The limitations of energy governance systems through the IEA

Global Sustainability & Energy Policy

What are the limitations of the contemporary global energy governance system and how can these be addressed? Use an international agreement or energy agency of your choice as case study.

Abstract

Global governance of energy remains a system of many individual competing and disagreeing bodies. The system of energy governance is limited by (1) its competition instead of cooperation, (2) its non-universal and often exclusionary nature, and (3) its lack of consensus and common goals or interests. The International Energy Agency (IEA) is a good tool to analyse these limitations as one of the most important organisations in the overly broad and divided system of energy governance. These limitations are constantly reinforced by the global energy governance’s actors and their competition. Therefore, to help these limitations, we must understand and use the power of the global civil society and the media to push for a deeper cooperation and eventually, for a universal system of energy governance, which would give security and transparency for all. Global issues like climate change or energy and its security need a global unified response, which today we are still far from, but there is a path which can lead us to the ideal system of global energy governance.

 

This essay will examine the limitations of the contemporary global energy governance system and will provide possible solutions on how to address these. After looking at the broad context of the complex– multi-layer, multi-actor and multi-form –  system of energy’s global governance, I will focus particularly on the example of the International Energy Agency (IEA), as this ‘is arguably still the most important multilateral organization for energy-importing countries’ (Van de Graaf, 2012: 233).

The argument of this essay is that the limitations of global energy governance rely behind its too broad range of independent, non-cooperating multi-layer levels (individual, state, inter-state and private), actors (voluntary, public/state and private) and forms (sectoral integration, exclusive summits, treaties and agreements), which instead of working together create and support a competition between themselves. There are three particular issues emerging from this nature of the system of global energy governance: (1) its competition above cooperation, (2) its non-universal and sometimes even exclusionary nature, and (3) its lack of consensus, common views and goals. Through the example of the IEA, we will see these issues of the global energy governance coming through the institution-level as well. Eventually, we will come to the point how we could address these limitations by the global civil society, the media, private stockholders and all other actors in the position of being able to do so – by using their power to push for an overlapping cooperation, which would mean more effectiveness (by sharing knowledge, data, norms, agreements, goals, funds, etc.). A global issue like climate change, or – in this case – energy needs a global governance. Not one of different, rarely overlapping but overly distanced institutions. Although, they have done some work in cooperation with another institution in the field, – as we will see – those are always in pairs on very specific topics, not in groups on the broadest level of energy, which we would truly need (Bailey, 2018; IEA, n.d. a).

First of all, it is important to briefly look at the complex system of global energy governance as well as its general pitfalls and shortcomings. Within the multi-layer context (which has been a result of globalisation and the rising power of private multinational actors), there are national-, international-, and supranational interests acting all together (Kuzemko, Keating and Goldthau, 2016). Even though, seemingly it could mean some positive things for global energy governance, due to the lack of a universal cooperation, this complex system of governance is not one that is interconnected across each and every level of governance. Instead, we have a competition of all levels, which leads to conflict over energy rather than cooperation (Dubash and Florini, 2011; Chep, Jewell and Glodthan, 2011). The IEA is no exception either. It has been created in reaction to the Organization of the Petroleum Exporting Countries’ (OPEC) failure to deal with the oil crisis in 1974 (Kottari, 2014; Baccini, Lenzi and Thuiner, 2013; Lesage and Van de Graaf, 2016: 51-74).

In addition, the actor can be state,  private or voluntary. Global governance of energy is present in all sectors at all levels mentioned before (Kuzemko, Keating and Goldthau, 2016). This results further issues in terms of the cooperation, as all these actors at the different levels have different interests and goals, which prevents any universal consensus (Dubash and Florini, 2011; Karlsson-Vinkhuyzen, Jollands, and Staudt, 2012; Chep, Jewell and Glodthan, 2011). This is the case with the IEA as well, which often lacks consensus between its member states, not to mention the international opinions on the role and existence of IEA (Van de Graaf, 2012).

Furthermore, global energy governance can not only take different levels (national, international or supranational) and actors (sate, private or voluntary) of interest but also, it can take various forms, which are sectoral integration (the IEA is one of this along with an endless number of institutions like the IAEA or IRENA), exclusive summits (the G8 or G20 for example), or treaties and agreements (like the International Energy Charter in 2015 or the Paris Agreement in 2016 most recently) (Kuzemko, Keating and Goldthau, 2016; Fischer, 1997: 9-60; Van de Graaf, 2013; Florini and Sovacool, 2009; European Commission, 2015; UNFCCC, n.d.). Here again rises the problem that none of these forms are ever universal. They are always limited to a number of actors either because not all states are allowed to- or willing to sign up (Kuzemko, Keating and Goldthau, 2016; Fischer, 1997: 9-60). The IEA for example, can only be joined by OPEC members, but not all OPEC members are required to join (Kottari, 2014; Baccini, Lenzi and Thuiner, 2013; Lesage and Van de Graaf, 2016: 51-74; Sainsbury and Wurf, 2016; IEA, n.d.b). All forms of global energy governance emerge not to help the other existing institutions, but to compete with them by highlighting and building on what they lack in their focus of work. This results in endless numbers of independently working institutions on various separate areas of global energy governance without connecting the whole together, which is namely the issue of sectoral specialisation (Urpelainen and Van de Graaf, 2015).

