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Government and corporate helplessness to stop oil gushing from a broken pipe in the Gulf of Mexico is a depressing reminder of the world’s
utter dependence on a limited supply of fossil fuel that poses so many environmental threats. US President Barack Obama suggested that the
accident could transform the nation’s energy policy, much as the 9/11 attacks altered US approach to security. But the notion of US energy
independence – like sad scenes of workers scraping away the tar balls washed onto beaches – is another foolish and futile quick fix. Publicpolicy Professor Ann Florini contends that there is no national solution for an immense global challenge. A US go-it-alone approach won’t work
on finding a solution to the energy crisis, complicated by fluctuating prices, huge profits, intricate government subsidies and minimal penalties
for increasing destruction to the environment. But only the US is capable of organizing nations around a global framework, Florini maintains,
and leading the inevitable transition away from an unsustainable energy system. – YaleGlobal
Seizing the Moment for Clean Energy
The transition from fossil fuels requires united global action – and some US leadership
Ann Florini
YaleGlobal , 1 July 2010
SINGAPORE: Critics have rightly panned President Barack Obama’s response to the BP oil
spill – but for all the wrong reasons. In comparing the spill’s devastation to that of 9/11, he
hoped to make the crisis the turning point for US energy policy just as terrorist attacks
transformed the country’s approach to national security. Critics focus on Obama’s lack of
specifics and a relative absence of compelling rhetoric we have come to expect from this
president.
The bigger problem, however, isn’t style, but substance: Obama’s surprising unilateralism
during an Oval Office address to the American people and in comments since misses a key
opportunity to reassert American global leadership.
Obama accurately outlines the immediacy, scale and scope of the energy challenge. Security
for the US, indeed the globe, requires a future largely free of dependence on fossil fuels. The
world has known this since the oil shocks of the 1970s.
But problems caused by fossil-fuel extraction, transport
and consumption are much larger than the geopolitical
Solo flying not advised: President Barack Obama at the DeSoto
vulnerabilities recognized but ignored for four decades.
Next Generation Solar Energy Center in Florida. Energy
From the devastation of the BP oil spill to the
independence cannot be national
expanding oceans that, thanks to global warming,
continue to erode coastlines around the planet, the mounting environmental costs of the developed world’s
ongoing carbon bonfires threaten prosperity and stability on an extraordinary scale. The people who live and
work near the world’s coal and oil deposits often suffer most cruelly, not just from poisoned lands and waters
but also from rapacious abuses of governments corrupted by the easy money.
Mounting
environmental costs
of the developed
world’s ongoing carbon
bonfires threaten
prosperity and
stability on an
extraordinary scale.
Such problems cannot be resolved by unilateral American action. Yet Obama frames his remarks around the call
for energy independence. Energy “independence” is politically useful language, but dreadful policy. Real energy independence, in which the United
States would neither buy nor sell energy sources or services, is both unattainable and unwise. It is unattainable at a minimum for however long it
takes for the nation to transition completely to a transportation system that does not need much in the way of the petroleum products on which the
US transportation sector is at present almost entirely dependent. And in a world where prosperity needs trade and cross-border investment, it makes
little sense to set independence in and of itself as a goal.
With regard to energy, a focus on “independence” undermines chances for enormous potential gains via cooperation.
Energy goods and services, like food, clothing, computers and all the other elements of modern life, not to
mention the investments needed to produce them, cross borders. That trade, if governed by well-designed rules
that serve public interests, can lead to big gains in efficiency and choices for consumers. Even a cleantechnology US energy system will depend on trade in energy technology components and services. The
anticipated US clean-energy firms will need global-scale markets, not merely national ones. If those US
companies are to compete in a truly free market that serves the public interest, global rules must ensure that
any subsidies support public interests, as in clean technology, not private ones – and that such subsidies allow
appropriate competition.
