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Confronting the Challenge of Energy Governance

  • Neil Gunningham (a1)
Abstract
Abstract

There is a compelling argument for developing a low carbon emissions trajectory to mitigate climate change and for doing so urgently. What is needed is a transformation of the energy sector and an ‘energy revolution’. Such a revolution can only be achieved through effective energy governance nationally, regionally, and globally. But frequently such governance is constrained by the tensions between energy security, climate change mitigation and energy poverty. At national level, there is a chasm between what is needed and what governments do ‘on the ground’, while regionally and globally, collective action challenges have often presented insurmountable obstacles. The article examines what forms of energy law, regulation and governance are most needed to overcome these challenges and whether answers are most likely to be found in hierarchy, markets, or networks.

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The online version of this article is published within an Open Access environment subject to the conditions of the Creative Commons Attribution-NonCommercial-ShareAlike licence, available at: http://creativecommons.org/licenses/by-nc-sa/2.5/. The written permission of Cambridge University Press must be obtained for commercial re-use.
References
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1 K. Richardson, et al., ‘Climate Change: Global Risks, Challenges and Decisions’, Synthesis Report, Copenhagen, 10?12 March 2009, available at: http://climatecongress.ku.dk/pdf/synthesisreport; Rockstrom J., et al. ., ‘A Safe Operating Space for Humanity’ (2009) 461 Nature, pp. 472–5.

2 Kyoto Protocol to the United Nations Framework Convention on Climate Change, Kyoto (Japan), 10 Dec. 1997, in force 16 Feb. 2005, available at: http://unfccc.int/kyoto_protocol/items/2830.php.

3 For example, the Cancun summit was an agreement, though not a binding treaty, to limit global warming to less than 2 degrees Celsius above pre-industrial levels. However, it contained no agreement on how to extend the Kyoto Protocol nor was it determined how a previously agreed $100 billion Green Climate Fund, designated to assist poor countries, would be raised. Nor was there any statement that action must be taken to ensure that emissions ‘peak’ within ten years, as the science suggests is essential. See Vidal J., ‘Does Cancun Agreement Show Climate Leadership?’, The Guardian, 13 Dec. 2010.

4 Garnaut R., The Garnaut Climate Change Review 2008 (Cambridge University Press, 2008), p. i.

5 See, e.g., US Government Accountability Office, ‘Observations on the Potential Role of Carbon Offsets in Climate Change Legislation (Statement of John Stephenson, Director Natural Resources and Environment)’, 5 Mar. 2009, available at: http://www.gao.gov/new.items/d09456t.pdf. This is not to deny the importance of energy taxes or to suggest that they do not play an important role, but rather that they are necessary but not sufficient: see Copenhagen Economics, ‘Innovation of Energy Technologies: The Role of Taxes. Final Report’, 26 Nov. 2010’, available at: http://ec.europa.eu/taxation_customs/resources/documents/common/publications/studies/taxation_energy_innov.pdf.

6 OECD, The Economics of Climate Change Mitigation (OECD, 2009), pp. 20–1.

7 Ibid.

8 R.E.H. Sims, et al., ‘Climate Change 2007: Working Group III: Mitigation of Climate Change’, IPCC Fourth Assessment Report, Ch. 4 ‘Energy Supply’, available at: http://www.ipcc.ch/publications_and_data/ar4/wg3/en/ch4.html. See also R. Sims, ‘Can Energy Technologies Provide Energy Security and Climate Change Mitigation?’, NATO Advanced Research Workshop, Energy and Environmental Challenges to Security, Budapest (Hungary), 21–23 Nov. 2007.

9 See further J. Aldy & W. Pizer, ‘Issues in Developing US Climate Change Policy’, Resources for the Future Discussion Paper, RFF DP 08-20, June 2008, at p. 21, available at: http://www.rff.org/documents/RFF-DP-08-20.pdf (pointing out that R&D generates benefits that the innovator cannot fully appropriate).

