Energy provision

Abstract

Appears in Jan Klabbers (ed), Cambridge Companion to International Organisations

Full text

Energy Provision
Volker Roeben
I. Concept and Problematique
Energy, in the broad sense of all sources and forms of energy, fossil, renewable, electricity and
fuels, is a late-comer to the field of international organization. The twin principles of permanent
sovereignty of producer states over their natural energy resources and the sovereignty of
consumer states over their energy mix seemed to remove this matter from the realm of
international law and to allocate it to domestic law. The organizational architecture reflects this.
Different from other functional systems such as health or trade, there is no single, central
international organization of universal membership for the energy sector. It is decentralized-
plural. This plurality has historically developed. It has its origin in producer and consumer states
organizing their cooperation in select membership organizations. Organizations and institutional
arrangements deal with international pipelines and energy networks, fossil fuel resources, and
nuclear energy, and only recently with renewable energy. These are typically limited membership
organizations which often escape public scrutiny. This layer of the organizational ‘geology’ of
energy was marked by an antagonism for which OPEC and IEA stood and to an extent still stand,
serving the perspective of national energy security. The picture of antagonistic interests and a
plural, dccentralised organizational architecture is changing fast, though. This chapter describes
how international institutions have expanded their hold of the provision of energy. It is about
change in international organization, considered through the lens of energy provision.
Provision of energy has only recently arisen as a common concern of the international
community of states. This concern is a focus of UN Agenda 2030 and the 2015 Sustainable
Development Goals.1 Goal 7 defines the priorities for the provision of energy. It is complemented
by Goal 13 on protecting the climate, demanding limiting carbon emissions and hence fossil fuel
consumption. The goal, which is reconfirmed by a range of international and regional strategy
documents, has the strong normative impetus of a universal social welfare objective. Moving
beyond the hitherto dominating rationale of security of supply (in oil and gas) defined from the
perspectives of producer and of consumer states, the goal embodies the idea that all have access
to sustainable, reliable and affordable energy, which is broken down into semi-quantified targets
on renewable energy sources (RES) and energy efficiency. This means a pledge that energy be
reliably available for consumption by all individuals in all states and that there should be a
dynamic substitution in the sources of energy from fossil to RES and hence electrification. The
international community of states assumes responsibility for designing a governance scheme
covering the global value chain of energy and coordination between all states – producers and
1 UN Doc. A/RES/70/1 - Transforming our world: the 2030 Agenda for Sustainable
Development.

consumers - to achieve those goals. This responsibility has been acted upon in the 2020 global
crisis and the unprecedented fall in the demand for energy. This collective responsibility
complements the responsibility of each state towards its people to provide it with energy.
Responsibility for the actual delivery of such energy rests with state-owned enterprises, private
multinationals, and generally the private sector in liberalized regimes. It is widely recognized
that energy today is in transition globally, increasing the share of renewables and electricity and
new kinds of energy in final consumption over fossil fuels, while at the same time meeting
growing demand for energy worldwide. This transition is not a market-response. It is primarily
driven by states’ collective policies and evidences their effectiveness.
This common concern leads to a realignment of the extant decentralized-plural architecture,
indicating autonomy and agency. The analytic device to make this realignment visible is the
meta-norm. Meta-norms provide institutional actors with orientation in the management of
complex governance schemes. The goal of sustainable energy has emerged as such a master-
norm for this architecture and is driving a realignment across the organisational set-up. This
realignment is the result of separate autonomous processes responsive to the normative impetus
of the meta-norm for energy provision in the twenty-first century. In these processes, each
organization reinterprets its mandates, develops novel functions and makes available suitable
instruments to achieve these. This has affected extant specialist organizations, has brought in
new representative institutions of global reach, and has led to deepened cooperation on energy
policies. Whatt emerges is a much more streamlined architecture, that provides for infrastructure-
based trade, standards, and transboundary regulation. Eventually, this realignment is leading to
institutionalized governance of the entire energy value-cycle, from generation through
transportation to the consumption of energy.
As part of this realignment, a function of global governance of energy has been forming, making
use of modern institutional developments and institutional models. These ensure representation
in the decision-making of all or most relevant states on how to balance supply and demand in the
transition to a sustainable and reliable global energy system. Representative institutions, the
G7/G20 and the meeting of Parties to the Paris Agreement, have now assumed universal
governance functions for the global energy economy and the transition away from fossil fuels.
Under the auspices of ECOSOC, the High-Level Political Forum (HLPF) reviews the high-level
SDGs and their implementation to this effect. The specialist international organizations become
mandated with initiating such action and then also with follow-up and implementation. This
leads to accountability of states for national energy policies. The mode of operation and the
instruments that international organizations have in the energy sector have evolved to this effect.
This mode aims to strategically direct national policy making, with instruments deployed ranging
from decision-making with recommendatory or binding quality to expert advice to best practice
exchanges. The interlocutors are not just governments but also the private sector.
Regionalization is a third trend. Regional organizations, such as the European Energy Union,
provide for the comprehensive institutionalization of energy regulation within a transboundary
energy markets and with interconnected infrastructure grids.

