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The End of The Green Illusion: 13 Theses For a New Ecology

This paper was originally published in Grand Continent

The energy transition has entered a new phase. Though the climate emergency has not gone away, decarbonization is now under way in a world marked by war, geopolitical fragmentation, and the increasing weaponization of value chains. Far from calming rivalries, the impacts of the climate crisis are reshaping them. These impacts are shifting places of power, changing the instruments of power, and reordering global hierarchies.

The energy transition is creating a new interdependence, one that is both asymmetrical and hierarchical. It is not putting an end to territorial geopolitics, but complements it and sometimes supplants it with the geopolitics of value chains, industrial capacity, critical minerals, and regulations. We are witnessing the end of the green illusion.

Within this context the physical impacts of the climate crisis act as multipliers of conflict, affecting economic resilience, national stability, and the robustness of supply chains.

Faced with this reality, it would be wishful thinking to defend principles without giving ourselves the means to implement them. But it would be just as dangerous to confuse realism with cynicism. The primary questions therefore become: how do we think about the energy transition in the short-term in a world fraught with conflict? How can we manage competition in the medium term? And, in the long term, how can we reestablish the conditions for international cooperation, which will not resume spontaneously nor be as before?

1 — Ecology is a fundamental function of power

The geoeconomy was long structured around a relatively stable group of power variables: the size of an economy, industrial capacity, access to strategic resources, command of key technologies, financial and monetary power, as well as the ability to define trade rules and international norms.

Within this framework, energy already played a central role, though mainly as a factor of dependence or income, revolving around hydrocarbons, transport infrastructure, and territorial geopolitical balances. Rather than eliminating these interdependencies, globalization reinforced them by embedding them in complex value chains dominated by a few major industrial and financial powers ¹ .

The climate crisis and the energy transition do not replace these traditional variables; they complement them as well as adding others. Industrial capacity becomes inseparable from the command of decarbonated technologies. Control of resources shifts towards critical minerals and, above all, towards intermediary segments of value chains. Regulatory power takes on a structural role in guiding markets and industrial trajectories.

Add to these dimensions factors which, until now, have been secondary in geoeconomy: the ability to finance the transition on a large scale, to insure growing risks linked to climate shocks, and maintaining the resilience of productive systems that are facing the physical impacts of climate change ² .

These financial dimensions are not secondary; they profoundly shape the ability of economies to invest and absorb risk. Certain functions, long considered peripheral, are therefore emerging as critical touchpoints for the transition.

2 — Power is an invisible node

The insurance sector is a critical chokepoint that is often underestimated.

Insurance is a fundamental pillar of the financial system. Without insurance coverage, most large-scale energy projects — particularly offshore, mining, and heavy infrastructure projects — cannot obtain bank financing. Insurers thus play an invisible, structural role in energy capitalism.

If major insurance companies decided to stop covering new oil and gas exploration and production projects, a significant portion of fossil fuel investments would become unable to be financed or become prohibitively expensive in terms of capital costs. The gradual withdrawal of insurers from fossil fuels could therefore become a decisive lever for accelerating the transition.

By integrating these new touchpoints — whether industrial, such as the refining of critical minerals, or financial, such as insurance for energy projects — the energy transition reflects a deeper transformation of the contemporary geo-economy: it does not eliminate the traditional variables of power, but reconfigures their hierarchy and shifts their centers of gravity.

The ability to control intermediary segments, manage risk financing, and ensure the resilience of production systems is now becoming just as crucial as owning the resources themselves.

3 — China is teaching us that transition is systemic

China understood this problem very early on. As early as 2006–2010 — with the official recognition of emerging strategic industries in its five-year plan — it made energy transition an explicit pillar of its strategy to move up the industrial value chain. This focus was then strengthened and accelerated starting in 2011 when these sectors became fully institutionalized priorities of Chinese economic policy.

China’s advantage is not solely due to the volume of investment or subsidies. It is based on its early development of an integrated policy that covers the supply chain from start to finish, combining the securing of critical mineral supplies, developing refining and processing capacities, providing massive support to the manufacturing industry, implementing a targeted innovation policy, and coordinating the use of public and private financial instruments ³ .

Whereas Europe and the United States have long dealt with these issues in a fragmented way — treating energy, industry, trade, innovation, and finance separately — China has designed its transition as a coherent productive and financial system ⁶ .

Regulatory power also plays a structuring role. Defining technical, environmental, or commercial standards effectively means organizing markets, guiding industrial development, and creating sustainable competitive advantages. Europe has a major asset in this regard, but it only produces strategic effects if it is linked to real industrial, financial, and technological capacity.

This geoeconomic reconfiguration is now compounded by a cross-cutting factor: climate resilience. The physical impacts of climate change — droughts, floods, water stress, extreme events — directly affect production capacities, infrastructure, supply chains, and financial systems.

