Andrea Zanon is an international advisor with over 20 years experience in sustainability, entrepreneurship, resilience and empowerment. He has advised international financial institutions, large corporations as well as entrepreneurs across 20 countries in the Middle East and Latin America.
The upcoming year represents a fundamental moment as half of the global population across 83 countries gear up for elections. This occurs during a time of profound global transformations, including Covid-19, conflicts in Ukraine and Palestine, and increased climate disasters. These factors have led to supply chain disruptions, economic instability, and escalating trade and political tensions, particularly between the US and China. Against this backdrop, decarbonization, digitalization, and deglobalization are all set to intensify in 2024 and 2025.
Decarbonization: The recently concluded COP28 (Climate Conference of the Parties) in the UAE in November/December 2023 succeeded bringing oil and gas producers to the table to address climate change challenges and participate in the green-growth revolution. The momentum toward achieving zero emissions by 2050 has gained traction despite serious delays, as countries acknowledge the high costs of climate inaction and the potential loss of competitiveness for those failing to adopt climate change mitigation and adaptation measures. To detail the risk further, Swiss Re, the leading Reinsurance Group, estimates that global climate change could reduce global GDP by 11–14%, or up to $23 trillion annually by 2050 if left unaddressed.
To illustrate the positive clean tech momentum further, investments in clean energy and technologies have surpassed investment in fossil fuels, as demonstrated in the IEA Energy Outlook 2023. With over US$ 3 trillion invested globally in energy in 2023 (as projected by the IEA Report), more than USD 1.8 trillion was invested in clean technologies, including renewables, electric vehicles, nuclear power, efficient grids, storage, low-emission fuels, and heat pumps (IEA 2023). This investment shift is influenced by geopolitical concerns and energy market shocks, pushing nations to prioritize energy security and reduce reliance on politically motivated suppliers. Major policy changes like the US Inflation Reduction Act and the European Green Initiative are also favoring these investments, prompting countries like Canada, Japan, and China to reposition their investment policies towards greater sustainability.
Deglobalization: The upcoming elections in the US, the European Union, India, UK, Pakistan, Indonesia, and Russia are characterized by growing polarization between progressive and conservative voters. These elections are happening after four years of economic shocks, global pandemics, and geopolitical tensions causing significant supply chain disruptions, reshaping global trade dynamics, and accelerating deglobalization.
Proposed trade policies and tariffs restricting technology transfers (think of the semiconductor industry) between China and the US are real and will only escalate slowing down tech innovation and putting pressure on prices. Regardless of the election outcomes in 2024, expect increased economic nationalism and a scaling-down of globalization for a more manageable regionalization of business and politics. Nations will prioritize regional trade and investment which is often referred to as “friend-shoring” seeking greater control and reliability over strategic industries for innovation and technology, trade and job creation.
In the energy sector, Europe aims for self-sufficiency, boosting renewable production withing the EU and relying more on LNG from reliable suppliers’ such as Qatar, Algeria, Canada the US and Australia. The US will continue to boost it oil production (which reached 13 million barrels per day in Dec 2023) while increasing investments in renewable energy supported by the Inflation Reduction Act. Additionally, the United States and the rest of the G7 strategic partners are friend-shoring clean energy supply chains (thorough greater investments in rare metals), relocating them to countries with shared values. This is resulting in greater industrial policy coordination among G7 countries which should boost mining investment. Strategic partnership with Peru, Turkey, Indonesia and Brazil could guarantee access to the critical minerals the G7 countries need.
Digitalization: Our lives have been dominated by algorithms as the digitally connected world population grows to 8 billion. Digitally powered remote work, entertainment, finance, health, and education will become mainstream, driven by the adoption of AI, and machine learning which in 2024-2025 will reach the masses. A key driver of digitalization in 2024 will be hyper-personalization, with users seeking hyper-personalized, cost effective, and on the spot digital offerings. Achieving this requires a combination of AI, data analytics and machine learning leadership, which the dominant Face-Book, Amazon, Apple, Netflix, Google and Microsoft have. These will capitalize on their market leadership deploying more AI, data analytics and machine learning to connect legacy systems to data driven systems, enabling smarter, faster, and more profitable decisions that match the new digital marketplace. With all that in mind, rest assured that digitalization will increase effectiveness and efficiency of industrial production, create new technologies for private users and businesses, and revolutionize practically every aspect of our lives.
Conclusion:
In 2024, decarbonization, digitalization, and deglobalization will be pervasive. COP28’s will propel the global community towards decarbonization, while investments in clean energy outpace fossil fuels. Elections in leading nations will shift the balance of power towards economic nationalism and regional self-sufficiency particularly as it relates to energy and trade. Simultaneously, digitalization will continue to shape a future dominated by algorithms, AI, and hyper-personalization.
As geopolitical and economic competitiveness are redefined, the choices made in 83 countries’ elections will reshape our lives for the foreseeable future. Adaptability and strategic alliances between G7 countries will become the cornerstone for a more collaborative, innovative, and resilient global community that aims to build a more predictable and sustainable future.