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The G7’s Energy Awakening

The late Nobel laureate chemist Richard Smalley once argued that humanity's challenges – including poverty, hunger, and violent conflict – can be overcome by ensuring energy delivery. Today, with even advanced economies experiencing the effects of energy insecurity, the world is learning the hard way that Smalley was right.

NEWARK, DELAWARE – The late Nobel laureate chemist Richard Smalley was once asked to rank global challenges in order of urgency. While citing the usual concerns about poverty, hunger, conflict, and resource access, he put energy security at the top of his list. Smalley argued that all other challenges have the potential to be resolved if we can ensure reliable energy supplies.

Today, with even G7 countries experiencing the cascading effects of energy insecurity on their economies and democratic institutions, the world is learning the hard way that Smalley was right. We have limited means of international governance or science-based decision-making regarding energy security. Let us hope, therefore, that the rude awakening provided by the current global economic crisis and the war in Ukraine will lead to more constructive international action and sensible domestic energy policies.

One indication that it will came on July 6, when the European Parliament voted to continue classifying nuclear energy and natural gas as “environmentally sustainable economic activities” under the European Union’s “taxonomy” regulations. The measure passed by a narrow margin of 328 votes to 278, with 33 abstentions, but the fact that such a vote was even called, and – better still – that common sense prevailed, represents a tectonic shift for Europe’s environmental agenda.

The EU’s energy policy exemplifies what geographers call the “social amplification of risk.” Perhaps most notably, Germany’s decision to phase out domestic nuclear power following the 2011 Fukushima accident in Japan ran contrary to the findings of a United Nations expert panel, which has not detected any causal cancer clusters linked to the incident even after ten years of detailed data recording. Japan itself has acted more sensibly, keeping nuclear power online for baseload power generation.

Both within the G7 and elsewhere, misapplication of the “precautionary principle” by forces at both ends of the political spectrum too often trumps the sensible use of science in decision-making. Even right-wing European politicians are gravitating toward environmental populism, as Serbia’s cancellation earlier this year of a lithium mining project demonstrated.

The Serbian government’s decision will adversely affect the prospects for renewable energy, because lithium-ion batteries are essential for battery storage in smart grids and related green infrastructure. In the United States, meanwhile, despite the litany of executive orders on critical minerals, many projects remain beset by environmental conflicts. Even the recently passed Inflation Reduction Act will face barriers to implementation, as environmental groups are already geared up to oppose its mining provisions.

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Much of the current battle over climate change reflects a fundamental clash in people’s understanding of the relationship between nature and social and political order. While scientists have rightly lamented the fossil-fuel industry’s “merchants of doubt,” a Utopian view of linear solutions in energy delivery also has contributed to our current impasse. Well-intentioned activists like Greta Thunberg have done a great job raising environmental awareness, but less so when it comes to promoting environmental literacy.

Consider the need for baseload power for energy delivery. Many critics of fossil-fuel subsidies pay scant attention to the fact that only nuclear energy and fossil fuels have the capacity to provide significant power in the absence of massive battery farms for solar and wind or pumped hydropower storage infrastructure.

Environmentalists will need to make concessions to permit the extraction of critical metals for this infrastructure. Recycling itself entails energy demand, and shifting to a circular economy requires us initially to have a large enough stock of material to recycle. This in turn implies the challenge of making products that are more easily recycled. We need to calculate the trade-off between durability, recyclability, and innovation for new technologies to figure out the optimal timing for what economists call “planned obsolescence.”

Given the wide range of technical issues and the persistent tensions with China and Russia, G7 countries will need to emphasize coordination of energy policy. The G7 should first establish a science panel focused on energy security to guide investment in a diversified range of sources. The panel’s output should be predicated solely on scientific and engineering constraints rather than on domestic political considerations. National legislation, including eminent-domain regulations, also may be needed to implement the panel’s recommendations.

The 2023 G7 summit in Japan – a country that has shown remarkable pragmatism in securing and diversifying its energy – is less than a year away. A working group to develop such a panel should get down to business right away.

Solutions regarding both climate-change mitigation and energy security should now be framed by long-term contingency planning for a diversified energy mix that is congruent with fundamental laws of nature, not political expedience. The “no free lunch” cliché is abundantly true when it comes to meeting energy demand.

Existing mechanisms such as the Energy Charter Treaty, the International Energy Agency, or the International Renewable Energy Agency lack the requisite mandate and have many members that benefit from the status quo. The G7, by contrast, has the potential to set standards that not only ensure energy security for the world’s major advanced economies, but also create a feasible science-based model for other countries to emulate.