energy Transitions

Report Jul 6, 2023

Technological and policy pathways to accelerate US industrial decarbonization

By Joseph Webster

Industrial decarbonization in the United States will be an important element in lowering global emissions. To limit the consequences of climate change, the United States must urgently advance a suite of efforts to guarantee the domestic and international industrial emissions reductions the world needs.

Americas Energy & Environment

The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

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The post Reducing US industrial emissions under budgetary uncertainty appeared first on Atlantic Council.

Southeast Asia is undergoing a profound transformation in its energy landscape, driven by rapid economic growth, urbanization, and a pressing need to reduce carbon emissions. Regional energy demand is expected to surge by two-thirds by 2040. Ensuring reliable and affordable supply for rapidly expanding populations requires an accelerated deployment of cleaner, more sustainable energy sources.

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From highly industrialized nations like Singapore to developing economies like Vietnam, each country faces distinct energy security and sustainability concerns. But across the region, there is a common need for an integrated transition strategy that supports economic growth, enhances energy security, and aligns with global climate objectives. Central to achieving this transition is the adoption of innovative clean technologies.

Technologies like carbon capture, utilization, and storage (CCUS), battery storage, enhanced geothermal systems, and small modular reactors (SMRs) are essential to ensure a reliable, resilient, and clean energy supply. With strategic investments and robust policy support, these technologies are poised to play a pivotal role in Southeast Asia’s energy future as the region faces rising demand and climate risks.

Diversifying the energy mix for resilience

By diversifying their energy sources with emerging technologies, Southeast Asian countries can enhance energy security while progressively reducing emissions. Finding the right balance between conventional and clean energy while leveraging innovative technologies is critical for maintaining resilience during the transition.

Natural gas is seen as a “transition fuel” for many Southeast Asian nations. While still a fossil fuel, natural gas produces nearly half the carbon dioxide emissions of coal and can be integrated with renewable sources of power generation. Investments in liquefied natural gas (LNG) infrastructure are increasing across the region. Singapore is positioning itself as a major LNG trading hub in Asia. Pavilion Energy and Sembcorp Industries have already made significant investments in LNG bunkering services, providing cleaner fuel options for shipping and ensuring Singapore’s energy security.

As countries rely on natural gas for immediate energy needs, emerging clean technologies are providing a pathway for achieving the deeper decarbonization needed for long-term sustainability. Clean energy technologies can diversify the energy mix, reduce emissions, and ensure resilience as Southeast Asia transitions to a more sustainable energy future.

Innovations supporting the region’s transition

Battery storage systems are critical for stabilizing power grids as intermittent renewables like solar and wind come online. The Asian Development Bank recently proposed a $30 million, 50-megawatt battery energy storage system project in northern Vietnam. The proposal is designed to reliably integrate solar energy into the grid. Vietnam added a massive 16.5 gigawatts (GW) of solar capacity in 2020. The project could provide a model for other Southeast Asian countries facing similar challenges with renewable integration.

CCUS is being deployed to mitigate emissions from the region’s fossil fuel use while maintaining energy security. Indonesia’s CCUS and enhanced gas recovery (EGR) project on the Gundih field in Central Java, led by Pertamina in partnership with Japan’s Ministry of Economy, Trade and Industry, is projected to capture and store 300,000 tons of carbon per year. Malaysia’s Kasawari project, spearheaded by Petronas, is expected to become one of the world’s largest offshore carbon capture projects, aiming to capture up to 3.3 million tons of carbon per year. Kasawari illustrates the potential for large-scale CCUS to decarbonize Southeast Asia’s natural gas industry.

Enhanced Geothermal Systems (EGS) represent a largely untapped opportunity for Southeast Asia which could expand geothermal energy in areas where other domestic energy resources are otherwise limited. Indonesia, with some of the highest geothermal potential globally, could meet its ambitious goal of increasing capacity to 9.3 GW by 2035 through EGS. However, scaling up this technology will require significant investments. The right policy frameworks are needed to de-risk projects and attract private sector involvement. Despite these hurdles, EGS could provide stable, baseload power—both at utility scale and to meet demand for energy-intensive facilities such as data centers and artificial intelligence hubs—complementing renewables and reducing reliance on coal.

Finally, advanced nuclear reactors, including SMRs, can produce carbon-free baseload energy while being more scalable and more efficient than traditional nuclear power plants. SMRs are gaining particular attention due to their smaller size, flexibility, and ability to integrate with renewables. For instance, in mid-2024, Singapore signed a civil nuclear cooperation agreement with the United States. Known as a “123 Agreement,” this provides access to US nuclear technology—including SMRs—as part of Singapore’s long-term decarbonization strategy. Indonesia is developing its own SMR technology through the PeLUIt-40 project, a domestically designed reactor aimed at helping the country achieve net-zero emissions by 2060. These initiatives highlight the growing interest in SMRs as a reliable and sustainable solution for Southeast Asia’s diverse energy needs.

Powering sustainable growth

Southeast Asia’s energy transition is a driver of economic growth and development. Clean energy technologies are creating new industries, attracting foreign investment, and creating jobs across the region. Countries that position themselves as leaders in cleantech innovation can unlock industrial expansion and international collaboration. And as Southeast Asia embraces sustainable energy, it will be better equipped to compete in the global economy. Reducing reliance on fossil fuels will not only help meet the region’s climate commitments, it will also protect Southeast Asia from the volatility of global energy markets. As clean energy infrastructure grows, regional energy cooperation—such as cross-border energy grids and trade in renewable energy—could further boost economic stability and integration.

Ultimately, by committing to a clean energy future, Southeast Asia can not only protect the climate, but also build a resilient, competitive economy that thrives in a rapidly changing global landscape.

Reed Blakemore is the director of research and programs at the Atlantic Council Global Energy Center.

Chase Thalheimer is an assistant director at the Atlantic Council Global Energy Center.

EnergySource

EnergySource is the Global Energy Center’s (GEC) online publication providing commentary and analysis on developments in the energy and climate sector from a wide-array of thought leaders, politicians, and experts.

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