Now can see how this multi-layer system with all the different levels, actors and forms are not in cooperation but instead, in competition with each other. They are formed in reaction to the others’ weaknesses, yet they do not fill what the others’ lack by contributing to their work. Instead, they form an independent institution in competition with the others. They also have different interests, therefore they vary in which actors of which level sign up to which forms of global energy governance. The IEA – which we will further discover – is no exception in terms of the general shortcomings and pitfalls of the global energy governance system. The global system of energy governance suffers from fragmentation and sectoral specialisation as the result of the constant competition within the system (Kuzemko, Keating and Goldthau, 2016; Urpelainen and Van de Graaf, 2015; Baccini, Lenzi and Thuiner, 2013; IEA, n.d. b).

Secondly, focusing on the previously introduced global level governance, we must keep in mind that at the international level there are state or non-state (private or voluntary) actors as well as various forms (detailed above) acting all together. The different actors meet others through this variety of means, but they do not ever get to a universal common ground (Kuzemko, Keating and Goldthau, 2016; Urpelainen and Van de Graaf, 2015). Within this context, the institutions of global energy governance – like the OPEC and later, the IEA – emerged within a competition of global governance (Kottari, 2014; Baccini, Lenzi and Thuiner, 2013). This competition is both, a benefit and a drawback of global energy governance. On one hand, it is positive in placing more and more focus on the importance of energy governance. A competition like this also pushes more actors to get involved. There is a global need for action, as those not involved get into a disadvantageous position of being neglected from the benefits of such institutions. Therefore, as more actors get involved, the importance of global energy governance increases. Yet, on the other hand this competition driven nature of global governance is what also limits the cooperation between all those various emerging institutions. The competition of highlighting the others’ drawbacks and limitations prevents us from reaching a collective body of global energy governance, as they do not see the other bodies as effective nor complete. Instead, each body of global energy governance sees itself as one filling the gap of the others’ shortcomings (Baccini, Lenzi and Thuiner, 2013). Even though, such competition of the reaction to one another benefits the global energy governance by covering more areas – building on what is missing –,it also reinforces the establishment of more independent bodies of governance – just like the IEA – which again, will not ever lead us to a well-connected universal system. Instead, we get overloaded with independent bodies who have different focuses, targets and causes and do not cooperate with the others within the same field of global governance of energy, creating a lack of transparency in the field (Karlsson-Vinkhuyzen, Jollands, and Staudt, 2012; Urpelainen and Van de Graaf, 2015).

Third, within the system of global energy governance analysed above, through the IEA we can now confirm the global issues with energy governance, which are its (1) competition against cooperation, (2) non-universal and exclusionary attribution, and (3) lack of consensus and joint goals. The IEA within the complex system is an international level sectoral integration between state actors. It has been established based on the lacks of the OPEC and under the OPEC as well, in 1974 (Kottari, 2014; Baccini, Lenzi and Thuiner, 2013; Lesage and Van de Graaf, 2016: 51-74). It is a good model for analysis as it can demonstrate all the three issues that emerge from the multi-layer competing nature of the global energy governance system (which prevents the nexus to work as one, or even to effectively cooperate with one another), which I have introduced before.

Firstly, the IEA is mostly competing instead of cooperating. It has been established under the OPEC in reaction to its failure to handle the 1970’s oil crisis (which has been started by the embargo of the Organization of Arab Petroleum Exporting Countries members’ on oil in 1973) (Kottari, 2014; Baccini, Lenzi and Thuiner, 2013; Lesage and Van de Graaf, 2016: 51-74). Although, it is a bit different from other established institutions as, to an extent it is under the organisation on which’ gaps it has been built on, yet it is independent in its own particular field within the whole and is aiming become unversal (Van de Graaf, 2012). The IEA supposed to be a temporary body for resolving the crisis, yet it has become a major competitor in global energy governance by securing those countries’ undisrupted oil supply (by requiring them to stock that of 90 days’ worth of their net imports in the previous year) (Lesage and Van de Graaf, 2016: 51-74; IEA, n.d. c; Baccini, Lenzi and Thuiner, 2013). It is competing with those non-members and other organisations who do not give that security for their members. Although, there are some signs of reaching outside and to connect with other organisations and countries (Brazil, China India, South Africa, etc.), the following issue limits the IEA to contribute to a universal transparent and cooperative governance of global energy (IEA, n.d. a, n.d. d).

Secondly then, the IEA is exclusionary. Only members of the OPEC can sign up, which prevents it to become universal. It requires a special double-level engagement from states who want to sign up as they first need to join the OPEC to reach the IEA (Kottari, 2014; Baccini, Lenzi and Thuiner, 2013; Lesage and Van de Graaf, 2016: 51-74; Sainsbury and  Wurf, 2016; IEA, n.d. c). This is a rather an unusual example, but by its extraordinary membership requirements the IEA is particularly good in demonstrating the issue with the institutions of global energy governance. They are not only overly divided on the different subfields of energy but also, they vary in their entry-requirements (even though, the IEA has a goal to overcome on this issue and to become universal), which states choose from based on their own interests and therefore, select which one to join against the others (Van Hust, 2017). This kind of entry then – in addition – determinates the member-states relationship and attitude towards the other institutions and their members in the long-term as they have chosen against them, their interests and goals (Van de Graaf, 2013).