10 International Energy Agency (IEA), Emissions from Fuel Combustion (IEA, 2009); World Resources Institute, ‘Power Surge: Energy Use and Emissions Continue to Rise’, available at: http://www.wri.org/publication/content/8601; Global CCS Institute, ‘Energy Fact Sheet’, available at: http://www.globalccsinstitute.com/institute/media-centre/energy-fact-sheet.

11 International Energy Agency, World Energy Report (IEA, 2009), p. 3.

12 OECD/NEA and OECD/IEA 2010, Technology Roadmap, Nuclear Energy; OECD/IEA 2010, Energy Efficiency Governance; OECD/IEA 2011, Clean Energy Progress Report, IEA Input to the Clean Energy Ministerial, Update June 2011; OECD/IEA 2010, World Energy Outlook 2010 Factsheet; World Energy Outlook (WEO) 2010, International Energy Agency.

13 It is, however, the concern of a long-term project being undertaken with my colleague, Professor Peter Drahos. See generally the Climate and Environmental Governance Network (CEGNet), at the Australian National University, and in particular its working paper series available at: http://cegnet.anu.edu.au/workingpapers/index.php.

14 Bauen A., ‘Future Energy Sources and Systems: Acting on Climate Change and Energy Security’ (2006) 157(2) Journal of Power Sources, pp. 893–901, at 896.

15 As to why Russia has not been more effective in wielding power through energy supplies, see Closson S., ‘The Energy Curse: Dependency in Soviet and Russian Policy’ (2010), available at: http://ssrn.com/abstract=1663402.

16 Chen W. & Xu R., ‘Clean Coal Technology Development in China’ (2010) 38(5) Energy Policy, pp. 2123–30.

17 Bradshaw M.J., ‘The Geopolitics of Global Energy Security’ (2009) 3Geography Compass, pp. 1920–37; Eisen J.B., ‘The New Energy Geopolitics? China, Renewable Energy, and The “GreenTech Race”’ (2011) 86(1) Chicago-Kent Law Review, pp. 9–58.

18 Available at: http://www.whitehouse.gov/energy/securing-american-energy#energy-menu. See also Bang G., ‘Energy Security and Climate Change Concerns: Triggers for Energy Policy Change in the United States?’ (2010) 38(4) Energy Policy, pp. 1645–53.

19 International Energy Agency, World Energy Outlook 2008 (IEA, 2008), at p. 37, available at: http://www.iea.org/textbase/nppdf/free/2008/weo2008.pdf.

20 Brown S.P.A. & Huntington H.G., ‘Energy Security and Climate Change Protection: Complementarity or Tradeoff?’ (2008) 36(9) Energy Policy, pp. 3510–3.

21 See, further, International Energy Agency, World Energy Outlook 2010 (IEA, 2010), at p. 14, available at: http://www.iea.org/Textbase/npsum/weo2010sum.pdf. See also International Energy Agency, ‘Energy Poverty – How to Make Modern Energy Access Universal?’, Sept. 2010, available at: http://www.iea.org/weo/docs/weo2010/weo2010_poverty.pdf.

22 Helm D., ‘Climate Change Policy: Why Has So Little Been Achieved?’ (2008) 24(2) Oxford Review of Economic Policy, pp. 211–28, at 215.

23 Pearse G., High and Dry (Penguin Books, 2007).

24 Sims R.E.H., ‘Bioenergy to Mitigate for Climate Change and Meet the Needs of Society, the Economy and the Environment’ (2003) 8(4) Mitigation and Adaptation Strategies for Global Change, pp. 349–70 (emphasis added).

25 International Energy Agency, World Energy Outlook 2009 (IEA, 2009), available at: http://www.iea.org/textbase/npsum/weo2009sum.pdf.

26 See, e.g., ‘£1bn Carbon Capture Project Axed’, The Guardian, 20 Oct. 2011.

27 Global Climate Network, ‘Breaking Through on Technology: Overcoming the Barriers to the Development and Wide Deployment of Low-Carbon Technology’, Global Climate Network Discussion Paper No. 2, July 2009, at p. 2, available at: http://www.globalclimatenetwork.info/ecomm/files/breaking_through.pdf.

