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Britain’s International Energy Strategy PDF Print E-mail
Monday, 06 December 2004

Foreign Secretary Jack Straw warned that Britain’s growing need for energy over the next decades has to be seen in a "changing context" due to declining production from the North Sea. "By 2020, we will probably be importing three-quarters of our primary energy needs -- and we will need to adapt to that," he warned when launching his government’s first-ever International Energy Strategy

Britain’s energy time bomb

For the Foreign Secretary's speech at the launch of the UK International Energy Strategy, click here.

Britain's International Energy Strategy : http://www.fco.gov.uk/Files/kfile/Energy_Report_281004.pdf

 

A scanned version of Britain's International Energy Strategy

Foreign &

Commonwealth

Office

Department of Trade and Industry

defra

ternational Priorities

The Energy Strategy

Glacier in the Antarctic

UK International Priorities

The Energy Strategy

Foreword 3

0 Introduction 4

The international energy challenge 4

Facing the challenge 4

What we need to achieve 6

Ensuring an international focus on energy... 7

...Where and when it matters most... 8

...and adapting to a changing world 8

0 Climate change 9

International context 9

Measures to address climate change 10

Q Energy security 13

International context 13

Price security 15

'Hard' security 16

Oil stocking arrangements 16

0 Some major questions common to energy security

and climate change 17

Transport 17

Nuclear energy 18

Research and development, including development of new

and cleaner technologies 18

0 Energy for poverty reduction 20

0 Good governance in the energy sector 21

0 Promoting UK commercial interests 23

0 Linkages between various UK international

energy objectives 25

Energy security and climate change 25

Energy for poverty reduction and energy security 25

Energy for poverty reduction and climate change 25

Good governance, energy security and commercial objectives 26

0 Linkages between international energy objectives and other

UK international priorities 27

<E) Multilateral institutions and partners 28

0 Countries 30

© UK working methods 31

Foreword

Britain's prosperity and wellbeing depend on access to secure and affordable energy supplies, and on mitigating the potentially catastrophic effects of climate change. That is the international energy challenge which this Strategy addresses.

It recognises that energy and climate change are linked to a range of other international issues and areas of our foreign policy. The global energy market relies on a complex and sophisticated infrastructure, with often long international supply lines. It is intimately connected to issues such as conflict or the need for political and economic reform in supplier and transit countries. Likewise, tackling climate change requires a sustained international effort to cut emissions and promote low-carbon technologies. And it also implies mitigating the wider effects - especially in the developing world, where climate change could lead to increases in disease, environmental degradation and conflict over scarce resources.

This document sets out how we propose to meet the international energy challenge over the next five to ten years. It builds on DTI's February 2003 White Paper, Our Energy Future - creating a low carbon economy, and on the FCO's White Paper, UK International Priorities, of December 2003. It has been agreed with the Prime Minister and with the Cabinet. And its preparation has been a joint effort by our Departments, who work together through the Sustainable Energy Policy Network (SEPN).

Although this Strategy is written from a British perspective, its success depends on a wide range of partnerships - both with other countries and governments, and with all those who have an interest in energy and climate change, from business and industry to the academic and scientific worlds and civil society.

The Strategy will guide and inform the work of our officials on international energy issues at home and in our network of posts abroad, helping us to concentrate our efforts where they will be most effective. And we hope that it will also be a valuable resource for those from outside Government and outside Britain who want to work together with us to achieve common objectives.

Jack Straw Patricia Hewitt Margaret Beckett

Introduction

Energy matters. The United Kingdom's national security depends on preventing the damaging effects of climate change, and on maintaining secure energy supplies at an affordable price.

Iceberg in the Antarctic

The international energy challenge

Failure to tackle climate change would lead globally to catastrophic effects such as severe heatwaves, flood and droughts; loss of biodiversity; famine; and disease.

The United Kingdom is set to become a net importer of oil and gas in the current decade, and will be reliant on supply lines from around the world. Any failure of the UK's energy supplies would be felt almost immediately. A serious disruption could rapidly have devastating effects on the economy, public health and security of the country.

Gas is set to become a much larger component of the UK's energy mix, not least because of increased usage prompted by its lower greenhouse gas emissions compared to other fossil fuels. Until now the market in gas, unlike oil, has been regional rather than global. Large-scale use of LNG (liquefied natural gas) may change that.

The development of the global economy, especially the economies of less developed countries, depends in large measure on robust international energy markets, and access to energy supplies at an affordable cost. The failure of international energy markets is among the potential causes of international instability.

To tackle the combination of long- and short-term challenges facing us, we need to take action now. These are difficult and complex matters, combining political, economic and security elements.

The threats we face, and the means of addressing them, are in very large part international, and they require a high degree of international cooperation to address them. While national actions and bilateral co-operation can achieve significant results, that is not adequate, for the United Kingdom or any other country. To protect ourselves effectively will require multilateral co-operation, making best possible use of the international system and its institutions, in which the United Kingdom plays an important part.

Facing the challenge

In February 2003 the Department of Trade and Industry (DTI) published the White Paper Our Energy Future - creating a low carbon economy. This set out in detail the challenges we face, and presented a long-term strategic vision for an energy policy which would address these challenges.

Energy policy aims

The Foreign Policy White Paper highlights as specific energy policy aims:

encourage sustainable energy consumption

help to liberalise EU energy markets and use the EU's relations with Russia and other countries to support our energy objectives help resolve disputes, and promote peaceful political and economic reform, in the Middle East, parts of Africa and the countries of the former Soviet Union improve investment regimes and energy sector management in these regions, focusing on key links in the supply chain to the UK

secure international agreement to reduce carbon emissions and promote practical initiatives to develop sustainable energy technologies

in the US and other major economies,

including fast-growing countries such as

China

promote the export of UK technology and

services, the import of best practice, and the

efforts of British energy companies

investing or trading abroad

provide early warning of, and help prevent,

terrorist and other threats to the energy

infrastructure, and encourage activity to

improve network resilience.

In addition, key aims derived from other strategic priorities in the Foreign Policy White Paper have a strong relevance to energy:

• build agreement between Europe and the US

on the most successful approaches to

international co-operation

• adapt the UN system and other multilateral

structures to respond better to the growing

influence of business, NGOs and other non-

state actors

• manage the growing pressures on the WTO

and maintain its core role in promoting a free

and fair trading system

• ensure that the UK has influence within new

structures for conducting more effective

common EU international policies

• drive forward internal economic reform in

the EU to boost growth, jobs and

competitiveness

use our 2005 G8 Presidency to strengthen international economic and development cooperation, action on the environment, and G8 outreach to leading regional economies support international co-operation and exchange of good practice in science and technology and other wealth creating sectors.

