CIAO DATE: 06/2013
Volume: 14, Issue: 1
Winter/Spring 2013
The Future of Energy
Letter from the Editors
William Handel, Nora McGann
The international system and the individual nation states that comprise it face crucial decisions regarding both the means and methods employed to supply energy to the globe’s seven billion human inhabitants. Indeed, there are few issues of public policy with as far-reaching implications as those related to energy production, consumption, distribution, and conservation. The extent to which fluctuations in price and supply of this diverse group of resources can have a dramatic impact upon the industry and livelihood of the entire global population cannot be overstated.
Forum: The Future of Energy (PDF)
Paul Sullivan
Energy and environmental security are two of the most important issues the world will face in the coming decades. This issue focuses on key debates and possible conflicts in the future of energy.
Challenges and Opportunities: Aviation Emissions and the European Cap & Trade System
Joshua Meltzer
On January 1, 2012, the European Union extended its cap and trade system, the Emissions Trading Scheme (ETS), to include CO2 emissions from all airlines arriving in and departing from EU airspace. The EU has claimed that this unilateral action was in response to the slow progress towards reaching a global deal. However, the EU remains committed to reaching a global solution to the problem of aviation emissions and hopes that including international aviation in the ETS will spur action. These additions to the ETS led the EU to take positions on a number of important policy issues that remain unresolved in the international climate change negotiations. These include issues such as how to attribute CO2 emissions from aviation to countries and how to operationalize the environmental principle of common but differentiated responsibilities (CBDR) – the notion that developed countries will do more to reduce their CO2 emissions than developing countries. Moreover, as many of these issues are also applicable to the broader UN climate change negotiations, the success or failure of the ETS approach to international aviation could affect progress in the wider climate change negotiations. This article outlines how the EU has designed its system to address these challenges. It also provides an overview of the challenges to reaching a global deal on regulating CO2 emissions from international aviation. The final part of the paper considers the current state of international negotiations over aviation emissions and suggests pathways forward.
Germany's Energiewende: The Prospects of a Grand-Scale Project
Rainer Baake
Imagine a mid-sized country. Its population, area, and energy consumption make it a flyweight compared to the emerging giants of China and India. Unlike Russia or Brazil, it possesses virtually no fossil fuels of its own – apart from disastrously dirty lignite and some expensive-to-extract hard coal. Furthermore, this country is located in Europe, a continent that has become synonymous with economic crisis and sluggish growth. Why do the energy policies of such a country – namely Germany – matter? The reason is in its dedication to systematically transform its energy system. It is the first major industrial country to seriously consider the challenge of overcoming the entire range of problems associated with fossil and nuclear fuels – from emissions to cost, from nuclear proliferation to nuclear waste, from environmental devastation to health impacts. If Germany, despite medium irradiation levels, limited land to grow biomass, and average wind and water resources, succeeds in transforming the energy system to renewable sources while maintaining system reliability and keeping an eye on cost, then every other country in the world will be able to follow on that track, too. And the challenges entailed for these countries will be significantly lower.
Power Shift: Smart Grid Transforms Electric Power for the 21st Century
Matthew Futch
For more than a century, the electric power industry has followed a model that produces and distributes electricity to, ultimately, passive consumers. The power system was originally configured for one-way flow from a concentrated source (the generating facility) to end-users on the other side of the meter. The system is optimized primarily for reli- ability, and has successfully supported global economic and social development. Dr. Kandeh Yumkella, chairman of the UN-Energy, a United Nations body created for promoting sustainable energy programs, summarized the relationship well, alluding to the "strong linkage between energy poverty and income poverty." With smarter energy networks nation states may now accelerate economic development through cleaner, more reliable, and consumer-friendly technologies. Global deployment of smart grid technology is fundamen- tally changing the one-way, "produce and distribute" model into a more dynamic "collaborate, manage, and use" model.
