Geopolitical contention and institutional inadequacy in the global energy game

With the publication of The Globalization of Energy, a third option now becomes available that allows for an appreciation of international geopolitical realities that always shadow the making of energy policies. In introducing the international relational perspective to the study of energy policies, it is easy to overemphasize conflicts of interests or international cooperation as an obvious binary. The authors in this collection transcend this binary, discussing the complexity and specificity in the historical relations between China and the European Union, and how changing geopolitical relations shape energy policies. The chapters not only attend to the domestic and international conditions in China and the European Union, but also discuss other important players in the game, such as the United States, India, Iran, and Russia. The volume takes full advantage of an edited book, bringing together research from different perspectives. Some chapters discuss the issues from the vantage point of energy suppliers, i.e., that of Russia and Iran. Some stand in the shoes of energy demanders. Other chapters examine the dynamics between different demanders. The accounts encompass a broad range of perspectives, but also stay focused on its central theme of Sino-EU energy relations, thereby gaining both breadth and depth.

The book consist of two parts, with the first devoted to discussing the “locking in” strategy of trying to secure more sources of conventional energy supply (i.e., oil and gas), and the second to exploring issues with the “seeking out” strategy of developing alternative sources of energy. The two parts are two sides of the same coin, as the world faces energy shortages and increasing energy insecurity.
The first part of the book offers a well-rounded overview of the geopolitical reality of the relation between China and the EU, and how energy issues play an increasingly important role in the relation. A key contribution of the chapters in this part is the identification of the potential for cooperation between China and the EU. The cooperation should not only be premised on the shared demand for oil and gas, but be rooted in a common domestic institutional arrangement that China and the EU share. Specifically, in both political entities, a centralized governing body is responsible for setting up goals of energy savings, and each local governing body devises their own strategies of achieving the goals.

In the European Union, the EU Commission sets legally binding targets. The targets include greenhouse gas emission reduction goals, energy efficiency goals, energy source diversification goals, among others. However, the Commission does not detail the specific action plans through which the goals should be achieved. Member states have the leeway to determine strategies that would work best in the national context. A similar institutional arrangement is in place in China where the National Development and Reform Commission (NDRC) is responsible for goal-setting in the form of Five-Year Plans. Provincial level governments in China are required to meet the goals as mandated by the NDRC, by way of locally defined strategies. Similar domestic governing structures in China and the European Union reflect similar problems faced by the two political entities. Both are troubled by rising energy demands, and corresponding environmental externalities of energy consumption.

Evidently, both China and the EU have turned to foreign policy leverages to enhance energy security and to satisfy domestic demands. More often than not, foreign policies are directed to stress the competitive aspect in the relation between China and EU as energy demanders. For example, regional organizations such as the Shanghai Cooperation Organization (SCO) are usually devised to enhance relations between demanders and suppliers. The chapters in the first part of The Globalization of Energy, however, offer insights as to how cooperative relations between demanders are not only necessary, but also possible. Especially with regard to China and the European Union, the two regions’ similarity in domestic energy policy structure warrants a closer tie, so as to learn from each other.

The second part of the book reviews efforts to tap the potential of renewable energy in China, the European Union and beyond. The chapters cast doubt on the feasibility of renewable energy. By examining the history and current status of energy efficiency and sustainable development policies in China, Japan, and the Netherlands, the four chapters reach a consensus that the development of renewable energy is not only hampered by high costs of such, but also by a variety of institutional barriers. In China, the renewable energy sector relies heavily on state subsidies and has little incentive to develop a commercialized market. The country also suffers from the lack of technological innovation, to the point that renewable energy is limited to a handful of technological applications, such as solar PV. Consequently, China’s renewable energy sector is only successful in certain rural areas where costs are relatively low. Similarly, Japan’s nuclear sector is also facing challenges. In light of the unstable foreign relations between China and Japan, it remains unclear how energy cooperation between the two countries will fare. Without benefiting from China’s buying power, Japan’s capacity of nuclear power generation is far from fully tapped. The Fukushima earthquake and its aftermath, which occurred after the publication of this volume, clearly added to the dismay of Japan’s nuclear energy sector. In the Netherlands, the development of renewable energy is also thwarted by institutional inadequacies. Interest groups in conventional energy sectors wield significant power to contain the growth of the renewable energy sector. As the emphasis on renewables is placed on technology research, instead of on social barriers, much of the Dutch renewable energy development remains in laboratories.

These chapters invite a serious look at the contemporary fade of low-carbon development throughout the globe. The current trajectory of energy-use points to a future situation in which carbon intensity will likely increase. In other words, in the absence of reliable and stable supplies of renewable energy, shortages in oil and gas compel nations to switch back to coal, which emits more greenhouse gas per unit of consumption. However, as the chapters suggest, the development of renewable energy faces more institutional barriers than technological ones. It follows that low-carbon development should be treated more as a process of social and political change than a process of industrial and technological change.

The two parts of the volume weave together a story of energy policies that is at once global and domestic, socio-political and technological. The breadth of the chapters is indeed laudable. However, with its limited space, the volume inevitably leaves out relevant topics that are equally important. For example, the development of energy efficiency measures in the transportation and building sectors have witnessed tremendous gains in recent years. The extent to which gains in energy efficiency might bring fundamental change to the global energy outlook deserves more attention. In addition, the chapters focus on governmental actors in the analysis, which is a legitimate realist orientation. However, the role of non-governmental organizations (NGOs) is widely documented in the realm of energy and environmental policies. NGOs are often times seen as the bridge between national or regional governments. Interested scholars should pay no less attention to the reality of multi-track diplomacy that involves citizen groups and many other non-state actors.
Overall, this edited volume is a testimony of the globalized era, in which energy policies must be contextualized in a broader picture of global interplay. However, the title of the book, The Globalization of Energy, deviates from the conventional understanding of globalization as the flow of goods and services per se. Instead, the book brings together studies of the socio-political dynamism that either promotes or prohibits the global flow of energy. It is therefore more about policies, geopolitical contention and domestic conditions in the globalized era – consequences of and reactions to globalization. Globalization is taken as a given, and therefore is not the subject of the volume. Thus, interested readers should not be distracted by this slightly deceptive title.
This book would be a suited starting point for scholars doing research on the effect of energy shortages on international relations, or conversely, the effect of international contention on energy policies. The collection exhibits the breadth that is necessary for a systematic understanding of the issue. This volume is also ideal for specialists in Chinese or European domestic energy policies who wish to explore the international implications of such. Thought-provoking as it is, the chapters invite readers to further explore the issues and stakes that comprise the contemporary scene of international energy diplomacy, not only between China and the European Union, but on a truly global scale.

Yifei Li is a doctoral student in the sociology program at the University of Wisconsin-Madison. His research interests include environmental sociology, urban sociology and community development (yifeili@ssc.wisc.edu).