The one key actor we always forget in the geopolitical landscape of the energy transition

July marked a historical moment for the energy transition, as IRENA, one of the key international institutions working on renewable energy technologies, published a report relevant to the geopolitics of critical raw materials. This was a continuation of a series of pledges and policies from key state actors over the past year, including the EU Critical Raw Materials Act and the projected EU-US critical raw materials agreement. 

All of the foregoing strategies have emphasized the geographical particularities of the raw materials market, as well as the oligopolistic nature, both of which hint towards a highly concentrated market geographically and economically, with specific countries in the Global South getting the lion’s share. Due to this concentration and the geopolitical dependencies that exist, the market has become inherently vulnerable to distortions that might not necessarily affect the existing energy markets, but contribute to decelerating the energy transition. 

While innovations, circular economy, stockpiling and diversification policy tools have been proposed and deployed, the need for these materials is not expected to cease to exist, and, hence, a pragmatic approach that helps ensure a constant supply is needed. Reflecting on the fact that stable supply depends considerably on the supplier, a paramount segment of each supplier is omitted in this policy toolkit and that is the citizens. Local communities have a much bigger power than is currently accorded to them and demand-hungry countries have a unique chance to engage with them and their policy and decision-makers via empowering local civil society. 

The importance of such an engagement ought to be further explained and a set of policy recommendations needs to be added to the existing toolkit, to create a more sturdy and resilient supply chain that will boost the energy transition and scale its deployment globally. 

The importance of civil society

It has already been mentioned that the critical raw materials supply chains are characterized by the fact that they are gathered in the hands of a few countries, governments and companies. This is adding increasing risk for corruption to an already vulnerable sector, such as the mining one. The extractives sector possesses a considerable risk of corruption due to its technical complexity, relations between the public and private sectors and large revenues. The last trait has been markedly heightened during the past years, taking into consideration that the majority of these raw materials have shown exponential growth in prices and this has brought disproportionally higher revenues to the firms involved. This is something that has been stressed even by the World Economic Forum and the National Resource Governance Institute, both of which have called for action to increase transparency in the sector, as corruption is becoming one of the biggest threats to the energy transition. There have been cases where human rights violations were reported, whereas good governance is also an issue that is under question in several countries. 

Transparency and accountability are two of the main concepts for which civil society organizations are usually striving. Their main function is to monitor government policies and laws and hold lawmakers and decision-makers accountable. However, in most of the aforesaid countries, local non-governmental organizations, which have a much higher outreach to local communities than international ones, have low capacity in human mobilization as well as in education in sectors relevant to the environment. They also lack the capacity to support local communities in transitioning their economies, by providing green and digital skills training. This shows exactly how much they can achieve, but also what we are missing with a weakened civil society. 

Such organizations can help train members of the local community to support all technological developments, which will modernize the local infrastructure and facilitate local communities. The energy transition requires skills, apart from raw materials, and most countries in the Global South enjoy a favoring demographic, where youth are the majority of their population. Civil society can contribute to creating a huge amount of skilled workforce, which can be harnessed either locally or internationally to scale the energy transition to the levels required. Also, considering that the majority of the population are young people, they will also bring creativity to the workforce, giving birth to novel and innovative ideas in the energy sector or on its digitalization, enlarging the pool of ideas that can be used in this respect. If we add the consideration that most of these young people face the worst effects of climate change, they are well-positioned to offer the best kinds of solutions, both for climate mitigation and for climate adaptation. All of the aforesaid, considering the lack of centralized infrastructure in these countries, can only be stimulated via a strong local civil society.

Another issue that is being faced in countries dominated by critical raw materials is bad governance practices. The vast majority of these have great potential of developing their own industrial policy using these materials; however, very few of them actually do. Developing an industrial policy and a heavy industry based on that can substantially raise growth rates and bring prosperity as well as white-collar and skilled jobs to the local population. The only region, so far, in the Global South, that has managed to do it successfully, has been Southeast Asia. 

Governance for industrial policy can also be connected with civil society, as another function of it is that they also practice the trade of policy advocacy and offer alternative pathways that are useful for academia, policymakers and the private sector. This requires that these organizations develop a skillset in negotiation, mediation, policy advocacy and institutional knowledge of the legal and policy framework. The role of local actors is even more important in this case because there is a need for engagement at a municipality level, which is even more challenging for international organizations. 

The role of civil society here encompasses two components. The first one involves working together with governmental stakeholders in developing a policy framework or assessing the current one, so that there is consistency with the national strategies and objectives. The second one is conveying the foregoing frameworks in a way that is understood by all segments of the society and, if a certain segment remains dissatisfied, campaigning for its rights. In both cases, the third sector is at the epicenter and, thus, without strengthening it, the claims of neocolonialism are expected to remain in place.

A policy and strategy roadmap

The main question at this point, however, is how can we engage local civil society in climate action related to the local critical raw materials. There are several ways that are already taking place in other action sectors that civil society is active, but also novel methods that can be harnessed. These recommendations include:

• There should be a shift in the humanitarian and international development aid policies that are being implemented. Currently, the vast majority of the financing mechanisms are targeted at human rights and transparency as separated and isolated issues. A higher percentage of funds could be allocated for good governance practices in critical raw material-rich countries, as well as a shift from solely human rights to human and environmental rights should take place. Finally, a considerable part of these funds ought to be used for training local organizations in specific sectors. These sectors should be policy advocacy, negotiation and mediation, but also green skills and other relevant skills, so that local communities will be able to create the workforce to power the energy transition locally, in some cases using these very materials. As actors of change, they can also be trained to create local youth councils and empower the youth as much as possible.
• Public participatory approaches should be encouraged. In some cases, while reforms are the stick, several international aid actors could pay attention to the carrot, which in this case could be financial incentives for a public participatory approach in policymaking. This could include interactive workshops of all kinds, including the novel concept of World Cafe methodology, organized by civil society, where scientific and policy experts, governmental workers and citizens can engage to co-design policies and strategies. This can minimize the instabilities, which bring price shocks and slow the energy transition, but they have also enormous local value, as they create an inclusive transition that has the potential to benefit most of the citizens of the countries in the Global South that have a high amount of critical raw materials.
• Increasing youth participation. With more than 60% of the population in Africa being below 25 and the demographics being similar in Asia, with almost 1 billion people being under the age of 24, young people are really the future in countries that are dominated by critical raw materials. Local civil society should be empowered by acquiring the skills to organize and mobilize youth into youth councils, but also to design and operate innovative spaces, such as incubators, accelerators, co-working spaces and organization of hackathons/climathons. All of these methods are expected to stimulate the minds of the majority of the population and unleash their creativity, which will help them either innovate at work, including the mining sector or create enterprises of their own and help their community grow
• Finally, another pain point that exists is the lack of accountability of companies in the extractives industry, which is usually expressed through ESG reporting. These firms are lagging compared to their counterparts further down the supply chain. Equipping local civil society with knowledge of ESG metrics can help them hold these companies accountable and make them operate in a more transparent, green and socially inclusive manner. 

Overall, when we are talking about the energy transition, the sky is the limit. However, some inherent challenges related to the supply chains persist. In these challenges, the people who operate the supply chains are the key and civil society can function as the “key operator”, helping us unlock and tap into the enormous potential that exists, but also to help us navigate the uncertainties that highly concentrated supply chains entail.

However, in order to achieve this, what is needed is revising and reimagining the role of civil society with respect to climate change and the energy transition and restructuring the international, humanitarian aid, but also our engagement strategies with them. Being amidst a problem related to centralized supply chains, we can only face it through decentralization and initiatives that are only projected to bring us closer to a clean energy future.