The Energy Transition and the Russo-European Gas Trade
Keywords:
Gas trade, Energy transition, Russia-European relations, Game theoryAbstract
I analyse the implications of the European energy transition, i.e., the transition to renewable energy sources for the gas trade between Europe and Russia using game theory. I present multiple different games that model the gas trade between Europe and Russia but are to some extent relevant in understanding the trade of oil and other natural resources. I try to find boundary conditions for scenarios in which rational decision-makers will pursue actions that are unfavourable to them as such and analyze how well the equilibria solutions of the models presented correspond with the reality of the "energy relationship" and its dramatic change in the wake of the war in Ukraine in 2022. I propose that fossil fuel -induced interdependency can, under certain conditions, lead to conflicts and inability to pursue favourable energy policy and a transition to renewable energy sources.