II. The Decentralized Architecture of Energy
The historically evolved organizational architecture of energy is decentralized and plural. It
covers segments of the energy value-chain primarily in oil and gas and contains a range of
organizational models.2
International trade in energy is necessarily bound to cross-border infrastructure, setting it apart
from the trade in other commodities. Transboundary pipelines are essential infrastructure that
transport oil and gas from the centres of production to the centres of consumption. This
infrastructure is subject to a multi-layered regime. This regime first comprises intergovernmental
agreements (IGAs) on the construction and operation of the pipeline. Such IGAs are bilateral,
serially bilateral, or multilateral depending on the number of states through which the pipeline
passes. An example of the latter is the Trans-Adriatic pipeline project that forms part of the
Southern Gas Corridor transporting gas from the Black Sea to Europe.3 Other pipeline
agreements regulate the construction and operation of cross-border pipelines in the territories of
the contracting states in general, setting forth the principles of non-discrimination with regard to
their use and of non-interference with the flow. The IGA sets out the basic obligations of the
sponsoring states and also the applicable international law, in particular the international law of
the environment, including the treaty and customary obligations on environmental impact
assessments for transboundary projects.4 In addition, host government agreements under
domestic law may be concluded between the state and the pipeline operator, the unit that actually
runs the pipeline, which may be a company under foreign domestic law with multiple
shareholders. Finally, transport through a pipeline usually is subject to contract between the
pipeline operator and the owner of the oil or gas.5 The framework for pipelines, then, may be
labelled as hybrid, comprised of an international and a domestic law element.6 The sector lacks
transparency as IGAs and host state agreements may not be published. International
organizations have a role in providing harmonized and transparent standards and realigning the
2 K. Meyer, ‘The Architecture of International Energy Governance’, (2012) 106 Proceedings of
the American Society of International Law, 389; R. Leal-Arcas & A. Filis, ‘The Fragmented
Governance of the Global Energy Economy: A Legal-Institutional Analysis’, (2013) 6 Journal of
World Energy Law and Business 348.
3 C. Vlachtis, ‘Trans-Adriatic Pipeline Projects – Agreements and Energy Charter Model Texts’,
(2016) 38 Comparative Law Yearbook of International Business 185.
4 D. Azaria, Treaties on Transit of Energy via Pipelines and Countermeasures (Oxford
University Press, 2015). Submarine pipelines are governed by the law of the sea: see M.
Roggenkamp ‘Petroleum Pipelines in the North Sea: Questions of Jurisdiction and Practical
Status’, (1998) 16 Journal of Energy and Natural Resources Law 92.
5 K. Talus, S. Looper & S. Otillar, ‘Lex Petrolea and the Internationalization of Petroleum
Agreements: Focus on Host Government Contracts’, (2012) 5 Journal of World Energy Law and
Business 181.

framework with the changing norms of global energy. The Energy Charter Secretariat to this
effect has developed model IGAs and host state agreements. These models serve as standards
and orientation for governments and pipeline entrepreneurs in designing the law - they are not
binding themselves. While the 2006 model agreements7 were largely designed to be enabling, the
2019 revision places a much greater emphasis on managing pipelines in a sustainable manner.
Pipelines are only one part of the global energy infrastructure, though. Both oil and
unconventional fossil energy sources such as LNG (i.e. liquefied ntural gas) require maritime
transportation that is governed by the International Maritime Organization (IMO). This maritime
infrastructure of oil supertankers does not transport but also store oil. That maritime capacity
adds to terrestrial storage capacity. Traders charter tankers for this purpose to mitigate temporal
volatility in demand of oil. This insulates somewhat Brent crude, the international benchmark for
the price oil from turning negative, which would have negative consequences for the stability of
the global oil market.
Energy is an internationally traded commodity. This applies to the traditional fossil fuels oil and
natural gas, but also for non-conventional (shale) oil and gas in liquified form. The production,
trade and consumption of conventional oil rests on three organisations, the Organisation of the
Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) that organize
antagonistic interests and the International Energy Forum (IEF) that seeks to bridge those
interests.8 OPEC is the organization of oil producing states, with a secretariat in Vienna. It was
founded in 1960 by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. The organization now
comprises the largest producer states, on the Arab peninsula, in South America, Africa and South
East Asia.9 Membership requires a substantial output of crude oil. 10 It is focused on the price for
crude oil on the world market. The objective is a sustainable price that will not lead a premature
substitution by other energy sources. To this effect, OPEC observes the market and can intervene
through coordinated production decisions, in particular production cuts. It may also discuss a
preferred oil price level, as a way the group can guide market expectations. The organization has
6 See Energy Charter Secretariat, Introductory Note to the Second Edition of the
Intergovernmental and HostGovernment Model Agreements of the Energy Charter Secretariat,
2006, paras. 20 and 29.
7 Model Host Government Agreement [2006]; Model Intergovernmental Agreement [2006].
8 Further J. Colgan, R. Keohane and T. Van de Graaf, ‘Punctuated Equilibrium in the Energy
Regime Complex’, (2012) 7 Review of International Organisations 117.
9 Qatar (1961), Indonesia (1962), Libya (1962), the United Arab Emirates (1967), Algeria
(1969), Nigeria (1971), Ecuador (1973), Gabon (1975), Angola (2007), Equatorial Guinea (2017)
and Congo (2018). Indonesia suspended its membership in January 2009, reactivated it again in
January 2016, but decided to suspend its membership once more at the 171st Meeting of the
OPEC Conference on 30 November 2016.
10 The Statute stipulates that “any country with a substantial net export of crude petroleum,
which has fundamentally similar interests to those of Member Countries, may become a Full
Member of the Organization, if accepted by a majority of three-fourths of Full Members,
including the concurring votes of all Founder Members.” A state that does not meet these
requirements may become an associate member admitted under such special conditions as
prescribed by the Conference.

