Energy security is global priority in 2023

“Countries share the goal of achieving carbon neutrality while at the same time ensuring a stable energy supply,” says Japan's Economy Minister Yasutoshi Nishimura. – Reuters

AS nearly 200 nations gathered at the COP27 United Nations climate summit last week, Japan announced a little-noticed change that sheds light on what’s going on with global energy and climate change diplomacy behind the scenes.

Without fanfare, Tokyo rebranded its state-owned natural resources company, which helps local companies to invest in overseas oil, natural gas and mining projects, as the “Japan Organisation for Metals and Energy Security”.

It may sound like a trivial name change, but it’s an important indication of where the priority lies for many nations, particularly in Asia. Energy security is top of mind.

It matters too that Japan is leading such a focus, because Tokyo will chair the Group of Seven (G7) nations in 2023, giving it a powerful pulpit to shape the global agenda. Japan hasn’t yet announced its G7 priorities, but I hear from diplomats in Asia that energy security will be a big one.

In the world of natural resources, policymakers have long wrangled with a trilemma: how to achieve security of supply, keep prices low and protect the environment – at the same time and for commodities from crude oil to wheat to aluminum.

Such a trilemma has often meant one of the three gives way to the other two.

In the 1970s and 1980s, with fresh memories of the first and second oil crises, security of supply and affordability trumped sustainability.

In 1979, for example, the G7 nations went as far as pledging in their annual summit “to increase as far as possible coal use” to lower energy costs. The trilemma balance started to change in the early ‘90s with the rise of the modern environmental movement. And over the last decade, as the evidence of global warming mounted, climate change has taken priority.

The current energy crisis is forcing governments to weigh their priorities again. Security and affordability are making a comeback.

True, policymakers insist they are not backtracking on their fight against climate change. But it’s clear that the environment is no longer the absolute priority. At best, it’s first among equals. At worst, it comes second.

Take the view of Yasutoshi Nishimura, Japan’s minister of economy, trade and industry, an extremely powerful body better. “Countries share the goal of achieving carbon neutrality while at the same time ensuring a stable energy supply,” he explained last week at the Bloomberg New Economy Forum conference in Singapore. Note how he puts climate change and energy security at the same level.

The new emphasis on security is a key reason why COP27 made so little progress on what really matters for the fight against climate change, ie, the need to reduce fossil fuel consumption and emissions of global warming gasses.

Rich countries took a first step toward paying poor ones for the losses they suffer due to climate change, but the summit did little elsewhere. The European Union had to threaten to walk away to avoid further backsliding on goals.

In many ways, this shouldn’t be surprising. Despite claims that the energy crisis wouldn’t derail the fight against climate change, it’s simply impossible that governments would not rethink priorities. Even the richest countries grouped in the

The Organisation for Economic Co-operation and Development (OECD) club are suffering.

This year, they will spend 17.7% of their gross domestic product on energy, the second highest ever and almost matching the 17.8% of 1980-1981 during the second oil shock.

Fortunately, today’s energy trilemma isn’t as difficult as the one G7 policymakers grappled with in 1979, when they turned to coal as a solution, ironically, during a summit in Tokyo. — Bloomberg

Javier Blas writes for Bloomberg. The views expressed here are the writer’s own.