Andreas Goldthau

Review of Global Energy Governance in International Affairs

Book review

International Affairs 86: 4, 2010, 1009-10

Global energy governance: the new rules of the game. Edited by Andreas Goldthau and Jan Martin Witte. Washington DC: Brookings Institution Press and Global Public Policy Institute. 2010. 356pp. Index. Pb.: £28.99. isbn 978 0 81570 343 3.

For far too long, the political economy of international energy relations has been overlooked by scholars and analysts, who have instead privileged issues of energy security and climate change. Much of the existing literature is therefore laden with concepts of resource nationalism, geopolitics and scarcity, problematizing energy as a zero-sum issue. Global energy governance signals a welcome break from this trend, clearly articulating a set of energy challenges alongside global, cooperative and governance-oriented responses. The product of a multi-year research project organized by the Global Public Policy Institute, this volume brings together a group of energy experts who offer original and provocative analysis. From the outset, the editors identify rules and institutions under which oil and gas markets operate as the focus of their study, and seek the reforms needed to update the global energy regime for twenty-first-century realities. The conflagration of three cross-cutting themes—the rise of new consumers, state players in energy markets and emerging climate regimes—has ignited a shift away from two decades of relative status quo in global energy relations. This process has also highlighted the often polarized ‘patchwork’ of international energy agreements and institutions, a system that relies greatly on self-reporting and self-regulation.

It has been said that the energy sector needs reform of institutions that do not exist. In fact, there are many international groupings that focus on energy, including established clubs such as the International Energy Agency, the Organization of the Petroleum Exporting Countries, International Energy Forum, UN-Energy, and newcomers such as the Major Economies Forum on Energy and Climate and the International Renewable Energy Agency. However, as identified by numerous contributors, no single agency bridges the many stakeholders (producers, consumers, transit countries, national and private energy companies, civil society) or the various energy sectors (oil, gas, coal, nuclear, alternatives) with the teeth needed to develop international policy and force country or company compliance. Global energy governance, then, can be seen as a delicate interplay of interests, issues and actors moderated not by a core institution but by the constant flux of the market. Through a deep examination of this phenomenon, this book presents an intriguing case of economic activity outpacing institutional capacity, one which all students of international political economy should read intently.

The 16 chapters are presented over four sections, each with a short policy paper as epilogue. This format is well selected, as it is designed to appeal to both academics and practitioners, and links the substantive research with current policy debates. Placing the international energy market and its forces of self-regulation at the centre of their analysis, the volume’s contributors raise many important questions on the reshaping of norms and institutions in the global energy sphere: how will the energy system adapt to the rise of new mega-consumers, such as China and India? What options exist for financing the transition to alternative energy sources? How can transparency be encouraged in resource-rich weak states? Does the emergence of sovereign wealth funds signal a new economic powerbase? What claims do transit countries have on the oil in their pipelines or coal in their seaports? Who is responsible for protecting critical infrastructure and securing transit routes? Do national oil companies stifle innovation by not reinvesting revenues into the sector? Can energy conflict between producers and consumers be mitigated by mutual self-interest? And so on.

Andreas Goldthau and Jan Martin Witte have assembled this volume at an interesting moment in time when most observers are consumed with the global economic recovery and the future of the global climate compact. The book highlights the lack of general concern for the global energy system. This view is reinforced by the sparse public reflection on and understanding of the 2008 oil price spike and its reverberating effects on the prices of food and consumer goods as well as on the yo-yo effect on investment in the traditional and alternative energy sectors. The energy sector remains prone to high speculation and risk, and as this book reveals there are not sufficient rules or tools to prevent another spike.

While Global energy governance is among a budding crop of new books that examine and detail the myriad global energy challenges, it should by no means be seen as a primer. This is an exceptionally well-researched, well-argued and well-structured volume. It presents complicated problems from the perspectives of various stakeholders (from business to government to state-owned enterprises) and provides wider context to significant global debates. The editors have done a commendable job in marshalling the crosscutting themes across the contributions. While the book does offer interesting ideas for improved producer–consumer relations, the analysis rests heavily on consumer country concerns and norm-setting. The interests of producer countries, as well as those of developing nations, deserve more detailed analysis in future work. Quite effectively, this book calls for a reconceptualization of energy away from the lens of national security towards that of global governance. This is likely to be a formidable if not uncomfortable shift in thinking. Energy remains the lifeblood of all economic activity. One has to question whether states and corporations will abide by the new rules of the game or retreat back to protectionist tendencies when tested by the next economic shocks or energy crisis.

Andrew Schrumm, The Centre for International Governance Innovation, Canada

© 2010 The Author(s). Journal Compilation © 2010 Blackwell Publishing Ltd/The Royal Institute of International Affairs

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