Global powers could suffer financially in the move away from fossil fuels - study

• Published date: 06 November 2021

The global transition from fossil fuels to renewable energy is well underway, and it's now apparent that getting on board may actually be the most effective approach for countries to both combat climate change and save money. As environmentally-friendly policies are implemented in an increasing number of countries, the choice to continue relying on fossil fuels may come with more consequences than a changing climate alone. Exactly what risks or rewards a country faces will depend on its relationship with fossil fuels.

Countries can be divided into one of three categories. For those that are heavily reliant on the import of fossil fuels, such as those in the European Union and China, moving toward greener policies has many benefits. Decarbonization for these countries means an opportunity to redirect financial resources toward the innovation of new technologies and jobs on a domestic level.

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At the same time, oil-rich countries that rely on the export of fossil fuels, such as Saudi Arabia, can reduce negative impact on their own economies from decreased global demand for fossil fuels by preemptively flooding the market at a reduced cost.

Countries like the US, Canada and Russia are regarded as "large uncompetitive exporters" and stand to lose the most from continued reliance on fossil fuels. In a market flooded by exports from other oil-rich countries, these large exporters would...