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Assessment of Energy Policy and Practices

Executive Summary

The modern industrial world exists by virtue of its command over energy production, supply, transport, and use. Consumers around the world expect energy supply to be affordable, secure, clean, and available for all-as encapsulated in the World Energy Council's (WEC's) 3 A's (see page 6 for a description). This is desired by most local and regional jurisdictions, and especially by national governments, which implement them through a range of supporting energy and energy-related policies.

Of equal importance is the evolution of a complex energy industry to meet the many and diverse needs of energy consumers. The industry, which has supported the extraordinary economic growth of the last two centuries, is facing a number of profound transitions:

• A major shift in demand towards Africa, Asia, Latin America, and the Middle East.
• A possible "peaking" of conventional oil in the coming 10-20 years, and of conventional natural gas before 2050.
• An urgent need to restrict the production of greenhouse gases and handle regional air pollution.
• The need for the rapid development of low-carbon and/or carbon-free energy supply.

These transitions, which need to be completed in one to two generations, will employ a wide array of technologies, some new, and will need enhanced policies.

To accomplish this, the energy industry needs to now move quickly, under considerable uncertainty  and with greater risk than it is used to.

WEC believes that relentless improvement of governments' energy policy and industry's practices are needed, and that this can lead to a material improvement in their capabilities to effectively handle these energy transitions.

To enable this rapid change, WEC is launching a comprehensive multi-year Assessment of Energy Policy and Practices, facilitated by the WEC's unique structure of national member committees worldwide.

This paper lays out the basic approach that WEC is employing along with illustrative examples. Its purpose is to elicit constructive comment from the energy community that can be incorporated in the development and execution of the methodology. The current approach employs a three-stage process:

• Examining the overall capability of a country to develop and implement energy policy and practices.
• Identifying the most effective specific energy policy and practices within a country.
• Examining for comparable countries the relative capability and effectiveness of their energy policy and practices.

We recognise that the focus of energy policy and practices within a country depends on its level of economic development and available energy resources. Thus energy-rich, higher-income countries, such as Norway, have quite different concerns and aims than energy-poor, lower-income countries, such as Senegal. Equally, a higher-income, energy-poor country, such as Japan, will focus its policy differently from a lower-income, energy-rich country like Nigeria. Thus, comparisons are best made between countries with a similar set of energy aims and resources

The focus of energy policy and practices within a country depends on its level of economic development and available energy resources. Thus, energy-rich, higher-income countries, such as Norway, have quite different concerns and aims than energy-poor, lower-income countries, such as Senegal. Equally, a higher-income, energy-poor country, such as Japan, will focus its policy differently from a lower-income, energy-rich country like Nigeria. Thus, comparisons are best made between countries with a similar set of energy aims and resources.

The Assessment will be implemented in the coming year. Before COP-15 in Copenhagen, a full Assessment is planned using the methodology in this paper for over 60 countries, drawing conclusions useful for the conduct of energy policy and practices to address climate change.

Comments on this paper are welcome and should be directed to assessmentstudy@worldenergy.org.