little formal powers, resolutions are recommendatory and cannot be enforced. It rests on the
member states using their domestic powers to implement. The actions of OPEC are implemented
by the national oil companies (NOCs) of the member states. The mode of operation is unanimity
and consensus. Saudi Arabia, by far the biggest producer by scale and impact of its production
decisions, carries more weight both in decision-making and effective implementation. OPEC’s
coverage is not comprehensive, though, leaving out important producers such as Russia and
Mexico. It has attempted to extend its key function to control supply to non-members, through
the so-called OPEC+ configuration. That configuration brings Russia into the decision-making
on supply Russia. The fundamental problem OPEC has in effectively steering production is that
important producers remain outside its formal membership circle, including the UK, Norway, the
Netherlands, and in particular Russia, China and the USA.11 The response has been to seek to
institutionalize cooperation with those non-members. OPEC+ was started in 2017 as a six-month
agreement on production targets but worked for almost two years. Russia is the largest producer
of that extended grouping. Under the 2019 open-ended cooperation agreement OPEC and non-
OPEC are to work together to bring production up or down. It does not have fixed production
targets, but foresees regular coordination and information sharing, inter alia on supply and
demand, and what kind of intervention is needed, if any, and when. It has had a mixed record of
success and in particular could not prevent a price war in 2020. But it still leaves out other major
producers. The rise of non-conventional fossil fuel from shale has, at some point, turned the USA
into the largest producer of oil. Others such as Canada have also become important. Different
from the conventional situation, the market in these countries is in the hands of a competitive
private sector, not of a NOC.
Organized under the auspices of OECD and hence assembling developed consumer states, the
IEA has originally served to coordinate the response of major economies to shocks in supply. An
IEA decision triggers the obligation to release reserve stocks. The IEA constituent document, the
International Energy Programme, requires unanimity in the Governing Board for the activation
of emergency measures.12 The IEA has used this power on three occasions, lastly in response to
the disruption caused by hurricane Katrina in the USA.
The International Energy Forum (IEF) is the only international organization that brings together
producer and consumer states, including China and India, both heavyweight users outside of the
IEA membership. A key objective is the provision of neutral and reliable data on energy. Data
about oil and gas reserves are notoriously unreliable, with discrepancies between the sources,
such as OPEC, IEA, and the US Energy Information Administration (EIA). The JODI (Joint
Organisation Data Initiative) was launched at the behest of the IEF Ministers in 2001 by six
organisations (APEC, Eurostat, the IEA, OLADE, OPEC, and the UN Statistics Division) and it
is now managed by the IEF. Natural gas has become increasingly important in the energy mix,
11 K. Hancock and V. Vivoda, ‘International Political Economy: A Field Born of the OPEC
Crisis Returns to Its Energy Roots’, (2014) 1 Energy Research & Social Science 206.
12 The IEA constituent treaty, the International Energy Programme (IEP Agreement), requires
unanimity in the Governing Board for the activation of emergency measures. It also provides for
weighted majority votes on the management of the IEA programme of work and
recommendations.

and it is the favoured substitute for coal and also oil in terms of carbon emissions. However,
there is no comparable institutional structure on the producer side. Rather, the framework is set
by bilateral IGAs between producer and consumer state governments.
In addition to these intergovernmental organizations, non-governmental organizations (NGOs)
have an important function to address deep-seated problems of the sector. The Extractive
Industries Transparency Initiative (EITI) is the global standard to promote the open and
accountable management of oil, gas and mineral resources. The EITI Standard requires the
disclosure of information along the extractive industry value chain from the point of extraction,
to how revenues make their way through the government, and how they benefit the public.
An interesting institutional model concerns the joint development of transboundary resources,
particularly but not limited to maritime resources.13 Joint development has the objective of
reaching an efficient outcome that maximizes the social welfare of all states, transcending
questions of sovereignty. Such joint development schemes presuppose institutional arrangements
that administer the resource as whole. They come about through the innovative use of non-
confrontational dispute settlement mechanisms, as exemplified by the first conciliation under the
UN Convention on the Law of Sea between Australia and Timor-Leste.14
Nuclear energy is the remit of the International Atomic Energy Agency (IAEA). It is an
independent international organization, not a UN agency. Most of its tasks relate to developing a
consensus on the safety standards to make nuclear energy safe to use for civilian purpose. Fissile
material, minerals extraction and trade remain outside of its purview. This remit and structure of
the IAEA is mirrored, regionally, by the European Community for Atomic Energy (Euratom).
The European Union is competent to cover trade in the fissile material.
III. A Master-norm of Sustainable Energy and the Realignment of the Institutional
Architecture
This rise of a master-norm of sustainable energy has had a profound effect on this historically oil
(and nuclear energy)-focused organizational architecture, which has been realigning itself with
the novel meta-norm. Klabbers has introduced into that debate that international organizations
are inevitably being autonomous through their actions vis-à-vis states or other actors. 15 But
autonomy also assists in conceptualizing the transformation of the entire organizational
architecture for the provision of energy. With the advent of the SDGs that constitute the
consensus of states on their cooperation, the international community of states has fixed its
13 P. Cameron, ‘The Rules of Engagement: Developing Cross-Border Petroleum Deposits in the
North Sea and the Caribbean’, (2006) 55 International and Comparative Law Quarterly 559.
14 V. Roeben and R. Macatangay, ‘Conciliation for Transboundary Energy Resources: A Law
and Economics Approach’, in Keyuan Zou, Shicun Wu & Qiang Ye (eds), The 21st Century
Maritime Road – Challenges and Opportunities for Asia and Europe (Abingdon: Routledge,
2019), 179.
15 J. Klabbers, ‘Interminable Disagreement: Reflections on the Autonomy of International
Organisations’, (2019) 88 Nordic Journal of International Law 111.

