The role of the G20 in developing long-term sustainable energy security strategies
World leaders face an array of challenges in seeking to provide the secure, affordable and sustainable energy supplies needed to drive economic growth. Many of these challenges are global in nature and are most effectively addressed through a combination of both domestic efforts and international cooperative action. The G20, alongside other key international fora and organisations, including the International Energy Agency (IEA), can play an important role in facilitating shared responses to our most critical energy challenges.
G20 members today account for around three-quarters of global energy demand. This reality looks set to continue, with strong demand growth projected in the decades ahead for the emerging economies of the G20. The Group also accounts for the lion’s share of global carbon emissions. For these and other reasons, the G20 economies share an interest in fostering energy systems and markets that possess enhanced resiliency, efficiency and sustainability.
Reflecting the importance of energy to the overall strength and stability of the global economy the G20 has, in the past five years, progressively expanded its deliberation of energy-related matters from a starting point of inefficient fossil fuel subsidies in 2008/9. These efforts were taken a step further in 2013, with the establishment of the G20 Energy Sustainability Working Group (ESWG), which brings together in a single forum the various strands of energy-related work that have emerged across the wider G20 agenda.
Importantly, the ESWG includes not only major consumers and producers from advanced and emerging economies, but also intergovernmental energy players such as the IEA, whose own mandate incorporates all fuels and all aspects of energy policy. Indeed, in actively deepening its own cooperation with key emerging economies, the IEA is seeking to support the objectives of G20 economies in moving towards a more secure and sustainable energy system.
The G20’s efforts in the field of energy have already begun to yield results. One such example is efforts toward the phase-out of inefficient fossil fuel subsidies. Not only can such a phase-out reduce wasteful consumption, save money and improve market transparency and efficiency, it can also help to encourage investment in alternative energy technologies that help reduce demand growth as well as carbon emissions.
In recent years, work commissioned by the G20 has also contributed to global understanding of the factors affecting oil price formation, as well as providing a crucial opportunity to underscore, at a high political level, the importance of data and transparency to the sound functioning of all energy markets. I am pleased to say that the IEA has been an active supporter of each of these G20 work streams.
This has included consistent support for, as a founding partner organisation, the Joint Organisations Data Initiative (JODI); both for the longer-standing JODI Oil and for JODI Gas, which was launched earlier this year.
The G20 is well placed to provide leadership on the transformation of the global energy system that will be required if we are to limit the global average temperature rise to less than two degrees Celsius, as envisaged under the UN climate change process. The IEA’s Energy Technology Perspectives 2014 (ETP 2014) highlights that no single silver bullet will allow us to achieve the so-called two degree scenario (2DS); rather a suite of technologies and actions, on the demand and supply sides, must play a role.
Chief among these is energy efficiency, and it is notable that in 2014 under the Australian Presidency, the G20 is seeking to improve energy efficiency. Opportunities now exist for G20 countries to share examples of their successful domestic actions in support of energy efficiency, as well as for collective G20 action on energy efficiency, for example to support enhanced data or to encourage the scaling up of investment for energy efficiency.
Ultimately, each member of the G20 will decide on its own plans for the transformation of its energy system. But the Group provides an important forum through which experiences and expertise can be shared, sound data and policies promoted, and common goals met. It can also encourage greater effectiveness and transparency of global energy markets, making them more secure in the process.
The IEA is proud to be a key contributor to the G20, providing analytical work on a range of topics since 2008, and will continue to support the Group in its efforts to encourage a shared vision for long-term energy security and sustainability.