“Dangerous deficit” in global energy governance – international bodies coordinating energy politics need reform

The growing pressure on energy resources and the threat of climate change, coupled with the changing geopolitical relationship between nations, is putting greater and greater pressure on the existing institutions for international cooperation on energy. However, they remain rooted in the energy world of thirty years ago and often exclude some of the largest and most dynamic players, such as China.

Existing institutions are not well focused on the critical task of sustainable economic development and tend to inhibit the finding of common ground between energy producers and consumers.  Even in their original energy security role, the increasing globalisation of the sector is diminishing their effectiveness. There is now a dangerous deficit in global energy governance.

A recent discussion paper issued by the Grantham Institute for Climate Change, Imperial College London and Chatham House recognises the practical difficulties of radical change and the understandable resistance to the creation of new institutions – in a field where there are arguably already too many. It calls for urgent action to modernise existing institutions. Fundamental reforms will take longer and require a period of confidence building, but the paper concludes that they remain essential to provide inclusive global governance that is fit for purpose in the modern world.

One of the most serious problems is that the International Energy Agency (IEA), by far the most substantial and influential body for international energy cooperation, excludes developing nations such as India and China from membership. The paper strongly supports reforms, already under consideration by the IEA, for a closer relationship with major developing countries, and argues that these should be a first step towards eventual membership. It makes proposals for the G20 to play a greater role, as has been called for by the Chinese government. It calls for greater support for the work of the UNFCCC on technology for sustainable development, and it suggests how better use could be made of the International Energy Forum and the Energy Charter Treaty.

This Grantham Discussion Paper draws on a workshop of senior officials from government, business, academia and international energy institutions around the world, though it does not represent the views of individual participants.

This article was originally published on the website of the Grantham Institute for Climate Change at Imperial College London and is available here.

Download the Discussion paper here: The reform of global energy governance