Resource Competition

In a recent interview for Foreign Policy, Lester Brown of the Earth Policy Institute raised an important aspect of global energy governance – the lack of an international forum to mitigate resource competition. This commentary came out in his discussion of rising food costs due to the growing ethanol market. Ethanol is most commonly derived from wheat and sugarcane, two food staples across the world. As an ethanol option is becoming increasingly popular as a tool of “energy security” in the United States, there has been an upward price pressure on these commodities. A rise in world grain or sugar prices makes it less accessible to the world’s poor. A competition for resources, from two seemingly intractable demands, thus emerges. Brown identifies, that:

[t]here’s no U.N. agency or office to mediate the competition between two groups that are competing for the same resources: the 2 billion poorest people in the world, many of whom already spend half or more of their income on food, and the 800 million people in the world who own automobiles.

This holds true in the broader energy sector, as there is no universal organization that has a mandate to legislate access to or arbitrate competition over international resources. Important lessons should be learned from the ethanol example, for demand pressures for energy resources (petroleum or others) in the industrialized and developing worlds will only intensify as conventional sources of oil begin (or at least appear) to deplete.

Governance mechanisms are needed in the global energy sector, beyond the control of corporations or the exclusive domain of states. As previously argued, this role can only be filled by the United Nations.