priorities for global energy. These goals have a strong normative content, combining the
provision of a fundamental human need with environmental, social and economic sustainability.
The resulting master-norm of sustainable energy to which all have access has led to an
autonomous realignment of the extant architecture. Intensified cooperation of states adds the new
layer of institutions to carry forward the intended transition and absorbs an older layer of the
fossil fuel age with little or no change to the formal legal bases.
The 2015 and 2017 meetings of IEA Ministerial, the organisation’s strategic decision-making
organ, have laid down a modernization mandate, with three pillars: expanding the IEA’s mandate
on energy security beyond oil to natural gas and electricity; opening the agency’s doors to
emerging countries; and turning the IEA into a global clean energy hub, including for energy
efficiency.16 The IEA has added to its historic operational functions important energy-policy
design functions and supporting capabilities. The flagship of that function is the Global Energy
Outlook, an annual publication now in its most recent 2019 instalment. This Outlook, together
with just a handful of others including that of USA Energy Information Agency, lays out the
factual baseline of transition planning.17 It is not prescriptive but informative, constituting an
essential element of transparency and hence accountability. It operates on the basis of scenarios,
rather than forecasts. These scenarios have the SDGs and the Paris Agreement as a point of
reference. They set out different assumptions about the energy policies and then explain their
consequences over a time horizon, and ultimately against the parameter of global temperature
rise. In its most recent 2019 edition, the Energy Outlook accordingly sets out three main
scenarios. The first is business-as-usual with no change in policy. The second scenario
extrapolates the change that will come about because of policies that states have already firmly
committed to. The third, sustainable development scenario is normative. It takes the
internationally binding objective of the Paris Agreement of limiting the global temperature rise to
well below 2C and charts those energy policies that would be needed to achieve it. This scenario
is the clearest manifestation yet of the requisite shift in supply away from fossil fuels. The
document’s performance is of a normative quality, it is persusasive if not prescriptive for national
decision-making. Underpinning this persuasiveness is the robustness and neutrality of the data
used and the expertise of its staff in modelling techniques. The IEA’s Policies and Measures
Database aims at best practice dissemination concerning energy transition. It makes available
information on past, existing or planned government policies and measures to reduce greenhouse
gas emissions, improve energy efficiency and support the development and deployment of
renewables and other clean energy technologies. The IEA has also realigned itself in terms of its
membership. The meta-norm demands that organizations adopt a universal perspective on energy
provision, rather than one of energy security from the point of view of a limited constituency.
Consequently, the IEA has expanded beyond the original OECD circle towards a more universal
membership, admittedly as associate rather than full members. This enables it to be
16 H. Heubaum and F. Biermann, ‘Integrating Global Energy and Climate Governance: The
Changing Role of the International Energy Agency’, (2015) 87 Energy Policy 229.
17 X. Mu and D. Jena, ‘Comparison of Outlooks and Implications for Energy Transition’, in P.
Cameron, X. Mu and V. Roeben (eds), Global Energy Transition (Oxford: Hart, forthcoming
2020).

representative and hence credible in its universal policy-recommendatory functioning. This
enhanced representativeness underpins the agency’s functionality in respect of the G20 and G7
as the global energy policy-makers (to be discussed below). A re-alignment may also take place
for OPEC. OPEC is developing a role in supporting its member states in transitioning to a larger
share of renewables. This recognizes that the dependence of resource-endowed developing
countries on those revenues can only be lessened over time.
Those realignments have been effectuated by the organizations infra-treaty - they have left the
constitutive treaty unchanged. The Energy Charter may prove an exception in that the ongoing
infra-treaty modernization of the Charter’s mandate, functions and operation has entered the
stage where Parties embark on a re-negotiation of the treaty itself. Energy is now traded on a
global market for all its forms whether fossil fuels or electricity, albeit to a different degree. In
that market, energy is generated in one state and consumed in another, transported via
transboundary infrastructure or vessel. The Energy Charter is the only organization to engage the
value-chain of energy, from generation through trade and transit to consumption, comprising all
forms of energy, inclusive of electricity, and all sources, including electricity, and also
renewables although the textual basis is less clear. The Energy Charter rests on a multilateral
treaty (Energy Charter Treaty, ECT). The treaty has three pillars, protection of foreign direct
investment in production, rules for transboundary trade and transit in energy, and cooperation on
all matters including efficiency and environmental protection.18 The membership comprises
producer and consumer states. It now has 51 members from Europe, Asia and Africa, although
the Russian Federation, one of the original signatories, in 2009 notified the depository of the
treaty of its intention not to ratify it, terminating the provisional application of the treaty. This
state remains bound, however, under artice 45 ECT to respect the investment protection
provisions of the treaty for established investments for another 20 years following the date of
termination.
The supreme decision-making body, the Energy Charter Conference, brings together the parties,
candidates and observer states to implement and to progressively develop the treaty to conform
to the priorities of the post-2015 energy era. It has been realigning itself with the meta-norm
through the 2015 International Energy Charter. This non-binding declaration modernizes the
European Energy Charter, the document that preceded the ECT. Its expertise-based directional
work on model agreements now accounts for the shift to environmental sustainability. This
modernization process has now also moved shifted to amending the treaty base and hence the
quasi-judicial function that the Energy Charter has acquired. This quasi-judicial function covers
generation and hence a segment of the value-chain only, but within these limits it is highly
effective. The energy industry is one of the heaviest users of investor-state arbitration to protect
typically long-term and capital intensive, transboundary investments. The ECT is unique in that
it sets up a multilateral system of arbitration. Through the treaty, parties give their consent to the
arbitration that investors with nationality of another party may institute. The protection standards
18 T. Wälde (ed), The Energy Charter Treaty: An East-West Gateway for Investment and
Trade (London: Kluwer, 1996); Y. Selivanova, ‘The Energy Charter and the International Energy
Governance’, (2012) 3 European Yearbook of International Economic Law 307.

