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It’s time for global energy bodies to embrace China

Greater involvement from China would strengthen the IEA, writes Neil Hirst

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(Image: UN Photo/Loey Felipe)

For China to make its full contribution to world leadership on energy issues, it must extend its participation beyond the United Nations (UN) Paris process where climate agreements are negotiated. This means working with other multilateral institutions that enable cooperation on energy topics, an area known collectively as “global energy governance”.

The International Energy Agency (IEA) is the most important working energy institution, providing a leading international source of world energy data and analysis. This is where governments confer on their energy policies, discussing everything from the deployment of renewables to improving energy efficiency.

It has a huge international technology network in which experts from around the world pursue joint projects on almost every aspect of energy policy and technology. It also runs the world’s emergency oil stocks. The policies and technologies that will enable countries to meet, and hopefully ratchet up, the low carbon commitments that they made at Paris are matters for analysis and discussion at the IEA.

There are other important bodies of energy governance, too. The International Energy Forum is the meeting place for energy consuming and producing countries, including members of the Organisation of the Petroleum Exporting Countries (OPEC). The Energy Charter protects overseas energy investment. There are also a number of bodies concerned with particular technologies, for instance, the International Renewable Energy Agency (IRENA) is the world body for cooperation on renewables.

The G20 is primarily concerned with finance and economics, but messages from these world leaders can also be influential for energy. Bilateral cooperation on energy is also important although it does not have such a broad reach.

One of the greatest weaknesses of energy governance today is that membership of the IEA, is still confined to rich countries that belong to the Organisation for Economic Cooperation and Development (OECD).

This is a problem because China, which is not a member of the IEA, is the world’s largest energy user, as well as being the largest oil importer and the largest manufacturer and user of renewable energy.

Without China’s full participation at the IEA, proving data, contributing to analysis, and working with other government to refine energy policies, we cannot satisfy global energy policy challenges, such as climate change, and the extension of modern energy to those who are without it. Nor can the IEA’s mechanism for emergency oil supply be fully effective.

Over recent years, there has been significant progress in global energy governance. The G20 has become increasingly involved with energy issues. In 2014, it published the “Principles on Energy Collaboration”, and its energy sub-group, the Sustainability Working Group, has become more active.

Now, the G20 is pursuing initiatives to promote energy efficiency, scale up renewables, enhance people’s access to energy in Africa and Asia, and stimulate financial support to fund an international move to low-carbon technologies.

Similarly, the IEA is taking steps to broaden its range beyond developed countries by entering into Association with China, India, Indonesia, Morocco, and Thailand – a move described by the IEA itself as the “first step towards building a truly global energy organisation”.

This provides a framework for collaboration, but it is still at an early stage. Association members have no votes at the IEA and do not contribute regular funding. They are not members of its governing board.

Nevertheless, association membership does enable much closer cooperation and participation. In fact, the Grantham Institute and ERI were part of the dialogue that brought about these developments – the reports of our work can be read in Global Energy Governance Reform and China’s Participation.

However, if humanity is to limit global warming to the target of two degrees Celsius set by the Paris Agreement, and provide secure, affordable energy that meets the needs of economic growth and prosperity around the world, then we need more improvements in global leadership on pressing energy challenges.

The withdrawal of the US from the Paris process is a serious setback, and this has also made it more difficult for the G20 to provide concerted energy leadership. However, the US remains committed to research, development, and deployment of renewables and to improving energy efficiency, which are basic ingredients of carbon reduction.

The role of the IEA in enabling governments to work together in these practical areas has become all the more important, and is another compelling reason for the IEA to fully open its membership to China and key developing countries.

Doing this will require the agreement of all 29 member countries. They may also need to go through the process of formally amending the IEA’s founding treaty, which dates back to 1974. It’s a rocky road. But today there are encouraging signs of progress.

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