National climate policies are often driven by cautious self-interest and energy security rather than pure ambition, as seen in China's export halts and Europe's return to coal during price spikes.
India's climate strategy presents a mixed picture: while it is exceeding clean energy installation goals, its official 2035 targets are unambitious and it faces significant challenges in domestic manufacturing and EV adoption.
The UK, particularly London, faces a severe economic and energy crisis, highlighted by the IMF's projection of being the worst-affected by the Middle East energy shock, despite ambitious local climate targets.
Major geopolitical powers are using energy policy to manage economic pressures; the US encourages drilling to lower prices, while China restricts exports to secure domestic supply.
Urban policy failures, such as London's significant shortfall in housing construction, can undermine broader economic and social goals despite ambitious climate initiatives.
▶Geopolitics of Energy Security
Rathi consistently highlights how nations prioritize immediate energy security over climate ambition during crises. He points to China halting fuel exports, Europe reverting to coal amid gas price spikes, and the US encouraging more drilling to manage global prices.
Investors should anticipate that national energy policies will remain highly reactive to geopolitical shocks, potentially slowing decarbonization timelines and creating volatility in both fossil fuel and renewable energy markets.
▶The Ambition-Performance Gap in Climate Policy
Rathi's analysis frequently contrasts ambitious climate targets with underwhelming real-world performance. This is evident in his critique of India's 'weak' 2035 plan despite its rapid renewable build-out, and London's world-leading net-zero goal clashing with its severe housing construction failures.
Analysts should look beyond headline climate pledges and scrutinize underlying industrial policies, manufacturing capacity, and execution capabilities, as these are the true indicators of a country's decarbonization trajectory.
▶India's Complex Energy Transition
Rathi portrays India as a key but complicated player in the global energy transition. He acknowledges its success in deploying clean energy capacity but emphasizes its significant weaknesses, including lagging EV adoption, dependency on Chinese supply chains for solar manufacturing, and unambitious official climate targets.
India represents both a massive growth opportunity and a significant risk for energy investors; success will depend on the government's ability to resolve domestic manufacturing bottlenecks and create a more aggressive policy framework.
▶UK's Economic Vulnerability in the Energy Crisis
Rathi repeatedly emphasizes the UK's precarious economic position, citing the IMF's assessment that it will be the hardest hit by the energy shock. This vulnerability is framed against a backdrop of major infrastructure decisions like the Heathrow expansion and ambitious but challenging city-level climate goals in London.
The UK's heightened sensitivity to global energy prices suggests significant political and economic headwinds for capital-intensive green projects, making policy stability and government support crucial for investment decisions.