are the usual: expropriation against compensation, non-discrimination, and fair and equal
treatment. These provide protection for investments admitted by and made in the host state, but
do not open access for investments. They also protect for investments in renewable energy
projects. The energy transition has brought into focus that this restrains the space for regulatory
change by host states. Treaty change driven by the EU will therefore aim to recognize that a state
pursuing a legitimate objective will not trigger compensation obligations and retains discretion
concerning which technologies it wishes to subsidize and whether to exit such support policy.
Energy transition is ultimately about decarbonizing the energy economy, and that means the
substitution of fossil fuels. Ultimately, all technological offers to decarbonize the global
economy – electrification through renewables, hydrogen – depend on the roll out of clean energy
technologies at scale and globally.19 A multi-faceted institutional framework is emerging to
support this roll out. The cooperative provision of RES emerged as novel concern in the 1990 as
the potential of solar, wind, tidal and biomass became clearer. An obvious approach would have
been to enlarge the mandate of the IEA, but for a number of reasons, states in 2009 decided to set
up a new international organisation, the International Renewable Energy Agency (IRENA). The
original signatories of the statute are all IEA members. But membership in the organization has
expanded to non-OECD states, including China and India, and now is near-universal. The
secretariat is based in the United Arab Emirates. The objective is for IRENA to promote rapid,
widespread use of RES. The mandate includes promoting use of all forms of renewable energy.
The powers are determined by express text in the constitutive treaty, impliedly if necessary for
the fulfilment of the organisation’s functions, and by subsequent practice. Under article IV(A)(1)
of the statute, the IRENA Assembly has powers to recommend, but no power to establish legal
obligations or targets for RES percentages. IRENA hence has been able to develop operational
policies with two initiatives. In 2015, it launched project navigator, a new online tool to help
develop renewable energy projects. It is designed to facilitate the development of bankable
renewable energy projects by making the process more transparent. The second initiative,
mercator, is an online platform to enhance the development and financing of RES projects by
pairing project owners with investors, with an initial focus on Africa, Latin America and the
Caribbean. It also provides for a process of assessing national legislation.
Expansion of the share in renewables and clean energy policies is not the remit of IRENA alone,
but is based on an multi-faceted institutional system. The Financing for Development initiative
under ECOSOC (i.e. the UN’s Economic and Social Council) focuses on multilateral investment.
Clean technology transfer and financing is also the remit of the ECOSOC Forum on Financing
for Development follow-up (FfD Forum), an intergovernmental process with universal
participation mandated to review the Addis Ababa Action Agenda (Addis Agenda) and other
financing for development outcomes and the means of implementation of the Sustainable
Development Goals (SDGs). There is furthermore horizontal cooperation under the UNFCCC on
clean energy. The Green Climate Fund and the UNFCC Clean Development Mechanism
predominantly deal with such projects.
19 M. Citelli, M. Barassi and K. Belykh ‘Renewable Energy in the International Arena: Legal
Aspects and Cooperation’ (2014) 2 Groningen Journal of International Law 1–32.

Finally, in a realignment with the meta-norm, flexible institutional models are forming for the
cooperation on transboundary electricity cables. There are the so-called interconnectors subject
to organizational arrangements on a bilateral basis. But these cables can also build a large-scale
grid infrastructure connecting several states. Such grids are the more cost-effective the more
states and markets they connect. These grids are necessarily subject to international
organizational arrangements, which are, in contradistinction from pipelines, multilateral. An
example is the North Sea Offshore Grid Initiative.20 It brings together the littoral states of the
Northern Seas, setting up an informal organizational structure of a steering group and several
working groups for planning and implementation, including cost sharing. The legal regime
integrates international law, EU law, and domestic laws. Similar forms of transboundary
cooperation are developed in other parts of the worlds, for instance in Asia since 1990 there has
been is power trade in the Greater Mekong Subregion. China’s Global Energy Interconnection
(GEI) initiative for a global energy grid backbone by 2070 involves ultra-high-voltage
transmission lines strung across vast distances and smart grid technology tapping large-scale
renewable power sources. In 2016, GEI signed a collaboration memorandum of understanding
with the UN Economic and Social Commission for Asia and the Pacific (UNESCAP).
IV. Governing the Global Energy Economy
Again responding to the new master-norm, the most significant addition to the organisational
architecture is a governance function, that is, collective decision-making on the energy value
chain. To an extent, this function is assumed, within the UN system, by ECOSOC, which has
always been concerned with energy. Under the auspices of ECOSOC, the HLPF reviews the
high-level SDGs and their implementation to this effect. Energy is a horizontal matter and so UN
programmes and specialized agencies address energy indirectly, from the perspectives of the
environment (United Nations Environment Programme [UNEP]), development (United Nations
Development Programme [UNDP]), and industrial innovation (United Nations Industrial
Development Organisation [UNIDO]). UN-Energy is the mechanism for inter-agency
collaboration in the field of energy specifically to support member states in their transition to
sustainable energy. It is a subsidiary of the Chief Executives Board that coordinates UN bodies
on social, economic and related matters, and reports to the High-Level Committee on
Programmes. Former UN Secretary-General Ban Ki-moon launched the Sustainable Energy for
All initiative in 2011 specific to advance on universal energy access through cooperation on best
practiees. It is now a non-governmental organisatio under Austrian law with close links with the
UN under a relationship agreement and with UN agencies; the CEO acts as Co-Chair of UN-
Energy. SE4All institutionally supports the coalition for energy transition that the 2019 UN
Climate Summit adopted. This coalition of interested states and UN agencies as well as the
World Bank Group is led by Denmark and Ethiopia. It will report to the next summit on
deliverables including investment and public-private parternships.
20 V. Roeben, ‘Governing Shared Offshore Electricity Infrastructure in the Northern Seas’,
(2013) 62 International and Comparative Law Quarterly 839.

