Global Table

BMW-Stiftung Herbert Quandt

• Publisher: Verlag Herder
• Year: 2016
• ISBN:
  9783451809484
• Edition: 1
• Topic: Politica e relazioni internazionali
• Subtopic: Politica pubblica

Der BMW Foundation Global Table versammelt Entscheider aus Europa und den neuen Gestaltungsmächten zu einem sektoren- und generationsübergreifenden strategischen Dialog. So soll ein stärkeres Bewusstsein für die Bedeutung gemeinsamer Führungsverantwortung bei der Lösung globaler Herausforderungen geschaffen werden. Fernab herkömmlicher Differenzen findet hier zwischen Entscheidern aus Europa und den emerging economies Dialog auf Augenhöhe statt, bei dem die Beteiligten gemeinsame Interessen und Konvergenzräume ausloten, statt sich auf vorgefertigte Meinungen zu konzentrieren."Looking at these new questions of order, one thing stands out straight away: they all transcend boundaries. They transcend national borders, and they transcend sectoral boundaries. The debate about the future of the international order is a debate in which foundations, particularly those operating internationally, play a major role. "Frank Walter Steinmeier, Minister for Foreign Affairs, Germany"In order to find sustainable solutions for today's complex issues, big corporations need to assume social and environmental responsibility and engage in cross-sector dialogues like the BMW Foundation Global Table."Norbert Reithofer, Chairman of the Supervisory Board, BMW AG, Munich, Germany"This book should be read by anyone interested in a true and trustful dialogue between Europe and the emerging powers."Norbert Röttgen, Chairman, Foreign Affairs Committee, Deutscher Bundestag, Germany

1

Energy: From Independence to Interdependence

An International Process Full of Energy

by Julian Popov, Chairman, Buildings Performance Institute, Brussels Former Minister of Environment and Water, Bulgaria, 2nd and 4th Global Table & Abdullah M. Al-Shehri, Governor, Electricity & Cogeneration Regulatory Authority (ECRA), Saudi Arabia, 4th Global Table

Energy security is an elusive concept. Oil and gas importers see it mostly as security of supply, while exporters see it as security of demand. Others focus on affordable access to energy for all or on environmental sustainability for generations of use.

Whatever approach we take, it is critical to have an adequate international energy security dialogue based on transparency and trust. Otherwise countries will interpret energy security primarily as energy independence, act as energy islands, and try to secure full supply of energy for themselves inside their national borders. The result could be expensive overcapacity that cannot pay for itself, that slows down technological and economic progress, and either leads to excessive political distortion of the markets or to large stranded assets that should be written off.

But how do you build trust in such a competitive, politically charged, and often unpredictable sector like energy?

Building trust: Julian Popov at the 2nd Global Table in Italy, where particpiants discussed the international ramifications of energy security.

We should first recognize that the nature of energy is changing. We used to divide countries broadly into energy producers, energy consumers, and transit countries. Energy producers used to be blessed with excessive resources, transit countries with favorable geography, and energy consumers used to be dependent on producers and transit routes. This division is increasingly being challenged. Energy consumption in traditional producers like Saudi Arabia, Iran or Algeria is growing steeply. BP, for instance, is expecting that primary energy consumption in the Middle East, a region which we associate primarily with energy production and export, will grow by 77 per cent by 2035.

Open dialogue on long-term energy policies: Abdullah M. Al-Shehri at the 4th Global Table in Lusławice, Poland, June 2015.

Energy producers used to treat energy as a cheap domestic resource. Not anymore. More and more traditional energy producers are taking steps to remove energy subsidies, introduce market prices, and increase energy efficiency – policies that are more typical of energy-consuming countries.

Traditional energy consumers are also turning into key producers. The U.S. shale revolution is only one example of the uncertain balance between consumers and producers that could change in the space of a few years.

Renewable energy is transforming the old division as well. In the first half of 2014, 13 percent of electricity in Germany came from wind energy alone. Denmark, a country that in the 1970s was almost entirely dependent on imported energy, is now the only EU country that is a net exporter of energy and often generates more than 100 percent of its electricity from its wind power farms.

Advances in energy efficiency are also affecting the traditional energy import-export relation. Highly efficient buildings could be much more easily heated with locally produced renewable electricity and supplied with hot water from solar collectors. With the introduction of the Near Zero Energy Buildings standard for new buildings, the European Union will change the view that gas is the best solution for heating.