28 A number of Western countries which privatized their energy sector in the interests of efficiency and competition now find that this led to the deferment of investments and infrastructure: Sims, n. 8 above. This has had adverse implications for greenhouse gas emissions and which they are now seeking belatedly to address.

29 See, in particular, South Korea’s Framework Act for Low Carbon Green Growth, 2010, available at: http://www.greengrowth.org/download/Framework%20Act%20on%20Low%20Carbon%20Green%20Growth%202010.pdf.

30 Anger N., ‘Emissions Trading Beyond Europe: Linking Schemes in a Post-Kyoto World’ (2008) 30(4) Energy Economics, pp. 2028 – 49; E. Tyler, M.D. Toit & Z. Dunn, ‘Emissions Trading as a Policy Option for Greenhouse Gas Mitigation in South Africa: The Economics of Climate Change Mitigation’ (Energy Research Centre, University of Cape Town, 2009).

31 James G. & Stuart R., ‘Climate Policy: From Carbon Tax to Direct Action?’ (2010) 110 Chain Reaction, pp. 23–4.

32 International Energy Agency, Energy Efficiency Policy and Carbon Pricing (IEA, 2011); and see also IEA, Combining Policy Instruments for Least-Cost Climate Mitigation Strategies (IEA, 2010).

33 IEA, 2011, ibid., p. 8.

34 See, e.g., Soderholm P., ‘Technological Change and Carbon Markets’ (2010) 1(2) Low Carbon Economy, pp. 80–5 (arguing that while technological progress depends critically on maintaining efficient carbon markets, other policy instruments, including public R&D and technology support, will also be necessary).

35 L. Ryan, S. Moarif, E. Levina & R. Baron, ‘Energy Efficiency Policy and Carbon Pricing’, International Energy Agency, Information Paper, Aug. 2011, available at: http://www.iea.org/papers/2011/EE_Carbon_Pricing.pdf.

36 UN General Assembly, ‘Promotion of New and Renewable Sources of Energy: Report to the Secretary General’, 15 Aug. 2011, at p. 15, available at: http://www.un.org/esa/dsd/resources/res_pdfs/ga-66/SG%20report_Promotion_new_renewable_energy.pdf. See also IPCC, ‘Special Report on Renewable Energy Sources and Climate Change Mitigation’, New York, 2011; Renewable Energy Policy Network for the 21st Century (REN21), Renewables 2010: Global Status Report (REN21 Secretariat, 2010).

37 OECD/IEA, ‘Carbon Capture and Storage: Legal and Regulatory Review’, May 2011, available at: http://www.iea.org/Papers/2011/ccs_legal.pdf.

38 Ibid.

39 Global CCS Institute, ‘Economic Assessment of Carbon Capture and Storage Technologies’, 2011, available at: http://cdn.globalccsinstitute.com/sites/default/files/publications/12786/economic-assessment-carbon-capture-and-storage-technologies-2011-update.pdf.

40 International Energy Organisation, ‘World Energy Outlook 2010 and Renewables’, available at: http://www.iea.org/work/2011/rewp/Session_1_Birol.pdf.

41 IEA, World Energy Outlook 2010, n. 21 above, at p. 13.

42 ‘Analysis of the Scope of Energy Subsidies and Suggestions for the G20 Initiative’, IEA, OPEC, OECD, World Bank Joint Report, prepared for submission to the G20 Summit Meeting Toronto (Canada), 26–27 June 2010, available at: http://www.oecd.org/dataoecd/55/5/45575666.pdf.

43 See also R. Baron, ‘Combining Policy Instruments for Least-Cost Climate Mitigation Strategies’, International Energy Agency, 6 Dec. 2010, available at: http://www.iea.org/work/2010/cop16/Baron_IEA_Side_event.pdf, which provides guidance on how to assess the need for supplementary policies for energy efficiency and renewable energy with existing carbon pricing.