The UN Security Council has also come to address the international security dimension of
energy. It has endorsed the Joint Comprehensive Programme of Action (JCPOA), and lifted
sanctions.21 While not a specialized UN agency, the IAEA has cooperated with the UN in the
verification of the JCPOA (agreed between the USA, EU, China, Russia and Iran) under which
Iran stops enriching uranium in exchange for a lifting of economic sanctions. The USA, when
withdrawing from JCPOA, did not allege that the treaty had not been complied with or that
verification had failed, but rather repudiated the basis and risk assessment underlying the treaty.
The Security Council could in the future become more active and declare situations of serious
energy shortages a threat to international security and call for international cooperation to
address them, following the precedent it has set for global health in cases of epidemics.
A global governance function for the energy economy has effectively been entrusted not to a
formal international organization, but to a looser institutional set-up under the control of states.
The international climate action regime anchored in the UN Framework Convention on Climate
Change (UNFCCC) has emerged as the top-level driver of universal policy and law-making for
states’ energy policy, and hence the governance of energy. Adopted in 2015 to concretize and
operationalize the UNFCCC, as well as SDG 13, the Paris Agreement assumes this function
because it sets a legally binding objective for permissible anthropogenic temperature rise. The
objective is to hold the temperature rise to well below 2C and ideally to 1.5C. This translates into
a headline obligation to cut carbon emissions. But those cuts are not possible without a shift
away from fossil fuels, which currently account for more than 60% of global emissions. It is
hence driving the rate and scale of deployment of clean energy technologies and electrification
and thus of the fundamental shift in both supply and demand of energy. The spread of 0.5C in the
temperature rise implies radically different prescriptions of the speed and scale of decarbonizing
the energy economy, with the lower objective requiring much faster and deeper changes to
energy supply. The international climate regime also establishes a dynamic bottom-up and top-
down law-making process based on Nationally Determined Contributions (NDCs) of each Party
and collective stocktaking. This objective-setting, implementing action, evaluation for aggregate
progress against the objective, and ultimately a raising of ambition and or implementation by
states becomes a loop.
The concretization of the temperature objective within the said spread and governance of the
collective pathway of decarbonization is in the power of the Conference of the Parties to the
UNFCCC serving as the meeting of the parties of the Paris Agreement (CMA). The meeting of
the Parties receives the NDCs, it evaluates those in the Global Stocktake and it will issue any
recommendations. It also provides the rules that harmonize NDCs such as the so-called Paris
Rulebook. These and other rules concretize and make operational the treaty provisions couched
at a high level of abstraction, which are directional rather than operational. Those rules are laid
down formally in decisions of the meeting of parties. Even through the precise legal status of
these CMA decisions may remain a matter for debate, they do have some legal value. Arguably,
through these decisions, the Parties are authentically interpreting the Agreement within the
meaning of article 31(3)(a) of the Vienna Convention on the Law of Treaties. This view is
21 See also the chapter by Nigel White, elsewhere in this volume.

