In 2012, Kenya joined the swathe of East African countries with recent significant oil and gas discoveries. Long-established as a regional leader in terms of economic growth, foreign investment and technological innovation, Kenya's leaders are now assessing how to establish an effective policy framework to manage oil revenues while at the same time managing the expectations of its citizens.  

At this event, the panel will discuss how transparency and accountability can be strengthened as Kenya moves to become an oil-producing nation. This event will mark the UK launch of a report by the Kenyan Civil Society Platform on Oil and Gas, entitled Setting the Agenda for the Development of Kenya's Oil and Gas Resources.

LIVE STREAM: This event will be live streamed. The live stream will be made available at 12:00 BST on Wednesday 8 October 2014.

THIS EVENT IS NOW FULL AND REGISTRATION IS CLOSED.

At the end of November amidst much speculation, OPEC kept its formal production level of 30 million barrels per day in what appears to be an oversupplied market. This controversial decision was taken because cutting production would cede market share to the growing production flooding out of the US. The immediate result was a significant fall in oil prices.

The 'official' logic behind the decision was twofold. First, it was contended that weak demand was temporary because of slow economic growth and would recover next year. Second, the argument went, lower prices would close high-cost production from the shale technology revolution. In other words, current prices were too low and the market, allowed to operate, would rectify this.  Many (rightly) saw this decision as a significant landmark in global oil markets. In effect, OPEC had ceded any semblance of control over the market and prices, instead launching the oil price onto a sea governed by market forces.

Those with knowledge of oil market history will see this as a very dangerous gamble based on two serious misconceptions. After the oil shocks of the 1970s, the market was in a similar position as now. Demand was falling and non-OPEC supply was rising. In response, to defend prices, OPEC (but effectively Saudi Arabia) cut production because the fall in demand was seen as temporary as a result of global recession and would shortly recover. It did not. Then when the oil price eventually collapsed in 1986, the OPEC view was that lower prices would quickly reverse as they would shut in high-cost production, specifically in the North Sea. These views in the 1980s were conceptual mistakes, still relevant today and likely to undermine OPEC’s current strategy. The mistakes are a failure to understand the difference between an income effect and a price effect on demand and the failure to understand the difference between a break-even price (what investors consider when deciding whether to invest in new producing capacity) and a shut-in price (what existing operators consider will cover variable costs and if not, will stop production from existing wells.).

While some of the fall in demand in the 1980s was because of the recession (an income effect), some was due to genuine demand destruction as the result of much higher prices (a price effect). Recession-induced lower demand reverses itself when the global economy recovers, but demand destruction is permanent. Today, part of the fall in oil demand is because oil prices have inexorably risen (from $32.40 in 2002 to $108.66 in constant 2013 dollars). Furthermore, many sources of recent oil demand growth, notably China and India, have been moving from subsidized domestic oil prices to higher border-based prices. OPEC’s expectations of quickly recovering demand may be optimistic as they were in the early 1980s.

OPEC is hoping lower break-even prices will reduce shale production.  Various estimates for the US shale break-even price have been bandied around (usually in the realm of $60-$80 per barrel). Most are far too high, because they ignore the fact that the recent boom in shale operations has grossly inflated project costs. If investment in new capacity slows, then project costs − and hence the break-even price − will fall.

However, in terms of OPEC’s current strategy, the break-even price is the wrong metric. What matters in the next few years is the shut-in price.  After the 1986 price collapse, a number of stripper wells in US (with high variable costs) did close, but the loss of production was minimal. North Sea production, which had been OPEC’s prime target, was hardly affected and actually increased in 1987. The current level of shut-in price for shale oil is again debatable, but almost certainly is well below $40 per barrel. Thus it will be some time before existing shale oil production falls, even if prices stay low.

Should the oil price fall towards variable costs, threatening shale supply, it will be the OPEC producers who must blink first. They will then try to take back control of the market, if they can.

To comment on this article, please contact Chatham House Feedback 

This event will focus on the trade in Pericopsis elata (Afrormosia/Assamela) harvested in West and Central Africa, and will be co-chaired by Emmanuel Heuse, FLEGT facilitator in the Democratic Republic of Congo.

This workshop is supported by the Climate and Land Use Alliance, the UK Department of International Development and the European Union Action to Fight Environmental Crime.