Power is no longer measured solely in terms of GDP or military capabilities, but also in terms of the ability to absorb climate shocks and maintain the functioning of value chains in an increasingly unstable environment.

5 — Value chains have become weapons

The initial promise of a green globalization, in which climate interdependence would promote cooperation, has now been largely dashed. Today, the energy transition has become part of a dynamic of contentious fragmentation, with each bloc seeking to protect its own decarbonization trajectory ⁷ . 

Transition value chains are becoming increasingly militarized in the sense that they are integrated into calculations of economic security and strategic rivalry ⁸ . Control of central nodes in economic networks allows for indirect coercion. The energy transition amplifies this dynamic by increasing technical and industrial dependencies.

This militarization comes at a cost. It makes the transition more expensive, delays technological rollout, and exacerbates inequalities in access to technology. But it has also become a political prerequisite for decarbonization. Without industrial policy, without secure supplies, without protection against external shocks, there is no sustainable political coalition in favor of the transition.

The United States is a prime example of this tension. Its trajectory in recent years reveals a power that is structurally bipolar: momentum under Obama, slowdown under Trump I, massive acceleration with the Inflation Reduction Act (IRA) under Biden, then a dramatic halt with Trump II. This instability weakens global value chains and reinforces the fragmentation of the system ⁹ . 

6 — Europe can become the first electric republic

The climate has become a central battleground for global value chains, with decarbonization taking place amid tensions in an era of blocs. Each major power is seeking to reduce its vulnerabilities, secure its supplies, and control critical segments of the transition.

This dynamic does not concern only the major industrial powers. Countries rich in critical resources — Australia, Chile, Brazil, Canada, the Democratic Republic of Congo, South Africa, and Indonesia — occupy a new strategic position. But here again, the issue is not just access to raw materials. It is the capacity for processing, refining, and adding value that determines true strategic autonomy.

Given this context, a clear distinction must be made between Europe’s dependence on fossil fuels and its dependence on carbon-free technologies.

The first is structural and irreversible.

The second is strategic and potentially reversible, as long as there is massive investment and coordination of industrial policies.

Europe could become a true electro-state, if it agreed to pay the investment costs.

For Europe, the way out of this situation does not lie in naive isolationism or resigned dependence. It lies in a clear power strategy based on levers that it already partly controls: the size of its internal market, its ability to define structural standards, the coordinated mobilization of its financial and budgetary instruments, and the reconstruction of a credible industrial base in key segments of the transition.

Alongside these strengths, there is a structural constraint — moving away from fossil fuels — which, far from being a handicap, has the potential to become the driving force behind a strategy for industrial and technological autonomy, provided that it is embraced politically ¹⁰ .

7 — We must learn to do to China what China has done to us

The European strategy towards China must be based on a realistic observation: the relationship combines partnership, competition, and systemic rivalry.

Partnership, because the energy transition and climate stabilization are global public goods for which no solution is possible without Sino-European cooperation. Competition, because the value chains of the transition have become a central arena for industrial and technological rivalry. Finally, systemic rivalry, because China is an ally of Russia and Europe of Ukraine.

For Europe, the challenge is therefore neither alignment nor decoupling, but rather the construction of a conditional strategic relationship based on clearly defined interests ¹¹ .

In practical terms this means doing with China what China has done with Western industrial powers: making access to the European market conditional on majority European joint ventures, arranging meaningful technology transfers, requiring industrial production to be located in Europe, and ensuring that these partnerships are part of explicit decarbonization plans.

When it comes to trade, in addition to innovating, Europe must embrace selective openness, protecting strategic industrial segments and using its trade defense instruments when Chinese practices create structural imbalances. In terms of investment, it must combine strict screening of incoming investments in critical sectors with the ability to attract Chinese capital to clearly defined projects that are aligned with its industrial, climate, and technological priorities.

The goal is not to restrain China, but to restore balance to an asymmetrical relationship so that cooperation on the energy transition no longer results in ongoing strategic dependence.

8 — Our strategic interest lies in resisting the fossil power of the United States

Relations with the United States are another strategic challenge for the Union.

Washington can no longer be considered a reliable ally. The American administration’s overt hostility towards Europe, combined with its unabashed push for fossil fuels and dismantling of federal climate policies, calls for a realistic review of the transatlantic partnership.

Europe must accept that the United States is now acting as an offensive petro-state, ready to use energy, trade, and standards as instruments of geopolitical pressure.

Faced with this reality, the European strategy cannot be one of alignment or wait-and-see: it must take a firm stance, unambiguously defend its industrial and energy interests, and implement reciprocal measures whenever U.S. policies result in structural competitive imbalances that are detrimental to Europe’s transition.

