Gas, Green Electricity, and Geopolitics: America in a World of Renewable Energy

Nikos Tsafos is interim director and senior fellow of the Energy Security and Climate Change Program at the Center for Strategic and International Studies (CSIS). He’s researched, written, advised, and consulted extensively on a range of fascinating topics, including natural gas, the geopolitics of energy, the future of mobility, and the global energy transition. He is the author of Beyond Debt: The Greek Crisis In Context, published in 2013, and countless articles, reports, and studies in the leading publications in energy policy and foreign affairs, including for National Bureau of Asian Research, Foreign Affairs, Foreign Policy, and the National Interest.

We began by exploring the role of energy in the foreign policy of previous administrations, covering the importance of fossil fuel imports in decades past and the Trump’s administration’s hope for fossil fuel exports to play a major role in the U.S. approach to Asia and Europe. As America looks to compete with China and others in the race to build renewables, the federal government can and should offer financial incentives on both the supply and demand sides of production for renewables, but must also make structural changes to physical and legal infrastructure to promote clean electricity. Active industrial policy in the United States -- which is taking shape under the American Jobs Plan -- must recognize that endless funding for strategic sectors can be wasteful, trade can undermine even the most ambitious domestic programs, and repurposing legacy facilities for renewable purposes will be crucial.

While Biden’s sweeping proposals for new energy investments have grabbed headlines, there has been another consequential shift in America’s energy policy that has transpired behind the scenes -- the pivot away from natural gas. While there have been no proposals for banning natural gas exports, the administration will certainly look more closely at where American gas is going, and whether it is displacing dirtier energy sources or “locking in” decades of fossil fuel use in place of renewables.

China’s Belt and Road Initiative, a sweeping strategy for investment in infrastructure across Eurasia, is widely seen as Beijing’s foremost geoeconomic initiative, and a major threat to U.S. interests. But at least on the energy front, Mr. Tsafos contended that American policymakers are often too narrow minded about Chinese-backed projects abroad; other factors, including the quality of a project, the engagement of important stakeholders, and the institutions supporting it, often matter more than where the money is coming from.

International institutions and relationships between the nations in different stages of development will play a major role in the globe’s approach to climate change, and Mr. Tsafos has important insights on this front as well. He suggested that financial incentives could be provided internationally to support nations that are investing in green energy, a global dialogue on green energy could facilitate global renewable energy investment, and global energy trade agreements will help nations avoid endless trade conflict on climate issues. Preparing the world for climate change extends far beyond the G-20, and Mr. Tsafos offered some lessons from his research on how emerging economies can pursue sustainable pathways to development -- progress in the West on renewables helps spur progress in the developing world, stable political institutions matter for sustainable development, and the tradeoff between economic growth and investment in low-carbon energy is often overestimated.

Mr. Tsafos concluded our conversation by recognizing that the climate crisis presents opportunities -- for students who hope to grapple with these challenges, he says “we need your help.”

Nikos Tsafos