Publications

Energy Policy Scenarios to 2050

3.2. Scenario 2:  Elephant (High Government Engagement - Low Cooperation and Integration)

The Elephant is a social animal with a strong hierarchical nature to the family. However, while the family unit is strong, there is little inclination to cooperate between families, and families strive for self-sufficiency. The Elephant also has a very good memory. In spite of a very structured existence, the elephant is slow to adapt. This scenario might be thought of in terms such as governance, or nationalistic energy security.

This scenario has significant government engagement but minimal international or regional cooperation and integration. The first priority is energy security to support economic activity and growth. Governments intervene and nations take responsibility for their energy security (short-, medium-, and long-term) through such actions as diversification of primary energy sources, development of indigenous resources, controlling exports, and/or securing imports by bilateral negotiations. In response to potential oil and gas shortages, governments may take specific steps to ensure national and/or regional security of supply through actions such as:

• Conservation programmes
• Coal- or gas-to-liquid projects for countries with appropriate resources
• Enhanced and more expensive oil-recovery projects such as oil sands and oil shale
• Biofuel projects
• Bilateral development of offshore energy resources
• Nuclear power programmes
• Large-scale hydropower
• Infrastructure investment
• Subsidies for renewable technologies.

As some countries move to ensure domestic energy supplies, more internationally traded oil and gas might become available for the rest of the world and alleviate or even curtail shortages. Oil price shocks may be less likely. On the other hand, bilateral agreements might have just the opposite effect.

Countries will act independently to enhance their energy security, such as relying on synthetic liquid fuels for transport, but this comes with a price. For the rest of the world, oil not sold elsewhere is available, somewhat mitigating the price spikes caused by supply constraints. This scenario does not end globalisation, but it creates challenges for international traded goods (e.g., petrochemicals) that have become cheaper under globalisation and free trade.

A strong sense of national pride and strong incentives drive the development of domestic capacity and supporting capabilities. The transfer of know-how and technologies is relatively constrained under this scenario, as the primary focus is inward toward domestic needs. Under this scenario, the role of international institutions (e.g., the United Nations) in driving global programmes is less effective than it might otherwise be. Countries are much more concerned about their own interests. This inward focus has a negative impact on economic growth, as some domestic solutions are sub-optimal and/or reliant on older and less efficient technologies.

Many of the actions also compromise environmental issues:

• More reliance on coal without carbon capture and storage increases carbon emissions from CTL projects.
• An increasing share of nuclear power in the energy mix requires more sophisticated and reliable storage for the additional nuclear waste.
• More agricultural land and fertiliser use is devoted to biomass production.
• Populations are displaced and methane emissions are increased by large-scale hydropower development.
• Decreases in energy use combined with an increase in renewable and nuclear energy are positives with respect to climate change. CTL and oil shale projects need to be coupled to carbon capture and storage (CCS) to avoid increased greenhouse gas emissions.