Attendance at this event is by invitation only.

Summary

The Guidelines for Good Governance in Emerging Oil and Gas Producers 2016, compiled under the auspices of the New Petroleum Producers Discussion Group, review common challenges facing emerging producer countries in the phases of exploration, recent discoveries and early production. The following are the Guidelines’ broad recommendations for addressing these challenges.

• International best practice may not be appropriate in the case of emerging producers in the oil and gas sector. Instead, the aim should be for more appropriate practice, taking account of the national context; more effective practice, in the interests of achieving rapid results; and better practice, allowing incremental improvements to governance.
• Government policy should be guided by a clear vision for the development of the country and a strategic view of how the petroleum sector will deliver that vision. 
• In order to attract the most qualified oil company to a country with an unproven resource base, the host government can invest in geological data, strengthen its prequalification criteria and ensure transparency. It should also plan for success and anticipate the implications of hydrocarbon discoveries in its tax code, and be robust through declining oil and gas prices.
• Licensing is a key mechanism whereby government can reap early revenues and maximize long-term national benefits. Government must ensure that it simplifies both negotiations and tax structures to mitigate knowledge asymmetries with oil companies.
• Government and industry must engage and share information with affected communities to manage local expectations regarding the petroleum sector and build trust. 
• In emerging producers, budgets for local content may be small and timelines for building capacity short. In this context, the focus should be on the potential for repeat use of any local capacity developed. 
• Meaningful participation of national organizations in resource development is a central objective of many emerging producers. Capacity is needed to enable this, and the Guidelines examine where and how best to develop that capacity.
• Incremental improvements to the governance of the national petroleum sector will allow emerging producers to increase accountability. The focus in this regard should be on building up capacity in checks and balances as resources become proven.

Presenting latest thinking from our senior research fellows on the dynamics that will affect fossil fuels investment and markets in the year ahead and promoting high-level discussion amongst experts.

The first session examines the oil price market which faces great uncertainty in 2017 with the OPEC agreement in Algiers raising questions about  compliance, supply and impact on the industry's future. It will also assess how US production may alter given the new administration; the state of the nuclear agreement with Iran; and future events in the Middle East.

The second session looks at what Brexit and the election of President Trump means for energy and climate policy in the UK and globally, investigating the major challenges, areas of contention, and areas of opportunity for the UK’s climate and energy policy in light of Brexit.

The second speaker in this session will outline what the appointment of President Trump will mean for global energy and climate policy.

Attendance at this event is by invitation only.

The measures taken to limit the spread of the coronavirus - in particular social distancing -  come with significant economic costs, as the drop both in demand for goods and services and in supply due to workers being at home sick will create a short-term economic shock not seen in modern times.

Sectors that are usually less affected by regular economic swings such as transport and tourism are being confronted with an almost total collapse in demand. In the airline sector, companies are warning they might only be able to hold out for a few months more.

Building on the calls to provide income support to all citizens and shore up businesses, European leaders should now be giving explicit permission to the European Central Bank (ECB) to provide whatever financial support is needed.

Although political leaders have responded to the economic threat, the measures announced across the continent have mainly been to support businesses. The crisis is broader and deeper than the current response.

Support for weaker governments

The ECB already reacted to COVID-19 by announcing measures to support the banking system, which is important to guarantee the continuity of the European financial system and to ensure financially weaker European governments do not have to confront a failing banking system as well.

Although government-subsidised reduced working hours and sick pay are a solution for many businesses and workers, crucially they are not for those working on temporary contracts or the self-employed. They need direct income support.

This might come down to instituting something that looks like a universal basic income (UBI), and ensuring money keeps flowing through the economy as much as possible to help avoid a cascade of defaults and significant long-term damage.

But while this is likely to be the most effective remedy to limit the medium-term impact on the economy, it is particularly costly. Just as an indication, total compensation of employees was on average around €470bn per month in the eurozone last year.

Attempting to target payments using existing welfare payment channels would reduce costs, but is difficult to implement and runs the risk of many households and businesses in need missing out.

The increase in spending and lost revenue associated with these support measures dwarf the fiscal response to the 2008-09 financial crisis. The eurozone economy could contract by close to 10% this year and budget deficits are likely be in double digits throughout the bloc.

