Energy Revolution: Policies for a Sustainable Future

1
Energy Revolution Policies for a Sustainable
Future

• Chapter 7 International Policies and
  Institutions
• Author Howard Geller
• Summary by Alvin Tran
• Critique by Gene Park

2
Summary Outline

• 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

3
International Clean Energy Cooperation

• International cooperation in research,
  development, and demonstration (RDD) on new
  energy technologies can balance resources and
  increase the pace of technological innovation
  among countries.
• 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.
• IEAs 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.
• 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.

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Fostering Clean Energy Innovation in Developing
Countries

• Developing countries have features that enable
  them to be leaders in the transition to a clean
  energy future.
• 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.
• Policies that encourage energy technology
  innovation and leadership in developing countries
  include
• RDD 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.
• 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.

5
Bilateral Assistance, the Global Environmental
Facility, and the United Nations

• Most industrialized countries support clean
  energy development and deployment in Third World
  countries through their bilateral assistance
  programs.
• Bilateral energy assistance is not always
  helpful. The distinction between development
  assistance and export promotion is often blurred.
  
• Authors 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.
• 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.

6
Bilateral Assistance, the Global Environmental
Facility, and the United Nations Cont.

• 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.
• 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.

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Multilateral Development Banks

• 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
• 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.
• The Author suggested that the World Bank and
  other MDBs could do more to encourage a clean
  energy revolution in developing countries.
• 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

8
The Climate Treaty

• The United Nations Framework Convention on
  Climate Change was adopted by over 150 nations at
  the Rio de Janeiro Earth Summit in 1992.
• 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 worlds 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.
• 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

9
The Climate Treaty

• Joint Implementation
• 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).
• Clean Development Mechanism
• 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
• 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.

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Enhancing International Technology and Policy
Cooperation

• 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

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Enhancing International Technology and Policy
Cooperation Cont.

• International Energy Efficiency and Renewable
  Energy Agency (IEEREA)
• 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.

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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.

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Critique

• Chapter 7 International Policies and
  Institutions

14
Objectives

• Authors Background
• Sources
• Overall Article
• Authors idea for an international energy agency

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Authors 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

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Sources

• Number 36
• Dates 1995-2002
• Majority (67) are recent
• Data Presentation
• Tables used are clear
• No graphs

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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
• Brazils ethanol fuel program
• Chinas more efficient power plants

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Suggested Solution

• Vague Ideas
• No firm solutions given, not enough detail
• How implement ideas?
• Policies need to be customized
• Flat quotas wont work for every country
• Social, economic issues
• Regulation Enforcement

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Gellers Idea

• 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

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Conclusion

• Well-organized chapter
• Ideas supported by examples
• Authors energy agency idea is not specific enough

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Questions?