choices. As transport and heating become
increasingly electrified, the focus of policy is
beginning to shift from the governance and
security of molecules to that of electrons. The
expansion of electricity networks, rapid deployment of electric vehicles and growth in storage
capacity could become a self-reinforcing
dynamic, creating new trade patterns and
interdependencies.
It is in all countries’ national interests to
ensure energy security. Much has been made of
China and the EU’s growing dependence on oil
imports, in contrast to North America’s emerging
age of energy independence, following the shale
gas revolution. However, as the nature of energy
choices shift, the emphasis of energy policy and
international cooperation is expanding to include
the governance of grids and cross-border trade in
electricity, as well as the supply security of
critical metals and minerals for the low-carbon
economy, such as lithium, cobalt and nickel.
Governments also have broader strategic
interests that are linked to energy governance and
cooperation, from economic performance to
quality of life, including clean air and water.
These policy areas are inextricably linked to
domestic energy choices—regardless of a country’s level of dependence on overseas imports or
its role as an energy exporter—and are facing
increasing public scrutiny. Table 1 describes
some of the key strategic interests of major
economies and how they might be affected by a
revised perspective on energy security and
cooperation that encompasses energy transition.
Governments will need to use a combination
of unilateral, bilateral and multilateral approaches to manage these challenges effectively.
While effective engagement and joint leadership
in a multilateral context require significant
political capital in the short term, in the longer
term such an approach can help mitigate the
substantial transaction costs associated with
managing multiple bilateral relationships. It can
also help reinforce emerging international norms
and provide a consistent structure for international cooperation.
With the exception of the Paris Agreement,
progress in multilateral forums has been slow
and complicated. Governments need to begin
laying the foundations for multilateral approaches early and be willing to play the long game,
while at the same time leveraging unilateral,
bilateral and thematic approaches to expedite
progress at the multilateral level and plug the
gaps in the existing energy governance architecture. These approaches will need to be resilient and able to adapt to changing political and
economic contexts, climate shocks and new
information.
Pragmatic approaches will be needed—in
many cases working within existing institutions
and groupings, and in others working to reform
them. The G20, for example, accounts for more
than 80% of global GDP, global primary energy
demand, and global emissions respectively, and
has the collective capacity to drive change on
various fronts including investment, infrastructure, access to energy and fossil fuel subsidies.
The International Energy Agency (IEA), by
contrast, is declining in relevance as hydrocarbon
demand growth shifts away from its member
OECD countries towards emerging markets, and
as increasingly complex energy systems break
down and make the distinction between producers and consumers less distinct.
Box 1: Definitions of international
cooperation and global energy
governance
While no official definition of global governance or international cooperation exists,
here we define the two in the following
terms. Global governance can be undertaken by a coalition of national governments, market actors, regulators or
lawmakers, within a formal or informal
multilateral organisation. Decisions within
these organisations, structures and mechanisms influence hard rules such as national
laws, regulations and standards, but also
soft rules such as norms and cultural
practices. Rules can arise from the bottom
up, for instance Internet governance, as
well as from the top down, in the case of
the United Nations.
596
W. Jigang and P. Webb
increasingly electrified, the focus of policy is
beginning to shift from the governance and
security of molecules to that of electrons. The
expansion of electricity networks, rapid deployment of electric vehicles and growth in storage
capacity could become a self-reinforcing
dynamic, creating new trade patterns and
interdependencies.
It is in all countries’ national interests to
ensure energy security. Much has been made of
China and the EU’s growing dependence on oil
imports, in contrast to North America’s emerging
age of energy independence, following the shale
gas revolution. However, as the nature of energy
choices shift, the emphasis of energy policy and
international cooperation is expanding to include
the governance of grids and cross-border trade in
electricity, as well as the supply security of
critical metals and minerals for the low-carbon
economy, such as lithium, cobalt and nickel.
Governments also have broader strategic
interests that are linked to energy governance and
cooperation, from economic performance to
quality of life, including clean air and water.
These policy areas are inextricably linked to
domestic energy choices—regardless of a country’s level of dependence on overseas imports or
its role as an energy exporter—and are facing
increasing public scrutiny. Table 1 describes
some of the key strategic interests of major
economies and how they might be affected by a
revised perspective on energy security and
cooperation that encompasses energy transition.
Governments will need to use a combination
of unilateral, bilateral and multilateral approaches to manage these challenges effectively.
While effective engagement and joint leadership
in a multilateral context require significant
political capital in the short term, in the longer
term such an approach can help mitigate the
substantial transaction costs associated with
managing multiple bilateral relationships. It can
also help reinforce emerging international norms
and provide a consistent structure for international cooperation.
With the exception of the Paris Agreement,
progress in multilateral forums has been slow
and complicated. Governments need to begin
laying the foundations for multilateral approaches early and be willing to play the long game,
while at the same time leveraging unilateral,
bilateral and thematic approaches to expedite
progress at the multilateral level and plug the
gaps in the existing energy governance architecture. These approaches will need to be resilient and able to adapt to changing political and
economic contexts, climate shocks and new
information.
Pragmatic approaches will be needed—in
many cases working within existing institutions
and groupings, and in others working to reform
them. The G20, for example, accounts for more
than 80% of global GDP, global primary energy
demand, and global emissions respectively, and
has the collective capacity to drive change on
various fronts including investment, infrastructure, access to energy and fossil fuel subsidies.
The International Energy Agency (IEA), by
contrast, is declining in relevance as hydrocarbon
demand growth shifts away from its member
OECD countries towards emerging markets, and
as increasingly complex energy systems break
down and make the distinction between producers and consumers less distinct.
Box 1: Definitions of international
cooperation and global energy
governance
While no official definition of global governance or international cooperation exists,
here we define the two in the following
terms. Global governance can be undertaken by a coalition of national governments, market actors, regulators or
lawmakers, within a formal or informal
multilateral organisation. Decisions within
these organisations, structures and mechanisms influence hard rules such as national
laws, regulations and standards, but also
soft rules such as norms and cultural
practices. Rules can arise from the bottom
up, for instance Internet governance, as
well as from the top down, in the case of
the United Nations.
596
W. Jigang and P. Webb