Transcript Global Energy Security: The Strategic Implications for

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A Technology-Driven
Framework for Energy and
Climate Policies
Robert Pritchard
Energy Alliance of Australia
APEC Energy Trade and
Investment Task Force
Brunei, November 22, 2010
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The Swirling Energy / Climate
Debate: How We Now See It
Energy security is economy-specific
but climate applies equally to all
 In the absence of a global climate
framework, many economies are
aligning domestic energy / climate
policies
 Next phase: global policy alignment is
likely to be very gradual

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 Reduced dependency on Middle East oil
 Phasing out all fossil fuels
 Increased use of coal, natural gas, nuclear
energy, renewables
 Use only renewables and nuclear energy
 Diversification of all sources of supply
 Investment in interchangeability
 Mitigate all avoidable GHG emissions
 Capture & store all unavoidable emissions
The Swirling Debate
EDGING TOWARDS GLOBAL ALIGNMENT
Achieving “sustainability” as fast as possible
Increase in cross-border energy trade and investment
Increase in energy efficiency / Decrease in energy wastage
Increase in renewable and nuclear energy generation with natural gas as balancing fuel
Identification and global deployment of all affordable technological solutions
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Energy Security: Why Is It Still
So Important?
Supply disruptions pose a national
security risk
 Affordable energy still remains:

essential to maintain our prosperity
 the key enabler of economic growth
 a prerequisite of sustainable
development

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Increased Energy Security
Risk: What Explains It?

Energy use is a function of:
population growth
 economic growth
 industrialisation and urbanisation


Increase in energy use is occurring at
the same time as oil importers are
increasing their dependence on the
Middle East
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Growth in Oil Demand
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Dependency of Major
Economies on Oil Imports
Japan
 Korea
 India
 US
 China

100%
100%
76%
61%
56%
Source: BP Statistical Review 2010
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Climate Change: What Is the
Real Issue?
The real issue is the build-up of the
stock of global emissions – this
continues to intensify
 Communities everywhere express the
need to “do something” but have
almost zero power over this global
environmental problem. Why?

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Global Emissions: Linkage to
Energy Use
80% of global emissions are linked to
energy use
 We reiterate that energy use is a
function of:

population growth
 economic growth
 industrialisation and urbanisation

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Domestic Emission Reductions:
Questions to Consider
To what extent will domestic emission
reductions actually reduce the risk of
global climate change?
 To what extent will a carbon price be
effective?

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Domestic Emission Reductions:
Questions to Consider contd.
How should a carbon price be fixed?
 How should it be adjusted?
 Should it apply in all sectors?
 Should it also apply to exports?

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APEC Energy and Climate
Pathfinder Process
First outlined by Energy Alliance of
Australia to EWG 39 in March 2010
 An ongoing 10-step process of policy
formulation, monitoring, reporting and
review
 Greater emphasis should be placed
on technology and sustainability

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Significance of Sustainability
Sustainability can be the unifying
global goal
 Sustainability is not an end-state but
a multi-dimensional process requiring
ongoing review and adjustment
 Low-carbon energy technologies are
indispensable for sustainability

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Low-Carbon Technologies:
R & D + Global Deployment
What technologies will change global
energy consumption patterns is the
most significant issue
 Without global deployment of these
technologies, we will only tinker with
the climate change problem
 Domestic and international policies
must therefore be aligned

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UNFCCC / Kyoto Framework
Kyoto Temperature Target
Country Emissions Limits
Global Carbon Trading
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Technology-Driven Framework
Domestic
Incentives,
Subsidies
R & D LowCarbon
Technologies
Cross-Border
Bilateral,
Multilateral,
Scientific
Collaboration
Removal
of Trade
Barriers,
Tariffs
Global
Technology
Deployment
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Importance of Removing
Trade Barriers
Trade barriers must not be allowed to
impede global deployment of low-carbon
energy technologies
 Tariffs on “Environmental Goods and
Services” (EGS) could be eliminated by
the Trans Pacific Partnership (TPP)
agreement or by an EGS agreement
under the WTO

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Gains from Elimination of
Tariffs on EGS
US Peterson Institute estimates
increase in world exports by $5.9
billion, with major GDP gains
 World Bank sees this providing winwin-win opportunities (trade,
technologies, emissions reduction)

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World Energy Council (WEC)
Recommendation to WTO
WEC has recommended that tariffs be
eliminated for all “Environmental
Goods” (low-carbon technologies)
 WEC has nominated 6 priority lowcarbon categories to WTO

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WEC’s WTO EG Categories
(1) Energy efficiency
(2) CCS
(3) Renewables
(4) Nuclear
(5) Natural gas generation
(6) Flare gas reduction
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Environmental Goods: Main
Examples
‘Smart Grid’ meters, transformers and
switching apparatus
 Generators, boilers, turbines,
compressors, pumps, tanks and plant
components
 Measuring and control systems and
related instruments

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Summary and Conclusions
(1) Business welcomes a more practical
approach to energy and climate
issues in many economies
(2) There are also positive signs of
bottom-up policy alignment (eg
APEC EMM 9 Declaration, June
2010) but global alignment is likely to
be very gradual
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Summary and Conclusions
contd.
(3) Business sees low-carbon
technological solutions as absolutely
vital
(4) A technology-driven policy
framework can both incentivise
domestic R & D and accelerate
global technology deployment
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Summary and Conclusions
contd.
(5) By eliminating tariffs on EGS, the TPP
and WTO can play an effective role in
facilitating global deployment of lowcarbon technologies
(6) Low-carbon technology deployment
provides the common policy thread for
future global policy alignment – this is
our key message to policymakers
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About the Energy Alliance of
Australia
The Energy Alliance is an Australian
energy policy body
 We are an apolitical NGO and do not
lobby governments
 We thank the APEC ETI Task Force
for its invitation to discuss these
important policy issues

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Technology-Driven Framework
Domestic
Incentives,
Subsidies
R & D LowCarbon
Technologies
Cross-Border
Bilateral,
Multilateral,
Scientific
Collaboration
Removal
of Trade
Barriers,
Tariffs
Global
Technology
Deployment