Capturing the benefits of the circular
economy at the global scale is no easy task.
While many of the technologies already
exist to use previously wasted materials,
standards and regulatory barriers often
prevent progress. In 2008, China passed
the Circular Economy Promotion Law,
while in 2015 the European Commission
adopted a Circular Economy Action Plan.
At the international level, focus could be
directed at cooperation between jurisdictions on reducing non-tariff barriers and
growing the markets for circular products
and services, investment and export
opportunities. This could be achieved
through greater engagement with the G7
Alliance on Resource Efficiency, a
knowledge-sharing forum formed in 2015
(Fig. 23).
4.5 Changing Political Dynamics
for Petroleum Producers
The emergence of new technologies like renewables, battery storage and EVs is not confined to
the electricity sector. As Fig. 24 illustrates, the
emergence of horizontal drilling techniques and
the expansion of the number of rigs used to
exploit shale oil has reversed US oil production.
The US shale industry can now respond quickly
to changes in the oil price. Project execution
times have fallen and shale companies have cut
costs, enabling them to survive in low oil price
environments. Advances in horizontal drilling
technology and fracturing processes, as well as
huge cost reductions in extraction, have brought
about a structural change in oil markets. This has
undermined the ability of conventional producers
to use production targets to influence oil prices
(Fig. 25).
Fig. 23 Predicted 2050 emissions for the five key
materials under various future strategies. Note The blue
bar shows how extensively the strategy must be implemented to reach the target set by the Intergovernmental
Panel on Climate Change. If 100% implementation is
insufficient, the red bar shows the excess emissions
relative to the target
Special Report 5: International Energy Cooperation and Governance
621
economy at the global scale is no easy task.
While many of the technologies already
exist to use previously wasted materials,
standards and regulatory barriers often
prevent progress. In 2008, China passed
the Circular Economy Promotion Law,
while in 2015 the European Commission
adopted a Circular Economy Action Plan.
At the international level, focus could be
directed at cooperation between jurisdictions on reducing non-tariff barriers and
growing the markets for circular products
and services, investment and export
opportunities. This could be achieved
through greater engagement with the G7
Alliance on Resource Efficiency, a
knowledge-sharing forum formed in 2015
(Fig. 23).
4.5 Changing Political Dynamics
for Petroleum Producers
The emergence of new technologies like renewables, battery storage and EVs is not confined to
the electricity sector. As Fig. 24 illustrates, the
emergence of horizontal drilling techniques and
the expansion of the number of rigs used to
exploit shale oil has reversed US oil production.
The US shale industry can now respond quickly
to changes in the oil price. Project execution
times have fallen and shale companies have cut
costs, enabling them to survive in low oil price
environments. Advances in horizontal drilling
technology and fracturing processes, as well as
huge cost reductions in extraction, have brought
about a structural change in oil markets. This has
undermined the ability of conventional producers
to use production targets to influence oil prices
(Fig. 25).
Fig. 23 Predicted 2050 emissions for the five key
materials under various future strategies. Note The blue
bar shows how extensively the strategy must be implemented to reach the target set by the Intergovernmental
Panel on Climate Change. If 100% implementation is
insufficient, the red bar shows the excess emissions
relative to the target
Special Report 5: International Energy Cooperation and Governance
621