alongside an international infrastructure
standardisation and investment strategy that
could enable demand-side balancing—both
of which could increase the reliability of
future electricity networks as electrification
and renewable generation accelerates.
3 New Trends in International
Energy Cooperation
3.1 Energy Security Has Traditionally
Focused on Oil and Gas
Supply Security and Price
Stability
Energy security has historically been regarded as
a function of global geopolitics, with securing
supply at affordable prices the key policy goal for
import-dependent countries. This put the spotlight on avoiding a significant interruption of fuel
—especially oil—produced in a few key countries and traded in global markets. At the national
level, this conception of energy security was
reflected in aspirations for energy independence,
not least in the USA.
Given the concentration of conventional
energy supplies in a handful of regions, much
attention has been given to the risk of a supply
disruption through critical maritime choke points
like the Strait of Hormuz and the Strait of
Malacca. Dependence on key gas pipeline routes,
especially those between Russia and Europe,
have also been a source of concern, although
these are typically seen as important bilateral or
regional issues rather than risks that can be
managed by the international community.
This traditional concept of energy security has
created a set of dynamics in past decades that
consolidated into two distinct groups of producers and consumers, which joined forces to
strengthen their respective bargaining power.
The 1970s fuel price crisis still looms large over
the institutions that emerged from that time to
address the risk of a further disruption, not least
the International Energy Agency (IEA). The
International Energy Forum (IEF), and more
recently the G20, have provided a valuable space
for dialogue between producers and consumers,
but it has rarely led to concrete policy action.
In recent years, there have been efforts to
expand partnerships between OECD countries
and emerging economies (especially China),
since the latter are not members of the IEA but
account for a rapidly increasing share of global
demand. The OECD association agreements with
China and India have made significant progress,
especially on technical cooperation and knowledge sharing, but it remains challenging to ensure
that existing international organisations reflect
the evolving geographical distribution of energy
consumption—as well as adapting to wider shifts
in energy security.
3.2 New Trends Are Changing
the Nature of Energy
Security
Today, three key trends are reshaping the nature
and focus of international energy cooperation
and governance.
First, with increasing awareness of global
climate threats, combined with rising concerns
over air pollution at the national level, it has
become clear to most governments and companies that energy security must be delivered
alongside action to rapidly reduce greenhouse
gas emissions internationally. The Paris Agreement of December 2015, adopted by all 196
parties of the United Nations Framework Convention on Climate Change (UNFCCC), was
followed by reports of global temperature records
in 2015 and 2016—underscoring the scale of the
challenge to keep global warming to well below
2°C above pre-industrial levels and pursue efforts
to limit the temperature increase to 1.5°C.
This means that most national, regional and
city governments are factoring in climatefriendlier or lower-carbon options in their
national energy planning, especially for the
power sector. Since the aggregation of all current
nationally defined pledges to the Paris Agreement fall short of the 2°C target, 2018 will
witness the beginning of the “facilitative
Special Report 5: International Energy Cooperation and Governance
603
standardisation and investment strategy that
could enable demand-side balancing—both
of which could increase the reliability of
future electricity networks as electrification
and renewable generation accelerates.
3 New Trends in International
Energy Cooperation
3.1 Energy Security Has Traditionally
Focused on Oil and Gas
Supply Security and Price
Stability
Energy security has historically been regarded as
a function of global geopolitics, with securing
supply at affordable prices the key policy goal for
import-dependent countries. This put the spotlight on avoiding a significant interruption of fuel
—especially oil—produced in a few key countries and traded in global markets. At the national
level, this conception of energy security was
reflected in aspirations for energy independence,
not least in the USA.
Given the concentration of conventional
energy supplies in a handful of regions, much
attention has been given to the risk of a supply
disruption through critical maritime choke points
like the Strait of Hormuz and the Strait of
Malacca. Dependence on key gas pipeline routes,
especially those between Russia and Europe,
have also been a source of concern, although
these are typically seen as important bilateral or
regional issues rather than risks that can be
managed by the international community.
This traditional concept of energy security has
created a set of dynamics in past decades that
consolidated into two distinct groups of producers and consumers, which joined forces to
strengthen their respective bargaining power.
The 1970s fuel price crisis still looms large over
the institutions that emerged from that time to
address the risk of a further disruption, not least
the International Energy Agency (IEA). The
International Energy Forum (IEF), and more
recently the G20, have provided a valuable space
for dialogue between producers and consumers,
but it has rarely led to concrete policy action.
In recent years, there have been efforts to
expand partnerships between OECD countries
and emerging economies (especially China),
since the latter are not members of the IEA but
account for a rapidly increasing share of global
demand. The OECD association agreements with
China and India have made significant progress,
especially on technical cooperation and knowledge sharing, but it remains challenging to ensure
that existing international organisations reflect
the evolving geographical distribution of energy
consumption—as well as adapting to wider shifts
in energy security.
3.2 New Trends Are Changing
the Nature of Energy
Security
Today, three key trends are reshaping the nature
and focus of international energy cooperation
and governance.
First, with increasing awareness of global
climate threats, combined with rising concerns
over air pollution at the national level, it has
become clear to most governments and companies that energy security must be delivered
alongside action to rapidly reduce greenhouse
gas emissions internationally. The Paris Agreement of December 2015, adopted by all 196
parties of the United Nations Framework Convention on Climate Change (UNFCCC), was
followed by reports of global temperature records
in 2015 and 2016—underscoring the scale of the
challenge to keep global warming to well below
2°C above pre-industrial levels and pursue efforts
to limit the temperature increase to 1.5°C.
This means that most national, regional and
city governments are factoring in climatefriendlier or lower-carbon options in their
national energy planning, especially for the
power sector. Since the aggregation of all current
nationally defined pledges to the Paris Agreement fall short of the 2°C target, 2018 will
witness the beginning of the “facilitative
Special Report 5: International Energy Cooperation and Governance
603