The U.S. Department of Energy describes smart grid as "a class of technology people are using to bring utility electricity delivery systems into the 21st century, using computer-based remote control and automation. These systems are made pos- sible by two-way communication technology and computer processing that has been put to use over the past few decades to transform how other industries operate." The grid transformation allows areas without significant twentieth century grid infrastruc- ture to implement a twenty-first century energy network specifically designed to include decentralized renewable generation and intelligently coupled micro grids. This article includes a broad set of technologies in the definition of a smart grid:
1. Any and all technologies that allow for the exchange of information between the power source and end user (e.g. smart meters)
2. Technologies that enable control, management, and coordination of intermittent generation sources (e.g. grid sensors and forecasting analytics)
3. Distributed generation sources (e.g. smaller-scale generation and dis- tributed renewables)
The remainder of the article looks at the potential of these technologies to modify how we think about electricity, and the power it provides to nations and their citizens.
Investment Power in Africa: Where from and where to?
Anton Eberhard, Katharine Nawaal Gratwick
Economic and social development depends critically on infrastructure, for which electricity may be among the most important inputs. Sub-Saharan Africa (SSA) has among the lowest rates of electricity access in the world - less than 30 percent. Furthermore, excluding South Africa, SSA is the only region for which per capita consumption of electricity is falling. The total installed capacity in the region amounts to less than South Korea's, and this limited supply is costly and unpredictable, imposing heavy tolls on social and economic development. It has been estimated that about 7,000 megawatts (MW) need to be added each year (2005-2015) to meet suppressed demand and provide additional capacity for electrification expansion. Such an investment would cost approximately $27 billion per year. Presently, funding to the electricity sector (for capital expenditure) is estimated at just $4.6 billion a year; hence, an annual funding gap of more than $20 billion exists. Public sources - utility income and fiscal transfers - contribute only about one-half of current capital investments, highlighting the urgent need for increased private investment, including public-private partnerships. Across Sub-Saharan Africa, the push towards private investment in electrical generation dates to the early 1990s, but the journey has not been smooth. Significant lessons may be identified, including: understanding the limited pool of investments, together with the importance of public stakeholders in equity and debt alike; the increasing application of partial risk guarantees (PRGs) to mobilize finance; and the emergence of more non-OECD partners. We note a number of success stories, including Kenya, South Africa and (potentially) Nigeria, whose policy innovations have replication potential in other Sub-Saharan African countries and beyond.
Bright Expectations, Tough Challenges: On Iraq's Energy Outlook (PDF)
William Handel, Catalina de la Sota
Fatih Birol is the Chief Economist at the International Energy Agency (IEA) and is responsible for the IEA's flagship World Energy Outlook publication. He is the Chairman of the World Economic Forum's (Davos) Energy Advisory Board and has served as a member of the UN Secretary-General's "High-level Group on Sustainable Energy for All."
The Human Element: Nuclear Power Development in the Middle East
Kevin Massy, John Banks
Most discussions on nuclear power in the Middle East in recent years have focused predominantly on Iran’s suspected weapons program. However, the region is also home to another major nuclear-related trend: it is likely to play host to the first new nuclear energy states of the twenty-first century. While many countries in the broader Middle East have expressed interest in civil nuclear power, three–the United Arab Emirates (UAE), Turkey, and Jordan–have set firm tar- gets for its implementation by the end of this decade. If they are to reach these ambitious goals and if they are to develop and deploy safe, secure, and sustainable civil nuclear power programs, these countries will have to overcome a range of technical, institutional, and, most importantly, human-resource related challenges. Of the countries in the region, the UAE is by far the most advanced in the development of its program. Having made public its interest in civil nuclear power in a white paper in 2008, the country purchased four nuclear reactors the following year from a South Korean consortium and is aiming to have its first reactor connected to the grid in 2017, an extremely ambitious time frame for a newcomer nuclear energy state. Turkey has a long history of attempting to implement civil nuclear power, and its latest agreement with Russia for the provision of four reactors at Akkuyu on the Mediterranean coast is, by some counts, its sixth attempt at a commercial-scale program. However, there is good reason to believe that this time will be different for Ankara; the terms provided by Rosatom– the Russian state-controlled nuclear company that will finance, build, and operate the project–shield Turkey from a large amount of financial–if not operational–risk, and the Akkuyu project is due to be operational by 2020. Like Turkey, Jordan has a public goal of de- ploying its first nuclear reactor by the end of the decade. Having reduced its shortlist of nuclear vendors to two bidders (Rosatom and a French-Japanese consortium led by Areva and Mitsubishi), the Jordanian Atomic Energy Commission plans to make its final decision in time to start construction of its first plant by the end of 2013.