9 — The battle for minerals is not won in the mines

At the same time, Europe must build long-term strategic partnerships with countries rich in critical resources, based not on extractive thinking, but on industrial co-investment, local processing, and value sharing. Europe’s regulatory power and the size of its market are decisive levers in this regard ¹² . 

In concrete terms, this means differentiated strategies depending on the metals and partners involved: with the Democratic Republic of Congo for cobalt, with Chile for copper, with Australia for lithium, with Indonesia for nickel, and with South Africa for key transition metals such as iridium, manganese, and platinum.

Finally, China remains a key player for certain strategic minerals and materials — notably dysprosium, neodymium, and graphite — which requires Europe to view these relationships not as simple trade exchanges, but as structural geoeconomic negotiations, incorporating investment, access to intermediate technologies, and securing value chains.

Whatever the case, the challenge is not just about access to raw materials, but the ability to work up the value chain, secure refining and processing, and make sure these partnerships fit into a coherent industrial and climate strategy.

10 — The transition is a battlefield

The energy transition can no longer be viewed as a simple environmental or technological undertaking. It has become a geopolitical reality which is reallocating power, reshaping dependencies, and transforming value chains into instruments of strategic rivalry.

Far from eliminating power dynamics, the transition is shifting them: away from territories and toward value chains, away from hydrocarbons and toward critical minerals, away from trade flows and toward industrial, financial, and regulatory control points ¹³ . In this fragmented world, decarbonization is progressing not despite conflict, but through it, under the constraints of power relations and climate shocks themselves.

The energy transition is creating hierarchical interdependence: dependencies are not disappearing, they are becoming more concentrated and asymmetrical. Power now lies in the ability to organize complete production systems, protect intermediate segments of value chains, define structural standards, and absorb climate shocks.

In this context, China appears to be the most consistent player, the United States an unstable and aggressive oil state, and Europe a potential power that is still underdeveloped, caught between dependence and potential autonomy. To consider the transition without taking this geoeonomic reality into account is to condemn oneself to strategic impotence.

11 — We can learn to tame rivalry

The current fragmentation of the international system does not inevitably lead to lasting chaos.

Even in a world of conflict, it is in the interests of the major powers to avoid unchecked escalation, which would drive up the cost of the energy transition and undermine their own industrial trajectories. The issue is therefore not one of returning to idealized cooperation, but rather of channeling rivalry around minimum rules, stabilization zones, and sectoral de-escalation mechanisms.

Controlled competition first requires that certain critical interdependencies become less ideological. In the energy transition’s value chains, not all segments have the same level of strategic sensitivity. Clearly identifying what is vital, strategic, and substitutable helps limit the temptation to engage in widespread militarization, which is costly and counterproductive. In the absence of trust in politics, a form of technical and industrial transparency can help reduce uncertainty and the risk of sudden disruptions.

Next, managing competition requires targeted, pragmatic, and reversible sectoral agreements. These may cover technical standards, rules for notifying export restrictions, or coordination mechanisms in the event of a shock to the supply of critical minerals. These arrangements are not based on a convergence of values, but on converging interests in the short and medium term: avoiding shortages, stabilizing markets, and preserving the credibility of decarbonization trajectories.

Finally, managing competition requires internal resilience. The more economies are able to absorb shocks — whether industrial, financial, or climatic — the less tempted they are to resort to extreme coercive measures. Investing in diversification of supply, industrial upgrading, and climate resilience is not just a defensive strategy: it is a prerequisite for systemic stability.

12 — Cooperation is not an illusion

In the long term, no sustainable energy transition is possible in a world of constant, unregulated rivalry.

Climate stabilization remains a global public good, and the physical effects of climate change will continue to affect established and emerging powers alike: international cooperation will therefore not disappear by fate, but it will not return spontaneously or in the forms inherited from the era of liberal globalization.

Any credible cooperation must be backed by a clear balance of power. Principles without instruments are ineffective. This means linking climate cooperation to real capabilities: financing, technology transfer, market access, as well as the ability to sanction predatory behavior. Post-carbon cooperation will be selective, conditional, and reversible.

Finally, this cooperation must take into account one key fact: the energy transition creates winners and losers, both within and between countries. Rebuilding a minimum level of international cooperation means addressing these asymmetries, particularly with regard to countries rich in critical resources and economies most exposed to climate shocks. Without credible mechanisms for sharing risks and benefits, conflict will remain the norm.

13 — Realism is not cynicism

In the short term, realism is essential. In a fragmented world plagued by war, strategic rivalry, and climate shocks, principles that are not backed by real implementation capabilities remain meaningless. Approaching the energy transition without considering industrial power, security of supply, and the resilience of value chains amounts to exposing oneself to long-term dependence and, therefore, a loss of sovereignty.

In the medium term, the challenge is not to eliminate conflict, but to channel it.

