Instability in Oil Nations Likely If World Addresses Climate Change

For several decades, fossil fuels have dominated the world energy sector. The cumulative effect has been climate change. Most countries in the world are taking steps towards clean energy but some are not doing enough. The risk for these latter countries, especially those located in Africa, is instability. Elliot Smith explores this problem in CNBC:

Algeria, Chad, Iraq and Nigeria will be among the first countries to experience political instability as oil producers feel the effects of a transition to low carbon energy production, according to a new report from risk consultancy Verisk Maplecroft.

In its 2021 Political Risk Outlook, published Thursday, the firm cautioned that countries that had failed to diversify their economies away from fossil fuel exports faced a “slow-motion wave of political instability.”

With the move away from fossil fuels set to accelerate over the next three to 20 years, and the Covid-19 pandemic eating into short-term gains gains in oil export revenues made in recent years, Maplecroft warned that oil-dependent countries failing to adapt risk sharp changes in credit risk, policy and regulation.

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