E3G

Club de Madrid: The Challenges of Energy and Democratic Leadership

By Nick Mabey

Energy and Climate Security can only be effectively achieved together.

Responding to the challenges of energy and climate security requires a convergent approach to policy that tackles these issues simultaneously. Maintaining the current political and policy silos will result in confusion and stasis. Convergence needs to happen in three areas:

Politically, we cannot achieve global cooperation to tackle climate change in an atmosphere of ever increasing national competition for energy resources. Preventing catastrophic climate change will require international cooperation on a scale never seen before, and must rest on a basis of trust and mutual interest. The politics of energy security must be reoriented in a similar way, with major consumers cooperating to ensure stable and reliable supplies.

Economically, the – mainly private – decisions to deploy between $11-17 trillion of energy system investment over the next 25 years need consistent signals from governments if they are to deliver the public goods of energy and climate security. The recent rise in oil prices has lead to an explosion of interest in new coal-fired power stations and in coal-to–liquids technology to preserve energy security. However, the lifetime emissions from the currently planned new coal power stations in China, India and USA alone will breach limits on a stable climate. There is a need for consistent incentives to ensure any future coal power stations are climate neutral (e.g. built with carbon capture and storage). Countries can no longer buy their national energy security at the expense of increasing global climate insecurity.

Institutionally, governments and regulators have separated the issues of energy, transport and environmental performance into different institutional silos. The challenge of achieving investment shifts of the size needed to tackle climate change makes this a self-defeating approach. For example, driving greater efficiency in the personal car fleet improves both climate and energy security, but requires unprecedented cooperation over investment, pricing, innovation and behavioural incentives between a range of ministries and constituencies. Climate and energy security challenges will only worsen over the coming decades; a major public sector reform process is needed in all countries to build the new institutions capable of tackling them.