The full set of policy priorities in the Foreign Policy White Paper is: (i) a world safer from global terrorism and weapons of mass destruction; (ii) protection of the UK from illegal immigration, drug trafficking and other international crime; (iii) an international system based on the rule of law, which is better able to resolve disputes and prevent conflicts; (iv) an effective EU in a secure neighbourhood; (v) promotion of UK economic interests in an open and expanding global economy; (vi) sustainable development, underpinned by democracy, good governance and human rights; (vii) security of UK and global energy supplies; (viii) security and good governance of the UK's overseas territories. Most of these priorities are of importance for meeting the United Kingdom's international energy objectives. And all of them have at least some relevance.

The energy dimension of the Foreign Policy White Paper published in December 2003, UK International Priorities - a Strategy for the FCO, should be seen against this background. It set eight strategic international policy priorities for the UK for the next decade, including energy. In putting energy security and climate change at the heart of the UK's international priorities, it reflects the core messages contained in the Energy White Paper.

UK International Priorities: the Energy Strategy builds on these foundations. The purpose of this paper is to focus on the international component of energy policy, and set out a clear way forward to achieve our policy goals. It identifies five key themes. First, the principal themes of energy security and climate change. Then, the important dimensions of UK commercial interests; energy for poverty reduction; and good governance.

This is a joint effort between the FCO, DTI, DEFRA, the Prime Minister's Office, and other government departments, as will be its implementation. Section 12 of this Strategy (UK Working Methods) sets out the UK government mechanisms which have been used to formulate the document, and which will be used to implement it.

What we need to achieve

We need to tackle climate change. The UK can make a real difference by showing international leadership, promotion of climate-friendly technologies, and helping ensure the success of the multilateral process. The UK has set the goal of putting itself on a path to cut its carbon dioxide emissions by some 60% by about 2050.

Smog above Cairo

We need to improve the long-term efficiency and stability of the international energy market, and protect the physical integrity of our international energy supply chain.

Effective action to combat energy poverty in less developed countries will be important for our wider international efforts to reduce poverty by meeting the Millennium Development Goals (MDGs). This in turn can have a positive impact on our overall energy policy objectives.

All this will require, among other things, political and economic reform in key supplier and transit countries; new energy and environmental technologies, including better energy efficiency and a significant switch towards renewables; resolution of disputes; and international diversification of sources and types of fuels.

The UK has given the international lead to the development of competitive energy markets, a process that is now taking place in the enlarged EUand in many other parts of the world. The UK is also a major centre of the international oil and gas industry. It has also established itself as a leading centre for emissions trading.

Most experts believe that there is no shortage of global oil and gas reserves over the next few decades, provided there is sufficient investment made in new production, transport and refinery capacity. Maintaining robust and transparent international markets for energy, including the free movement of capital, is a key policy objective. But many reserves lie in parts of the world where there is political instability, or there are other barriers to investment.

The UK needs to work with the relevant countries and institutions to ensure that the energy resources can be developed in an appropriate manner, with clear long-term benefits for the citizens of producer countries. There is an important link here with development policy.

UK International Priorities: The Energy Strategy sets out how this foreign policy agenda in respect of energy will be met.

Ensuring an international focus on energy...

Internationally, no country - not even the USA -can successfully pursue its objectives alone. To achieve its international energy objectives the UK will need and want to work with others, through a range of alliances and institutions. The EU, its member states and its institutions will be a high priority. So will the US, both in the form of UK-US bilateral relations and a strengthened EU-US relationship. The G8 will be a very important forum.

The UK will make full use of its position in the EU and G8 (including chairing both in 2005), the UN and elsewhere to help ensure that important energy policy objectives are effectively addressed.

The International Energy Agency (IEA, part of the OECD system), in which a senior UK official holds the chairmanship until the end of 2005, has a central role as a major international energy institution. The international stockholding and emergency arrangements coordinated through the IEA are a crucial element of our energy security. It will be important, working with the IEA, USA and others, to develop our dialogue with OPEC. The Energy Charter Treaty is a key tool for addressing important energy transit issues.

This is by no means an exhaustive list. The analysis in UK International Priorities: The Energy Strategy assumes an effective partnership with fellow industrialised consumers of energy and allies of the UK, in making judgements about how and where the UK can best exercise influence to promote its national interests in the international energy arena.

... where and when it matters most and adapting to a changing world

Crucially, to be effective, UK foreign policy needs to be able to recognise and compare the differing priorities of the varied tasks facing it across the globe. This is an essential step if the right resources are to be targeted on the right problems at the right time.

The tactical policy and resource decisions which government will have to take will be informed not only by the overall importance of succeeding in a particular task. The circumstances in which the task is being carried out are also crucial. A very high priority task may require few resources if the country involved already agrees with a UK position. Conversely, a lower priority task may require significant effort for a time if one or more international partners are reluctant.

The United Kingdom needs at every stage to be able to make informed judgements about where it can get the most useful impact for its inevitably limited resources. Achieving this will require enhanced co-ordination between policymakers and analysts in government departments and the UK's network of overseas posts, taking full advantage of modern communications technology. A reinforced overseas energy network will be a vital tool with which FCO can help HMG negotiate in capitals and in international fora. Given the links between energy and issues such as climate change, poverty reduction and good governance it will be essential, in posts in the key energy producer and consumer countries, to mobilise a wide range of knowledge, contacts and resources. Heads of Mission in priority posts will therefore be responsible for directing the effort to take forward the objectives in this Strategy.

To maximise our impact we need to be capable of adapting our methods, and to do that we need a thorough understanding of the dynamics of the international energy scene. This ideally needs to be long-range, given the lead times and timescales involved in, for example, new energy infrastructure, long-term 'closed' deals which producers may make with consumers, the evolving roles of national and international oil companies, shifts in energy consumption patterns and the impacts of climate change.

Energy trading centre

UK International Priorities: The Energy Strategy, like the Foreign Policy White Paper, looks ahead over the next 5-10 years. Both result from a serious attempt to address the key international challenges facing the United Kingdom over that period. But all predictions have to be looked at in the light of what has actually occurred in the intervening period. So, like the Foreign Policy White Paper, UK International Priorities: The Energy Strategy will be reviewed and, if necessary, revised after two years.

Climate change

The international scientific consensus on climate change implies an appreciable risk of significant damage to the UK's economic and security interests if inadequate measures are taken to mitigate the predicted changes.

