IEEJ: July 2012 All Right Reserved
Special Bulletin
A Japanese Perspective on the International Energy Landscape (92)June 21, 2012

Global Energy/Environmental Problems and Global Governance
Ken Koyama, PhD
Chief Economist, Managing Director
The Institute of Energy Economics, JapanOn June 14 and 15, I visited Seoul and had an opportunity to exchange views at aninternational conference with various experts on international energy security problems,
environmental problems including global warming, and relevant global governance realities andproblems. In the following, I would like to put in order impressive points of the discussions.
A common perception for the discussions there was that global energy problems such asenergy security, climate change and global warming have become more complicated and serious.
The perception means that great uncertainties and risks regarding energy security exist in theinternational energy market as there are various problems including wild fluctuations of crude oil
prices in a higher range, geopolitical risks (such as the “Arab Spring” movements and the Iraniansituation) behind the fluctuations, European credit fears and downside risks to the world economy,
fears of rising energy demand in China and other emerging countries and of their intensifying
competition for access to resources, and energy investment climate deterioration through growing
resource nationalism and other developments.
In addition, participants in the discussions indicated their concerns for the Fukushima
Daiichi nuclear plant accident’s various impacts on nuclear energy uses in the world. It is needless tosay that safety enhancement is seen as the most important challenge following the Fukushima
accident. Nuclear security and proliferation are also viewed as important post-Fukushima challenges.
They have become great challenges particularly for China, India and other Asian emerging countries
that are about to substantially expand nuclear power generation.
As the world economy slows down, it is difficult to view the urgency, importance andpriority of global warming prevention efforts as high. But the global warming problem has notdisappeared. Its essential significance has not been lost, either. Rather, discussion participants shared
the view that the problem has gradually grown more serious as responses to the problem as a risk
factor for global environmental conservation and humans’ sustainable survival and development
have failed to make progress.
In various ways, however, the participants doubted if global governance has been working
to lead international frameworks and cooperation to complement and enhance ongoing
country-by-country policy efforts to address the global energy and environmental issues.
On roles and functions of international frameworks and organizations tackling specificenergy issues, for example, the participants discussed present operations of the International Energy
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Agency (IEA), the Organization of Petroleum Exporting Countries (OPEC), the International Energy
Forum (IEF), the International Renewable Energy Agency (IRENA), the International Atomic
Energy Agency (IAEA) and other organizations. Some said that while these organizations madegreat contributions to stabilizing and developing international energy markets and enhancing market
safety in their respective areas, there are some limitations and constraints on their functions.
The IEA’s specific international oil market stabilization efforts including coordinated oilstockpile releases and its non-oil market analyses and policy recommendations (including recentreports on natural gas) were appreciated as important. But some problems were pointed out. First,
the IEA members are limited to the 28 participants in the Organization for Economic Cooperationand Development (OECD) while their share of or importance for international energy markets has
declined. Second, China and other emerging countries that have grown more important forstabilizing international energy markets are still left out of the IEA framework as a member of theorganization. Third, the IEA, while trying to expand its operational scope, still focuses primarily on
the oil market even with oil’s share of total energy demand declining. The IEA has been striving toaddress these problems, stepping up “outreach” efforts to enhance cooperation with non-IEA
countries such as China, India and Russia. But questions were raised if the IEA has sufficiently
enhanced capacity to address the global energy situation and energy security problems that havebeen growing more complicated and serious.
Problems were cited in regard to relations between international organizations in addition
to their respective challenges. For example, the relationship between the IEA, OPEC and IEF was
taken up. The IEA (oil consumers) and OPEC (oil producers) had been confronting each other amid
growing tensions soon after these organizations were founded. But their relations shifted tocooperation and coordination as they deepened their understanding on their interdependence. But
crude oil price hikes since the early 2000s have brought about new challenges in the relations
between oil-producing and oil-consuming countries. These organizations’ relations have moved intandem with changes in international energy market dynamics. New global governance-related
moves have recently been seen. For example, the IEF’s efforts to promote and enhance dialogue
between oil-producing and oil-consuming countries have been seen as important.
Frameworks of the Group of Eight and Group of 20 major countries, though not
specialized in energy issues, have begun to frequently address energy-related topics as key
challenges, including crude oil prices, the Iranian situation, climate change and the Fukushima
nuclear accident. This development is important as indicating that major countries have given
priority to energy and environmental problems and are required to enhance efforts to address theseproblems. But discussion participants cited some problems. First, they questioned if theseframeworks have methods or approaches to address specific energy problems. Second, they doubted
if these frameworks are specialized to analyze and tackle specific energy issues. Even if somespecific measures are given through these frameworks, they also said, how to secure theirimplementation may be a problem.
On the climate change and global warming problems, the Conference of Parties (COP) tothe U.N. Framework Convention on Climate Change (UNFCCC) and other forums have promoted
discussions. But developments particularly since the COP15 meeting indicated how difficult it is to2

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coordinate global environment protection as a “global interest” with “national interests” related tocountry-by-country costs and problems related to implementing global warming measures, somediscussion participants said, questioning and fearing whether the present frameworks and mechanism
can be expected to provide effective solutions and whether global governance can work under theparticularly severe world economic situation.
I would like to reiterate that country-by-country efforts and global cooperation areindispensable for addressing the global energy and environmental problems that have been growing
more significant. In this process, the world will be required to overcome the conflict between globaland national interests. To this end, some strong leadership will be required to overcome the conflict.
At a time when all major countries tend to focus on their domestic conditions and look inward intackling political and economic problems, the future of global governance is growing more
uncertain.

Contact: report@tky.ieej.or.jp
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