These trends require different governance from what we have now. A simple producer-consumer relationship can no longer guarantee our energy security. What we need is a new, inclusive international forum to share and debate the increasing complexity of international energy interdependencies and policies.There are three things that such a forum should avoid.

First, it should not be led or dominated by a single country or a block of countries. It will not be a problem if it is initiated by a few, but it must not put some ahead of others.

Second, it should not have a global ambition. Global energy security is a noble objective, but it would be impractical to try to bring everybody around the table.

And, third, it should not aim at legally binding decisions. There are plenty of bodies, such as the World Trade Organization, the Energy Charter or the Energy Community, that are doing an excellent job developing legal rules or enforcing compliance in the energy sector.

What is missing from the international energy scene is an open dialogue on long-term energy policies. The European Commission could initiate it for two reasons. First, the European Union is the largest energy importer in the world. The changing energy realities might disrupt its position as a buyer. It would be good if the EU developed its changing energy import strategy in dialogue with the main current exporters. And it is important for the establishment of a proper energy security forum to be an inclusive process from its inception. Second, the European Union is in the process of revising both its energy and foreign affairs policies. It would be wise if the EU from the start integrated an open energy policy dialogue into its energy security and foreign policy. It would be a mistake not to do so.

The fact that the foreign and the energy policies of the EU member states are mostly, though not completely, a national rather than a EU domain could be an advantage rather than a problem. That puts the European Commission in a better position to be a facilitator rather than a leader or a dominant player.

The rapidly transforming energy sector could be steered in a direction of prosperity for all. Failing to do so could lead to tensions and confrontation that could easily leave the realm of energy trade and spill over into international relations and security. ■

“What we need is a new inclusive international forum to share and debate the increasing complexity of international energy interdependencies and policies.”

Energy Security First

by Janusz Reiter, Chairman of the Board, Center for International Relations, Warsaw, 1st and 4th Global Table

Europe is taking a crash course in strategic thinking. In the East, it has been trying to find a common response to the war in Ukraine, more successfully than many would have expected. It is also dealing with the dramatic refugee problem from the South. In both cases Europe is learning that if it does not go to the challenges and conflicts in its neighborhood, they may get closer to Europe or even become an internal problem. The gap between its internal power and its external influence threatens to make Europe dysfunctional. In international relations, Europe increasingly faces the famous challenge that if it is not at the table with the other powers, it may end up on the menu. That could easily happen with regard to European energy policy.

The European Energy Union is going to fix the fragmentation of the EU energy markets, the source of economic inefficiencies and political weakness. However, as Julian Popov and Abdullah M. Al-Shehri (page 40) rightly noted, the goal is not to establish European energy autarchy as an alternative to national or local ones. We can use the Energy Union for our neighborhood policy as well as for our international security strategy. Ukraine is an example of a country that should be involved in our energy security thinking, and not only as a country in need. It can contribute to Europe’s energy security as a supplier of electricity, including zero emission power, an operator of gas storage facilities or a transit country for gas infrastructure projects.

Strengthening Ukraine’s energy security will certainly help stabilize Europe’s security environment. After the experiences of the recent crisis, nobody can seriously doubt that the immediate neighborhood matters to Europe. But what would be the added value of a stronger EU presence in regions like Central Asia?

The economic interests in the resource-rich region are obviously part of the answer. But Europe also has a strategic interest in Central Asia. The region can either add to global security tensions, including international terrorism, or it can contribute to the solution of the security problem. Furthermore, the EU can play an instrumental role in managing and mitigating the regional competition for power and influence. Can that be done without the United States? Energy security policy could be a vehicle of Europe’s strategic interests, but it should not be an accelerator of naive great power ambitions.

The EU as a provider of public goods: Janusz Reiter, former Polish Ambassador to Germany and the United States, at the 4th Global Table in Lusławice.

Since the end of World War II, the United States has been the only provider of so-called public goods in international relations. It is getting more and more overstretched in this role but remains indispensible for global security policy. Europe will have to learn to play the role of another provider of public goods but not in order to replace the United States. Ask decision-makers in the Middle East or East Asia whether they can imagine their region without the United States. The answer, whether they like it or not, will clearly be no. Would they welcome a greater European presence in their region? Their answer will be yes.

