Brief Description of the Project
The Centre on Asia and Globalisation (CAG) at the LKY School of Public Policy will use its support from the MacArthur Foundation’s Asia Security Initiative to investigate two key areas: improving energy governance, and creating an energy security index.
The first research area will focus on issues of cross-border energy governance at multiple levels. At the global scale, the CAG research will take place in connection with the broad CAG agenda on global governance. Through in-house research and commissioned papers, CAG will explore the fractured and complex landscape of global energy governance, which includes both formal inter-governmental organizations and governance processes (such as the international Energy Agency; the International Atomic Energy Agency; the World Trade Organisation and relevant trade rules; and bilateral investment treaties) and the rapidly growing medley of alternative processes (public-
private partnerships such as the Renewable Energy and Energy Efficiency Partnership (REEEP); and Global Action Networks (GANs) of non-state actors, etc). This landscape is being dramatically and rapidly altered by growing pressures to transition to a low-carbon economy and by geopolitical tensions over access to energy supplies. At the regional scale, relevant issues include the emerging architecture of energy agreements crafted by the Association of Southeast Asian Nations (ASEAN), with a special emphasis placed on the role of hydropower expansion and the Mekong River Commission and plans for the establishment of regional electricity transmission grids.
The second component will focus on creating an Energy Security Index to explore the potential for developing a rigorous yet user-friendly set of metrics comparing Asian country performances in achieving energy security. This component of the project has three central foci: (1) exploring the different dimensions of energy security, (2) correlating these dimensions with appropriate metrics, and (3) identifying the feasibility and challenges associated with collecting data related to these metrics for the ten ASEAN members as well as China, India, Japan, and South Korea. The research will work towards the ultimate goal of creating an Energy Security Index, which could be utilized to disseminate information on energy security to policymakers and the public and to identify the best practices relating to energy policy within the region. The research will include extensive travel to collect data from government ministries and energy institutes throughout the world and the hosting of two workshops.
Objectives and Approach
The grant enables CAG to build upon and expand its current work on energy security in three key ways. First, it will greatly expand the Centre’s current research on global and regional energy governance and facilitate the creation of a network of researchers in this topic across Asia and North America. Second, the Centre will develop a new program of research focused on Asian innovations in energy governance. Thirdly, the Centre will explore the different dimensions to energy security, associated metrics, and the challenges of compiling this data into a usable index.
Global and Regional Energy Governance
Asian Innovations in Energy Governance
The Centre will carry out extensive research, both in-house and commissioned, on global energy governance, with a focus on the existing and potential roles of Asian governments in the relevant institutions, including:
- Formal institutions of energy governance: Formal institutions of energy governance are unlikely to measure up to the increasing scale of the governance challenge. The global climate regime is embryonic, weak, and insufficiently institutionalized. Formal organizations relevant to energy security – such as the International Energy Agency, International Energy Forum, Energy Charter Treaty – add up to fragmented governance at best, each with partial scope, limited membership, or weak authority.
- Institutions that indirectly govern energy: A second set of institutions have as their primary focus other issue areas that indirectly impact energy. These include:
- Trade and investment rules including the WTO and bilateral investment treaties;
- G-8 and G-20 mechanisms of economic and political coordination;
- Public financial institutions such as Multilateral Development Banks and Export Credit Agencies that influence public and private financial flows; and
- Nuclear proliferation regime;
Throughout, the research will examine the views of Asian scholars and policymakers on the roles their countries do and should play in inter-governmental organizations with regard to energy policy.
Despite the generally bleak state of energy governance throughout the region, some interesting experimentation is beginning. There is a wealth of emerging practice within regulatory institutions on how to advance and implement sustainable energy solutions, and citizens and policymakers in these countries are increasingly looking at the regulatory process for electricity as an important mechanism to address inevitable tradeoffs. The MacArthur grant will make it possible to conduct or commission case studies on these experiments, and to hold regional workshops on the findings.
One case study will investigate the Mekong River Commission (MRC) and its role in regulating the use of the Mekong River with regard to its potential for hydroelectric power. The MRC case study highlights the role of regional governance mechanisms and their ability to address the water-energy nexus, especially the critical challenges posed by the unequal use, allocation and distribution of water among the six riparian countries. A second set of case studies focuses on ongoing and proposed regional power grids and electricity trading in the Greater Mekong Subregion (GMS) Regional Cooperation Program and the Central Asia Regional Cooperation Program (CAREC).
These studies hope to provide recommendations on strengthening governance mechanisms where they already exist, or introduce good governance practices where these are absent. A final case study focuses on the CAREC Members Regulatory Forum (CMERF) which aims to introduce market-based reforms to rationalize the electricity industry in Central Asian countries, overcome commercial failures, and provide a governance framework whose core feature is a partnership between the public and private sectors.