Buenos Aires 2001

Conclusions and Recommendations

It is important to remember that mankind has faced many challenges through the ages but always found an innovative solution to each of them. A holistic, comprehensive approach to energy, including its social and cultural dimensions, is required, for example its links to basic human needs and access to safe and adequate water supplies. Industry needs to reduce costs, increase efficiency and respect the environment. Governments can help industry by complementing private RD&D investments with support for basic research and demonstration of new technologies, by providing adequate protection for intellectual property, by increasing world cooperation and regional market integration, and by strengthening competition and trade. Economic growth, social progress, and environmental protection are the three interlinked pillars of sustainable development. It is important to put mankind at the centre of market reform, regulation, and technology diffusion. Energy companies have made progress in these areas but there is more to do to address poverty, skills and working conditions, and pollution. It is essential for energy companies and governments to continue to work together on realistic market driven solutions to specific problems. Raising the awareness of energy issues by the public at large, beginning with curricula in schools and universities, remains a common responsibility of both governments and industry. A better understanding of customer behaviour and needs is a prerequisite for more effective demand side management. Education on the role of energy in sustainable development, capacity building in developing countries, and better communication with the general public are important factors in this work. Governments have a legitimate and essential role in energy policy and shaping regulation, especially as market reform leads to regional or even global energy solutions. It is important for governments to maintain their policy focus on market reform even in the face of economic difficulties. Skilled people, transparency and the rule of law are critical issues on which government policies must be well conceived and put in place. In the context of sustainable development, they should renew their commitment to fund adequate basic energy research, as well as the development and demonstration of advanced technologies (for example, on carbon sequestration, renewables, and the potential for hydrogen). This needs to be done in the context of an intergovernmental agenda aimed at reliable, affordable, and sustainable energy services for all people in the world with the following specific goals:

• Bringing commercial energy services to the one third of the world's people who do not now have access and by involving developing countries in the planning of this RD&D programme;
• Protecting the local, regional and global environment;
• Pursuing a long term focus which takes into account the inertia of energy infrastructure and the impact of competition on the horizons of industry; and,
• Diversifying the portfolio of robust technologies, which are the only true hedge against the uncertainties of the future.

Regulators are central to the smooth functioning of energy markets at the local, regional, and global levels. While the Congress reaffirmed the primacy of market mechanisms in fostering efficient energy resource allocation, market mechanisms alone are not always sufficient and require voluntary agreements or appropriate regulation, for example to address transmission capacity, affordability and environmental issues. At the regional level, there are significant differences to be taken into account, especially in regulatory and institutional issues. At the global level there is a need for energy infrastructure to link electricity and natural gas markets, based on harmonised regulations, which address the issues of customer choice, fair competition, transmission, trade, and investment in new capacity. Once governments have established clear energy policies, the day to day independence of regulators from government or industry interference is fundamental and must be respected. Energy businesses, even with short term pressures on performance, must renew their commitment to long term and global solutions. The internationalisation of energy services should and will continue. Increased competition will help accelerate private R&D innovation while clear energy price signals will foster more rapid technology diffusion from one market to another. A full fuel cycle approach will allow for external costs, such as environmental costs, to be taken into account in energy pricing. WEC is in a unique position to sow the seeds of working together on a global, multi-energy basis. It will:

• Update and reassess its prospective work on drivers of the energy scene;
• In further work on market reform, take a position advocating appropriate design of markets including trading, not just in KWh but also in capacity, with retailers obligated to provide the needed capacity for a set margin and with a linkage between retail and wholesale prices. This work should promote a mechanism to bring transmission infrastructure of electricity and gas on line when needed;
• Carry out further analysis of end use technologies, distributed generation and carbon sequestration;
• Address the impact of rules for emissions trading, CDM and other aspects of global environmental governance in the context of the WEC's GHG Emissions Reduction Pilot Programme and sustainable development goals;
• Identify, compile, compare and publish the key data on the economic, environmental and social aspects of fossil fuels, nuclear power and renewables;
• Pursue broader and deeper best practises and efficiency improvements in energy production, distribution and utilisation, with a special focus on cleaner technologies and the more rapid diffusion of technology to developing countries;
• Enhance its regional efforts in developing countries to facilitate market reform and appropriate regulations designed to attract adequate investment capital (including CDM) to address the goals of energy accessibility, energy availability and energy acceptability; and,
• Establish an outreach programme on the ethical dimension of the energy business based on specific case studies, which cover the behavioural, social, and environmental aspects.

With governments, regulators, energy companies and consumers working together, energy development will serve all people in the world and be a real catalyst for peace.

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