Publications

Energy Policy Scenarios to 2050

3.1. Scenario 1:  Leopard (Low Government Engagement - Low Cooperation and Integration)

The Leopard is chosen as a name as this large animal is silent and enjoys the more solitary existence characteristic of this scenario. It looks out for itself with very little cooperation, scanning the landscape for opportunities and it is swift to act when they arise, but acts alone. Most of the time, it remains within its territory and interacts very little with other animals. It protects its territory and does not share its food resources with others of its species. This scenario might be thought of as being laissez-faire or simply restrained.

This scenario has the least government engagement and global or regional cooperation and integration. Domestic economic development is the primary driver, underpinned by domestic energy security. World market forces and free trade tend to be hindered by national barriers that protect local production, which may lead to higher prices and lower efficiencies. Government engagement is constrained and there are few levies or subsidies. Many industrialised countries are reluctant to pursue structural reforms and continue to rely on welfare policies, increasing the level of unemployment and limiting economic dynamism. Most developing countries see their economic growth limited by the lack of equitable policies in terms of gender equality, education, telecommunication, electricity, water, health, and infrastructures (road, pipeline, and electricity transmission).

The low level or lack of government engagement and international cooperation results in less-than-optimal reactivity to external events such as energy shocks or worldwide recessions. However, the capacity of market forces to foster new technologies mitigates the impact on those countries with domestic resources to fund innovation. The lack of international cooperation reinforces the poverty spiral for countries already impoverished. It will affect developing nations in different ways.

The transfer of know-how and technologies is relatively constrained under this scenario. Few international cooperation treaties encourage such exchanges and few market drivers justify exchanges between highly developed and less developed countries. Less developed countries have neither the market capacity to justify entrepreneurial investment nor the wealth to pay expected returns on investments. Energy intensity tends to be relatively high, due to low energy efficiency, both on the supply side and more so on the consumption side of the energy balance.

In this scenario, there are no rules of trade for energy services established under the World Trade Organisation and no international post-Kyoto treaty on climate change. Many actions also compromise the environment in other ways. As some countries go on their own to ensure their domestic energy supply, more internationally traded oil and gas become available for the rest of the world and may alleviate to some extent shortages and price volatility.

Finally, most policy actions initiated under this scenario probably benefit "have" nations rather than "have-not" nations, as there is little, if any, cooperation or proactive policies to aid the poorer, less developed areas of the world.