current affairs energy

Iran’s renewable energy peace dividend

The idea of a ‘peace dividend’ comes from the Cold War. As the decades of tension eased and the threat of conflict receded, world leaders saw a chance to collectively reduce their military budgets. Armed forces could be demobilized, nuclear weapons destroyed, and expensive programmes drawn to a close. There were potentially huge savings, and many hoped that the money could be used on healthcare or infrastructure instead.

It was a striking moment of opportunity, looking back. In 1991 George Bush Sr was able to propose a 25% reduction in US military spending, ordered the destruction of all the country’s short range nuclear missiles, and stood down its strategic bombers. All of this was done first and in trust: “there is every reason for the Soviet Union to match our actions”. This kind of move is almost unimaginable from America today, in the era of pre-emptive warfare introduced by his son in the wake of 9/11.

The actual phrase ‘peace dividend’ is itself conflicted. Some referred to the potential boost in domestic spending that would come from disarmament. Margaret Thatcher insisted that “that is the wrong way around. Peace is the dividend that comes from sustained and heavy investment in weapons and defence technology.”

Given that it has been interpreted in different ways in the past, I feel justified in re-appropriating the term to talk about renewable energy. Can a transition to renewable energy reduce tensions? Will it make the world safer?

When you look at the number of wars for oil throughout recent history, one might reasonably think that the sooner we make oil obsolete the better. Oil also funds ISIS, and props up corrupt regimes and elites. Fossil fuels lie behind tensions, or are a contributing factor, in dozens of places, from South Sudan, to Ukraine, to the South China Sea. Elsewhere, the huge lobbying power of fossil fuel companies undermines democracy and environmental action.

Imagine how these power imbalances begin to shift as renewable energy erodes fossil fuels. It will take decades, but it can’t come soon enough. A shift towards renewable energy wouldn’t just help to protect us from climate change. It would remove one of the biggest sources of conflict in human history.

Today though, I want to focus on one particular country: Iran. It’s not the first place to look for a peace dividend through replacing fossil fuels. What makes it an interesting case study is that renewable energy could potentially reset the country’s standing in the world.

The West has worried about Iran for a long time, and the main source of tension has been energy – specifically nuclear energy, rather than fossil fuels. It’s worth remembering that Iran only got involved in nuclear power at the invitation of the US, as part of the 1950s Atoms for Peace project (see also Pakistan). But they hadn’t counted on a revolution, or on Iran choosing to work with the Russians instead. In the early 2000s it emerged that Iran was enriching uranium in secret and that’s when things got complicated, with demands to desist on one side and denial on the other. Years of sanctions and suspicion appeared to be easing in 2016 as a decade of negotiations finally delivered an international deal – only for Donald Trump to promise to overturn it.

Here’s the interesting thing – research shows that Iran could be 100% powered by renewable energy with comparative ease. Not only that, it would be cheaper than the nuclear power plants that Iran insists it has the right to build. New nuclear power would cost an estimated 110 euros per megawatt hour in 2020, while renewable electricity would cost 40-60 euros per megawatt hour.

Why would Iran switch to renewable energy if it has the world’s second largest gas reserves, one might ask. Indeed, why would you bother with nuclear energy when you have gas at your disposal? Presumably Iran wants nuclear power, perhaps because it has the side benefits of enriched uranium. A fair point, so this is very much a possibility, a choice that Iran could make if it wanted to.

This is what Iran could do: it could announce plans to go 100% renewable, focusing on solar, wind power and storage. All nuclear power ambitions could be wound down as renewable power comes online. Following Norway’s model, gas could be prioritized for export and used to fund the transition. The country would be better off financially than if it pursues nuclear power, it could rebuild its reputation internationally, and move towards sustainability at the same time.

I’m no expert in Persian politics. I’m aware the situation is complicated, and as usual I invite you to point out anything I’m missing. But the way I see it, the improving economics of renewable energy offer a way forward for Iran which hasn’t been available until very recently. There is a new option on the table, one that potentially delivers a triple win for the environment, the economy, and for peace in the region.


  1. As usual, the thought is ‘why havn’t they started down this path, then?’. They are no more stupid than we are. Maybe it hasn’t occured to them? Maybe there isn’t a powerful advocate? In both cases, we could do worse that at least put this thought to the British Ambassador and ask him to raise it with the appropriate persons there. With your awards for your blog and your number of followers, Jeremy, you are more likely to gain traction with him than I am. If you don’t have much time, I would be willing to research this route for you but you would need to actually send it.

    1. I imagine it’s for similar reasons that Britain is building new nuclear power stations and subsidizing fossil fuels, even though all the evidence suggests renewable energy is our best option: inertia, vested interests and the glamour of a big project. It is also true that the economics of renewable energy are in transition, and this particular opportunity is pretty recent.

      Good point about advocates. I’m not sure that I have any clout with diplomats, but it would be interesting to try float the idea in a few places. If you want to have a dig around and find out who would be the best person to talk to, that would be great – thanks for your help!

  2. Jeremy – a few observations:

    1. Contrary to the basic assumption of the research to which you provide a link, COP21 did not result “in a global agreement on net zero CO2 emissions shortly after the middle of the 21st century” and therefore is unlikely to “lead to a collapse of fossil fuel demand”

    2. Iran is responsible for 1.7% of global emissions, which have grown by 11% since 2010. (The equivalent figures for the UK are 1.1% and minus 19%.)

    3. Iran is classified by the UN as a “developing” country and therefore is under no obligation, legal or moral, to reduce its greenhouse gas emissions.

    4. Accordingly its Intended Nationally Determined Contribution (submitted to the UNFCCC in November 2015) says nothing about emission reduction, indicating “Unconditional Mitigation Action” of 4% compared to Business As Usual by 2030 – i.e. emissions will continue to grow but slightly less rapidly than previously anticipated.

    5. In 2014, Iran’s electricity production came 93% from fossil fuels (gas and oil – no coal), 6% from hydroelectric and 2% from nuclear. Wind and solar were essentially zero.

    6. There are some proposals for wind/solar investment in Iran. But they’re extremely modest.

    All in all, it seems unlikely that renewable energy will reset Iran’s standing in the world.


    Click to access paris_agreement_english_.pdf

    Click to access cop-21-developing-countries-_-2.pdf

    Click to access INDC%20Iran%20Final%20Text.pdf

    1. True. But you did say “that renewable energy could potentially reset the country’s standing in the world”. My observations suggest that that seems unlikely.

      1. There are all sorts of things in the world that could happen, that should happen, and that aren’t likely. So what? There would be no new ideas, no new possibilities, no progress, if we confined ourselves to what is likely.

        1. Very true. Nonetheless it may be useful to demonstrate that this particular one is particularly unlikely.

  3. Iran is unfortunately close to nuclear armed countries; Russia, Israel, Pakistan and India furthermore there is an American military presence in Kuwait, Saudi Arabia, Bahrain, Iraq, UAE, Afghanistan and Oman. With such a threat, were it my decision, I would keep the option of nuclear weapons development as a safeguard. Perhaps if the belligerent forces surrounding Iran were to withdraw the possibility of a Renewable Energy Dividend might just be possible.

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