Transcript Energy Revolution: Policies for a Sustainable Future

Energy Revolution: Policies for
a Sustainable Future
Chapter 7: International Policies and Institutions
Author: Howard Geller
Summary by Alvin Tran
Critique by Gene Park
Summary Outline
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International Clean Energy Cooperation
Fostering Clean Energy Innovation in Developing
Countries
Bilateral Assistance, the Global Environmental
Facility, and the United Nations
Multilateral Development Banks
The Climate Treaty
Enhancing International Technology and Policy
Cooperation
International Clean Energy Cooperation
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International cooperation in research, development, and demonstration
(RD&D) on new energy technologies can balance resources and increase the
pace of technological innovation among countries.
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The worldwide energy technology cooperation is controlled by the
International Energy Agency (IEA). Established in 1973 because of the oil
crisis and has 26 member countries from Europe, North America, and the
Pacific Region.
IEA’s main goal is to promote the effective operation of international energy
markets as well as maintaining a system for coping with oil supply disruptions.
– IEA hosts the Climate Technology Initiative, which helps developing countries with
the adoption of new energy technology and practices. Unfortunately their budget is
quite small.
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International Clean Energy Cooperation faces challenges because countries are
focused in promoting their own industries rather than supporting
manufacturing and distribution of clean energy technologies in other nation.
Fostering Clean Energy Innovation in
Developing Countries
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Developing countries have features that enable them to be leaders in the transition to a
clean energy future.
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Policies that encourage energy technology innovation and leadership in developing
countries include:
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RD&D emphasizes clean energy supply and use technology innovation
Development of new industries and introduction of new technologies through international joint
ventures and other technology transfer mechanism.
Adopting and enforcing strong energy efficiency and environmental standards so that new
infrastructure is state-of-the-art rather than technologically outdated.
Technology transfer between industrialized and developing countries can be an
important component of clean energy development worldwide.
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Plentiful renewable energy resources
Growing industrial, transport, buildings, and power infrastructures.
As developing countries progress economically and socially, there is the potential to leapfrog
over the inefficient, fossil fuel-based, and polluting energy production found in industrialized
nations.
Investment by private companies represents a large and growing share of total financial flows to
developing countries.
He suggested using women to produce and sale energy efficiency and renewable energy
technologies in developing countries.
Bilateral Assistance, the Global
Environmental Facility, and the United
Nations
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Most industrialized countries support clean energy development and deployment in
Third World countries through their bilateral assistance programs.
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Bilateral energy assistance is not always helpful. The distinction between development
assistance and export promotion is often blurred.
Author’s Suggestion: Donor-supported programs need to be carefully designed and driven by
local technological, socioeconomic, and institutional needs. Donor support should contribute to
a long-term strategy to build sustainable markets for clean energy technologies in developing
countries. Developing countries should insist on these conditions when negotiating projects
with potential funders.
The Global Environmental Facility (GEF) was created with funding from industrialized
nations to help developing countries implement global environmental treaties.
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GEF projects are implemented by the World Bank, the United Nations Development
Programme, and the United Nations Environment Programme.
Some GEF projects help to leverage larger-scale loans from the World Bank for energy
efficiency and renewable energy development.
GEF is moving away from funding discrete technology-oriented projects and is increasing
support for efforts aimed at removing market barriers and establishing self-sustaining energy
efficiency and renewable energy markets in developing countries.
Bilateral Assistance, the Global
Environmental Facility, and the United
Nations Cont.
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The United Nations Development Programme (UNDP) promotes
innovative energy policies and funds capacity building, training
activities, and feasibility studies in developing countries.
– Its overall objective is to foster human development through greater
energy efficiency, renewable energy use, and introduction of other
modern, clean energy technologies.
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The United Nations Environment Programme (UNEP) hosts a
Collaborating Centre on Energy and Environment.
– The Centre focuses on helping developing countries integrate
environmental considerations into energy planning and policy making.
Multilateral Development Banks
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The World Bank and regional development banks (known collectively as
the multilateral development banks, or MDBs) are important lenders for
energy projects in developing and transition countries
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In the past very little financing went to energy efficiency or smaller-scale
renewable energy projects.
– Recently the development banks have begun to improve on this record. The
World Bank indicating that between 1994 and 1998 it approved $1.2 billion in
loans for end-use energy efficiency projects, efficiency improvements in district
heating system, and nontraditional renewable energy projects.
– The World Bank approved 17 projects with renewable energy components
totaling about $700 million between 1992 and 1999, and the Global
Environment Facility provided $230 million in grants for these projects.
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The Author suggested that the World Bank and other MDBs could do more
to encourage a clean energy revolution in developing countries.
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MDBs could allocated all of their resources to energy efficiency, renewable
energy, and natural gas projects.
– If developing countries prefer conventional energy technologies, project
developers could obtain financing from commercial banks or other sources of
capital
The Climate Treaty
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The United Nations Framework Convention on Climate Change was adopted by over
150 nations at the Rio de Janeiro “Earth Summit” in 1992.
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It was ratified by the United States and other countries, and entered into force in 1994.
The ultimate objective of the Convention is to stabilize the concentration of greenhouse gases
in the atmosphere at a level that would prevent dangerous interference with the world’s climate.
The Climate Change Convention include a nonbinding provision that industrialized countries
attempt to return their greenhouse gas emission to 1990 levels by the end of 2000.
Understanding the devastating impact of global warming during the 90s, nations came
together to negotiate the Kyoto Protocol to the Climate Change Convention.
