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About this book

The supply and demand of energy, its security and environmental sustainability are increasingly central issues in the contemporary world. This broad-ranging new text provides an international and interdisciplinary introduction to today's political, economic, security, policy and technological challenges set in a clear historical context.

Table of Contents

Introduction: The Global Energy Challenge

Abstract
Since the industrial revolution, greenhouse gases (GHGs) in the atmosphere have progressively increased because of human processes, many of which are energy related. Consensus exists that if the climate system warms to more than 2C above pre-industrial levels, the implications for our environment and for humankind will be increasingly severe. At the same time, around 1.3 billion people (predominantly in developing states) today live without access to modern energy services (IEA 2013). Energy poverty excludes people from education, health services and economic opportunities. Acknowledging the important role that energy access plays in economic development, the United Nations (UN) declared 2012 the year of Sustainable Energy for All. Concerns over energy security have also made a comeback in world politics since the mid-2000s. Factors such as the rise of China as an energy consumer heavyweight, Russias assertive energy politics, and renewed energy-related conflict have all contributed to the securitisation of energy across the globe. In short, the world faces a triple global energy challenge: the current, fossil fuel - based energy system is environmentally unsustainable; rapid economic transformation in the developing world fuels steeply rising energy consumption; and finite resources trigger concerns over the security of supply and demand.
Caroline Kuzemko, Michael F. Keating, Andreas Goldthau

Chapter 1. Perspectives on the Global Energy Challenge

Abstract
Understandings of world energy systems and the challenges they face necessarily reflect particular perspectives. Perspectives are systems of ideas and beliefs through which people understand and explain the operation of their social world. In energy, analysts, engineers, scientists and corporate executives use these perspectives to help frame the issues, identify problems and suggest solutions. Energy governance decisions then reflect the perspectives that have been used to inform decision-making. Each perspective casts light on different aspects of the global energy challenge, but in focusing analysis on some variables this necessarily excludes others. Given the range of different perspectives available, there can be a broad variety of different policy agendas in the energy sector, and different justifications used even for the same set of policy measures. Indeed, perspectives are more than just worldviews - they are also the practical actions that derive from a particular worldview. It is important to comprehend the scope of the different perspectives that actors are adopting with regard to energy. While individual actors or groups may adopt just one perspective, no single perspective - whatever its strengths - can provide a complete understanding of the subject. For example, analysis may focus on technology as a driver of energy system change, whilst ignoring the economic and political context within which energy, and energy technology, is produced.
Caroline Kuzemko, Michael F. Keating, Andreas Goldthau

Chapter 2. Evolution and Dynamics of the World Energy System

Abstract
Energy has often been referred to as the lifeblood of modern society. Energy input makes economies run, and without modern fuels such as oil, gas or electricity societies would find it hard to develop economically, or to maintain adequate levels of welfare or economic output. The energy industry has also become a key economic factor in some countries. Russias majority state-owned gas company Gazprom accounts for an estimated 10 percent of total Russian gross domestic product (GDP), and 25 percent of state revenues. In Saudi Arabia, oil and oil products generate an estimated 90 percent of all export revenues, more than 70 percent of state income, and 45 percent of the countrys GDP. The energy sector can also underpin significant employment levels. China National Petroleum Company (CNPC), the Chinese national oil company (NOC), is said to employ more than a million people. The German coal sector (until the 1980s at least) provided jobs for a million people and represented the backbone of the countrys steel industry. Indeed, in the post-World War II era, the size and economic impact of coal within the domestic economy gave this industry significant political power as well. Petroleus de Venezuela S.A. (PdVSA), the Venezuelan NOC, became both the largest employer in the country and the main source of funds for social welfare programmes. Given this, it is hardly surprising that governments have sought to protect or even control the energy sector.
Caroline Kuzemko, Michael F. Keating, Andreas Goldthau

Chapter 3. The Political Economy of Energy

Abstract
The political economy of energy - what states do, and what markets do, and the relations between states and markets is important to understanding contemporary global energy challenges. States are legal entities often referred to as nations, nation-states or countries. They are most famously defined by Weber in 1919 as having the monopoly of the legitimate use of physical force within a given territory (Weber 2009). Within this territory, states have legal and judicial power, military and police enforcement capability, and the ability to set both economic and political rules and regulations. States can, in effect, command and control. Legitimacy may be derived from a popular mandate, as in a democratic state, or in non-democratic states from coercion, historical tradition, patrimonialism, or the delivery of economic goods and resources. States interact with other states through foreign policy, including foreign economic policy.
Caroline Kuzemko, Michael F. Keating, Andreas Goldthau