Conflicts, Oil Prices, and International Financial Stability
Hossein Askari
Over the last 100 years, crude oil has been priced between $10 and $30 per barrel (adjusted for inflation, in 2010 U.S. dollars), with the exception of two periods: 1973-1983 and 2001-2011.1 These two periods were both marked by conflicts, upheavals, and disruptions in the Middle East. The resulting oil price shocks were dramatic and led to large swings in current account balances, as oil producers rapidly acquired cash for their increasingly valuable resources. Large current account surpluses signify net annual savings in a country’s transactions with the rest of the world, and large imbalances put stress on the international financial and banking system. These massive surpluses and corresponding deficits played a leading role in the developing-world debt crisis of the 1980s and may have a contributing factor to the global financial crisis of the late 2000s. In this paper, we begin by taking a brief look at the factors affecting oil prices, a subject that is often the victim of popular misconceptions. Then, we turn to a significant result of higher prices, large swings in current account balances, and potential financial crises. We conclude by proposing a change in U.S. and international policies to contain conflicts, reduce violent swings in oil prices, better manage and recycle the current account surpluses of oil exporters, and reduce the likelihood of recurring and severe financial crises.
Sovereign Energy Independence: Properly Understood and Effectively Achieved in the 21st Century
Spencer Abraham, Mark P. Mills
Energy, like food, is a foundational requirement for civiliza- tion. The World Economic Forum’s 2012 Energy Vision Update begins with the observation: “Energy is the lifeblood of the global economy – a crucial input to nearly all of the goods and services of the modern world.” We disagree with the Forum in one respect. Energy is crucial not to “nearly all” but in fact to all goods and services. Ensuring the availability of an economically sustainable and secure energy supply is one of the primary responsibilities of sovereign governments. Energy independence, properly understood, is a central component in achieving both supply and economic security. The policy options for pursuing “independence” depend on the realities of the day. In this paper we will argue that a clear understanding of the landscape is more important than clever policies, and that, in any case, there are precious few options in regards to the latter. We begin by noting that two central features of the global energy landscape are the same now as they have been for decades, even centuries. These are the underlying character of both geopolitics and geophysics. The animating forces in geopolitics have been the same for as long as there have been nation states. National goals, political systems, and social objectives vary widely, and always have. Differences can lead to both unintentional and intentional conflicts. Conflicts are ultimately resolved using the same three tools since time immemorial: business arrangements of mutual convenience, diplomacy, or war. Put simply, people have not changed. Similarly, underlying geophysical realities of the planet remain constant. The asymmetric distribution of easily accessible high-grade resources is incontestably a fact that creates opportunities for economic or geopolitical advantage, or conflict.
A Brief History of Energy: Where We've Come From and Where We're Going (PDF)
Daniel Yergin
To gain further insight into the contemporary global energy schema, the Georgetown Journal of International Affairs meets with Pulitzer Prize winning author Dr. Daniel Yergin who has been described by Fortune as “one of the planet’s foremost thinkers about energy and its implications” to discuss the themes of his latest New York Times bestseller, The Quest: Energy, Security, and the Remaking of the Modern World, and much more.
The Gulf States and U.S. Policy: How Strongly to Push Reform?
