The new rush to discover and exploit hydrocarbon resources in West Africa, and particularly in the Gulf of Guinea, has raised hopes in the affected countries for new petroleum wealth and economic development. History shows, however, that major oil and gas discoveries have a very mixed record, at best, in terms of societal gains and political stability. This article therefore assesses the macroeconomic and governance implications of the recent oil and gas rush in West Africa. Clearly, sound management of the resource revenues will be crucial in national efforts to tackle poverty and promote socio-economic development. While there is a large body of literature available on the issues and best practices related to oil and gas resource management and the design of associated institutions and financial mechanisms, the article fills two gaps. First, while Nigeria and Angola have received ample attention, this article focuses on some smaller countries in the Gulf of Guinea that have only recently emerged as oil and gas producers, such as Liberia, Niger and Sierra Leone. Secondly, it highlights implications for two major socio-economic characteristics of these emerging resource-rich states: (1) energy poverty; and (2) agricultural dependence and lock-in on single crops. The early evolution of institutions to manage the newfound revenues is found to be critical to long-term prosperity or instability. A legacy of beneficial or problematic social impact of new resources hinges on the success in using the new petroleum resources to establish an ‘enabling environment’ where resource wealth is seen across society as a means to build stable institutions, reduce social and economic inequality and drive national prosperity.
Together with Dries Lesage, I have written a piece on the role of the OECD/IEA in global taxation and energy governance. The piece is part of a special issue of Global Governance on regime complexity. The article argues that, although the OECD system is often portrayed as an agency in crisis, the organization seems to thrive when it comes to both global energy and global taxation governance. We suggest the OECD’s distinct working methods, its close ties with the G8, and path dependency loom large in explaining this outcome. At the same time, we urge the OECD to consider expanding its membership towards the largest emerging economies for reasons of legitimacy and effectiveness. Learn more.
From climate change over peak oil to the geopolitical scramble for the Arctic, there are ample signs that a global energy crisis is unfolding. The sheer scale and urgency of this looming crisis calls for international coordination. Yet, even a cursory look at the existing international energy institutions leads to a sobering conclusion: the global energy governance architecture is weak, fragmented and incomplete. This policy brief discusses both the flaws in the multilateral energy architecture and some emerging ideas to strengthen it, such as the proposal for a Sustainable Energy Trade Agreement and the new American disclosure rules for the extractive sector. It is available on the website of the Egmont Institute, Brussels. You can read it, by clicking here.
Founded in response to the 1973 oil shock, the International Energy Agency (IEA) is arguably still the most important multilateral organization for energy-importing countries. Yet, the global geopolitical landscape has changed considerably since the IEA’s creation. The rise of new energy consumers, new energy-related challenges and new international energy forums prompt a rethink of the agency’s current role and institutional design.
This article seeks to contribute to the recent debate on the future role of the IEA by examining specific drivers, avenues and constraints for institutional reform. The method used is SWOT analysis, which allows to summarize the key factors emanating from an assessment of an organization’s internal characteristics (strengths and weaknesses) and its external environment (opportunities and threats).
Building on this SWOT analysis, the article formulates a strategy for the IEA to remain the focal point in global energy governance. Key elements of this strategy include: stronger engagement with new consumers, rapprochement with OPEC, becoming a leading voice in the energy transition, and changing the agency’s internal governance practices.
Worldwide – and that includes much of the emerging economies – there is a widespread conviction that regardless of any controversy on climate change or “peak oil”, it is vitally important to boost all forms of sustainable energy as much as possible.
To achieve this on a global scale, three years ago the International Renewable Energy Agency (IRENA) was founded in Germany. If you have not heard much of IRENA so far, there is a reason: the organization got off to a rocky start, complete with a financial and managerial crisis.
However, under the leadership of its new Director-General, the dynamic Kenyan lawyer Adnan Amin, IRENA has quickly recovered in recent times. It is increasingly becoming recognized in international forums as the major international voice for renewable energy policy and is launching major new initiatives, such as the Global Wind and Solar Atlas.
Still, one may wonder whether we really need another international energy organization in an already crowded policy field. I had an elaborate exchange of views with Adnan Amin in London – with some surprising results. It turns out Amin is a man who very much has his eyes on the ball: he is highly ambitious about spreading the renewable energy gospel, but at the same time highly pragmatic – and impatient to get real results.
You can read the interview by clicking here.
Jeff Colgan, Robert O. Keohane and I have written an article on the historical development of multilateral energy institutions that has just been published in the June 2012 issue of The Review of International Organizations. The paper applies the concept of “punctuated equilibrium” from evolutionary biology to institutional development in the energy regime complex from 1950 to 2010. We empirically demonstrate that the energy regime complex has followed a pattern of relatively static periods punctuated by abrupt upheavals driven by dissatisfaction and shocks, and that the nature of innovation—that is, whether it is path-dependent or de novo—depends on interest homogeneity among major actors. Learn more.