The European Commission has already stated member states are free to spend whatever is necessary to combat the crisis, which is not surprising given the Stability and Growth Pact - which includes the fiscal rules - allows for such eventualities.

Several eurozone countries do probably have the fiscal space to deal with this. Countries such as Germany and the Netherlands have run several years of balanced budgets recently and significantly decreased their debt levels. For countries such as Italy, and even France, it is a different story and the combination of much higher spending and a collapse in tax revenue is more likely to lead to questions in the market over the sustainability of their debt levels. In order to avoid this, the Covid-19 response must be financed collectively.

The Eurogroup could decide to use the European Stability Mechanism (ESM) to provide states with the funds, while suitably ditching the political conditionality that came with previous bailout. But the ESM currently has €410bn in remaining lending capacity, which is unlikely to be enough and difficult to rapidly increase.

So this leaves the ECB to pick up the tab of national governments’ increase in spending, as the only institution with effectively unlimited monetary firepower. But a collective EU response is complicated by the common currency, and particularly by the role of the ECB.

The ECB can’t just do whatever it likes and is limited more than other major central banks in its room for manoeuvre. It does have a programme to buy government bonds but this relies on countries agreeing to a rescue programme within the context of the ESM, with all the resulting political difficulties.

There are two main ways that the ECB could finance the response to the crisis. First, it could buy up more or all bonds issued by the member states. A first step in this direction would be to scrap the limits on the bonds it can buy. Through self-imposed rules, the ECB can only buy up to a third of every country’s outstanding public debt. There are good reasons for this in normal times, but these are not normal times. With the political blessing of the European Council, the Eurosystem of central banks could then start buying bonds issued by governments to finance whatever expenditure they deem necessary to combat the crisis.

Secondly, essentially give governments an overdraft with the ECB or the national central banks. Although a central bank lending directly to governments is outlawed by the European treaties, the COVID-19 crisis means these rules should be temporarily suspended by the European Council.

Back in 2012, the then president of the ECB, Mario Draghi, proclaimed the ECB would do whatever it takes, within its mandate, to save the euro, which was widely seen as a crucial step towards solving the eurozone crisis. The time is now right for eurozone political leaders to explicitly tell the ECB that together they can do whatever it takes to save the eurozone economy through direct support for businesses and households.

Please note this an online-only event.

According to a previously agreed timetable for phase two of Brexit talks, negotiations on the future EU-UK trade relations were scheduled to begin in March. Then a global pandemic hit. Despite the ongoing COVID-19 outbreak, the UK government insists that the Brexit negotiations are on track and there are currently no plans to extend the transition period beyond 2020.

However, the original timetable for trade talks was already widely seen as extremely constrained. Can negotiations still be done in time? With the decision on any possible extension to be made by July at the latest, can the two sides make sufficient progress by that point? Or would the ongoing public health crisis make requesting an extension to the transition period more politically viable for the UK government? Finally, if there is no extension, could Britain still leave the EU with no deal?

In this webinar, the speaker will discuss how the need to manage other challenges, such as the current COVID-19 outbreak, might affect the government’s approach to the negotiations with the EU. He will also share his insights on what to expect from the second phase of negotiations and on the most important lessons from phase one. 

Please note this an online-only event.

Norway is one of the few European countries that remains outside of the European Union. After the country’s population rejected the prospect of joining the EU twice, Norway’s relationship with the Union has been based on its membership of the European Economic Area (EEA), alongside Iceland and Liechtenstein.

The ‘Norway Model’ was often mentioned in the run up to the Brexit vote as a possible basis for Britain’s future relationship with the bloc, not least because it offers the least disruption to the current arrangement. Equally, Norway is not subject to the EU fisheries policy - an anticipated major issue in the next phase of Brexit talks. Nor is it part of the EU Customs Union.

Even though Prime Minister Johnson has now ruled out the type of deep economic and regulatory integration with the EU that Norway enjoys through its EEA membership, the country’s experience can still offer valuable lessons for the UK as it prepares to exit the transition period at the end of 2020.

In this session, the speaker will share Norway’s experience as a long-standing EEA member and discuss the challenges of engaging with the EU from the outside. What lessons can Norway offer the UK ahead of the negotiations on the future of UK-EU relations? What are the limits of its current arrangement with the EU? And is there any appetite among the Norwegian population to revisit it?

