International energy policy

International energy policy – before it became international 

Back in the day, energy policy was mainly a national topic and individual countries managed their energy supplies without any significant international cooperation. This is no longer the case. Today, energy policy is international, because energy worth billions of dollars moves across national borders while markets have replaced monopolies and decisions about the energy policy in one country can have a huge impact on neighbouring countries, regions or even the rest of the world.

For this reason, energy policies are discussed and coordinated to a great extent at the international. In the case of Denmark, this of course happens first and foremost in the EU, but also in a number of other international fora. 

IEA – the International Energy Agency

One of the most important international fora for analyses and discussions about energy policy is the International Energy Agency (IEA). The IEA was founded in 1974 following the first great oil crisis, which hit the economy in the western world hard. To avoid similar crises in the future, the OECD-countries established the IEA as a forum to cooperate on energy policies, primarily in order to build up oil supplies to avoid getting hit as hard by future cuts in the oil supply. 

The IEA was therefore originally focused almost solely on oil supply security, but as the global energy agenda developed, the IEA changed significantly. Today, the organisation has a much wider area of interest than the oil supply security and is the most important intergovernmental forum when it comes to energy policy. It is also the international energy community’s most dominant think tank. 

The IEA’s analyses

The IEA conducts a series of analyses across the energy policy spectrum on an ongoing basis via an international secretariat with approximately 200 people. They look at the security of supply as well as economic, technical and environmental issues related to the production and consumption of energy.

The IEA evaluates the market situation within coal, oil, gas, renewable energy and energy efficiency on an ongoing basis. A number of the organisation’s analyses can be downloaded for free on the IEA’s homepage while other publications must be purchased.

The IEA’s flagship publication is the World Energy Outlook, which is published each year at the beginning of November and aims to provide an overview of the entire global energy situation today and perspectives for the coming 25 years. The World Energy Outlook is approximately 700 pages long and has developed into a regular bestseller, firmly setting the agenda within the international energy policy community – a sort of bible for the energy community, which portrays current tendencies and points to future challenges.

The IEA’s technical analyses are discussed by the secretariat and the member states in technical committees while they are being produced and once they are complete. This ensures that the IEA’s analyses are both neutral and technical, but at the same time based on input from the energy political realities in the member states. The Energy Agency represents Denmark in a number of the IEA’s technical committees.

Denmark, IEA and the new political energy agenda

Denmark has been a member of the IEA since the organisation was founded in 1974.  It has a total of 29 members, which all are members of the western countries’ organisation for economic cooperation, the OECD. When the IEA was formed, the member states all had in common that they together accounted for the majority of the global economy and, as such, the global energy consumption. At the same time, their energy consumption primarily was also primarily based on imports from other countries, especially the oil-producing countries. The oil-producing countries had organised themselves in OPEC and the IEA could therefore be seen as a counterpart to OPEC.

The global economic world order has changed immensely since the 1990’s as a consequence of the significant economic growth in a number of large emerging markets not least China. As such, the energy and environmental world order have also changed. It is no longer the IEA members alone, which account for the majority of the world’s energy consumption and the related economic and environmental challenges.

Within recent years, the IEA has therefore developed close relations to a series of so-called partner countries in emerging markets such as China, India, Indonesia, Brazil, South Africa and Mexico. It simply makes more sense to discuss global challenges related to energy when representatives from the emerging markets are at the table.