Rules and institutions
currently governing
international energy
investment,
production, service
delivery, trade and
consumption are a
horrendous mess.
Rules and institutions currently governing international energy investment, production, service delivery, trade
and consumption are a horrendous mess. Governments everywhere subsidize dirty fuels at the expense of clean
ones. Cross-border investments that would put capital to use on fostering clean-energy transactions are hobbled by inadequate rules that fail to
protect public interests. Wild surges in oil prices have discouraged businesses from investing confidently in clean-energy alternatives that are not
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Seizing the Moment for Clean Energy | YaleGlobal Online Magazine
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economically competitive when oil prices are low. And the absence of international mechanisms that price fossil fuels at the true costs of their
environmentally dirty production and consumption makes it difficult, if not impossible, to challenge the continued dominance of oil and coal.
In short, Obama’s vision of America’s energy future needs more than American national technological ingenuity and
It needs
an
Adetermination.
secure energy
future
efficient global marketplace with effective international rules, enabling the world to wean itself off fossil fuels
needs more than
and transition to an entirely new energy system. Those rules must cover a range of arenas: They need to provide
national technological
ways of taming oil price volatility. They need to protect the legitimate interests of investors in energy projects
ingenuity and
while ensuring that governments maintain the capacity to regulate those projects to protect the public interest,
in contrast to the current web of bilateral investment treaties that too often are biased in favor of investors.
determination. It
They need to ensure that donor agencies, whether governmental or private, coordinate and rationalize their
needs an efficient
development assistance programs so that they systematically promote the energy transition without penalizing
global marketplace
the poor.
All this requires a different kind of American ingenuity, more like the innovativeness displayed in the face of the
adversity during World War II than the spending binge that followed 9/11.
with effective
international rules.
And it must be American. Even in these days of globalization and the rise of Asia, large-scale international
cooperation flounders without American leadership. Europe has focused for decades on its intra-regional
development and is currently consumed by internal travails. Rising powers such as China and India still focus primarily on their overwhelming
internal challenges and rarely put forward major proposals for international cooperation. Just as the United States led the construction of the
post-World War II international order, it must lead the world to new frameworks that can set the rules to foster the energy transition.
This requires a more inventive American leadership from the kind that created the United Nations, the International
Monetary
Fund,
World
Just
as the
UStheled
the
Bank and other institutions of the post-second world war order. The days of creating big overarching
construction of the
organizations are over. Instead, what’s needed is patient and systematic reform of a whole series of inadequate
or poorly designed rules and institutions.
Fortunately, opportunities abound. At US instigation, the G-20 already has the problem of perverse energy
subsidies on its agenda. The International Energy Forum brings together major oil producers and consumers
and could provide the venue for an effective arrangement on oil-price stability. The International Energy
Agency, which despite its name is comprised only of wealthy industrialized countries, has made serious efforts
to reach out to such emerging players as China for discussions about how the world can transition to a rational
and sustainable energy path, an effort the US has supported and can promote – and indeed, energy is already
among the more successful components of the US-China Strategic and Economic Dialogue. And a concerted
drive to devise appropriate trade rules might have the double benefit of revitalizing the moribund Doha Round.
post–World War II
international order, it
must lead the world to
new frameworks that
foster energy
transition.
It’s essential for the Obama administration to ensure that any comparison to 9/11 does not become inadvertently more apt than the president
intended. After that earlier crisis, the US underwent a long and painful experience born of shortsighted nationalism and hubris. Obama is, of course,
a pragmatic, talented and thoughtful president leading a very indebted government and confronting many challenges left by his predecessor. He now
should seize the moment born of catastrophe to achieve his stirring vision of a clean-energy future that benefits both the United States and the
world.
Ann Florini is professor at the LKY School of Public Policy, National University of Singapore, director of the NUS Centre on Asia and Globalisation,
and senior fellow at the Brookings Institution.
Rights:Copyright © 2010 Yale Center for the Study of Globalization
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