In recent years, the discussions around climate change and energy security have been increasingly linked, driven by the belief that doing so can catalyse political action. In a recent report, however, the World Economic Forum (WEF) suggests that such linkages are not always valid: They are often rooted more in tactical political goals than in a real understanding of how both issues intersect.
Its White Paper on Energy Security and Global Warming, published in October 2012 is set against the backdrop of the 20th anniversary of the United Nations Framework Convention on Climate Change. Since its institution, the world's energy system and markets have undergone massive changes, with important implications for energy security. Yet, policies needed to boost energy security have been fragmented and important parts are oftentimes missing. So, what is needed to link energy security and climate change?
- "Smart globalisation" is essential. All major fuels are now traded on global markets. All major energy technologies are also globalized, especially the most advanced ones needed to drive deep cuts in emissions and secure energy supplies. Any programme that seeks to link energy security and decarbonisation must therefore start with a review of the huge opportunities offered by globalisation in the areas of technology, fuels and engineering of large systems.
- Scale and speed are important. Politicians have a tendency to over-promise, which explains the string of bold visions that have little bearing on how energy markets actually function. The global energy system changes slowly; the process of increasing energy security and lowering emissions will take three to five decades. Hence, policy-makers must get serious instead about the policies that take effect during the interim period. Such policies will be those that cover issues such as the need for energy systems to adapt to changes in weather patterns, the need for large oil consumers to better coordinate their stockpiles, etc.
- Innovation is needed. To address energy security and climate change requires the creation of new energy sources that are affordable and highly-reliable – something that is unachievable without radical innovation. Governments need to spend much more on R&D, even in a time of fiscal austerity. It will be an uphill task but some of the funds can potentially come from tax reform and the redirection of subsidies. Greater efforts will also be needed to start driving innovation at a global level.
- Recognise what is achievable. Much of the interest in linking energy security and climate change has been born out of political expedience. Climate change advocates have--quite rightly--been looking at ways to link climate change to other issues to garner more attention. The WEF report examines areas where such existing links can be further strengthened, as well as areas where a greater separation is needed to deliver more clarity to our understanding of the issues. One area that belongs in the latter category, for example, would be the decarbonisation of electricity supplies which, while desirable, need to be executed at a pace that ensures the stability of electric power systems.
In theory, linking energy security and climate change could lead to greater progress on both fronts. In practice, however, little has been achieved. Political expedience, rather than the search for a practical vision, has been the primary driving force, leading policymakers to set goals that are not achievable in the short term. The lack of credibility, in turn, undermines the incentive for the industry players to invest in new technologies because they know policy goals will remain unmet. Fixing these problems will require setting more realistic goals, creating equal competition between emerging energy technologies, and embracing opportunities offered by globalisation.
The World Economic Forum (WEF) is an independent international organisation committed to improving the state of the world by engaging business, political, academic and other leaders of society to shape global, regional and industry agendas. The white paper, written by the WEF's Global Agenda Council on Energy Security, is available for download here.