International context

The most recent scientific assessment by the Intergovernmental Panel on Climate Change (IPCC) estimates that the globally averaged surface temperature will rise by 1.4 to 5.8°C by the year 2100. The IPCC predicts an associated rise in sea level of 9 to 88cm.

Implications for human welfare and natural ecosystems globally include increased incidence of heat waves, floods and droughts; loss of biodiversity; increases in the potential

transmission of infectious diseases such as malaria; and increased risk of famine. The loss of mountain glaciers will also have implications for water supplies for many cities and subsequently for energy supplies due to reduced water capacity for hydroelectric power. All will have potentially large human costs, but also significant economic costs, creating stresses which threaten political stability, particularly in the poorest countries which are least able to adapt. If these impacts occurred there would be significant global economic and security effects.

Source: IPCC

There is as yet no international consensus as to what constitutes dangerous climate change or at what level greenhouse gas concentrations should be stabilised to avoid it (the objective of the UN Framework Convention on Climate Change, UNFCCC). The EU has indicated that global limitation and reduction efforts should be guided by an increase in temperature of no more than 2°C and a level lower than 550 parts per million (ppm) of C02 in the atmosphere, which is about twice the pre-industrial concentration. Recent (2004) figures suggest a concentration of 379 ppm, up by 3 ppm from a year earlier. The Royal Commission on Environmental Pollution (RCEP) has also recommended that, on the basis of current scientific knowledge about human impact on climate, an atmospheric concentration of 550ppm of C02 should be regarded as an upper limit that should not be exceeded.

The Energy White Pa per goal for the UK to put itself on a path to cut C02 emissions by some 60% from current levels by about 2050 is predicated on these assumptions. The UK's objective is by the end of 2007 to agree the next step in the international process that will lead to stabilisation of the concentration of greenhouse gases in the atmosphere at a level that avoids dangerous climate change.

Measures to address climate change

The Intergovernmental Panel on Climate Change (IPCC) has developed a number of future emission scenarios based on a variety of assumptions about population growth, economic growth, societal changes and energy futures. For each scenario, C02 concentrations are set to rise. Currently, emissions from developed countries exceed those from developing countries. However, developing countries' emissions are projected to become a significant proportion of the total rise and in many cases the dominating factor. China is already the world's second largest emitter of greenhouse gases, and WWF estimates that it will overtake the US by 2025 if no action is taken. Without action by less developed countries to control their emissions, stabilisation of greenhouse gas concentrations at any level will be impossible. At the same time it is important that these countries should have access to energy supplies, essential to their growth and social development. The commercialisation of existing renewable energy and energy efficiency technologies as well as the development and application of new technologies with low or no emissions will be crucial.

The UK has put itself on a path to cut C02 emissions by some 60% from current levels by about 2050, as recommended by the RCEP and set out in the 2003 Energy White Paper. However, the UK represents less than 2% of global emissions. The UK can show leadership, but we cannot act in isolation. It is therefore important to continue to work with other countries to establish both a consensus around

10

Wind turbines

the need for change and firm commitments to take action to reduce carbon emissions world wide. (We are using the framework of the UN Framework Convention on Climate Change, UNFCCC). A key objective of the UK's foreign policy will be to secure further international commitment to this ambition. This will have benefits for both long-term global economic development and human welfare, and insure against the potential loss of UK competitiveness from isolated action.

The UK and EU have remained strong supporters of the Kyoto Protocol as a critical first step towards tackling greenhouse gas emissions. Its overall impact on global emissions will be small (1-2%). But the UK is trying hard to obtain maximum value from it by working to ensure the effective implementation of its mechanisms directed at facilitating cost effective action to cut emissions. It is doing this through:

• international emissions trading (where the

UK has strong expertise through the UK

Emissions Trading Scheme and our

preparations for the EU Emissions Trading

Scheme)

• Joint Implementation (for emission

reduction projects in other industrialised

countries, particularly Russia and the

economies in transition)

• Clean Development Mechanism (projects

undertaken in developing countries)

• encouraging an efficient, functioning

international emissions trading market, with

scope to use credits derived from Jl and

COM projects, as an important part of our

current strategy to promote international

action to tackle climate change including

beyond the Kyoto first commitment period

(2008-2012).

The USA has not ratified the Kyoto Protocol, and its domestic emissions are forecast to rise up to 30% over 1990 levels by 2010. The UK is working with the USA on a range of climate change related initiatives, including development of low carbon technologies. Our objective remains for the USA to take on a more ambitious domestic policy, aimed at stabilising and ultimately cutting emissions in real terms. We also want the USA to take an active part in the international dialogue on climate change and a post-Kyoto framework.

11

The Russian government recently submitted the Kyoto Protocol to the Duma for ratification. We welcome this, and look forward to a swift decision to ratify by the Duma. The UK looks forward to continuing to work closely with Russia bilaterally, as well as with EU partners, to share experience to implement the Protocol.

The UK is also working to ensure that the EU fulfils its commitments. A number of EU countries are not yet on track to meet their Kyoto targets, based on existing policies. This risks undermining international confidence in the credibility of Kyoto and the commitment of countries which have contributed to the problem to take the necessary steps to overcome it.

2005 is a key milestone in the climate change negotiations process. This is the date when, under the terms of the Kyoto Protocol, formal negotiations on further international action should begin. It is also the date by which countries with Kyoto Protocol targets ('Annexe B' Parties) need to show 'demonstrable progress' towards meeting their commitments (including emission reduction targets). As the commitment period defined in the Kyoto Protocol spans 2008-2012, negotiations on post-Kyoto would ideally need to be concluded by the end of 2007.

Key objectives

International energy policy priorities: climate change - some key objectives

• Russian ratification of the Kyoto Protocol

• Entry into force of the Kyoto Protocol

• EU meeting Kyoto commitments

• USA engaged in effective action to

reduce domestic emissions, and taking

part in post-Kyoto discussions

• Development of the EU's external policies

to tackle climate change

• Convergence of views with large

consumers, including developing

countries, on the options for post-Kyoto

future action to reduce greenhouse gas

emissions

• Fossil fuel producer interests impacting

more positively on the international

climate change framework

12

Energy security

Given the current dominance of oil and gas in the UK fuel mix, UK economic wellbeing depends on secure oil and gas supplies at an affordable price for the UK and world economies.

International context

One of the four priorities of the Energy White Paper is to maintain the reliability of energy supplies. And the Foreign Policy White Paper highlights security of UK and global energy supplies as one of the eight strategic priorities of UK foreign policy. This section looks mainly, but not exclusively, at oil and gas.

The UK is currently a net exporter of oil and gas. However, demand for oil and gas is widely projected to rise by 2020, while domestic production is projected to fall. It is likely that the UK will become a net importer of gas annually by around 2006 and of oil by around 2010. By 2020, the UK is expected to be importing around 75% of its primary energy needs.

