E3G

Club de Madrid: The Challenges of Energy and Democratic Leadership

By Nick Mabey

Immediate progress on Energy and Climate Security can be driven by deals between major consuming countries; if new processes can be built to align national interests.

The technology needed to move to a low carbon, energy secure global economy exists. Shifting to such a system is affordable; costing less than 1% of global GDP over thirty years. Delivering energy and climate security for all is at its heart a question of global political alignment. Countries must feel that their national strategic interests are best advanced through cooperation not competition, and through prevention not reaction.

But no fora currently exist where these broad political alignments can be created. Energy security discussions are too narrow, generally bilateral and too heavily focused on short term solutions. Climate change discussions are based in environmental fora, fail to engage with economic interests and are often marginalised inside political debates. There is a need to create new spaces, with a new range of actors to drive agreement forward. These will not replace existing UN approaches, but are needed to make progress with the required urgency.

An example would be for Europe to use its enormous economic weight to drive change in its relationships with India and China. China is currently building a major 1GW coal-fuelled power station every 4 days; mainly to fuel production for OECD markets. We cannot stop India and China building coal power stations to meet their energy security aims, but we could prevent lock-in to their carbon emissions by helping deploy carbon capture and storage (CCS) technologies. The EU has already agreed to build a commercial scale CCS demonstration plant with China by 2020, but without renewed political impetus and funds it will be too late to have any substantial impact on climate stability.

For energy security reasons, China has also set an ambitious target of reducing energy intensity per unit of GDP by 20% by 2010. It is in Europe’s interest to act decisively to help China achieve this; for example, by harmonising efficient automobile and product standards and lowering tariffs. Fears around IPR protection are holding up EU-China and EU-India cooperation in renewable technologies, coal, and other areas. A robust deal over this issue, which balances legitimate public and private interests, is critical to moving forward.

Such a deal with China and India would also need to address Europe’s interests in ensuring access to energy sources is driven by rules-based market processes, not strategic and military relationships. Europe needs to further promote mechanisms to weaken the “curse of oil” on unstable states; a process in which China and India as growing consumers have an equal interest. This would involve working with China and India to reduce destabilising interventions and breaches of human rights, and expand and strengthen agreements such as the Extractive Industry Transparency Initiative (EITI) to help reduce corruption and ensure populations benefit from their country’s natural wealth. It will be politically impossible in Europe to forge the necessary depth of agreement with China on climate change, unless China itself agrees to act as a more responsible global citizen on energy issues.

A web of global deals on energy and climate security between major energy consuming nations could be a first, pragmatic step to producing a stable global regime. This will require the careful construction of a new global political alignment, making full use of formal and informal channels, in order to drive change at the scale and pace needed.