Energy lies at the heart of the world’s most pressing global challenges. Yet at both the global and national levels, energy is poorly governed. The fiasco of the Copenhagen climate summit is just one illustration of how far the world is from being able to bring about the desperately needed transition to a system of sustainable and secure provision of energy services.
The key role of energy in global problems is clear. Two-thirds of the greenhouse-gas emissions that are causing climate change trace back to fossil fuel use. A renewed scramble for oil is raising fears of a new generation of geopolitical conflicts. Global economic instability correlates strongly with energy-price volatility. Economic development is in significant part defined by the process of overcoming energy poverty, yet 1.6 billion people still lack access to even the most basic energy services.
Only recently has it become clear that these seemingly disparate issues are a collective manifestation of a dysfunctional energy system. Globally and at the national level, energy is still conceptualized and managed in terms of energy sources, not in terms of the energy services those sources provide. Yet consumers of energy services have no particular interest in what sources of energy fuel their production, transportation, lighting, heating, air conditioning or appliances. The existing paradigm serves to rigidify decision-making at a time when extraordinary flexibility and rapid change are essential.
At the global level, a host of inter-governmental organizations is tasked with addressing various pieces of the energy puzzle. Among these, the most conspicuous is the International Energy Agency (IEA). Created by oil consumers in the 1970s in response to the OPEC price shocks and the embargoes by Arab oil exporters, the IEA has succeeded in establishing and supervising a system of national oil stockpiles, which has helped to prevent a recurrence. With a small but highly competent professional staff, the IEA has also become the primary source for the world’s energy statistics and is playing a key role in the climate debate.
However, it is nowhere near the truly international organization that its name implies. The IEA was established by and for a small number of wealthy oil-importing countries under the aegis of the OECD. Its membership remains restricted to OECD countries, even though surging demand from non-member countries like China and India is rapidly undermining the IEA’s ability to speak for and coordinate responses among oil importers as a group. Although the IEA’s mandate has expanded beyond oil since the early 1990’s to include broader energy policy, several of its own member governments, led by Germany, found its record on renewable energy resources so unsatisfactory that they recently established the International Renewable Energy Agency (IRENA), whose membership is open to all.
Other key inter-governmental organizations face their own limits. The International Energy Forum, which grew out of a series of meetings of energy ministers, is intended to provide a common forum for fossil-fuel producers and consumers. It has taken some useful steps that may help to stabilize markets, such as the Joint Oil Data Initiative, but it plays a relatively minor role. The Energy Charter Treaty has failed to bring Russia into a rule-based framework for international transit via oil and gas pipelines. And, the World Bank’s energy financing remains overwhelmingly dedicated to fossil fuels, despite limited efforts to establish funding for low-carbon energy.
Numerous networks and partnerships have emerged in response to the gaps in global energy governance. For example, the Renewable Energy and Energy Efficiency Partnership, founded in the UK, has grown into a multi-stakeholder body supporting renewables and efficiency in numerous countries. So far, however, such initiatives remain quite small. They will not in the foreseeable future operate on a scale that can foster a rapid transition away from fossil fuels or provide energy services to billions of new consumers.
As is true of other global problems, much depends on the capacity and willingness of the most powerful national governments to find ways to act collectively. Yet these countries’ deeply flawed systems of national energy governance will make such collective action all the more challenging.
Indeed, in many ways, the situation has been getting worse. Over the past two decades, advocates of privatization have promised greater efficiencies and lower energy prices, but the failure to accompany privatization with appropriate regulation and enforcement has left many countries with poorly governed and often deeply corrupt energy sectors.
Moreover, given the vast profits available under the current system, the struggle to bring about a significant energy transition faces stiff resistance from deeply entrenched vested interests. And market forces alone are unable to cope with major externalities such as greenhouse-gas emissions, with overwhelming government control over major energy sources such as oil, and with huge numbers of people too poor to constitute a market.
Our fractured landscape for energy governance was not planned. It has evolved piecemeal with little coordination among its various parts. If we are to avoid paying a high economic, strategic and environmental price for its shortcomings, a better system of developing and enforcing internationally agreed energy rules is essential.
Ann Florini is director of the Centre on Asia and Globalisation at the Lee Kuan Yew School of Public Policy and a senior fellow at the Brookings Institution.COPYRIGHT: PROJECT SYNDICATE
On March 22, 2023, at the close of their meeting in Moscow, media microphones were allowed to record Chinese Communist Party (CCP) dictator Xi Jinping (習近平) telling Russia’s dictator Vladimir Putin, “Right now there are changes — the likes of which we haven’t seen for 100 years — and we are the ones driving these changes together.” Widely read as Xi’s oath to create a China-Russia-dominated world order, it can be considered a high point for the China-Russia-Iran-North Korea (CRINK) informal alliance, which also included the dictatorships of Venezuela and Cuba. China enables and assists Russia’s war against Ukraine and North Korea’s
After thousands of Taiwanese fans poured into the Tokyo Dome to cheer for Taiwan’s national team in the World Baseball Classic’s (WBC) Pool C games, an image of food and drink waste left at the stadium said to have been left by Taiwanese fans began spreading on social media. The image sparked wide debate, only later to be revealed as an artificially generated image. The image caption claimed that “Taiwanese left trash everywhere after watching the game in Tokyo Dome,” and said that one of the “three bad habits” of Taiwanese is littering. However, a reporter from a Japanese media outlet
Taiwanese pragmatism has long been praised when it comes to addressing Chinese attempts to erase Taiwan from the international stage. “Taipei” and the even more inaccurate and degrading “Chinese Taipei,” imposed titles required to participate in international events, are loathed by Taiwanese. That is why there was huge applause in Taiwan when Japanese public broadcaster NHK referred to the Taiwanese Olympic team as “Taiwan,” instead of “Chinese Taipei” during the opening ceremony of the Tokyo Olympics. What is standard protocol for most nations — calling a national team by the name their country is commonly known by — is impossible for
India is not China, and many of its residents fear it never will be. It is hard to imagine a future in which the subcontinent’s manufacturing dominates the world, its foreign investment shapes nations’ destinies, and the challenge of its economic system forces the West to reshape its own policies and principles. However, that is, apparently, what the US administration fears. Speaking in New Delhi last week, US Deputy Secretary of State Christopher Landau warned that “we will not make the same mistakes with India that we did with China 20 years ago.” Although he claimed the recently agreed framework
RSS