World reserves are widely assessed to be more than sufficient to meet projected demand for oil and gas over the next few decades, provided national and international frameworks allow them to be developed. However, by 2020, around half of total oil demand will be met by countries with a significant potential risk of internal instability.

In the oil sector, both OPEC and non-OPEC production is expected to increase, but the Middle East will remain the largest producing region and its share is forecast to increase. Saudi Arabia will continue to be the world's swing producer. Other key future producers of oil include Iraq and other OPEC members, Mexico, USA, Canada, Norway, Brazil, countries

Oil platform

of the Former Soviet Union (Russia, Kazakhstan, Azerbaijan) and Africa (Nigeria, Angola, Equatorial Guinea).

In gas, key future producers are likely to include Norway, Russia and Former Soviet Union states, Algeria, possibly Libya, Iran and other Caspian countries. EU gas market liberalisation will be crucial to achieving gas security, by ensuring the development of liquid international gas markets. As an alternative to piped gas, much of which may reach Europe via Turkey, potentially a key country for transit, potential suppliers of liquefied natural gas (LNG)-which is shipped -include Trinidad and Tobago, Qatar and Egypt. As the LNG market develops, this may over time lead to greater price convergence between regional markets given the increasing scope for arbitrage. This will have positive implications for UK gas security by promoting diversity and flexibility of supply. However, this could increase

13

the number of countries competing with the UK for the same supplies. Security of supply across transit states-and regions, including sea lanes in key areas - is also an important consideration, for example in relation to supplies from Central Asia.

Many producer and transit countries suffer from poor civil, judicial and legislative frameworks, inequality, social unrest, corruption, monopolistic practice and other problems that compromise the working environment and increase the price of oil and gas exploration and extraction. There are also strong linkages between natural resource dependency and conflict which threatens UK energy security. Finally, many oil and gas producers will be developing countries, most of whose citizens do not have access to modern energy services themselves. This can cause tension, if citizens believe they are not enjoying the benefits of their country's natural resource wealth. The Extractive Industries Transparency Initiative (EITI), launched by the UK at the World Summit for Sustainable Development (WSSD) in 2002, aims to help address this problem by promoting transparency of revenues paid by extractive companies and received by host governments.

On the demand side, as large consumer countries such as China and India are rapidly developing, the global demand for oil and gas will increase. While this will create incentives for producers to innovate and source new suppliers, we also need to recognise the implications of increasing global demand for UK energy supplies and regional politics. If global demand rises faster than production capacity, sharp increases in global oil prices are likely, with an economic impact on the UK and possible severe disruption to the global economy.

Delivering competitive, liberalised energy markets will be key in ensuring reliable, affordable energy supplies. Large-scale, long-term 'closed' deals between producers and particular consumers have the potential to lock out other consumers and cause negative market impacts. It is important that the UK has a detailed understanding of the dynamics of producer-consumer relations, in order to inform a flexible policy response, adapted to any significant underlying changes that may have been caused to our market assumptions, which are a key foundation of this energy strategy.

United Nations

"ORLDIUMMITONtUITJllKliBLEDmiOPM^

World Summit on Sustainable Development Johannesburg 2002

The tension between ever increasing dependence on fossil energy and the urgent need to reduce world greenhouse gas emissions presents a major challenge for policy makers considering long term energy security. The capture of C02 from industrial installations and its permanent geological storage ('carbon capture and storage', or CCS) can make a major contribution to global energy security in three ways. Firstly, widespread use of CCS can enable continued use of fossil energy while incurring minimal emission penalty, and will enable transition to hydrogen fuel. Secondly the use of C02 in enhanced oil recovery can extend the commercial lifetime of existing oil resources and may lead to up to one third of additional oil recovered. Thirdly, the development of new gas

14

reserves often comes with high levels of associated C02 which has to be separated before the gas may be introduced into the network. Geological storage of associated C02 (such as is already practised at the Sleipner field in Norway and is planned for the In Salah field in Algeria and the Gorgon field in Western Australia) enables development of these gas reserves without increasing emission levels. The UK aims to develop this technology in co-operation with its North Sea neighbours, other European partners and internationally, for example through the Carbon Sequestration Leadership Forum.

Price security

Although global oil and gas reserves are projected to be sufficient to meet global demand, it is important to ensure more sustainable oil prices, avoiding destabilising swings, in the interests of both consumers and producers. The oil market is characterised by significant price volatility, with many examples of short-term price spikes. For example, following the Iranian revolution in 1979 (when over 5 mbpd3 was taken out of the market) prices rose 150%; after Iraq's invasion of Kuwait in 1990 the price doubled. The IEA and OECD assess that a US$10 per barrel rise in the price of oil would: knock 0.4 percentage points off OECD growth; raise the OECD price level by 0.4-0.8 percentage points and raise the import bill for oil importers by US$100 billion. The impact on oil importing developing countries is typically larger. Traditionally the price of gas has been fixed by long-term contract though it has a (sometimes tenuous) relationship to the price of oil. The possible development of LNG and a consequent global spot market in gas may alter this relationship, and it will be vital to ensure the delivery of a competitive, liberalised gas market.

The UK is not aiming for any explicit price target. The key point is that a transparent, liquid and competitive market is the best mechanism for delivering more sustainable prices. A low oil price would risk destabilising producer countries, many of whom are heavily dependent on oil and gas production. It could also make many OECD oil fields uncompetitive and discourage investment in new (non-OPEC) fields and so reduce security by reducing diversity of supply. It would also reduce the incentives for investing in non-fossil fuel energy sources such as renewables, a key part of our long-term energy security strategy. The biggest single issue on gas pricing involves Russia and its very low prices for domestic (both household and industrial) supply. The danger is that low prices will deter investors from entering the market and new production capacity will not be developed, with negative effects on our security of supply. However, in the EU-Russia World Trade Organisation accession agreement of May 2004 Russia committed itself to doubling gas prices to industrial users by 2010.

1 mbpd = million barrels per day "Baku-Tblisi-Ceyhan Pipeline, due to come on-stream in 2005

15

'Hard'Security

Oil stocking arrangements

An important part of energy security is the potential international threat to the 'hard' security of our supplies. This could take many forms. Recent examples of threats which have materialised include sabotage of Iraqi oil fields and protests in Nigeria, which regularly affect oil and gas supplies. Additionally there are threats to soft targets such as oil and gas company personnel. We need to improve the resilience of the network through improved co-ordination and enhanced capability to anticipate and counter terrorist and other threats.