David Galbraith
As revolution swept across the Arab world beginning in early 2011, the monarchies of the Gulf Cooperation Council (GCC) appeared largely immune. In Bahrain, the only GCC country where mass protests did erupt, the government suppressed them violently with the political and military support of neighboring GCC countries. This crackdown was a leading exhibit in what observers termed the “counterrevolution.” Yet to think of the Gulf states as immune to unrest ignores the internal challenges that have been inspired by the Arab Spring over the past two years. Although these challenges differed from country to country, three trends broadly hold: they represent an intensification of trends that pre-dated the Arab Spring; except in Bahrain, they have not evolved into broad-based movements that question regime legitimacy; and no regime has chosen to open up meaningful new institutional political space in response. The United States has been criticized for hypocrisy in the wake of the Arab uprisings because it maintains strong alliances with the Gulf monarchies even as it supports democratic transitions elsewhere. However, the United States should not push strongly for systemic political reform across these countries in the absence of broad social mobilization. A more targeted and softer approach, adjusted to the internal dynamics in each country, is the right course.
Clash of Elites: What Lies Behind the Defamation Debates
Mark P. Lagon, Ryan Kaminski
Since Samuel Huntington’s 1993 article warning of inter-civilizational conflict, pundits and policymakers alike have been quick to forecast a so-called “clash of civilizations.” This has become especially common following 9/11, with warnings of a unitary Islam pitted against a unified West. Yet a clear-eyed assessment reveals that the West includes Muslim-majority regions and the often fractious United Nations; this divisive vision is as incorrect as it is unhelpful. In his address to the UN General Assembly in September 2012, President Barack Obama argued that freedom of speech and tolerance transcends civilizational, cultural, and religious fault lines. “Together, we must work towards a world where we are strengthened by our differences and not defined by them. That is what America embodies, that’s the vision we will support,” declared Obama. In direct opposition to those favoring limitations on the freedom of expression or the imposition of blasphemy charges, the president noted, “The strongest weapon against hateful speech is not repression, it is more speech – the voices of tolerance that rally against bigotry and blasphemy and lift up the values of understanding and mutual respect.” Setting the stage for Obama’s remarks was what can roughly be termed as a global panic attack with peaceful, semi-violent, and violent protests about a video spreading from Europe, Africa, the Middle East, and Asia. In the face of the unmistakable energy and vigor associated with protests, however, many were left confused how a shabbily crafted video, Innocence of Muslims, with a skeletal budget, and miniscule opening audience to match, could instigate such a worldwide conflagration.
The Turkish-Kurdish Peace Progress
Michael M. Gunter
During the summer and fall of 2009, the continuing and often violent Kurdish problem in Turkey seemed on the verge of a solution when the ruling Adalet ve Kalkinma Partisi (Justice and Development Party) or AK Party (AKP) government of Prime Minister Recep Tayyip Erdogan and President Abdullah Gul announced a Kurdish Opening. Gul declared that "the biggest problem of Turkey is the Kurdish question" and that "there is an opportunity [to solve it] and it should not be missed."Erdogan asked: "If Turkey had not spent its energy, budget, peace and young people on [combating] terrorism, if Turkey had not spent the last twenty-five years in conflict, where would we be today?" Even the insurgent Partiya Karkaren Kurdistan (PKK) or Kurdistan Workers Party, still led by its imprisoned leader Abdullah Ocalan, briefly took Turkey's Kurdish Opening seriously. For a fleeting moment optimism ran rampant. That optimism, however, would ultimately go unfulfilled. What happened? The Kurdish Opening failed to live up to expectations because of roadblocks it encountered before it had a chance to get off the ground. Decades-old resistance to decentralization and an unwillingness to negotiate seriously with the PKK additionally worked to undermine the stated goals of the Kurdish Opening. This article will provide historical background to the recent efforts as well as a timeline of the government's initiatives and the Kurdish response regarding the Kurdish Opening. The question of why the Opening has failed to date will be examined. Recent developments including the civil war in Syria, which suggest that some possibility for progress on the Kurdish question remains, will also be discussed. Finally, the article puts forth recommendations to facilitate progress on finding a political settlement between the Turkish government and the PKK.
