Grupo de Economia da Energia

Energy security and climate change: different views, several policies

In energy on 23/05/2011 at 00:30

By Ronaldo Bicalho

Energy security and climate change are the two main axes currently surrounded by the energy policies in the world.

Then, to ensure the supply of energy and reduce emissions of greenhouse gases have become major strategic objectives of Nation States in the energy field, with significant impact in the desired composition of the future energy matrix and setting the most appropriate strategies to achieve it.

However, the evaluation of the real consequences of these two objectives at the heart of energy policy needs a qualification. Especially, because Nation States perceive, hierarchized and insert into their set of public policies such goals, which, after all, translates into the amount of resources that, in fact, these States are willing to mobilize to achieve them.

Taking the energy security as a first step, it appears that the term admits different interpretations. A cursory reading might confuse this security with energy self-sufficiency.

In this sense, increasing the energy security of a country would be tantamount to reduce its energy input import from abroad. An energy policy that would embrace this approach would cause an autonomous and endogenous energy supply,  which would include especially domestic sources.

Alternatively, we can see energy security as the degree of control over the entire energy supply chain, whether such chain is in its territory or not. Thus, the strong expansion of control over the energy supplier countries can bring greater dividends to reduce the risk of energy supply than the full internalization of this supply.

For example, the proposal to reduce energy dependence is on the agenda of U.S. energy policy for decades. However, the practical results of this apparent commitment to the expansion of domestic sources in the energy matrix do not correspond to the relevance to the achievement of independence in various strategic energy plans since Carter administration.

This apparent “failure” of U.S. energy policy suggests that U.S. energy security goes beyond the simple expansion of autonomy, incorporating a range of access controls on external resources, which presumes the economic, political and military power need to gain access to such resources.

Across the Atlantic, old Europe is seen struggling to ensure its energy security through the use of endogeneity of its energy supply, given its very limited capacity of natural fossil resources. Russia and North Africa as energy suppliers contributes effectively to reduce these difficulties.

Considering strong growth in Asian demand, it is hard to believe that the Chinese energy security lies in autarchy for its energy supply.

In this context, energy security is not practicing the energy autonomy. Although the growing share of domestic production in the energy supply collaborates to reduce the risk of supply, it is not sufficient to cope with booming energy demand in some countries for next decades.

This means that energy security, for some countries, has a strong global dimension and relates to access to global energy resources. In this case, energy security is intertwined with the success in the struggle for accessing these resources.

The importance that this global aspect will obtain in a given energy policy will depend on a number of factors ranging from natural resource capacity to the magnitude of energy consumption, through the power resources available to specific country.

According to this, energy security can mean to those who have energy resources the expansion of domestic production; for those who manage, somehow, their suppliers, increased imports; for those who own both, they combine production and imports, and so on.

In short, energy security can mean many things depending on the perception about its nature and proper level, in addition to energy resources available to guarantee it.

With regard to climate change, the diversity of views is also present in the formulation of energy policies, leading to different actions from several perceptions about the severity of this change and its causes.

The first item to note is how each Nation State recognizes the results presented by the Intergovernmental Panel on Climate Change/United Nations (IPCC/UN). It is not about to recognize the severity of impacts from climate change, but recognize CO2 emissions as the main root of this process and be willing to implement concrete actions to reduce them significantly, which, at last, means a significant reduction in the use of fossil fuels.

Thus, the reduced use of fossil fuels is directly related to the recognition of such severity and causality. The larger this recognition, the greater the commitment to this reduction.

This commitment is impressionistically higher in Obama Administration than in Bush Administration, greater in Europe than in the United States, greater in Germany than in China.

Indeed, the degree of engagement is important as it is critical to support the sacrifice in terms of growth and welfare represented by a more significant reduction in the fossil fuel consumption.

This situation is important because it concerns the perception that it is not possible to maintain the current pattern of growth and welfare before a drastic reduction in the use of fossil fuels. Now, we have an implicit hypothesis that the technologies available today for renewables are not able of replacing fossil fuels at the same level of reliability, availability and costs.

Thus, climate change is related to energy security not only in terms of demand for energy, to which the supply will be guaranteed, but also the contents of such supply.

Complying with full demand, without changing consumption pattern, affects the incorporation of “clean” sources not limited to renewables, incorporating nuclear, natural gas and even coal – since using so-called clean coal technologies.

We can discuss the cleanliness of these sources, but they play an important role for discarding the sacrifices associated with reduced fossil fuel consumption. In the lack of these sources, these sacrifices become larger, hindering the political progress of proposals for addressing the problems associated with climate change.

Accordingly, when Obama gave up earlier this year his strategy of penalizing the use of fossil fuels, replacing it by policy of incentives for clean energy – nuclear, natural gas and coal – he calculated the boundary he could go regarding the environmental issue with the current support by American society.

The International Energy Agency also concerns about the consequences of the Fukushima accident and removal nuclear from the range of solutions: strengthening of fossil fuels and increased emissions.

The role of natural gas as transition fuel from fossils to renewables also follows the theme of reconciling the confrontation for the causes of climate change and a view of energy security which includes maintaining the consumption pattern by using a fossil fuel “better” than others.

These strategies represent an aspect of energy policy that covers the face of climate change without changing the consumption pattern; at the limit, a “painless” transition.

However, we can consider that the seriousness of global climate change hinders the current consumption pattern, causing a relationship between energy security and climate change different from previous ones marked by the strong reduction of consumption and radical change of the contents in the matrix, favoring renewables.

In short, energy security and climate change, although they are current two great pillars of energy policy in the world, do not have the ability to define clearly the content of these policies, allowing different interpretations.

To better understand the nature of these policies (the common and different aspects between them), it is necessary to analyze them more carefully, placing them in the broader context of the strategic projects of Nation States.

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