The new European Commission had a bold new agenda when it began its work in December 2019, with climate change, digital transformation and strengthening European democracy among its priorities. Less than six months later, the European continent is in the midst of the worst crisis since the second World War and business as usual has been taken over by crisis management.

Has COVID-19 monopolized the agenda in Brussels? What priorities are still on the table and what debates have fallen victim to the coronavirus? Is the current crisis reigniting and exacerbating existing faultlines in the EU or creating new ones?

Reflecting on his first four months as the Economist’s Charlemagne columnist, the speaker will share what decision-making in Brussels looks like during a pandemic and what debates are dominating conversations in the EU capital today.

In the last 100 years, global economic crises from the Great Depression of the 1930s to the 2008 financial crash have contributed to significant political changes in Europe, often leading to a rise in popularity for extremist parties and politics. As Europe contends with a perceived crisis of democracy - now compounded by the varied responses to the coronavirus outbreak - how should we understand the relationship between externally-driven economic crises, political upheaval and democracy?

The panellists will consider the parallels between the political responses to some of the greatest economic crises Europe has experienced in the last century. Given that economic crises often transcend borders, why does political disruption vary between democracies? What can history tell us about the potential political impact of the unfolding COVID-19-related economic crisis? And will the unprecedented financial interventions by governments across Europe fundamentally change the expectations citizens have of the role government should play in their lives?

This event is based on a recent article in The World Today by Hans Kundnani and Pepijn Bergsen who are both researchers in Chatham House's Europe Programme. 'Crawling from the Wreckage' is the first in a series of articles that look at key themes in European political discourse from the last century. You can read the article here. 

This event is open to Chatham House Members. Not a member? Find out more.

Earlier this month, Sheikh Tamim – the emir of Qatar – hailed the country’s success in overcoming the impacts of the embargo levied by the so-called Arab Quartet – Bahrain, Egypt, Saudi Arabia and the United Arab Emirates (UAE). Qatar will post a budget surplus for the first time in three years, and the country’s long-term plan for economic diversification has taken great strides, according to the emir. Key among the achievements cited was the advancement of Qatar’s domestic food industry.

When the blockade was introduced in June 2017, it threw the vulnerability of Qatar’s domestic food supply to outside interruption into sharp relief. Qatar is poorly suited to growing food. The desert country ranks as the most water-stressed in the world. As one of the hottest, most arid countries in the world, trade is critical to feeding the nation; over 90 per cent of its food supply is imported.

Most of Qatar’s cereal imports – including 80 per cent of its wheat supply – arrive by sea from exporters including India, Russia and Australia. Sitting on the eastern edge of the Persian Gulf, Qatar’s only maritime gateway to the world is the Strait of Hormuz. This narrow body of water can, as events this summer have shown, be disrupted by geopolitical events. But for 40 per cent of overall food imports, overland trade from Saudi Arabia was Qatar’s primary supply channel before June 2017 – particularly so for dairy products and fresh fruit and vegetables coming from the EU, Turkey and Jordan.

The abrupt closure of Saudi Arabia’s borders prompted significant private investment in Qatar’s own food industry; domestic production has reportedly increased four-fold since the blockade was introduced. Prior to the blockade, Qatar imported 85 per cent of its vegetables; it now hopes to produce 60 per cent within the next three years. Perhaps even more remarkably, the country is now self-sufficient in dairy, having previously relied on imports for 72 per cent of its supply.

This progress has come at a cost. Qatar’s booming domestic industry is highly resource-intensive. To fill the gap in the dairy sector, Baladna – the country’s principal dairy producer – imported around 18,000 Holstein dairy cows from the EU and US. The company is thriving; in June of this year, it made its first dairy exports.

But the desert is not a natural environment for these cows; they must be kept indoors, at temperatures around 15°C cooler than the outside air, and misted with water to prevent overheating. The cooling systems are a huge drain on local resources. Each dairy cow requires an average of 185 gallons of water a day, almost twice the volume used by the average Qatari household. The majority of this water comes from oil- or gas-powered desalination plants; the cooling systems themselves run on gas-fired electricity.

