The joint Energy Forum and IEEJ major study on The Global Energy Market: Comprehensive Strategies to Meet Geopolitical and Financial Risks—The G8, Energy Security, and Global Climate Issues is a one-year study, finalized prior to the G8 meeting in Japan during July 2008. The study is part of the Baker Institute's longstanding research collaboration with key Japanese think tanks and university scholars. In September 2006, a Baker Institute delegation including Ambassador Edward Djerejian, Founding Director of the Baker Institute, Amy Myers Jaffe, Wallace S. Wilson Fellow in Energy Studies, and Mahmoud El-Gamal, Rice University Professor of Economics, traveled to Tokyo for the study's inaugural meeting.
The research examines a variety of scenarios for the future of global energy markets, focusing on factors that could trigger a regional or worldwide crisis. The study assesses the geopolitical risks currently facing international energy markets and the global financial system. It also investigates the consequences that such risks could pose to energy security, pricing and supply as well as to the transparent and smooth operation of the global market for oil trade and investment.
Finally, researchers developed a concrete menu of policy recommendations to strengthen the stability of global energy and financial markets in order to withstand possible shocks and geopolitical threats, including strategies related to enhancing diversification, alternative energy technologies, multilateral energy trade accords, emergency market procedures, and economic reform and privatization in the Middle East and Russia. By analyzing these threats in depth, the study aims to develop a series of policy frameworks that can be used to fortify the current market system and ensure that it can respond flexibly to the array of threats that might be encountered in the coming years.
The primary items to be researched in this study are:
(1) Visions to address global warming issues including that of a post-Kyoto multilateral framework;
(2) Main policy options as solutions to global warming and energy security issues;
(3) Risks and threats to the stability of international energy markets and measures to cope with them.
This study was made possible through the generous support of the Institute of Energy Economics, Japan
and the Baker Institute Energy Forum Sponsors.