Demonstrate Global Leadership on Energy
Because oil and gas production is projected to become more concentrated in the Middle East, North Africa, and Central Asia over time, the risks to our economy and security will become more pronounced unless supplies can be enhanced, new supply sources opened, alternative fuels found and fostered, and the effi ciency of energy use improved—both at home and abroad. At the same time, the security concerns associated with tighter energy supplies can be adequately addressed if nations diversify energy supplies and supply routes and increase the use of environmentally sustainable sources.
Tighter supplies also require greater protection of the infrastructure that ensures the transportation and delivery of energy around the world. The protection and enhancement of the global energy infrastructure has several major dimensions. It involves defending the free fl ow of oil and gas supplies around the world, over pipelines and sea lanes. It involves maintaining a robust emergency response posture to deal with oil supply disruptions, as both a deterrent to and a response to such disruptions. It involves strengthening and protecting the infrastructure of pipelines, terminals, and transmission lines over which oil, gas, and power are transported. This also means increasing nonproliferation efforts to signifi cantly enhance national security.
The world has changed considerably since the establishment of many of the institutions that have a global focus on energy and environmental issues, including the IEA launched in 1973 and the United Nations Framework Convention on Climate Change (UNFCCC) launched in 1992. The old model of donor and recipient countries refl ects neither the current state of affairs nor the future very well.
Indeed, signifi cant transitions are occurring and will continue in world energy markets, especially in developing countries, that are changing the structure of energy markets
dramatically. By 2030, global energy demand could be 50% higher than in 2005 (Figure 13), with the vast majority of this growth—roughly three quarters—coming from developing countries. The anticipated growth in energy demand from large developing countries is quite astonishing. For example, between 2005 and 2030, the increase in energy demand from China alone (88.1 quadrillion Btu) is expected to be nearly twice that from developed countries (45.0 quadrillion Btu).
This growth in energy usage is expected to increase global emissions of CO2. In many developing countries, providing citizens with energy services is a much more pressing need than addressing climate change and even air pollution, although the latter is changing rapidly as countries recognize the almost immediate benefi ts of reducing air pollution levels.
Developing countries make up the largest projected source of future global GHG emissions, especially the large emerging economies such as China and India (Figure 14). More than 80%
of the increase in CO2 emissions from energy between 2005 and 2030 is expected to come from developing countries. To be effective in reducing global emissions, therefore, any new international arrangement addressing climate change must include active participation from developing countries. In this regard, the Bali Roadmap that emerged from the UNFCCC talks in Indonesia in 2007 was a welcome development because developing countries agreed to consider actions that are measurable, reportable, and verifi able.
It is a simple fact that energy is needed to power economic growth and lift people from poverty, and much of that energy will likely be supplied by fossil fuels. Many developing countries have large resources of coal, natural gas, and oil, and it would be naive to believe that they will not use it. However, the increased use of existing and advanced new technologies can limit the environmental impact of using these fuels, reduce demand for them through effi ciency, and provide alternate sources of energy.
That is a goal all countries can share.
We have seen through the experiences of centrally planned economies and the Kyoto Protocol that top-down
approaches do not work. The United States should work to promote a more bottom-up international approach
participation, including major developing countries;
promotes the development and commercialization of, and trade in, clean energy technologies and services; protects intellectual property; and maintain U.S. competitiveness.
The fact is that many countries—both developed and developing—fi nd it diffi cult to reconcile addressing climate change and meeting increasing energy demand at an affordable price. Strategies that recognize these realities can raise the level of trust among developed and developing countries and win international support.
Energy security must be viewed as a set of complex interlocking challenges. Energy requires us to tap our technological, political, fi nancial, and security strengths in
Figure 13. Global Energy Demand by Region: 2005 & 2030
Quadrillion Btu
Source: EIA, International Energy Outlook 2008, Table A1 (http://www.eia.doe.gov/oiaf/ieo/ieorefcase.html).
0 20 40 60 80 100 120 140 160
USA Europe Former Soviet Union
Japan Canada Australia/
NZ China India Other
Asia Middle
East Africa Latin America 2005
2030
Developed
Countries Developing
Countries
We should look to capitalize on signifi cant opportunities to work together with developed and developing countries alike to tackle the common problems of energy security, economic growth, air pollution, and climate change. In particular, voluntary sectoral partnerships should be pursued to enhance the effectiveness of emissions reduction policies and to engage emerging economies on a lower emissions path. Innovative fi nancing and free trade in clean energy technologies, goods, and services also should be pursued vigorously, as should joint R&D of promising clean energy technologies. We must be equally clear that international or domestic climate policy should not be used as an excuse to erect barriers to free and open trade or as a way to gain competitive advantage or redistribute wealth.
Figure 14. Global CO
2Emissions from Fossil Fuels by Region: 2005 & 2030
Source: EIA, International Energy Outlook 2008, Table A10 (http://www.eia.doe.gov/oiaf/ieo/ieorefcase.html).
2005 2030
Gigatons CO2 per Year
-1 0 1 2 3 4 5 6 7 8 9 10 11 12 13
USA Europe Former Soviet Union
Japan CanadaAustralia/
NZ China India Southeast Asia Middle
East Africa Latin America
Developed
Countries Developing
Countries
Recommendations
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• The United States should strengthen support for the International Energy Agency (IEA) and support efforts to expand its membership to key consuming countries, particularly China and India.
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• The U.S. government should engage the North Atlantic Treaty Organization (NATO) on energy security challenges and encourage member countries to support the expansion of its mandate to address energy security.
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• Nations should improve transparency,
reliability, and availability of oil and gas market data as well as their analysis of long- and short-term supply and demand trends to help make the world energy market less volatile.
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• The United States should continue leadership efforts to expand the use of nuclear energy for peaceful purposes worldwide in a safe and secure manner through advanced technologies to foster economic growth, improve the environment, and reduce the risk of nuclear proliferation.
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• The United States and other industrialized countries should support efforts to establish an International Clean Energy Fund, housed at the World Bank, to reduce capital costs for clean energy projects in the developing world.
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• The United States should examine all of its tools through the Export-Import Bank, U.S. Trade and Development Agency, the Overseas Private Investment Corporation, and it should work closely with the multilateral development banks to ensure that attractive instruments are made available for clean energy projects.
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• The U.S. government should elevate energy as a critical part of the U.S. trade agenda and lead a global effort to eliminate tariff and nontariff barriers to clean energy goods and services and utilize the World Trade Organization and bilateral free trade agreements to ensure a level playing fi eld for energy projects, access, and trade.
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• The United States should promote a global approach to energy security and climate change that does the following:
• Allows each nation to develop its own path to meet strong environmental and economic development goals.
• Considers growing energy needs, circumstances, and resource endowments
• Sets achievable and realistic goals.
• Ensures global participation, including major developing countries.
• Ensures that mitigation actions by all parties are measurable, reportable,
and verifi able.
• Promotes the development and
commercialization of, and trade in, clean energy technologies and services.
• Protects intellectual property.