Qatar has traditionally invested in production overseas – particularly in Sudan and Tanzania – to secure its fodder supply, but the government has plans to become self-sufficient in fodder crops such as lucerne (alfalfa) and Rhodes grass. This will require irrigation on a vast scale. Qatar’s farmland is mostly located in the north of the country where it benefits from aquifers; fodder production already accounts for half of the groundwater extracted for use in agriculture.

Despite commitments made under the National Food Security Programme to improving the water efficiency of Qatar’s food production, the rate of draw-down of these aquifers exceeds their recharge rates. Overexploitation has resulted in saline intrusion, threatening their long-term viability. With 92 per cent of all extracted groundwater given to farmers free of charge, there is little incentive for economizing on its use.

Increasing production will also likely mean increasing fertilizer use; rates of fertilizer use in Qatar are among the highest in the world, second only to those in Singapore.

Both government and industry are taking small steps to ‘green’ the country’s food production. Certain local authorities plan to ban the use of groundwater for fodder production by 2025, requiring producers to use treated sewage water instead and reserving the use of groundwater for crop production.

A number of companies are also adopting so-called ‘circular’ practices to achieve more efficienct resource use; Agrico, a major vegetable producer, has expanded its organic hydroponics operations, a move the company reports has led to a 90 per cent reduction in water use. But, with a target to produce up to 50 per cent of Qatar’s fresh food supply domestically within just a few years, scattered examples of resource-saving strategies will not be enough to mitigate the rise in water demand.

As Qatar looks to continue growing its food industry in the wake of the blockade, it is from Saudi Arabia – ironic though it may be – that Qatar stands to learn important lessons.

Saudi Arabia’s scaling up of domestic wheat production – initially to achieve self-sufficiency and then to support a prosperous export industry – was ultimately a failed effort. The unsustainable extraction of groundwater – fuelled by generous subsidies for wheat producers and the nominal cost of diesel for pumping – brought the country’s water table to the brink of collapse, and the government was forced to make a dramatic U-turn, reducing then removing the subsidies and shrinking its wheat sector.

The UAE also provides an instructive example for how domestic food production may be supported – this time positive. This summer, the Department of Environment in Abu Dhabi announced its Recycled Water Policy, laying out a policy framework to promote and facilitate reused water across all major sectors, including agriculture.

Back in 2014, the Ministry of Climate Change and Environment set hydroponics as a key priority, launching a 100 million Emirati dirham fund to incentivize and support farmers establishing hydroponic farms. And the International Center for Biosaline Agriculture, based in Dubai and supported by the UAE government, undertakes pioneering research into sustainable food production in saline environments.

On the face of it, Qatar has indeed bounced back from the blockade. As and when cross-border trade is re-established with Saudi Arabia, Qatar will boast a more diverse – and more resilient – network of trade relationships than it did prior to June 2017.

In addition to investment in domestic food production, the blockade also provoked a rapid recalibration of Qatar’s trade relationships. Allies in the region – most notably Turkey and Iran – were quick to come to Qatar’s assistance, delivering fresh produce by air. Since then, Qatar has scaled up its trading relationship with both countries.

It has also leveraged its position as the world’s largest exporter of liquid natural gas to establish new maritime trade lines with major food exporters, including India. Should tensions spike again in the future, it will be in a stronger position to weather the storm.

But, in the absence of a commitment to support the widespread adoption of circular agricultural technologies and practices, Qatar’s commitment to increasing its self-sufficiency and expanding its domestic production could ultimately undermine its long-term food security.

Rising average temperatures and increasingly frequent extreme weather events – like the heatwave in 2010 when temperatures soared to over 50°C – will exacerbate already high resource stress in the country. Unsustainable exploitation of finite land, water and energy reserves will limit the country’s long-term capacity to produce food and weaken its ability to withstand future disruptions to regional and international supply channels.

As Qatar continues in its efforts to secure a reliable food supply, it would do well to heed the experience of its neighbours, be they friend or foe.

In a new event in the Sustainable Transitions series, the speaker will present an update of Sino-Russian gas cooperation.

