In part due to difficulties around potential treaty
reform, voting rights and other areas, some of the
fastest-growing energy markets—including
China—have been left with relatively little
influence over international energy cooperation
at the IEA. This is not only a question for energy
policy—it reflects, for example, how China and
other rising powers have struggled to make their
voices heard at the International Monetary Fund
and World Bank, and initial US reservations
about the Asian Infrastructure Investment Bank.
Following the financial crisis, the G20 has
increased its role in energy, bringing in both
established and emerging energy powers. The
G20 has delved into traditional energy governance—codified in its energy principles—but
also provides a platform for innovative governance reforms with cross-cutting impacts for
energy systems. These range from the G20 Task
Force on Climate-related Financial Disclosures
to the introduction of the Green Finance Study
Group during China’s presidency of the G20 in
2016. The German government also made carbon
prices a priority during its presidency of the G20
in 2017.
4 Major Factors Driving Global
Energy Governance
Transformation
4.1 Shifts in Energy Consumption
Patterns and the Role
of Key Institutions
and Groupings
The global energy landscape is being redrawn as
the weight of new consumers diminishes the
market power of the old. Non-OECD oil demand
overtook that of the OECD in 2011, and China is
now the world’s largest renewable energy
investor, around double that of the USA. The
growing market power of emerging economies,
as well as the changing fossil fuel balance in
global and national energy mixes, has led to
questions about the representativeness and
agency of existing mechanisms and groupings.
Two prominent examples are the International
Energy Agency (IEA), where voting shares still
reflect consumption levels of the 1970s and
emerging economies are not members (although
they have recently explored partnership
arrangements); and the Asian Infrastructure
Investment Bank (AIIB), established by China in
2016 in response to a perceived gap in the
existing international arrangements.
As Fig. 9 shows, the IEA member countries’
share of primary energy consumption fell from
61 to 42% between 1980 and 2013. IEA member
countries’ share of production also dropped from
41 to 30% over the same period. This declining
representation undermines the IEA’s ability to
fulfil its core functions. In 2009 one of the IEA’s
founding fathers, Henry Kissinger, put the
dilemma to the governing board:
[The fact that] nations outside of the OECD (and
the IEA) now account for the majority of global
energy consumption is a change of great significance…the fact that this bloc of rising major
consumers resides outside of the cooperative
framework of the IEA compromises the organization’s ability to effectively address global energy
security and climate concerns and concurrently
deprives these nations of the full benefits of IEA
membership.
Today, the G20—which includes many of the
IEA member countries but also emerging
economies—represents a much greater proportion of energy markets and greenhouse gas
emissions. Its members accounted for 82% of
consumption and 73% of production in 2013, as
well as around 80% of greenhouse gas emissions.
The G20 collectively represents almost 40%
more primary energy consumption and production relative to the IEA or OECD. Even if China
was to join the IEA, the G20 would still represent
around 18% more primary energy consumption
and around 24% more production—one reason
IEA Association Agreements have also been
developed with Indonesia, Thailand, Singapore,
Morocco and India.
Of course, these organisations vary considerably in nature and in their expectations of
membership. The IEA is a treaty-based organisation and members agree to rules and
Special Report 5: International Energy Cooperation and Governance
609
reform, voting rights and other areas, some of the
fastest-growing energy markets—including
China—have been left with relatively little
influence over international energy cooperation
at the IEA. This is not only a question for energy
policy—it reflects, for example, how China and
other rising powers have struggled to make their
voices heard at the International Monetary Fund
and World Bank, and initial US reservations
about the Asian Infrastructure Investment Bank.
Following the financial crisis, the G20 has
increased its role in energy, bringing in both
established and emerging energy powers. The
G20 has delved into traditional energy governance—codified in its energy principles—but
also provides a platform for innovative governance reforms with cross-cutting impacts for
energy systems. These range from the G20 Task
Force on Climate-related Financial Disclosures
to the introduction of the Green Finance Study
Group during China’s presidency of the G20 in
2016. The German government also made carbon
prices a priority during its presidency of the G20
in 2017.
4 Major Factors Driving Global
Energy Governance
Transformation
4.1 Shifts in Energy Consumption
Patterns and the Role
of Key Institutions
and Groupings
The global energy landscape is being redrawn as
the weight of new consumers diminishes the
market power of the old. Non-OECD oil demand
overtook that of the OECD in 2011, and China is
now the world’s largest renewable energy
investor, around double that of the USA. The
growing market power of emerging economies,
as well as the changing fossil fuel balance in
global and national energy mixes, has led to
questions about the representativeness and
agency of existing mechanisms and groupings.
Two prominent examples are the International
Energy Agency (IEA), where voting shares still
reflect consumption levels of the 1970s and
emerging economies are not members (although
they have recently explored partnership
arrangements); and the Asian Infrastructure
Investment Bank (AIIB), established by China in
2016 in response to a perceived gap in the
existing international arrangements.
As Fig. 9 shows, the IEA member countries’
share of primary energy consumption fell from
61 to 42% between 1980 and 2013. IEA member
countries’ share of production also dropped from
41 to 30% over the same period. This declining
representation undermines the IEA’s ability to
fulfil its core functions. In 2009 one of the IEA’s
founding fathers, Henry Kissinger, put the
dilemma to the governing board:
[The fact that] nations outside of the OECD (and
the IEA) now account for the majority of global
energy consumption is a change of great significance…the fact that this bloc of rising major
consumers resides outside of the cooperative
framework of the IEA compromises the organization’s ability to effectively address global energy
security and climate concerns and concurrently
deprives these nations of the full benefits of IEA
membership.
Today, the G20—which includes many of the
IEA member countries but also emerging
economies—represents a much greater proportion of energy markets and greenhouse gas
emissions. Its members accounted for 82% of
consumption and 73% of production in 2013, as
well as around 80% of greenhouse gas emissions.
The G20 collectively represents almost 40%
more primary energy consumption and production relative to the IEA or OECD. Even if China
was to join the IEA, the G20 would still represent
around 18% more primary energy consumption
and around 24% more production—one reason
IEA Association Agreements have also been
developed with Indonesia, Thailand, Singapore,
Morocco and India.
Of course, these organisations vary considerably in nature and in their expectations of
membership. The IEA is a treaty-based organisation and members agree to rules and
Special Report 5: International Energy Cooperation and Governance
609