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The Kyoto Protocol established concrete and binding emissions reduction targets for the Annex
I nations starting in the period from 2008 to 2012.
The target for all Annex I countries is a 5.2 percent reduction relative to emissions in 1990
In early 2001, the Bush Administration announced that the U.S. will not ratify the Kyoto
Protocol even though they are responsible for 25 - 30% of current CO2 emissions. They later
announced an alternative CO2 emissions reduction strategy in early 2002, but this strategy
appeal for voluntary action and was widely criticized.
The Kyoto Protocol includes flexible mechanisms that aim to allow greenhouse gas emission
reductions to take place and emissions reductions targets to be met at the lowest overall cost.
But it is this that limits the effectiveness of the Protocol due to the so-called hot air trading
allowance
The Climate Treaty
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Joint Implementation
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Article 6 of the Kyoto Protocol allows joint implementation (JI) between Annex I
nations that have fixed emissions limits. This provision allows Western nations to
invest in and receive emissions credits from energy efficiency projects in Eastern
Europe and the former Soviet Union.
– Western nations can also purchase excess emissions credits that the transition
countries will have due to their economic contraction since 1990 (“hot air trading”).
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Clean Development Mechanism
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Article 12 of the Kyoto Protocol provides for a Clean Development Mechanism
(CDM) that allows parties in Western nations to receive emission credits for
investing in projects that reduce greenhouse gas emission in non-Annex I countries,
as long as the project advance sustainable development within the host country.
Implications of the U.S. Withdrawal
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Without the U.S. participation in the Kyoto Protocol, studies show that Annex I
countries would reduce their emission by 3 percent between 2008 and 2012,
compared to 17 percent annual reduction with the United States included
– One hope is that when other nations move ahead with Kyoto Protocol
implementation in spite of the U.S. withdrawal, it will increase pressure for the
U.S. to act responsibly and join other nations in limiting the risk of potentially
catastrophic climate change.
Enhancing International Technology and
Policy Cooperation
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There are a number of limitations to the current set of activities and
institutions
– The IEA is not a truly global agency because developing countries and
other nonmember are not involved in defining the goals or setting the
priorities of the IEA. The IEA only has about 10 staff and a relatively
modest budget devoted to promoting greater energy efficiency and
renewable energy use.
– United Nations has energy programs scattered throughout a number of its
agencies. No individual United Nations agency has a “critical mass” or
strong mandate to advance a clean energy transition.
– The GEF is helping developing countries acquire and build sustainable
markets for clean energy technologies. But GEF has been criticized for
being too closely linked to and dominated by the World Bank. They
prefer the GEF to be an organization operating under the Climate Change
Convention
– Bilateral assistance is often self-serving and/or driven by political
concerns. Their assistance is uncoordinated and frequently not responsive
to the need of developing countries
Enhancing International Technology and
Policy Cooperation Cont.
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International Energy Efficiency and Renewable Energy Agency (IEEREA)
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provide support and strengthen national and private sector initiatives through
technology and policy cooperation, capacity building, and so on.
serves as a forum for discussing and negotiating global energy efficiency and
renewable energy targets on an ongoing basis. But it would not substitute for
national, state, and local action.
should be form from the combined efforts of the large number of bilateral and
multilateral organization working on clean energy development today. The
IEEREA could be assigned a primary role for clean energy technology cooperation
under the United Nation Framework Convention on Climate Change.
Initial funding and staff for the IEEREA could come from combining some or all of
the programs listed here. Additional funding could be obtain by having a small
carbon tax in all OECD nations could generate substantial new resources ( a tax of
just $.10 per metric ton of carbon would generate about $400 million per year). An
IEEREA could also be funded by having nations pledge a portion of savings to
governments from reducing subsidies for conventional fossil fuel and nuclear
energy.
A well-funded IEEREA need a headquarter, but it could also have branches on each
continent. These branches could coordinate activities in their region, working
closely with individual countries.
Conclusion
Current international efforts supporting a clean
energy transition worldwide are fragmented and
suffer from a number of problems. There is not one
single institution that can lead the transition. The
author suggests that a new institution is needed.
One that is truly global in nature and has a clear
mandate to nurture a clean energy transition. He
proposed the IEEREA Agency to lead the world in
this energy revolution.
Critique
Chapter 7: International Policies and Institutions
Objectives
Author’s Background
 Sources
 Overall Article
 Author’s idea for an international energy
agency
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Author’s Background
 Education
– M.S. in Mechanical Engineering from Princeton
University
– PhD in Energy Policy from University of Sao Paulo
 Executive Director of American Council for an
Energy Efficient Economy (1981-2001)
 Founder and Director of Southwest Energy
Efficiency Project
 Author/Co-author of four books
Sources
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Number: 36
 Dates: 1995-2002
– Majority (67%) are recent
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Data Presentation
– Tables used are clear
– No graphs
Overall Article
Logical Organization
– Current institutions and policies
– Pros and cons of each
– Idea for international energy agency
Examples given to support each major
claim
– Brazil’s ethanol fuel program
– China’s more efficient power plants
Suggested Solution
Vague Ideas
– No firm solutions given, not enough detail
– How implement ideas?
Policies need to be customized
– Flat quotas won’t work for every country
– Social, economic issues
Regulation Enforcement
Geller’s Idea
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Energy Tax
– Does it matter if energy source is renewable?
– How to separate between renewable/non-
renewable energy?
– Financially disadvantaged people may cut back
on important energy usage
Conclusion
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Well-organized chapter
 Ideas supported by examples
 Author’s energy agency idea is not specific
enough
Questions?