To give a comprehensive account of their impact on global liquefied natural gas (LNG) supplies, he will discuss the following points:

• Gas is scheduled to start flowing from the Power of Siberia I (POS) on 2 December 2019. But what is the background of development of POS 1 and what is its current status and prospects? 
• What are the chances of exporting gas through the proposed Altai pipeline? Why is the Mongolia export route so significant? And how will it affect the Central Asian Republics and in particular Turkmenistan’s gas export to China? 
• What are the implications of both POS I and Altai gas via Mongolia route in the context of global LNG supply?
• What are the prospects for multilateral pipeline gas cooperation in northeast Asia?
• What are the implications for other Arctic onshore LNG supply, in particular, for Novatek's Yamal LNG and Arctic LNG 1 and 2 to China on top of POS 1 and Altai gas?

Attendance at this event is by invitation only.

A ground-breaking research project from Chatham House, supported by The Power of Nutrition, is exploring the business case for tackling undernutrition, micronutrient deficiencies and overnutrition. Companies across all sectors hold huge, transformative power to save countless lives and transform their own financial prospects. To act, they need more compelling evidence of the potential for targeted investments and strategies to promote better nutrition and create healthier, more productive workforces and consumers.

At this workshop, Chatham House will engage business decision-makers in a scenario exercise that explores different nutrition futures and their commercial prospects in each before examining what different strategies business can pursue to maximize future profitability through investments in nutrition.

Attendance at this event is by invitation only.

Mass human displacement crises like those in Syria, Democratic Republic of Congo and Myanmar do not dissipate within a year or two. The average age of a refugee camp globally is 18 and counting.

Meanwhile, the pressures on resources and services in neighbouring countries absorbing an influx of vulnerable people can be harsh. Imagine the overstressed schools and hospitals where intake has doubled in areas of Jordan and Lebanon, and the damage to ecosystems and elephant habitats where camps have sprung up in Bangladesh. 

The fallout from such crises is prompting new ways of working in the international humanitarian system. These recognize that short-term, emergency responses can jeopardize national development goals if maintained indefinitely. In most refugee camps for instance, each family cooks with wood in regions already suffering from deforestation.

Reliance on polluting trucks to bring in fuel and water is high. At the same time, developing countries – which host 80 per cent of the record 70.8 million people currently displaced by conflict – desperately need to address health, water, energy and housing needs for their own populations. Aid and welfare interventions directed only at refugees can provoke frustrations amongst the local community, damaging social cohesion and fostering political instability. 

The Global Compact on Refugees, affirmed by the United Nations General Assembly one year ago, aims at fairer responsibility-sharing amongst countries and equitable resourcing to host communities and refugees. The Global Refugee Forum (GRF) taking place 17–18 December in Geneva is the starting point for donor pledges and commitments. 

An opportunity for refugee-hosting countries

Among the GRF’s 6 focus themes is ‘Energy and Infrastructure’ – a new priority for humanitarian aid and finance. This covers energy, environment, water and sanitation, health, shelter and connectivity – services that are tightly interconnected. In October, the UN Refugee Agency (UNHCR) also launched its first energy strategy, which ‘promotes the transition to clean, renewable energy at refugee camps and hosting sites’.

Given this impetus, alongside a growing international focus on speeding up Sustainable Development Goal (SDG) delivery, stabilizing migration and supporting climate resilience, more aid and soft credit for interlinked objectives will become available. Countries hosting refugees have an opportunity; how they approach it will determine the level of support they attract and how effectively it is deployed. 

Policy conditions are key to success

In a refugee situation, energy access is about much more than keeping warm or cooking food. It is also about connecting with loved ones across borders, safety at night, healthy births and making a living. Due to the lack of long-term funding, maintenance systems or government approvals, failed pilots to introduce for example, solar streetlighting or clean cookstoves, are the norm. 

To increase their durability and reach, projects need to harness local markets and support national development goals, especially those on access to modern energy for all (SDG 7), protecting ecosystems (SDG 15) and resilient human settlements (SDG 11). Several examples of these are emerging, each with valuable lessons to share. 

The policy environment, in particular, coordination between authorities, humanitarian agencies and private sector actors, can make or break a project. Beyond the basic conditions of adequate security and refugee acceptance, our research highlights three enabling factors:

First: government willingness to engage in long-term response and resilience coordination. Jordan is the most advanced in this with its three-year rolling Response Plan for the Syria Crisis whereby the government works with humanitarian agencies to integrate refugee welfare with national development needs.