Finally, global energy governance is not yet universal due to the lack of consensus. The IEA has both, internal and external disagreements. Internally, member-states have different interests when it comes to decision-making, which makes the institution’s governance more difficult, even with its limited number of members (Van de Graaf, 2012). For example, among the governing board there has been a disagreement on the extent to which the IEA’s funding should come from voluntary sources (Dubash and Florini, 2011). Probably, a common goal that is stronger than the self-interest of the member-states could overcome on this.

Also, the IEA’s external disagreements with other non-member states and institutions of energy governance are very frequent as a result of their competition. The IEA simply does not agree on a common energy governance with other institutions in the field. For instance, the IEA is working closely with many institutions of global governance, such as the Group of 20 (G20), Group of Eight (G8), Mission Innovation, the OPEC, the International Energy Forum (IEF), the Conference of Parties (COP) of the United Nations Framework Convention on Climate Change (UNFCCC), and many more (IEA, n.d. a, n.d. d). Yet, they do so one by one, never bringing all these relevant actors together. Therefore, we can see how the IEA is a good example to see how the specific limitations of global energy governance come through in the institutions of the system: it competes, lacks consensus and does not bring all actors together.

Finally, to see how these limitations could be addressed, we need to look at the role of the civil society and the media who are in position to push for changes in the system of global energy governance. Global civil society is – according to Castells –  ‘… the organised expression of the values and interests of society’ (2008: 78). Today, individuals, companies, non-governmental organisations, volunteers, etc. all have the power to speak out for their interests and needs and to gather supporters. This way, anyone can push for a change in any global governance, like that of energy (Castells, 2008). The media has a similar power, as it is listened to by people, citizens of all countries, to which the internet has gave global reach. The media has the power to be trusted by people, for whom it is the channel for any information (Castells, 2007). Therefore both, global civil society – with all its different actors from many different levels – and the media have a very similar power to that of states and multinational companies when it comes to influencing global decision-making (Shirky, 2011). The media can not only affect the reputation of governments and energy-firms, but it can also influence the global civil society’s perceptions about them. That global civil society then, can reject to consume or support those governments’ and firms’ ‘products’ (whether it is a physical one or in the form of a policy), by which they can push for a change, as the government or the firm cannot live long without their ‘consumers’.

Therefore, in global energy governance, global civil society and the media have the power to address the limitations of the current previously detailed disconnected system (Shirky, 2011). They would be able to push for cooperation, universality and common consensus or goals. Universal resources – such as energy – and the issues which come with it need universal governance. Yet, that universal governance needs a push from the global civil society and the media together. They would be able to reach this by the following means: (1) building cross-institution channels for cooperative communications, (2), by protests, petitions to give voice to the need for universality. It is the global civil society and the media that can do these free from those state and non-state actors who have personal competing interests in energy (Shirky, 2011).

In addition, all institutions in global energy governance and state actors could give a green light for these actions, if they would leave their competition behind. Then, a universal cooperation in energy governance could help to solve the limitations of (1) the competition instead of cooperation, (2) the non-universal, often exclusionary nature, and (3) the lack of consensus which we have discovered through the IEA.  There are already some works regarding this – as we saw – the IEA is also reaching further than its members, but so far it is not powerful enough. We also saw how these efforts connect the institutions of global energy governance in pairs but never in groups, which would be closer to a single universal form. There are only pairings on very limited and very specific grounds of the whole field of energy governance (IEA, n.d. a, n.d. d). As a result, all these initiatives are only rudimentary and do not promise sharp changes in the near future for the structure of global energy governance.

In a conclusion, after we have discovered the global level of energy governance, through the particular example of the IEA we could see how the system suffers from (1) its competition instead of cooperation, (2) its non-universal and often exclusionary behaviour, and (3) its lack of consensus and common goals. In the globalised era we only have various competing institutions established through the different sub-fields of energy (Urpelainen and Van de Graaf, 2015). Although, there is some cooperation among them, they rather do it is pairs with one another on very specific topics than together on the universal level (IEA, n.d. a, n.d. d). The IEA has been a good tool for analysis as it has showed us how it is mostly competing instead of cooperating, how it is particularly exclusionary and how it lacks both, internal and external consensus in governance.

I have suggested that the global civil society and the media could push for coming together in global energy governance’s field. These are the platforms through which the society can push the actors within the global governance of energy to bring their sources and knowledge together for a global action in the interconnected field of energy (Castells, 2007, 2008; Shirky, 2011). Yet, these measures need to be accompanied by the opening up of the institutions.

Finally, to put this all together, a unified global governance of energy would benefit the system as it would solve the three key limitations that we have analysed through the global level and the IEA. Therefore, there is a need to further discover the potential of the global civil society and the media, who can address the three main limitations and make these changes in the system actually happen.

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