Publications

Energy Policy Scenarios to 2050

3.4. Scenario 4:  Giraffe (Low Government Engagement - High Cooperation and Integration)

The Giraffe, the tallest animal on earth, is chosen because it strolls calmly across the plains and sees both danger and opportunity at great distances. Giraffes are also very adaptable and can exist on their own. Leadership is a very loose arrangement with no established overall hierarchy. The giraffe is not constrained by a strong social structure and individual animals have great freedom of choice. The giraffe is essentially an entrepreneur and can readily adapt to different circumstances. It is also able to defend itself, either by running away on its long legs (avoiding conflict) or by using its legs as weapons. This scenario might be thought of as market driven or enterprise dominated.

This scenario has minimal government engagement but significant international and regional cooperation and integration. In this scenario, the primary driver is economic development. The main preoccupation is freeing up global markets to promote GDP growth through affordable energy and international trade. There is increased reliance on market mechanisms, including in the developing world. Government involvement is constrained (predominantly directed to market regulation, when necessary) and there are few levies or subsidies. There are few restrictions on global movement of goods and services.

Little is done by governments to proactively avoid energy shocks and their effects on all countries, and what little is done tends to be short-term oriented. On the positive side is the capacity of market forces to foster new technologies and the role of improved private sector governance and fewer access limitations. The poor benefit from the open border policies and possibly from new World Trade Organisation agreements.
The opening of markets and the reducing of trade barriers encourage a freer flow of goods and services. Entrepreneurs actively seek to enter emerging markets, stimulating innovation. Market driven interchange leads to more rapid transfer of technology and experience. International market opportunities stimulate new energy-technology development and methods to protect intellectual property, which plays a very important role in enabling countries to profit from these international market opportunities.

Those countries slow to liberalise their markets are left behind as the entrepreneurs go where they see better opportunities. Appropriate rewards are expected for entrepreneurial risks and this results in a downward poverty spiral for the already impoverished because they cannot afford the necessary returns to stimulate investment in the private sector.

Environmental awareness is enhanced at local and regional levels, but increasing reliance on coal and increased energy demand increases greenhouse gas emissions. Carbon capture and storage tends to be limited in developing counties because of a lack of financial and technological resources and government inaction.

Because of the lack of proactive government policy intervention and anticipation, severe energy shocks probably happen, but the open world economy is resilient and rebounds from recessions.

Success in this scenario depends on the market delivering technologies to increase security and reduce greenhouse gas emissions and other environmental impacts. Overall energy and economic performance could be better in this scenario, but it may be less equitable than in Scenario 3.