Let me start by raising in the question of: what is the governance that we are trying
to address in our proposal for a Global Energy Forum? The governance gap is that the institutions
we have right now for addressing energy problems are unable to manage those problems, for at
least three reasons. One is that most of those institutions were set up in an era when governments
had direct control over energy supplies and consumption. That is true to a much lesser
degree today; there is a much more important role for markets. There are important gaps
between issues: energy and water, for example. Energy and food issues are rising in importance.
We have not done a very good job so far in engaging the new champions: India, China,
other emerging economies that for the most part have not been formally engaged in a major
way in the existing institutions we have for governing the world’s problems related to
energy.
So, what we are proposing is eventually the emergence of what we call a Global Energy
Forum – a global forum, legitimate, a place where important energy related issues can
be addressed in a way that engages the major producers and consumers on equal terms. We
are proposing to get there in part through some ideas around an energy stability board,
or a mechanism by which countries that are relevant for a problem can get together and
solve particular problems, and then from that, cooperation will emerge more broadly. I’ll
talk in a little bit about particular ideas, and get your help in the breakout session,
for particular places where countries might start working on these practical energy problems
that today are not being governed very well. So, how do we get started? In part, we need
to start with a smaller forum, and crucially in this whole process, we need to identify
the major consumers and major producers and find ways to get them working on problems
together.
I think when we do that, there are at least two special sensitivities that any serious
effort to manage energy problems must address. One of the special sensitivities clearly is
how you are going to engage the new champions. This issue arises in particular with respect
to China. I think existing institutions for the most part have failed to engage China
in a way that makes the Chinese comfortable. We saw evidence of that most recently in the
Copenhagen conference. I would say that this story is true not only for China, but also
for India, and for other important countries. The other special sensitivity is we have to
find a way for consumers and producers to work together. In the industrialised countries,
most of our institutions around energy are focused on energy consumption and its side
effects. Those institutions for the most part have not done a very good job of engaging
producers in ways that would give producers confidence, for example to invest in long-term
energy supplies. That is part of the gridlock that we have right now.
Why is the proposal that we are putting forward unique and, we think, viable and important?
It’s because there have been many efforts so far to reform existing institutions. Existing
institutions do a very good job on the problems they were set up to address: the IEA, the
IAEA, and so on – terrific institutions that perform important functions. Efforts
to reform those institutions and try and take on new problems have met an enormous amount
of resistance, and difficulty, and gridlock. So, what our strategy does is it starts by
engaging the key countries bottom up, focused on particular problems. I am going to talk
in a moment about those problems, and I would very much like your help during the breakout
session to set up a short list of things that you think will be important for countries
to work on.
So, where do we begin, and how do we begin? We put together a short list of some problems
– functions that serious countries could start working on, that over time could stitch
together into a more effective system for governance on energy and eventually a global
energy forum. Here are the three on my list. First, what are you going to do post-Copenhagen?
We have a vacuum in governance right now, and no clarity on which direction next. The
second: innovation. There is a lot of evidence that the world massively under-invests in
research and development, in testing of technologies, and yet almost all serious energy and environmental
problems ultimately get solved with new technologies. How can we, on a global level, invest much
greater resources in innovation? Last are questions around standards. The energy business
is very capital intensive – massive resources are needed. In parallel with that, we need
standards to make sure that those investments take place in ways that respect other priorities:
governance, human rights, and so on. Thank you.