Investing in Renewables Is an Investment in Peace

The United States’ recent intervention in Venezuela has been framed as a question of energy security. But that framing misses the deeper issue. The real risk exposed by Venezuela is not about access to oil. It is about what happens when the rule of law erodes—both in the countries that produce fossil fuels and in the powers that seek to control them.

[time-brightcove not-tgx=”true”]

This matters far beyond Venezuela. For economies to function and for peace to hold, rules must be predictable. Deals, contracts must mean something. When energy security is pursued through coercion, legal shortcuts, or discretionary intervention, those foundations weaken. The result is not stability, but higher risk, lower investment, and greater volatility. 

For businesses operating across borders, the rule of law is not an abstract principle. It is what allows long-term planning. When rules are bent in the name of strategic necessity, the costs ripple outward:  markets price in uncertainty, capital becomes cautious, investment horizons shrink. Energy security achieved at the expense of legal order ultimately undermines itself. 

Venezuela shows why. This is not simply a story of mismanaged oil wealth. It is a lesson in how dependence on fossil-fuel revenues reshapes politics. When governments rely on income from oil and gas rather than taxes paid by citizens, accountability weakens. The link between the state and the public frays, power concentrates in the hands of the few and institutions are hollowed out. Over time, repression—managing dissent through control rather than representation through consent—becomes cheaper than representation. 

Read more: How Democracy Died In Venezuela

Economists have long described this dynamic as the “resource curse” and its impacts are explored in The Peace Formula by Dominic Rohner. Easy access to oil money allows elites to maintain control without public consent. Conflict persists because fossil fuel revenues can make instability profitable for those in power. In these systems, violence is not a failure of governance, it is often a feature of it. 

This helps explain a broader pattern. Many of the world’s most stable and prosperous democracies are not rich in natural resources. Lacking easy extraction revenues, they were forced to build growth through education, skills, and innovation. Human capital became the foundation of competitiveness. Stronger institutions followed. 

This is where the global energy transition takes on a significance that goes well beyond climate. Clean energy systems are not just lower-carbon substitutes for fossil fuels. They have different political and economic characteristics. They are more distributed. They depend on work rather than extraction. They reward engineering, maintenance, and planning rather than control of a single resource.

This does not mean renewables automatically create democracy. But they do change incentives. Societies are more stable when citizens have a stake and when rules are enforced. Moving away from fossil fuels to clean energy supports those conditions. 

Read more: At Davos, Phasing Out Fossil Fuels Is No Longer Debatable

Even as geopolitical tensions have intensified, oil prices have remained relatively steady. Investors see what governments often resist acknowledging: oil demand is slowing, while clean energy offers cheaper, more reliable and less volatile systems. ExxonMobil’s CEO described Venezuela as “uninvestable” without deep legal and commercial reforms.  

The key issue is how to manage the transition in an orderly manner. As fossil-fuel revenues decline, some states will face financial stress and political strain. If alternatives are not built, instability could increase rather than fade. Supporting credible transition pathways is therefore not aid or charity. It is long-term risk management. 

For many countries in the Global South, oil and gas revenues still fund public services. The question is not whether to move away from fossil fuels, but how to replace lost income and jobs in ways that strengthen social contracts rather than fracture them. That requires investment in clean electrification, cooperation, and rules that hold. 

Venezuela is not an exception. It is a warning. Energy debates are often treated as technical questions about fuels and supply. But the deeper transition underway is institutional. Peace and prosperity will depend less on who controls oil fields and more on whether economies are built around participation, work, and law.