Defending with Declining Means
Thomas X. Hammes
Even as America continues its withdrawal from Afghanistan, a crucial problem is emerging for the U.S. defense establishment. It must meet an increasing variety of threats with decreasing resources. Despite the fervent wishes of those who seek to refocus on state versus state war, the spectrum of conflict continues to expand. Further, defying the Pentagon’s best efforts to fight short, decisive wars, today’s wars are often ambiguous, indecisive, and protracted. While the demands increase, defense resources are being squeezed by three major factors. First, and most obvious, are the looming cuts in the defense budget. Second, is the inability of the Department of Defense (DoD) to control the cost of new weapons systems. Third, is the near doubling of military personnel costs since 2001. Balancing the demands of the expanding spectrum of war with the decline in defense resources represents the fundamental issue for defense planners. To succeed, the Pentagon cannot continue to operate as it has over the last two decades. This article will take a brief look at the expanding spec- trum of threats, as well as the concomitant budgetary pressures that face U.S. defense. It will then address the strate- gist’s fundamental problem of achieving balance among ends, ways, and means. It will close with modest suggestions for how to match today’s declining resources with expanding demands.
Not on Blind Faith: The Risks of U.S. Defense Cuts
Travis Sharp
Washington has failed to have a legitimate debate of the risks involved with budget cuts. This lack of sophisticated discourse about the strategic risks of defense cuts may lead American political leaders to make poor choices that imperil U.S. interests.
The Absent Agriculturalist in International Affairs
A.R. Vasavi
At the high table of international policymaking, no agriculturist sits. Without presence, voice, or representation, a significant proportion of humanity remains uninvited to contribute to those very agendas where their livelihood, life, and future are planned.
Coal Mining in China: The Social Costs
Tim Wright
China's coal industry is central to the state's economic success. However, the industry has been the focus of major social problems-including corruption, work safety, and environmental damage-that need to be immediately addressed by the state.
The Global Online Freedom Act
Ian Brown
The Global Online Freedom Act is one of the most comprehensive legislative attempts to protect online human rights. However, some civil society groups are concerned that certain controls could block the availability of tools useful for human rights activists in affected countries.
Vietnam at a Crossroad and in the Cross Hairs
Robert A. Rogowsky
Vietnam has experienced tremendous economic growth over the past two decades, but a convergence of three conditions—a slow global economy, a young and expanding population, and political tensions with China—presents a challenge to Southeast Asia’s security.
India-Pakistan Trade: Opportunities and Constraints
Kishore C. Dash
Increased bilateral trade can be a significant driver of peace between India and Pakistan. This is in stark contrast to the relative economic isolation that the two countries have pursued for so long.
Russian Arctic Resource Development and Related Policy Considerations
Vlad M. Kaczynski
Russia remains increasingly concerned with Arctic development in terms of off-shore oil and gas exploitation, fisheries and tourism. In order to further economic and military development plans, the state should actively engage in foreign partnerships and emphasize environmental sustainability.
Nukes, Lies, and International Organization
Douglas B. Shaw
A review of The Age of Deception by Mohamed ElBaradei.
Financial Reform, A View from the Trenches
Ingo Walter
A review of The Financial Crisis and the Free Market Cure by John A. Allison.
American Power at Home and Abroad: Success, Failures, and Challenges (PDF)
James L. Jones
In the midst of dynamic geopolitical shifts since President Obama’s first term, former National Security Advisor General James Jones (USMC, ret.) offers insights into the successes, failures, and future challenges for U.S. foreign policy and national security in the 21st Century. General Jones reflects on the role of the National Security Council in the Obama Administration, the fate of Afghanistan after 2014, the future of NATO, and the “pivot” to the Asia-Pacific region in this wide-ranging interview with the Georgetown Journal of International Affairs.
Flower of the Burma Spring (PDF)
Michael Madoff
In 2012, the author traveled through Burma to take the pulse of a country in the midst of hopefully a transition to democracy and reintegration with the international system.