The progression towards 3C of global warming is not measured in degrees centigrade. Instead, capital expenditure and investment figures serve as the real indicators, revealing a flourishing transition economy. Globally, investments in transition industries are twice as much as those in fossil fuels, with growth rates in the net zero sector surpassing the rest of the economy by over eight times.
Value
Europe produced more electricity from solar energy last year than from fossil fuels, and EVs outsold petrol cars for the first time. Europe is not alone in this trend; globally, sales of green technology, from solar panels to electric trucks, are rapidly outpacing petro-technology.
In the 1990s and early 2000s, both the US and Europe sought to establish industrial dominance in transition industries, along with other core technologies of the fourth industrial revolution, including AI and biotechnology. However, industrial climate denial, bipartisan support for fossil industries, and continuous anti-climate compromises hindered the US’s green tech sectors.
Ultimately, China emerged as the primary winner in the transition race. Nevertheless, both the US and the EU have developed transition industries and large net zero workforces, where employment is growing at twice the rate of the rest of the economy. Yet, these industries are evolving within a global value chain increasingly dominated by Chinese firms, rather than US or European IP or companies.
Transformation
The transition’s impact is evident in supportive countries like Britain.
The British government has announced significant support for green industries, including the assembly and deployment of floating wind turbines in Port Talbot, a town that recently experienced green deindustrialisation with the closure of its steel mill’s blast furnaces.
This initiative will create thousands of jobs, not in high-value manufacturing, but in installing wind turbines manufactured in China, using imported steel rather than local materials. The real economic value will ultimately benefit elsewhere.
The transition economy is reshaping the structure of global value chains, challenging the dichotomy of petro-states versus electro-states, and transforming the global factory’s organization.
Decolonisation
Intellectual property and research are increasingly occurring outside the US-European core, with high-value manufacturing already concentrated in East Asia. Despite the rise of neo-mercantilism in response to zero-sum conflicts in a stagnant global economy, production remains globally dispersed: while globalisation may have slowed, it has not regressed significantly.
The attention given to the ‘new cold war’ obscures the genuine concern behind Trump’s war on Iran: the fear that the US might lose its privileged position at the heart of the global economy and descend the value chain.
When Trump asserts that renewable energy is “destroying a large part of the free world,” it echoes fears similar to those of European empires confronting decolonisation movements—the end of tribute and power, and the emergence of competitors unfriendly to the US.
Oil’s return?
In response to this threat, Trump has sought to reaffirm the petro-economy’s supremacy, aggressively pursuing petro-supremacy since taking office in 2025. He has repeatedly tried to bolster oil and gas production, attacking the Inflation Reduction Act and halting offshore wind permitting while promoting fossil fuel use and production.
His efforts extend beyond the US, as he has pressured Europe, Japan, South Korea, Indonesia, and Malaysia to commit to purchasing more liquefied natural gas (LNG). He has also kidnapped the Venezuelan president, pushed for oil and gas industry investment, and ensured that Venezuelan oil would be refined in Texas. Currently, he is waging a war on Iran, openly expressing his desire for control over Iran’s substantial gas and oil reserves.
Exploration
However, Trump’s achievements are accompanied by failures. His efforts have not resulted in a boom in fossil fuel investment. Shale producers are not planning to expand investment, and productivity growth in the industry has stagnated. Although US shale production is expected to peak soon, this has not triggered a rush to invest elsewhere. Instead, global upstream investment has declined.
Before the war on Iran, the International Energy Agency (IEA) predicted a growing gap between oil supply and demand, a gap that has since widened due to the rapid acceleration of consumer and national spending on alternatives.
With limited growth prospects, downward pressure on prices, and increasing exploration and production costs, oil majors see little incentive to expand production. Consolidation, not expansion, is the prevailing trend.
Bribing
Trump has resorted to threats and presidential directives to create demand and investment. Despite countries’ pledges to purchase more US oil and gas, actual demand is decreasing.
