Never let an energy crisis go to waste: government responses to the US-Israel war on Iran

The current energy crisis triggered by the US–Israel war on Iran has once again placed energy security at the centre of geopolitical tensions. It marks the third major shock to the global energy system since 2020, highlighting the inherent vulnerabilities of fossil fuel-based energy systems.

The way governments respond to energy crises determines whether these shocks delay the transition or accelerate structural change in the energy system. Past crises—the COVID‑19 pandemic and the Russia‑Ukraine war—saw governments provide simultaneous support for renewables and fossil fuels, which stabilised emissions but failed to deliver structural progress.

Government reaction has been mixed. While many increasingly recognise that reliance on fossil fuels poses persistent risks to energy security and economic development, appropriate action is still lacking.

Clean energy technologies have matured, electrification is accelerating, and renewables are scaling at exponential rates, while fossil fuel expansion is expensive, insecure and constrained.

In this briefing, we first look at what responses work toward an energy transition and a decarbonisation of the global economy and then analyse which of the 40 countries we cover in the Climate Action Tracker have taken steps toward this, and who has not.

Governments now face a narrowing window of choice: either entrench fossil fuel lock‑ins through short‑term relief and supply expansion, or decisively tip the system toward a cleaner, more resilient equilibrium. In this context, the Transitioning Away from Fossil Fuels (TAFF) process and the associated transition roadmaps become critical governance instruments, as they can help align immediate crisis responses with longer-term decarbonisation.

• Short‑term crisis responses seem to go broadly in the wrong direction. Broad fuel subsidies, tax cuts and price caps ease social pressure but weaken price signals, entrench fossil fuel dependence and raise fiscal costs.
• Targeted support for vulnerable households and critical sectors, combined with maintaining high fossil fuel prices and lowering the cost of clean electricity, has so far been chosen by a minority of governments.
• Crises can serve as catalysts for structural reform if governments choose to act accordingly. Examples from the EU, Egypt and others show that scaling renewables, electrification and grid expansion can be an intentional crisis response that improves resilience.
• Structural reform matters most. Short‑term relief is necessary, but long‑term resilience depends on deeper reforms. Countries like Chile and Spain show how structural responses reduce future exposure to shocks.
• Better off are countries such as China and Pakistan, that doubled down on renewables and electrification; they are now more resilient to price and supply shocks, although Pakistan still faces grid/transmission issues.

It is in the hands of governments to make this crisis a tipping point toward a cleaner, more secure energy system or reinforce fossil lock-ins.

The CAT founds that the Global Stocktake goals—tripling renewables, doubling energy efficiency and cutting methane—provide the strongest available framework for aligning immediate crisis responses with long-term energy security. These Energy and Methane goals link short-term policy choices to the structural reforms required to transition away from fossil fuels.

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