Oil stocks can contribute to resilience in the event of actual or potential supply disruptions. But they are unlikely ever to be large enough to act as a lever on oil prices. The International Energy Agency (IEA) is the key organisation for managing oil supply disruptions and the release of stocks by its members, including countries such as the US and Japan, in addition to EU members. The IEA is working to establish a dialogue with key non-lEA member countries such as China and India on the importance of oil security arrangements, the role of the IEA and how these countries could develop a closer relationship with the IEA.

Key objectives

International energy policy priorities: energy security - some key objectives

Effective delivery of liberalisation of EU energy markets

Development of the EU's external policies to address energy security

Energy market reform/liberalisation in other strategic markets e.g. Russia Improved investment regimes and energy sector management in key oil and gas producer countries or regions

A transparent, liquid and competitive oil and gas market with more sustainable oil and gas prices, avoiding destabilising swings

Well-functioning emergency oil stocking arrangements, working through IEA and developing its constructive role as a policy forum

Political and economic stability and democratic reform in key producer countries

and regions, including efforts on conflict prevention and human rights (for many of these, this will involve close co-operation with our economic development and poverty reduction policies)

Sufficient infrastructure/pipelines/transit routes for oil and gas, including trans-boundary relations, for example with Norway

Adequate capacity in the system to accommodate shocks Improved uptake of renewablesand more efficient use of energy as well as prudent oil stocking and oil emergency policies in fast-growing energy consumers such as China and India

Early warning and prevention of terrorist and other threats to the energy infrastructure, and enhanced action to improve network resilience

16

Some major questions common to energy security and climate change

Energy and climate change are linked to a range of other international issues and areas of our foreign policy.

Transport

Transport consumes most of the liquid fuel used in the UK, and produces about a quarter of the UK's carbon emissions. Clean, low carbon transport is an important part of the UK's domestic and international strategy, both in relation to climate change and energy security.

Road transport is currently by far the biggest source in the UK of transport carbon emissions, and the biggest user of fuel. The UK will work domestically and collaborate internationally on projects to ensure the development, and take up in the economy, of lower carbon vehicles. The auto industry generally expects hydrogen powered cars - a technology which looks likely to play a key role in future low-carbon energy systems - to move toward mass marketing around 2020.

Aviation is also an important area. By 2030, C02 emissions from UK aviation (domestic and international departures from the UK) will amount to perhaps 16-18 million tonnes of carbon, of which 97% would be from international flights. This could amount to about a quarter of the UK's total contribution to global warming by that date.

The international nature of the aviation industry means that action to tackle these problems needs collaboration with governments and institutions world-wide. The UK will ensure that it meets its international commitments and obligations; and it will continue to play a major role in seeking to develop new solutions and

stronger actions by the appropriate European and international bodies. The UK will use every opportunity to press for new international regimes to address aviation's contribution to climate change, and in particular to ensure that, over time, aviation meets its external costs. Specific proposals were set out in the Government's White Paper, The Future of Air Transport, published in December 2003.

Compared with other modes of transport, shipping has environmental advantages. The energy demand is relatively low, counted per unit goods. The International Maritime Organisation (IMO) Assembly in November 2003 adopted a resolution on IMO policies and practices related to the reduction of greenhouse gas emissions from ships. The United Kingdom will work to minimise the shipping industry's C02 contributions, and maximise its efficiency in carrying out its vital role in the world trading system, including the transport of fuels such as oil and LNG.

Key objectives

International Energy Policy Priorities: Transport - some key objectives

• Development of lower carbon road

transport

• Securing international progress to

address aviation's contribution to climate

change

• Shipping industry C02 emissions

minimised

17

Nuclear energy

The Energy White Paper does not contain specific proposals for building new nuclear power stations in the UK. However, it does not rule out the possibility that at some point in the future new nuclear build might be necessary.

It will be important to monitor the policies of other countries with regard to nuclear energy to enable the UK to keep abreast of new developments in this field, and to understand the potential implications for demand for other energy sources such as oil and gas, as well as the international community's ability to meet climate change requirements by reducing greenhouse gas emissions. The UK should continue to make a full contribution to the activities of the Nuclear Energy Agency and the International Atomic Energy Agency. It is important to ensure that the civil nuclear industry is able to operate overseas, within the constraints of our international obligations and commitments, to ensure effective management of the way nuclear issues affect the UK's bilateral relationships.

G8 Summit in the United States 2004

Research and development, including development of new and cleaner technologies

The G8 Evian Summit called for a major international research and development effort to provide the world with new energy technologies capable of providing energy security and addressing our climate change and other environmental requirements. Renewables, hydrogen (as an energy vector), cleaner fossil fuels (including carbon storage and capture), energy efficiency and nuclear (both fission and fusion) are all important elements in the required, global research and development package. Well-established technologies may have a major role to play soon. Technologies at earlier stages in their development will not solve our short term problems, but are likely to make a very important contribution to providing solutions in the medium and longer term to the security challenges presented by the need for reliable energy supplies for ever more highly developed economies, and an effective answer to climate change. The United Kingdom has significant and internationally respected scientific and technological expertise. In partnership with others, this needs to be brought to bear on the enormous, potentially existential challenge we face in this sector.

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Commercialisation of existing non-carbon (or hydrocarbon) energy and energy efficiency technologies as well as the development of new, cleaner technologies will be key to reducing global C02 emissions and also to energy security in the long term.

Although renewable energy and technologies to increase the efficiency of energy systems are available, the market development of these is constrained by a range of policy barriers. A concerted world-wide effort to develop the global market for renewable energy and energy efficient systems is therefore essential. The UK is focusing its efforts in this area through leading the development of the Renewable Energy and Energy Efficiency Partnership (REEEP), which was launched by the UK at the World Summit for Sustainable Development (WSSD) in 2002. This provides the major vehicle for delivering the UK's International Sustainable Energy Commitments as expressed in the Energy White Paper.

Key objectives

International energy policy priorities: Research and development, Including developing new and cleaner technologies -some key objectives

• Major international R&D effort, in line

with G8 commitments and global

medium to long-term energy security

and climate requirements

• Enhanced development of the global

market for renewable energy and

energy efficiency systems and faster

take-up by large consumers

• Enhanced international innovation in

new, clean technologies

Removing the market barriers to existing clean technologies will also help stimulate innovation in new technologies. However, to secure a sustainable global energy system in the longer term, much greater investment and innovation in new technologies is also necessary, particularly moving beyond 2020.