supported by the conclusions of the International Law Commission on that provision.22 As a
consequence, obligations are now to be seen in the light of the decisions, and a party effectively
must comply with them to satisfy its treaty obligations. This high-level governance by the
meeting of parties is supported by the climate regime fund to bring about transformational
change to the current fossil fuel base, through financing of disruptive projects. It is governed by a
board of five experts elected in their personal capacity. The voting procedure of unanimity has
been the subject of debate, as it will slow the process of decision-making. In October 2018, the
board agreed on the first replenishment of the funds’ resources, to be provided by the developed
states parties to the Convention.
The interlocutors of this regime are not just states, but also the large multinationals that are
dominating the field. It is true that the global oil market has evolved considerably since the
1970s when OPEC and the IEA were established. Physical trading comprises now both long-term
bilateral supply agreements and spot deals and term contracts, backed by a deep, highly liquid
futures market. Nevertheless the supply side remains in the hands of a few private international
oil companies and state-owned companies in resource-endowed countries. The meta-norm seeks
to directly address the conduct of these international companies, and not just indirectly through
the home or host state, which is the traditional mode of operation of international law.
International oil companies are indeed realigning themselves autonomously with the meta-norm,
adopting corporate net zero carbon targets (BP, Shell), and therewith assume responsibility for
sustainable energy. They will mirror targets and timetables for carbon neutrality adopted by
states. This is ultimately grounded in developments in international law to extend human rights
and sustainability beyond states. The UN Guiding Principles on Business and Human Rights lay
the foundations within the framework of human rights, by identifying the secondary
responsibility of companies to respect, protect and promote human rights, in addition to the
primary responsibility of states.23 The UN Global Compact creates voluntary commitments for
signatory companies to respect and promote sustainability principles. In so doing, energy
multinationals align themselves with States as the holders of primary responsibility.
As was pointed out above, institutionalized cooperation in energy has historically evolved ad hoc
for certain sectors and for antagonistic interests. There is no single organization with
responsibility for and representation of all states. This creates a void for governance directly,
specifically and comprehensively for the global energy system. This void is being filled by the
G7/G20, which is representative in its membership for purposes of the global economy. With the
normative perspective of sustainable and reliable energy, the G7/G20 has extended its remit for
the global economy into energy. The G7/G20 has become the universal institutional arrangement
with a policy-setting and oversight function over the energy market through self-coordination of
the major energy producers and consumers. The G7/G20 has developed this function to drive the
transition to sustainable, low-carbon economy with a shift from fossil to renewable sources. This
policy-making and indeed oversight function of the sister fora G7/G20 has manifested itself first
22 P. Minnerop, ‘The Legal Effect of the ‘Paris Rulebook’ under the Doctrine of Treaty
Interpretation’, in Global Energy Transition (note 17) (forthcoming 2020).
23 UN Doc A/HRC/17/31. The document also develops a set of guidelines for them to prevent,
address and remedy human rights abuses committed in business operations.

for the transition to renewables. Meetings of the group have formulated the consensus on the
meta-norm, the transition and means for its implementation.24 Even though States’ commitments
are politically binding, not legally, there is a follow-up procedure through which actual
compliance with these commitments is monitored.
The policy-making function-cum-national commitments extends to the stability of the global
market in fossil fuels, under the master-norm of reliable energy and energy security for all
countries. That security enables provision of essential services, in particular health care. Hence,
the perspective on energy security changes. It is the common concern for energy security of all
states, rather than the antagonistic securities of each individual state, that matters. Stability of the
market is the means to provide this security during the transition. The comprehensive scope of
cooperation for stability is provided by the G20, comprising the major consumer and producer
economies. This grouping has ad hoc extended its mandate to support market stabilisation
through supply control. At the April 2020 extraordinary meeting in the context of oversupply
and demand shock resulting from the coronavirus crisis, G20 energy ministers agreed a supply
cut deal supported by producer and consumer states as “necessary measures to ensure energy
market stability”. 25 This deal is seven times bigger than action taken during the 2008 financial
crisis, where the G20 first intervened for global oil-market stabilization. It also brings into play
new instruments, such as side-payments for producers26 and consumer states buying up oil for
their strategic stockpiles.
V. Regionalization
The implementation of the master-norm and the concretizing Paris Agreement leaves a large
space to regional organizations, which can develop integrated climate and energy policies across
the territory of their member states.
Sustainable (and secure) energy means electricity. Electricity can be traded across borders. It
then falls under the world trading regime. Electricity is a good within the meaning of WTO law,
and hence its general disciplines on market access and non-discrimination are applicable, as are
24 See 2019 G20 Osaka leaders' declaration, para 37. “We acknowledge the importance of
energy transitions that realize the “3E+S” (Energy Security, Economic Efficiency, and
Environment + Safety) in order to transform our energy systems into affordable, reliable,
sustainable and low GHG emissions systems as soon as possible, recognizing that there are
different possible national paths to achieve this goal. … We acknowledge the G20 Japanese
Presidency’s initiative called Research and Development 20 for clean energy technologies
(“RD20”)”.
25 G20 extraordinary energy ministers meeting, 10 April 2020, statement, “necessary measures
to ensure energy market stability”. Available https://www.canada.ca/en/natural-resources-
canada/news/2020/04/g20-energy-ministers-statement.html?wbdisable=true (accessed 1 June
2020).
26 For instance, the USA offered Mexico compensation for 350K bpd cut.

