A shift to renewables creates destabilization of oil prices which collapses stability of many countries.

Amid the dizzying acceleration of headlines and debate about the vital global transition to renewable energy, new research shows how that change could destabilize dozens of fragile states that depend heavily on oil exports. The new study underscores that governments and international institutions will need to guard against risks that the shift away from carbon-heavy fuels will inadvertently upset political balances and potentially ignite violent conflicts in a swath of nations from Venezuela to Nigeria to Iraq and beyond. Above all, the research suggests, the world must avoid an unplanned “traumatic decarbonization” of these economies.

The U.S. recommitment to the Paris climate accords — plus summit conferences called by the Biden administration, the G7 nations and NATO — reflect the reality that countries are moving to cut their oil consumption in hope of constraining the planet’s warming. Politicians in the world’s more comfortably developed nations focus on managing this transition to serve their own economies and polities, meeting costs and generating jobs, with an eye toward winning the next election.

Where Oil Buys Stability

Yet fragile states that produce a large share of the world’s oil face a different, more acute problem set. Their leaders, rarely confronted with true electoral challenges, pursue political survival instead by cutting deals among contentious and often violent elite factions. The deals typically involve material benefits linked to the cash from oil exports. When these countries face a sudden cutoff of their cash flow, leaders must either bargain — or battle — for slices of a smaller pie.

A challenge for U.S. and allied policymakers is that a greening of the global economy creates new risks for violence on a global scale. Violent conflict already has been rising for a decade, driven by spikes in civil unrest and again this month resetting the record for human displacement — now 82.4 million people worldwide. And we know already that a transition to renewable and other low-carbon energy sources will risk igniting unintended conflicts around the mining of minerals that will be essential to green technologies. The new research, still being synthesized, suggests that closing the planet’s oil spigot will generate simultaneous new risks in dozens of countries whose collective population will be counted in the billions.

In fragile states, governance institutions are weak. Rather than functioning under the rule of law, politics centers on transactional bargains among rival members of the elite. How the bargains operate varies from country to country. The specific mechanisms may be legal or illegal under national laws. There may be overt corruption, cronyism or structural oligarchies, a combination of all three, or other less detectable tactics. A common feature, however, is that the oil sector is typically controlled, entirely or overwhelmingly, by the members of the elite who hold the levers of state power. No matter the mechanism, oil money is central to elite deals with implications for stability.

The connection between oil prices and peacemaking in oil-dependent countries is visible in data. Since 1990, the new research finds, high oil prices accompany broader, stronger peacemaking processes in such countries. Higher oil revenues in the 2000s funded “big-tent” patronage politics in which rivals have greater incentive to cooperate for a slice of the cash pie. Leaders can spread around oil-derived cash to pay off foes and keep allies loyal. When oil prices slumped in the 2010s, peace agreements became thinner — often merely cease-fire accords. The lack of cash to pay off factions left rival groups more often to chase their goals through unstable, shorter-term deals, or simply by continuing armed conflict, which itself is often part of the bargaining process.

The transition to the global green economy will not simply unleash power struggles over existing resources in oil-pumping fragile states. It also will push those countries’ elites to seek new revenues. The new research suggests that the scrambles for alternate income streams — ranging from legally obtained natural resources to illicit activities — will create further, specific risks. An example: When Sudan lost oil income after the secession of South Sudan, Sudanese leaders found replacement incomes partly by renting their mercenary forces to Middle Eastern states that used them in the wars in Libya and Yemen.