Here, energy, water and housing needs are specified and have attracted funding. For example, in Irbid, Jordan where over 137,600 Syrian refugees live, the Norwegian Refugee Council, is expanding a programme under the Renewable Energy for Refugees (RE4R) initiative that applies energy efficiency and solar water heating to reduce bills and rents for refugee tenants while adding value for Jordanian homeowners.   

Second: strong, clear, energy and environment plans and legislation. Signals can be mixed. Jordan’s ‘wheeling’ regulation, allowed UNHCR to reduce its electricity bills through specially built solar plants at Azraq and Zaatari, yet the current freeze on renewable connections has stifled further projects.

In Rwanda,  the government banned the supply of woodfuel to refugee camps on the basis of concerns about deforestation. The announcement sharpens focus on cleaner cooking.

Yet with little guidance on enforcement and the timeframe for change, it is difficult for UNHCR and its partners to plan viable schemes. A reversion to stove and fuel handouts is likely, damaging the potential to create markets for alternative cooking practices in the camps. 

Third: local fuel prices. Where polluting fuels are subsidized or untaxed, additional subsidy is needed to make cleaner alternatives competitive. The higher prices of diesel in Uganda for example are an incentive for solar projects at Bidi Bidi, the world’s largest refugee settlement.

The Gaia Association-UNHCR clean energy programme in Ethiopia’s Western refugee camps has avoided burning some 10,000 tonnes of wood since 2006 through ethanol, but if  VAT (which is applied to neither charcoal nor kerosene) were waived, it could scale up commercially. 

Joining up the dots

Many humanitarian and government dots could be joined up in support of the SDGs. In Rwanda for example, clarity on electrification plans – which appear to cover refugee areas – could allow camp mini-grids to be designed for eventual grid integration. In Jordan, lessons learned from the home upgrading programme could be applied to meet city climate resilience ambitions. 

Donors at the GRF should support humanitarian operations that leave a positive legacy, increasing the robustness of country infrastructure and systems. Host-country governments should help define and encourage projects that benefit national and refugee populations. This will be critical to both development outcomes and limiting future human suffering. 

The Forecasting Forum 2020 will present the latest thinking from the Chatham House Energy, Environment and Resources Department's senior research team on the dynamics that will affect fossil fuel and energy investments and markets in the year ahead.

14:00 - 14:30 | Introduction and Climate Risks Outlook 

In the last decade, following the financial crisis, the literature on systemic risks has grown. Systemic risks occur when complex, non-linear, interconnected systems fail, often through relatively small perturbations, as their impacts cascade and amplify across the system. Within this context, climate change is a 'threat multiplier' with the risks increasing in scale, frequency and magnitude. Just as complex systems can pass thresholds and tip from a functional state to a non-functional state, so can societies and people’s attitudes. Together risk cascades or systemic risks and attitudinal tipping points have the potential to rapidly change the way the world works. 

Professor Tim Benton will open the Forecasting Forum 2020 with reflections on what this might mean for the pace and linearity of the fossil fuel transition.

14:30 - 15:30 | Session 1: An Outlook on Oil Prices in 2020

In this session, Professor Paul Stevens will argue that the recent events associated with the assassination of Iranian General Qasem Soleimani have exacerbated the sensitivity of oil markets to political events and brought 'geopolitics' back into global oil prices. Up to 2014, geopolitics played a key role in determining oil prices in the paper markets where perceptions and expectations ruled. By 2014, the world was so oversupplied with real oil barrels that the oil price collapsed and little attention was given to geopolitical events as geopolitics became marginalized in the determination of crude oil prices. However, recent events in the Middle East suggest that prices will become increasingly volatile but, at the same time, benefit from a rising geopolitical premium.

15:45 - 16:45 | Session 2: An Outlook for Energy in 2020

Recent years have brought significant disruption to the European power sector. Not only are many of Europe’s major utilities restructuring their businesses in light of decarbonization and technological developments but Brexit has distracted - and detracted from - efforts to create more systemic energy linkages between the UK and the rest of Europe. During his presentation, Antony Froggatt will draw on his ongoing research to outline what he believes are the prevailing challenges and opportunities for the European power sector over the coming year while highlighting some of the most significant global trends.

Please note, attendance at this event is by invitation only.