Chapter 4. Actors and Institutions

Abstract
Energy, like any other good or sector, is governed by a set of rules, institutions and policies. By definition, crucial policy choices, such as those relating to the energy mix, market design, or energy infrastructure have to be made on a national level and are hence left to nation-states. Governments, therefore, play an important role in todays energy governance. At the same time, however, a number of energy challenges exceed the regulatory capacity of national governments and transcend the nation-state. Most energy commodities are traded and transported across national jurisdictions. Individual importing nations of oil and gas cannot unilaterally ensure that their own supply of energy will be reliable, nor can they effectively address market imbalances such as cartels. Negative externalities such as carbon emissions ignore national borders. Fighting energy poverty and providing access to modern energy services for the energy poor is also a task that clearly exceeds the capacity of countries aspiring to catch up with industrialised nations. In short, global energy challenges require both national and global answers. Consequently, a multilayered, somewhat fragmented and complex architecture of international institutions and organisations has emerged to deal with these and related challenges. They include clubs of states (such as oil producers and consumers), international agreements (such as the Energy Charter Treaty) or agencies (such as the International Renewable Energy Agency, or IRENA and IAEA), in addition to important regional arrangements (such as in the EU). Deeply intertwined with these institutional arrangements are actors in global energy - private companies (IOCs), state-owned corporations (NOCs) and organisations representing special interests (e.g. global civil society such as NGOs).
Caroline Kuzemko, Michael F. Keating, Andreas Goldthau

Chapter 5. Energy, Climate Change and the Environment

Abstract
Almost all climate scientists now agree that humankind has influenced global warming, partly through the combustion of fossil fuels. This is referred to as the climate consensus. As it now stands, a wide variety of elite political institutions including governments and inter-governmental organisations (IGOs) accept this consensus, and so are trying to establish ways to lower greenhouse gas emissions. One of the most common routes to climate mitigation is to seek a sustainable or low-carbon energy transition of global proportions. Climate change mitigation has therefore become a core objective of energy policy for much of the world. In addition to these more formal or traditional governance institutions, new groupings of state, civil society and corporate actors are emerging to work towards climate mitigation and sometimes also towards the promotion of specific new technologies. The ongoing process of mitigating climate change through an energy transition has proved far more difficult and complex than many predicted. It requires a major transition of inter-connected regimes, each with their own social, economic and technological aspects.
Caroline Kuzemko, Michael F. Keating, Andreas Goldthau

Chapter 6. Energy for Development

Abstract
Despite nearly 70 years of national development strategies and development aid from wealthier countries, the essential needs and aspirations of vast numbers of people in developing states are not being met. Promoting development is a broad and multifaceted problem, of which energy is only one aspect. Energy is certainly strongly linked to processes of development, and is a first-order issue of importance for the developing world. Yet energy is often underemphasised or absent in development literature. The strategies developing states use to meet their energy needs are a subject worthy of greater attention. This chapter addresses some of the key issues that constitute the global energy challenge as it pertains to issues of development and to developing states. The chapter addresses the links between energy and poverty first. Around 1.3 billion people are today without access to electricity (IEA 2011).
Caroline Kuzemko, Michael F. Keating, Andreas Goldthau

Chapter 7. Energy Security

Abstract
This chapter presents as rounded a view as possible of energy security what it is, and what is being done to address it as a governance issue around the world. A range of different perspectives that help us to understand and interpret this historically thorny subject are introduced, including (but not limited to) geopolitical perspectives. The chapter begins by looking at different ways in which the concept of energy security is understood, including how energy security concerns overlap with other non-traditional security issues such as food and water security. The chapter then considers the question of why energy has returned as a security issue, and different views on which particular aspects of energy are causes of security concerns. The final section details governance approaches to energy security, at the international level, and from the perspective of both importers and exporters.
Caroline Kuzemko, Michael F. Keating, Andreas Goldthau

Chapter 8. Transit and Infrastructure

Abstract
Infrastructure is the physical plant necessary to support technology for transport, communications, and governmental and industrial processes. It facilitates the production of goods and services and the provision of public goods for example in education, health care, and of course energy services. Energy infrastructure is essential for the functioning of energy systems and modern societies, and for maintaining welfare. It connects producers and consumers of energy across geographical distances, it brings oil, gas and electricity to people and companies, and it provides for essential services such as heating. Because energy infrastructure is inextricably linked to economic development, it represents a significant part of a states stock of physical capital. A McKinsey study estimates that infrastructure, including energy infrastructure, typically amounts to around 70 percent of national GDP (Dobbs et al. 2013). Much of this infrastructure is dedicated to transit: the problem of moving energy sources from where they are in abundant supply to where demand is found. The geographic disparity between supply and demand in energy makes transit, and transit infrastructure, a key aspect of the global energy challenge.
Caroline Kuzemko, Michael F. Keating, Andreas Goldthau

Chapter 9. Technology and Innovation

Abstract
Energy technology innovation is widely regarded as a key element in addressing the global energy challenge. Novel technologies such as low-carbon appliances, demand-side response mechanisms, energy storage devices and renewable energy sources are expected to place the planet on a more sustainable pathway whilst providing the energy poor with access to crucial energy services. However, such a technological shift would be both shocking and transformative, both within energy systems and beyond (Rosenau 1990). As we saw in Chapter 2, the Industrial Revolution led to the spread of energy technologies which had an enormous impact on economic activity throughout the world - the steam engine being a clear example. Radical changes to human social organisation will also have unintended consequences. The environmental consequences of the global fossil fuel economy which resulted from the Industrial Revolution, for example, are only now becoming apparent. However, as scientific knowledge catches up with changing energy systems, we are far more informed about how different energy systems interact with ecosystems, and so ow we can produce and use energy in more sustainable ways.
Caroline Kuzemko, Michael F. Keating, Andreas Goldthau
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