rules on subsidies.27 Through several argumentative devices that are very much aligned with the
master-norm, WTO panels and the Appellate Body have refrained from preventing states from
subsidizing the provision from renewables. But the European Union (EU) and other regional
organizations such as the Energy Community have stepped in and driven forward the regulation
of transboundary markets in electricity. The EU has created the project of a European Energy
Union (EEU).28 Under article 194 TFEU, the EU has the competence to adopt the implementing
legislation on carbon emission reductions, RES and EE percentages, and the internal electricity
market. The legislative packages of 2015 and 2016 serve to align the EU with the climate
objectives of the Paris Agreement. But the process is circular, with the legislation enabling the
EU to make pledges on the international level that drive the climate regime forward, motivating
others to do more to achieve the collective goal. Objectives are set at the international level, but
they depend for their implementation on action at the regional level. That implementation feeds
back into the iterative objective setting at the international level. The EEU also contains a strong
push to multilateralise the framework for pipelines. The EU has pushed for control over member
states’ IGAs against the EU Treaties. This requires legislation and does not come under the
exclusive EU commercial competence, since these agreements are primarily commercial, not
trade. The EU has also legislated to extend the principles of energy solidarity and of efficient,
market-based affordable energy to import pipelines, legislation that was shaped in the
controversies around the NordStream 2 pipeline. The Energy Union covers the EU member
states. But it has connectivity beyond the territory of the member states. It extends to peripheral
states organised within the Energy Community. Further expansion would ultimately connect
several regional electricity markets, a connectivity that is also envisaged by the 2015
International Energy Charter.
Regional organization becomes the supplementary form of organizing transboundary
international energy markets. In that space, regional organization provides an organizational
programme that is potentially of universal application even if it is implemented to different
degrees and at different times. In Africa, energy is an advanced sectoral policy of ECOWAS
adopting policies and mechanisms to promote the efficient exploitation, development, joint
research and utilisation of various energy resources available within the region. Other relevant
regional organizations include the Asia-Pacific Economic Cooperation and the Organization of
Latin American Countries. Regional free trade agreements such as NAFTA are an effective
instrument to go much further than the WTO in liberalizing and regulating trade in energy
aligned with the master-norm.
VI. Conclusion
27 R. Leal-Arcas & A. Filis, ‘Renewable Energy Disputes in the World Trade Organization’,
(2015) 12 Transnational Dispute Management 1.
28 V. Roeben, Towards a European Energy Union (Cambridge University Press, 2018).

With the advent of the SDGs that constitute the consensus of states, the international community
of states has fixed its priorities for global energy. These goals have a strong normative content,
combining the provision of a fundamental human need with environmental, social and economic
sustainability. The resulting master-norm of sustainable energy to which all have access has led
to an autonomous realignment of the extant architecture. Intensified cooperation of states adds a
new layer of institutions to carry forward the intended transition, and absorbs an older layer of
the fossil fuel age with little or no change to the formal legal bases. The Energy Charter may
prove an exception in that the ongoing modernisation of the Charter’s mandate, functions and
operation has now entered the stage where parties embark on a re-negotiation of the treaty itself.
This realignment results in a streamlining of the multi-faceted architecture with a clearer
definition of functionalities. There has, for the first time, emerged universal governance for the
global energy system and value chain, supported by expertise-based initiative and
implementation by specialist international organizations. Governance is assumed by several
organizational fora that represent overlapping interests in energy, and critically, both consumer
states and producer states. The overall governance of global energy hence rests with the G7/G20,
then the COP to the UNFCCC, and also the HLPF for the SDG. Representative of the key states
in the energy transition measured by the critical mass of their economies, the G7/G20 has
emerged as a forum for governance of the global energy system with a dedicated energy
ministers’ segment. It establishes consensus on the objectives of the energy transition and the
coordination of policies to be followed both at international and national level. The meetings
result in commitments that are followed up at subsequent meetings. The international climate
regime governs energy indirectly through climate and carbon targets. The UNFCCC and its
conference of the parties is the universal forum for climate change negotiations and hence the
key driver of the energy transition. G7/G20 are served by international organizations with energy
expertise, such as the IEA, IRENA, OPEC and also the World Bank. The global governance
function entails the autonomous reorientation of the capacity of these specialist international
organizations towards policy-initiatives and policy-implementation. Their scenarios in energy
production and consumption and the likely relative percentages of the different energy sources
becomes a principal tool for governments to plan pathways towards the SDGs on energy.
Under the master-norm for energy, the idea of institutional governance as a process of strategic
collective decision-making within a shared timeframe takes centre-stage. The emphasis lies on
dynamic decision-making and production of supportive rules infra-treaty towards the agreed
objectives. Treaties only provide authorization of such governance processes, and the
institutional home for them. Meetings of parties, either in the supreme decision-making body of
an institutionalized treaty or in an organ of international organization, concretize the broad
objectives and mechanism that the treaty lays down. They produce standards coordinating states’
energy policy and law-making based on expertise, benchmarked and supported by standardized
progressive best practices, supported by self-perception and ambition of the parties. These
standards are improved through an iterative process that involves collective review of the
standard and its implementation. All of this rests on a shared understanding of the methodology
of delivery of strategic initiatives, monitoring, controlling and coordination, and ultimately of the
combination of bottom up and top down decision-making governance techniques. On the basis of

this strategic modus operandi, the institutional architecture can structure the value chain of
energy, from generation through transportation to consumption.
In the architecture of energy, the dominant organizations of limited membership initially received
little public scrutiny. Yet, the strategic focus on a decarbonized energy system has been changing
this, and energy has become one of the more scrutinized fields. Such scrutiny of the work of the
IEA by parliamentarians led to the creation of a new international organization, IRENA.29 The
point of the Paris Agreement was precisely to bring about that very public scrutiny and
accountability of the work of governments, based on the independent scientific assessment of the
universally legitimised IPCC and the policy scenarios of IEA. This has implications for
enforcement. In addition to direct quasi-judicial enforcement means in the field of energy
investment protection, the strategic modus operandi opens up the possibility of indirect
enforcement. Onto these standards can then be latched the general positive obligations to protect
the environment and rights to life and health of individuals under regional human rights treaties
that are underpinned by judicial machinery. This development can be exemplified in cases for
Europe and for Africa. The crisis of climate change has turned the field of energy into a
laboratory for the global governance of time-sensitive transition processes.
29 T. Van de Graaf, ‘Fragmentation in Global Energy Governance: Explaining the Creation of
IRENA’, (2013) 13 Global Environmental Politics 14.