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Energy for poverty reduction

There are currently 2.4 billion people world-wide dependent on biomass such as wood, crop residues and dung for their daily cooking requirements and 1.6 billion people lack access to electricity.4

Although energy alone will not reduce poverty, inadequate energy supplies and services can be a constraint to economic growth and development. Promoting access to modern, efficient energy services plays a key role in helping to achieve the Millennium Development Goals.

Key objectives

International energy policy priorities: energy for poverty reduction -a key objective

• Improved access to affordable and reliable energy services, in line with WSSD outcomes

The UK is working with international partners such as the World Bank, the EU Energy Initiative (EUEI), Global Village Energy Partnership (GVEP) and the Renewable Energy and Energy Efficiency Partnership (REEEP) to improve access to modern energy services, in support of economic growth and social development in least developed countries. These initiatives were launched at WSSD in 2002.

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Energy consumption in the developing world IEA world Energy Outlook 2002

Good governance in the energy sector

The UK is keen to promote an approach to the production of oil and gas in producer countries that is based on the principles of good governance.

There are three aspects to this:

Support reform to tackle corruption: In many of the developing country producers of oil and gas, hydrocarbons are the key revenue-generating sector in the economy. Thus, engaging with the energy sector to promote good economic governance will be crucial. As the main players in the energy sector in many countries are either parastatals or foreign firms in joint venture agreements with the Government, this will require efforts to tackle government corruption. This is obviously an objective in itself, but is also a necessary condition for enhancing UK energy security and also promoting poverty reduction in many producer countries. The entry into force of the UN Convention against Corruption, probably in 2006, could be helpful in this regard. However, there is the question of how to tackle corrupt governments who do not want to reform. It will be necessary to identify on a country-by-country basis what levers or tools, including potential inducements, we can deploy in pursuit of these objectives.

Promote environmental governance:

Oil extraction in many producer countries has sometimes caused severe environmental degradation due to a legacy of oil spills, gas flaring and lax environmental regulations. Oil and gas pipelines can also damage the environment. The UK supports action to improve the processes and institutions used to make important environmental decisions. This can be achieved through promoting easy access to environmental information and encouraging broad participation

in environmental decision-making. The FCO is the lead Department for UK involvement in Partnership for Principle 10 (PP10). PP10, established at the World Summit on Sustainable Development (WSSD) in 2002, is an international partnership open to governments, international organisations, and civil society groups to promote improved environmental governance. The key objectives are to ensure access to information, public participation in environmental decision-making and access to justice on environmental matters.

Oil rig in Latin America

Promote Corporate Social Responsibility (CSR): Businesses have a key role to play in promoting security and prosperity in developing countries producing oil and gas. They are also key partners in the effort to improve economic and political governance. The UK is a strong supporter of CSR.

21

o

The UK is currently engaging with the international energy sector on good governance issues through the EITI and the Voluntary Principles for Security and Human Rights, among other work. To achieve the longer-term strategic interest of mainstreaming EITI principles, the UK should also work to develop coalitions with other donors and partners to identify mutual interests in promoting good governance and transparency in other countries such as Equatorial Guinea and Indonesia. The USA and Norway are partners in the Voluntary Principles for Security and Human Rights, working with companies in Nigeria, Angola and Indonesia. G8 countries have also been highlighted, given their importance as potential donors and also in promoting the EITI.

Key objectives

International energy policy priorities: good governance in the energy sector-a key objective

• Better governance of natural resource wealth in producer countries, including by implementation of the Extractive Industries Transparency Initiative (EITI), the Voluntary Principles for Human Rights and Security

22

Promoting UK commercial interests

Commercial staff in overseas posts, who are part of the UKTI resource, are engaged in activities that assist UK-based exporters and in attracting investment into the UK.

In the oil and gas sector they also support UK multinational energy companies and international operators in their pursuit of acreage and investment. The UK's wider international energy policy objectives need to be dovetailed optimally with the commercial goals - as do the resources required to deliver each -in order to produce the best results overall for the UK national interest (as outlined in the preceding sections of this strategy document). The two sets of aims are in large part mutually reinforcing.

The energy sector provides significant market opportunities for UK firms. For example, the global oil and gas market, including refining and petrochemicals, is valued at approximately £200 billion per annum; the power generation and equipment industry has exports in excess of £2.2 billion perannum; and UK renewable energy exports are already around £80-100 million perannum. The global renewables market is forecast to be the fastest growing energy market, its value rising from approximately £6 billion per annum to £52 billion perannum. The financing of projects to meet EU renewable energy targets alone will require over £30 billion of new capital over the next seven years.

The service sector in the UK has a major involvement in the development of energy projects throughout the world and plays a key role in support of the international energy sector as a whole, especially in the context of market liberalisation. The UK has established itself asa leading centre of emissions trading with consequent benefits to the service sector. Trading greenhouse gas emissions is interrelated to markets in fuel and electricity in which the City of London already occupies a pivotal position. The UK can expect to be a significant force in the international business in energy and emissions.

Two of the world's three largest oil companies are UK multinationals. UK companies have major investments in the energy sector around the world.

23

As highlighted in the oil and gas security section, above, many producer countries suffer from severe poverty, inequality, social unrest, conflict, corruption and other problems that threaten the interests of UK companies. Although extractive companies are not deterred from investing in risky developing countries, experience in Colombia, Nigeria, Indonesia and many other oil-rich developing countries shows that millions of dollars are lost every year because of the need to protect sites from social protests and economically motivated sabotage.

Key objectives

International energy policy priorities: Commercial -some key objectives

• Export of UK equipment and services,

and import of best practice and the

efforts of British energy companies

investing or trading abroad

• Development of global markets in

renewable energy and energy efficient

systems

• Good investment climate in oil and gas

producing countries

• Wider UK international energy policy

work and commercial objectives

optimally combined, at Post and in

Whitehall, leading to mutually

reinforcing, positive impacts on the

outcomes for both

24

Linkages between various UK international energy objectives

The UK needs at every stage to be able to make informed judgements about where it can get the most useful impact for its inevitably limited resources.

Energy security and climate change

Diversification of the energy mix away from fossil fuels in the longer term will both enhance energy security and help in the effort to tackle climate change. International recognition of the threats of climate change and efforts to mitigate them reinforce support for promoting non-carbon energy and energy efficiency systems.

Energy efficiency and greater reliance on use of indigenous renewable resources in industrialising economies will reduce pressure on prices of and competition for fossil fuels, as well as cutting emissions growth.

The promotion of distributed generation sources, embedded in electricity networks, should improve energy security, due to the reduced impact of disruption from any one location. These will increase the scope for using renewable energy and ensure greater efficiency of the energy system as a whole. This in turn may reduce our overall dependence on fossil fuels.