In Venezuela, Trump had to threaten oil companies to secure investment, issuing an executive order to prevent courts or creditors from seizing revenue linked to the sale of Venezuelan oil held in US Treasury accounts. When Exxon suggested they might not invest in Venezuela, Trump directly jeopardised their debts, stating, “I didn’t like Exxon’s response, I’ll probably be inclined to keep Exxon out.”
Reflecting the broader debacle, Trump’s regime has resorted to bribing energy companies to refrain from building renewables, offering over $1 billion to French oil major TotalEnergies to abandon an offshore windfarm project.
Windfall
This contrasts with the £1 billion in climate funding for logistics companies announced by the British government in the same week. While Trump’s efforts aim to obstruct construction, the British initiative seeks to stimulate investment and support small and medium-sized businesses.
However, this fund is not intended for building electric vans but for purchasing them. Despite promises to revive Western industry, the transition will focus on installation rather than manufacturing.
The war on Iran is accelerating these trends. Rather than securing a fossil fuel future, the conflict is likely to provide a windfall for oil companies and encourage majority-oil importing countries to invest in and adopt transition technologies more aggressively.
Twilight of the West?
The war on Iran is part of a broader strategy to maintain the US’s unchallenged position at the top of the value chain and control oil and the global economy. This strategy includes pursuing crypto-dominance, positioning US tech and AI as indispensable and untaxable infrastructure, and combating the transition economy.
Unlike the assaults on other countries conducted by the Trump regime, the war on Iran is not proceeding as planned. While the US is generating a short-term cash windfall from rising oil prices, so too are Iran and Russia.
As many focus on looming shortages and inflationary spikes, the more significant concern for Trump’s project is the threat to his allies in the Gulf.
Bombed
The Gulf states are more than just ‘petrodollar pumps’; they anchor the US dollar’s status as the global reserve currency, a status under pressure as Iran announces that passage through Hormuz will only be granted to oil priced in renminbi.
These states are key funders for the AI build-out, but Iranian retaliation is steadily diminishing that funding, placing the emerging petro-compute complex under immense strain.
Coupled with higher energy prices, rampant inflation, and helium shortages, there is a strong possibility that this war will finally burst the AI bubble, dismantling one of the pillars supporting the k-shaped US economy.
If this occurs, it would mark a fitting conclusion.
Currently, the US’s social landscape is characterised by scams and pyramid schemes. While AI enriches a small elite, it contributes little more than inefficiency, job losses, and increased workloads for the majority. It only seems to excel in generating lists of schools for missile attacks.
Embedded
However, it is not AI that encapsulates the state of the US, but the prediction market Polymarket, where gambling on future events results in losses for most participants.
Approximately 80% of Polymarket users lose money, with the majority of profits captured by so-called elite traders. These elites are not skilled gamblers but possess insider information, including the timing of attacks and White House announcements on oil.
Scams and corruption are not forward-looking. With the future as a material entity historically tied to fossil fuels for over a century, the idea of the economy as an autonomous sphere rooted in oil is coming to an end.
A new era of energy abundance and security is emerging. While it may not arrest climate change below so-called ‘safe’ levels, it will strand fossil assets and the regions dependent on them.
Fascism
This new era is also disrupting the existing structure of global production, eroding traditional power structures and shifting the centres of economic development to Asia, away from Europe and the US.
This moment may be pivotal in the decline of the US empire, with the country retreating from its bases across the Middle East, unable to do more than bully allies and launch missiles at defenseless nations.
The petrodollar complex could collapse, bringing the AI bubble down with it. Israel, already economically battered, could implode, potentially paving the way for progress toward peace.
However, the loss is greater than that. The US has lost its hold on the future. Perhaps this is why fascism has become a distinctly American phenomenon, no longer aiming for future renewal but instead embodying reactionary nostalgia, viewing the future as a threat to what it once imagined itself to be.
This Author
Dr Nicholas Beuret is a lecturer at the University of Essex specializing in the politics and political economy of climate change and the green transition. His book, Or Something Worse: Why we need to disrupt the climate transition, is published by Verso.