Transforming anarchic rivalry into more controlled competition requires identifying minimum rules, sectoral arrangements, and stabilization mechanisms capable of limiting spirals of coercion and fragmentation. This does not mean a return to harmonious cooperation, but rather strategic management of interdependencies, based on converging interests as well as accepted power relations.

Finally, in the longer term, no energy transition away from fossil fuels is possible without renewed international cooperation. This cooperation will not happen spontaneously, nor will it take the form of past globalization. It will have to be built patiently, based on a clear understanding of the power shifts brought about by the energy transition and recognition of our now shared climate vulnerabilities.

Realism without a plan for change turns into cynicism. But initiative without a strategic foundation turns into powerlessness. Considering the energy transition today means accepting these two requirements together.

1. Gary Gereffi, John Humphrey and Timothy Sturgeon, “The Governance of Global Value Chains”, Review of International Political Economy, n°12 (1), 2005, pp. 78–104.
2. Emmanuel Guérin and Laurence Tubiana, “Global Climate Governance in the Age of Geoeconomics”, CEBRI-Revista, n°222, 2025.
3. Tim Büthe and Walter Mattli, The New Global Rulers. The Privatization of Regulation in the World Economy, Princeton, Princeton University Press, 2011.
6. Barry Naughton, The Rise of China’s Industrial Policy, 1978–2020, Oxford, Oxford University Press, 2021. ⁴ . More than short-term cost advantages, it is this long-term strategic coherence that explains China’s dominant position in many key segments of the energy transition value chains today.

   4 — Governing the transition means controlling its touchpoints

   Control over critical minerals is fully in line with this reasoning. Power does not lie solely in extraction. It is concentrated in the intermediate segments — refining, processing, component manufacturing — which constitute critical control points within value chains. These obligatory points of passage make it possible to restrict, slow down, or steer the entire production system, especially when combined with financial, trade, or regulatory instruments.

   This rationale for controlling intermediate segments is not abstract. It becomes concrete in certain strategic value chains, where the concentration of industrial capacity creates systemic vulnerabilities.

   Strategic vulnerability stems not only from the geographical concentration of mining resources, but above all from the concentration of refining and processing capacities. While the extraction of lithium and rare earths is relatively dispersed, China overwhelmingly dominates the intermediate segments of the value chains. According to the International Energy Agency, China controls around 60% of global lithium refining, 73% of cobalt and nearly 90% of rare earths.

   This power over the various stages of processing is a real geoeconomic chokepoint: when tensions arise, control over these intermediate segments makes it possible to slow down or impose conditions on the entire global production of batteries, wind turbines, or electric vehicles. Vulnerability therefore lies less in the physical scarcity of minerals than in the concentration of critical industrial capacity ⁵ Critical Minerals Market Review, Paris, Agence internationale de l’énergie, 2023.

7. Gavin Bridge, Stefan Bouzarovski, Michael Bradshaw and Nick Eyre, “Geographies of Energy Transition: Space, Place and the Low-Carbon Economy”, Energy Policy, n°53, 2013, pp. 331–340. See also Marshall B. Burke, Solomon M. Hsiang and Edward Miguel, “Climate and Conflict”, Annual Review of Economics, n°7, 2015, pp. 577–617.
8. Henry Farrell and Abraham L. Newman, “Weaponized Interdependence: How Global Economic Networks Shape State Coercion”, International Security, n°44 (1), 2019, pp. 42–79.
9. For a review of the role of the United States in the weaponization of value chains, see Henry Farrell and Abraham L. Newman, Underground Empire: How America Weaponized the World Economy, New York, Henry Holt, 2023. See also Gary Gereffi, “The Organization of Buyer-Driven Global Commodity Chains: How U.S. Retailers Shape Overseas Production Networks” in Gary Gereffi and Miguel Korzeniewicz (eds.), Commodity Chains and Global Capitalism, Westport, CT, Praeger, pp. 95–122.
10. Andreas Goldthau and Nick Sitter, “Power, Authority and Energy Security. The EU’s Russian gas dilemma”, International Affairs n°96 (2), 2020, pp. 389–407.
11. Emmanuel Guérin and Bernice Lee, “The EU and China Need a Shared Competitiveness Agenda for Clean Trade”, Project Syndicate, July 2025.
12. Anu Bradford, The Brussels Effect. How the European Union Rules the World, Oxford, Oxford University Press, 2020. See also: Andreas Goldthau and Nick Sitter, “A Liberal Actor in a Realist World: The European Union Regulatory State and the Global Political Economy of Energy,” Oxford Institute for Energy Studies, OIES Paper: SP 33, 2015; Ian Manners, “Normative Power Europe: A Contradiction in Terms?” Journal of Common Market Studies No. 40 (2), 2002, 235–258.
13. The Role of Critical Minerals in Clean Energy Transitions, Paris, Agence internationale de l’énergie, 2021.