44 IEA, n. 25 above.

45 See Florini A., ‘Rising Asian Powers and Changing Global Governance’ (2011) 13 International Studies Review, pp. 24–33; and Lake D., ‘The State and International Relations’, available at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1004423.

46 ElBaradei M., ‘A Global Agency is Needed for the Energy Crisis’, Financial Times, 23 July 2008. This is an approach that Abbott and Snidal characterize as ‘international old governance’: Abbott K. & Snidal D., ‘Strengthening International Regulation through Transnational New Governance: Overcoming the Orchestration Deficit’ (2009) 42(2) Vanderbilt Journal of Transnational Law, pp. 501–78.

47 Most recently, note the establishment of the UN Secretary General’s Advisory Group on Energy and Climate Change (agecc), created in 2009, which has called on the UN system and its Member States to support the goals of ensuring universal access to modern energy services and reducing energy intensity by 40% by 2030.

48 D. Hodas, ‘International Law and Sustainable Energy: A Portrait of Failure’, Widener Law School Legal Studies Research Paper No. 10, 2010, available at: http://ssrn.com/abstract=1648906.

49 Goldthau A. & Witte J.M., ‘Back to the Future or Forward to the Past? Strengthening Markets and Rules for Effective Global Energy Governance’ (2009) 85(2) International Affairs, pp. 373–90. See also Witte J.M. & Goldthau A., Global Energy Governance: The New Rules of the Game (Brookings Institution Press, 2010).

50 Ibid.

51 Not all international relations theory is state-centric. The ‘transnational’ perspective, in particular, emphasizes the role of non-state actors (individuals, multinational corporations or NGOs) across borders: see Keohane R. & Nye J., (eds.), Transnational Relations and World Politics (Harvard University Press, 1972); D. Lake, ‘The State and International Relations’, Social Science Research Network (2007) pp. 1–16, available at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1004423, which suggests a shift from the study of ‘international relations’ per se and toward the study of ‘global society’; see D. Lake, ‘Rightful Rules: Authority, Order, and the Foundations of Global Governance’ (2010) 54 International Studies Quarterly, pp. 587–613; M. Barnett & K. Sikkink, ‘From International Relations to Global Society’, in C. Reus-Smit & D. Snidal (eds.), The Oxford Handbook of International Relations (Oxford University Press, 2008), pp. 62–81.

52 See Florini A., ‘Rising Asian Powers and Changing Global Governance’, (2011) 13 International Studies Review, pp. 24–33.

53 See, e.g., Biermann F., ‘Earth System Governance as a Crosscutting Theme of Global Change Research’ (2007) 17(3–4) Global Environmental Change, pp. 326–37; Speth J.G. & Haas P.M., Global Environmental Governance (Pearson Longman: 2006).

54 Stiglitz J., Globalization and Its Discontents (Norton, 2002); Okereke C., Bulkeley H. & Schroeder H., ‘Conceptualizing Climate Governance Beyond the International Regime’ (2009) 9(1) Global Environmental Politics, pp. 58–78; Castells M., ‘The New Public Sphere: Global Civil Society, Communication Networks and Global Governance’ (2008) 616 Annals of the American Academy of Political and Social Science, pp. 78–93.

55 March J.G. & Olsen J.P., ‘The Institutional Dynamics of International Political Orders’ (1998) 52 International Organisation, pp. 943–69; March J.G. & Olsen J.P., Rediscovering Institutions: The Organisational Basics of Politics (The Free Press, 1989).

56 Risse T., ‘“Let’s Argue!” Communicative Action in International Relations’ (2000) 54 International Organisation, pp. 1–39.

57 Keohane R. & Victor D., ‘The Regime Complex for Climate Change’ (2011) 9(1) Perspectives on Politics, pp. 7–23.

58 Cherp A., Jewell J. & Goldthau A., ‘Governing Global Energy: Systems, Transitions, Complexity’ (2011) 2(1) Global Policy, pp. 75–88.

59 Ibid., at p. 80.

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