It is therefore very important to treat climate change as a core element of overall energy policy, rather than as a separate, sustainable development issue. This also highlights the importance of continuing to have an integrated approach to policy development across the whole of government.

Energy for poverty reduction and energy security

Access to modern energy services will not only help general economic development and thus poverty reduction, it will also contribute to reduced socio-economic instability in key oil producing regions with subsequent benefits for energy security. For example, only 1 0% of rural households and approximately 40% of Nigeria's total population have access to electricity. This leaves some 76 million people without electricity services in a country with a rich endowment of natural energy resources.5 This is a cause for tension.

Energy for poverty reduction and climate change

UK development policy has been that a full menu of options (from renewables to fossil fuels) should be considered for providing energy services. There is a potential tension between doing this quickly and cheaply, and doing it sustainably. A concerted global effort to drive down the costs of low carbon technologies would allow continued poverty reduction without excessive increases in greenhouse gas emissions in the medium or long term. We are, however, a long way from this reality. The important (but not unique) case of Russia highlights the use by governments of cheap fossil fuel as a means of poverty amelioration.

"IEA World Energy Outlook

o

Hurricane Jeanne over the Dominican Republic September 2004

Increased use of renewable technologies and energy efficiency reduces dependence on imported fuels with macro-economic benefits for developing countries (e.g. debt and balance of payments). Least developed countries with very limited access to modern energy services will need to draw on the full range of possible technology options, including (but not only) renewable energy. In much of Africa, for instance, access to affordable and reliable services is important to economic growth and social development. There are in Africa significant unexploited opportunities for renewable energy.

Renewable technologies and energy efficiency will reduce local and indoor air pollution, with consequent health benefits and savings on health costs. Moreover, through reducing reliance on unsustainable use of fuel wood, these can also reduce deforestation, desertification and drought in areas where resources are in short supply.

Good governance, energy security and commercial objectives

Efforts to ensure that the benefits of resource wealth are managed efficiently and equitably will help achieve both poverty reduction and energy security objectives.

Implementing the EITI will not, in itself, solve the complex social and economic problems faced by many resource rich developing countries. It is an essential first step to improving accountability and the management of public finances. Broadly based social development and economic growth will crucially depend on good governance, policy reforms and sound economic management. Taken together, these will also improve the investment climate and opportunities for UK companies.

26

Linkages between international energy objectives and other UK international priorities

There are strong linkages between energy objectives and the UK's other international priorities as set out in the December 2003 Foreign Policy White Paper.

In particular, there is strong read-across with the UK's broader agenda of stability and reform in key regions and its sustainable development objectives.

There is a need for some short-term work on the linkages between energy security and conflict or failing states. There have been a large number of academic studies on the links between natural resource dependency and conflict and instability. For example, recent research undertaken by the World Bank and others suggests that developing countries face substantially higher risks of violent conflict and poor governance if they are highly dependent on primary commodities. Natural resources are never the sole source of conflict, and they do not make conflict inevitable. However, the presence of abundant primary commodities, especially in low-income countries, exacerbates the risks of conflict and, if conflict does break out, tends to prolong it and makes it harder to resolve.6 Five the world's 20 most oil-dependent states have had civil wars since 1990. There is a need to assess what this means for the UK, including the need for horizon scanning, risk management and policy interventions. EITI and other initiatives address some of the root causes, but thinking on policies to deal with symptoms is also required. In the longer term, producer countries need to reduce their dependence on a single commodity and find ways of achieving broadly based economic growth.

OPEC meeting in Vienna September 2004

Natural resource dependency also suggests the need for very long-term thinking about the impact on oil exporters of successful emission mitigation policies, and how they need to prepare for that through social and economic reform. Many producers are highly dependent on oil or gas production, which means they are opposed to efforts to diversify away from fossil fuels and reduce carbon emissions. The UK resists producer demands for funding to compensate for climate change mitigation. But some thinking is required to identify other ways to address this issue.

27

Multilateral institutions and partners

Bilateral engagement is important. However, in many instances, working through multilateral institutions will be the way to achieve more significant results.

This is particularly the case when engaging with smaller bilateral partners. The key multilateral organisations are the EU, the G8, the IEA, the OECD, the UN System, the international financial institutions (IFIs) and NATO.

TheEU

Three EU member states other than the UK (France, Germany and Italy) are also members of the G8. Sometimes a member state has an important role in meeting a particular objective because of its strong interests. It will be important to engage with these countries. But additionally, working with EU member states and EU institutions more widely will be necessary and sometimes key to success. This is because decisions taken by the European Commission and the Council of Ministers have a direct impact on UK energy policy.

The EU speaks as a group at international climate change negotiations and carries corresponding weight. This is important to ensure that the EU is able to negotiate effectively to meet the agreed objectives of its members.

Engaging with EU member states will also be vital to ensuring that the 2002 EU Energy Market Liberalisation package is effectively implemented. The European Commission is engaged in energy dialogues with Russia, Iran and Algeria. The UK needs to work closely with the Commission and member states to help ensure the dialogues yield maximum mutual benefit.

More widely the external action of the EU, including through the European Security Strategy of 2003, needs to be harnessed as effectively as possible in pursuit of the energy policy goals set out in this strategy document.

TheGS

The G8 is an important forum for promoting our energy interests. In particular, the G8 Action Plan on Science and Technology will play a role in promoting the development of new, cleaner energy technologies. The G8 is also an important forum for achieving progress on EITI and good governance. The UK and US are leading on the G8 Initiative on Corruption and Transparency, which was announced at the Evian Summit in 2003.

IEA, OECD and the IEF

The International Energy Agency plays a key role helping to ensure stable energy markets. Originally formed to oversee its members' oil emergency arrangements, it is now also a policy forum for analysis, sharing best practice and technical collaboration in energy. Its committees review the energy policy of both member and non-member countries and long-term issues such as regulation, security of supply and the environment as well as R&D, technology, oil markets and emergency preparedness. The IEA works closely with its parent organisation, the OECD, and its sister organisation, the Nuclear Energy Agency (NEA), on joint analysis of the economic, social and environmental impacts of

28

energy policy. We also play a full part in the International Energy Forum (IEF), the key forum for multilateral dialogue between energy producers and consumers.

UN system

The UN Security Council is the primary international decision-making body for issues surrounding security and conflict resolution. These will often directly relate to global energy security interests. The UK is a permanent member of the Council, with significant influence.

