from Energy, Security, and Climate and Energy Security and Climate Change Program

The International Energy Agency’s Hybrid Model

August 24, 2016

Blog Post
Blog posts represent the views of CFR fellows and staff and not those of CFR, which takes no institutional positions.

This guest post is co-authored by Stewart Patrick, senior fellow and director of the International Institutions and Global Governance program at the Council on Foreign Relations, and Naomi Egel, former research associate at the Council on Foreign Relations and doctoral student at Cornell University. 

International institutions created in the twentieth century face the daunting challenge of remaining relevant as the geopolitical landscape shifts. This reality is abundantly clear in the energy field, as the International Energy Agency (IEA)—formed by Western countries in response to OPEC’s 1973 oil embargo—finds its membership less and less representative of global energy consumption. In a recent Foreign Affairs article, we argue that the IEA’s outreach to nonmember states, especially rising powers—while stopping short of offering membership—is a wise approach that could pay economic, environmental, and geopolitical dividends for the United States and other IEA members.

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Diplomacy and International Institutions

To join the IEA, countries must hold and maintain emergency oil stockpiles equivalent to 90 days of net imports. Even more demanding, they must also be members of the OECD—meeting all the hoops and hurdles that status requires. Recognizing the growing importance of countries outside its ranks, the IEA has developed multiple programs to strengthen partnerships between the agency and nonmembers. These range from limited technology sharing arrangements to the deepest level of partnership—known as association agreements. These agreements allow select nonmembers—at present China, Indonesia, and Thailand—to participate in many IEA meetings and secure the agency’s technical assistance in improving their own energy security.

While these agreements fall well short of full membership (and emerging powers are not exactly banging on the IEA’s door to be admitted as full members), they represent the best way forward for global energy governance. As we describe in the article, these partnership arrangements bring current IEA members tangible economic, ecological, and geopolitical benefits:

On the economic front, by improving the accuracy and sharing of data on national energy production and consumption and by promoting the gradual creation of fuel stockpiles upon which countries can draw in the event of unexpected supply interruptions, the IEA’s closer association with rising powers should work to make the world less vulnerable to supply and price shocks.

Similarly, the IEA’s outreach efforts reinforces the agency’s efforts to combat global warming and its role as a hub for promoting clean energy technologies, including in some of the world’s major greenhouse gas emitters. Drawing on its analytical strengths, the IEA should provide technical assistance and training to help emerging economies measure progress toward their emissions reductions targets. It should also promote research and development for clean energy, especially through its energy technology initiatives, which involve both member and nonmember countries, as well as the private sector.

Finally, as we note:

The association agreements could even pay geopolitical dividends by helping embed rising powers within the liberal order’s existing institutions. That is especially important with respect to China, as the drama over the establishment of the Asia Infrastructure and Investment Bank demonstrated. Indeed, when Beijing assumed the chair of the G-20 in December 2015, senior U.S. officials expressed anxiety to one of us that it might exploit the opportunity to create an alternative Asia-centered, multilateral energy organization—perhaps even launching it at this September’s G-20 summit in Hangzhou. China’s association agreement makes this scenario less likely, and it will help acclimatize Chinese officials to greater transparency and information-sharing in the energy sector.

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Diplomacy and International Institutions

Still, it is not a given that the IEA will reap the potential benefits of these outreach agreements, which are a significant departure from the agency’s traditional priorities. At the end of the day, the IEA remains a membership organization, and the scope and depth of its outreach agenda will reflect the preferences of its own members rather than its secretariat. The agency is making a laudable effort to adapt to a changing energy landscape and increase its relevance to emerging powers, without sacrificing its status as the world’s premier source of authoritative data and analysis on energy matters. But the success of these experiments will depend on whether its members provide the agency with the budget and personnel it requires to fulfill a more ambitious agenda. And it will require discipline on the part of the IEA itself in setting priorities and defining goals, so that it avoids accusations of mission creep. . Expanding training programs and new technology initiatives should not diminish the agency’s focus on producing authoritative data and analysis.

The IEA’s embrace of nonmember countries provides a fascinating case study of what is a recurrent challenge in contemporary global governance: Namely, how can international institutions adapt their membership to a changing international order while still preserving their core competencies and the goals of their members?

Still, as we conclude:

The IEA’s experiments with partnerships with nonmembers and its emphasis on flexibility are a valuable primer for international institutions seeking to remain relevant. The agency’s approach will help member states—including the United States—promote the rules and norms underpinning the organizations they established and bring rising powers into the fold.

Read the full article here.