“Europe as a major economic power can play a key role in establishing an international energy security system.”

Energy is a strategic asset, not only for those countries who hold major deposits of energy resources. Europe as a major economic power with slowly growing political influence can play a key role in establishing an international energy security system.

This is why the BMW Foundation Global Table process comes at the right time and addresses the relevant questions. And this is also why it should be continued. ■

The Great Sino-Russian Expectations: An Opening for Europe and Eurasia

by Inna Veleva, Project Manager, BMW Foundation, Berlin & Liudmila Filippova, Program Manager, Russian International Affairs Council, Moscow, 4th Global Table

Exploring opportunities for cooperation between the EU and the Eurasian Economic Union: Inna Veleva at the 1st Global Table in Hangzhou.

Despite Russia’s publicly orchestrated pivot to Asia, which was accompanied by various rhetorical commitments and diplomatic gestures, the Sino-Russian relationship has taken a downturn following the sharp devaluation of the ruble and China’s stock-market crash. The subsequent disillusionment among China’s and Russia’s elites creates a window of opportunity for Europe to revisit its strategy towards the Eurasian Economic Union and to engage all major stakeholders from Russia and the Central Asian republics in a transparent and inclusive political dialogue on a level playing field.

Russia’s pivot to Asia: Much ado about nothing?

During the 7th BRICS Summit, which was held jointly with the 15th Shanghai Cooperation Organization Summit in the geographical heart of Eurasia – in the Russian city of Ufa – both China and Russia again reaffirmed their shared intent to work towards a new, multipolar system of international relations. Though elaborately staged on every level, their interest in challenging the superiority of the Western-dominated global financial order is not enough, however, to translate the emerging powers’ common narrative of a new power-sharing arrangement into reality. Particularly with tumbling oil prices and deflating housing bubbles pushing many advanced economies into recession, a collaboration that is based on pragmatic considerations is exposed to higher volatility and faces a greater risk of being trumped by short-term priorities and changing circumstances. Moreover, what is being perceived as a standstill illustrates the substantial gap between publicly communicated intentions and actual implementation.

A year after Gazprom and the China National Petroleum Corporation (CNPC) closed the $400 billion deal for the construction of the Power of Siberia pipeline, the collapse of hydrocarbon prices and China’s decreasing demand for natural gas, together with greater availability of liquefied natural gas (LNG) inside China, are seriously threatening the implementation of what had been labelled an “historic” agreement. Furthermore, talks on the development of the Power of Siberia-2 pipeline have reached a stalemate, and their breakdown seems imminent. In addition to the impasse in energy cooperation, the volume of Chinese direct investment in the Russian economy has decreased by 20 per cent over the first months of 2015, as announced by Zhi Lin, the Director of the Department for Eastern Europe and Central Asia at the Chinese Ministry of Commerce: “As you know, the ruble rate fell in the first half of the year, it is unstable, all this affects the real activities and psychology of investors.” However, the investment outflow did not prevent the volume of RUB/CNY trade from skyrocketing 400 per cent during a 12-month period, as Moscow started to accept payments for its hydrocarbon exports to China in yuan. Amid the news that China has overtaken the U.S. as the world’s leading importer of crude oil, Russia recently surpassed Angola as the second-largest oil supplier to China, and, in May, even outstripped Saudi Arabia in the amount of oil it supplies to China.

By prolonging sanctions over Ukraine, EU foreign ministers have undoubtedly exacerbated Russia’s diplomatic and economic isolation, pushing the Kremlin towards an even greater dependence on China. However, Russia’s initial euphoria at “turning east“ appears to have evaporated following the precipitous crash of China’s stock market and signs of economic slowdown in China, and the optimism regarding a possible alignment of China’s Economic Silk Belt with the Eurasian Economic Union has given way to growing disappointment. The financial lifeline for Moscow – Chinese loans to Russian companies and investments – could be running dry, confronting Putin’s administration with an additional significant challenge. With the Russia-China axis being...

Table of contents

• [Title page]
• [Imprint]
• The BMW Foundation
• Introduction
• 1st Berlin Global Forum
• 1. Energy: From Independence to Interdependence
• 2. The New Silk Road: Game Changer for Inclusive Diplomacy
• 3. Resources and Sustainable Development
• Impact of the Global Tables
• Participants Global Tables 1-5
• List of References