Climate change negotiations are conducted under the auspices of the UNFCCC. UN agencies also play an important role on energy issues, including UNIDO (through its mandate for technology transfer and the International Technology Centres) and UNER

The international financial institutions

The IFIs have a key role in assisting countries secure macroeconomic stability, debt sustainability, and long-term growth and poverty reduction. The IMF has a key role in economic surveillance, crisis prevention and crisis resolution. The World Bank is promoting energy sector restructuring and reform in many countries, partly to stimulate private sector participation and investment. It is also seeking to increase its annual lending commitments for renewable energy and energy efficiency projects by an average of 20% per year over the five years to 2010. Both organisations work to support good governance, and promote adherence to internationally agreed codes and standards. The institutions are engaging with less developed countries on climate change,

access to energy services and the EITl.The UK also works with other development banks such as the EBRD (European Bank for Reconstruction and Development).

Other international organisations

There are also a number of other important international organisations and partners with which the UK must continue to engage:

• IAEA-the International Atomic Energy

Agency is an important partner on

nuclear energy issues, including the

physical protection of nuclear power

plants.

• IPCC-which will be preparing the

fourth Assessment report on Climate

Change over the next three years.

• Energy Charter Conference - comprises

52 signatories, aiming to create a level

playing field of rules to be observed by

all participating governments.

• Energy companies-energy companies

provide the investment which makes the

delivery energy supplies possible; they

are also partners in the EITI, Voluntary

Principles and REEEP, as well as providing

detailed information on oil/gas

production trends.

29

Countries

It is worth giving a summary illustration here of the importance of carrying out the UK's key objectives in certain countries.

WJii

Solar panels

• energy security: if they are key producers

(such as Algeria, Canada, Nigeria, Norway,

Russia, Saudi Arabia etc.) or are important

transit countries (Turkey, Ukraine). Important

consumers such as China, India, Japan and

USA will be competing with the UK for

future energy supplies and so have

implications for UK energy security and

global prices. The UK pursues a close energy

dialogue with the USA

• climate change: if they are historically large

emitters (such as Russia, USA), large emitters

in the future (e.g. Brazil, China and India) or

countries which are playing a key role in

developing new, low-carbon technologies

(such as Canada, China, USA)

• commercial links: if they have oil and gas

sectors, opportunities in power generation

or in renewable or low-carbon technologies.

Examples include Brazil, China, India,

Indonesia, Russia and USA

• energy for poverty reduction: if they have

significant percentages of their populations

without access to energy and are partners in

the Renewable Energy and Energy Efficiency

Partnership (REEEP) and Global Village

Energy Partnership (e.g. Angola, China, India,

Nigeria, South Africa) or are potential donors

• good governance: if the energy sector

provides the opportunity to promote wider

UK objectives on good governance

(economic, environmental etc.). Angola,

Azerbaijan, Georgia, Kazakhstan, Nigeria

and Trinidad & Tobago have been identified

in the initial list of potential pilot countries

for the Extractive Industries Transparency

Initiative (EITI), which is giving a particular

focus to Africa.

30

UK working methods

UK International Priorities: The Energy Strategy is a joint effort between government departments.

The Defence and Overseas Policy Secretariat of the Cabinet Office has responsibility for ensuring all departmental views are fully integrated into foreign policy activity requiring co-ordination between the FCO and other government departments. The Domestic Affairs Secretariat has the same role on the domestic side. In addition, the Sustainable Energy Policy Network (SEPN) has been set up, chaired and co-ordinated by DTI officials, involving policy units from across government departments, the devolved administrations, regulators and key delivery organisations that are jointly responsible for delivering the Energy White Paper. There is a SEPN Ministerial Group (co-chaired by the Secretaries of State for Trade and Industry; and for the Environment, Food and Rural Affairs). There is an ad hoc Ministerial Group on Climate Change (co-chaired by the Secretaries of State for Foreign and Commonwealth Affairs; and for the Environment, Food and Rural Affairs). A Domestic Affairs Sub-Committee of the Cabinet can take relevant domestic policy decisions. The Defence and Overseas Policy Committee of the Cabinet (and its subcommittees) can take foreign and defence policy decisions.

The FCO in London and the overseas diplomatic network will need to play a key role in working with SEPN members who are responsible for delivering the international energy commitments contained in the Energy White Paper, including through the International Issues Group of SEPN. These commitments are reflected and built upon, in the Foreign Policy

White Paper, and in this Strategy. The relevant SEPN members include the DTI, DEFRA, DfID, HM Treasury and UKTI (a joint FCO/DTI department), as well as the MoD, DfT and the devolved administrations.

To achieve these goals the FCO in London will ensure that the foreign policy advice given to ministers and Whitehall's policy processes take into account international energy angles. With the DTI and DEFRA, the FCO will help negotiate with other capitals and advise on how to achieve UK international climate and energy objectives in other countries and in international organisations. It will work to ensure that the Government's dealings with other countries are coherently managed. The FCO will give support for the Prime Minister's involvement in foreign policy, which will be essential for the UK's international impact in the climate and energy field as elsewhere. And it will work with a range of interested partners outside Whitehall. In the overseas diplomatic posts, staff will gather, analyse and share information, and participate in international negotiation. They will help the FCO and Whitehall Departments form policy on international energy issues, and will advocate and implement itabroad. This Strategy will have an important role in helping inform decisions about the distribution of resources required to deliver on the objectives set out in it.

31

32

Abbreviations

COM Clean Development Mechanism

CSR Corporate Social Responsibility

DEFRA Department for Environment, Food and Rural Affairs

DfID Department for International Development

DfT Department for Transport

DTI Department of Trade and Industry

EITI Extractive Industries Transparency Initiative

EUEI European Union Energy Initiative

FCO Foreign and Commonwealth Office

GVEP Global Village Energy Partnership

HMG Her Majesty's Government

IAEA International Atomic Energy Agency

IEA International Energy Agency

IEF International Energy Forum

IFIs International Financial Institutions

IMO International Maritime Organisation

IPCC Intergovernmental Panel on Climate Change

LNG Liquefied Natural Gas

MDGs Millennium Development Goals

MOD Ministry of Defence

NATO North Atlantic Treaty Organisation

NEA Nuclear Energy Agency

NGO Non-Governmental Organisation

OECD Organisation for Economic Co-operation and Development

OPEC Organization of the Petroleum Exporting Countries

RCEP Royal Commission on Environmental Pollution

REEEP Renewable Energy and Energy Efficiency Partnership

SEPN Sustainable Energy Policy Network

UKTI UK Trade and Investment

UNEP United Nations Environment Programme

UNFCCC UN Framework Convention on Climate Change

UNIDO UN Industrial Development Organization

WSSD World Summit for Sustainable Development

WTO World Trade Organisation

WWF World Wildlife Fund

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