What makes for good energy policy?

Posted on 3 December 2012

Joan MacNaughton, Executive Chair of the WEC’s newly released World Energy Trilemma report, tells us its key findings, and why every government should heed its advice.

 

WP_JOAN_MACNAUGHTONTell us about the World Energy Trilemma report.

The report measures the sustainability of countries’ energy policies on three dimensions – energy security, environmental mitigation and social equity which encompasses both access to energy and affordability of energy supplies.

The report is now in its fourth year. What’s new in this year’s report?

What is new about this year’s report is that we have interviewed about 40 CEO’s of global energy companies to ask what they consider makes for sustainable energy policies. They’ve given us some very important messages.

Firstly, sustainable policies include having a long-term strategic vision and having stable policies based on a master plan. Secondly, you should have consistent and stable regulatory frameworks. And thirdly, you should be able to harness the power of the markets to deliver energy policies and goals with the private sector playing an appropriate role. And lastly, CEOs have emphasised the importance of strong support for research and development of energy technologies, including clean energy technologies in particular.

Now that we have the CEO’s views, what’s next?

In our report next year, we are asking policymakers to engage with us in a dialogue about their responses to the CEO’s views. We want policymakers to tell us what they expect from industry and business in order to deliver on public goals and on good and sustainable energy.

We’re looking to bring together these two sets of comments in order to work out the implications at our triennial World Energy Congress in Korea in October 2013.

You are at the COP-18 Doha climate conference right now. What do you hope to achieve there?

I hope at COP-18 we can engage with policy negotiators to stress to them the importance that business attaches to having a predictable and strong global framework on how to tackle climate change. Businesses need to be able to invest with reasonable confidence that policy will not flip and leave them with stranded assets. In addition, we’re going to take the opportunity to publish the 2012 Trilemma report. We shall be working to ensure that policymakers will take note of the important messages it contains.

Why is having business and industry support so important?

What is clear is that the scale of investment is way beyond what governments can do. The business community has a vital role to play in delivering that investment and executing the necessary projects. Business makes another important contribution to the conversation – they know what works and what is needed to deliver projects on the ground. So what we’re saying is that policymakers will succeed in delivering sustainable policy if they engage the business sector at an early stage. It is not easy to do, but unless they do it, they run the risk of devising policies which the business community is unable deliver.

What is the message that you want everyone to take from the report?

Without a robust and coherent policy framework based on long-term vision, we will not get the investment we need in environmental mitigation, energy security, and to deliver social equity in the energy sector.

According to our Energy Sustainability Index, policy is the key discriminating factor between countries, however wealthy or poor they are. Good policies can help sustain better energy performance and a better performance against all three criteria.

 

 

Joan MacNaughton is Executive Chair of the WEC’s World Energy Trilemma report. She has been an influential figure in the energy policy debate in a variety of roles. These include the positions of UK Director General of Energy, Chair of the Governing Board of the International Energy Agency, and Vice-Chair of the UNFCCC High-level Panel on the Clean Development Mechanism. She is currently the President of the UK’s Energy Institute.