Publications

Energy Policy Scenarios to 2050

7.3. Energy Policies for Action

At the end of this study, a question that may be asked is, “In a global sense, are governments and the private sector on a path today to sustainable energy development, as defined by the 3 A’s of Accessibility, Availability, and Acceptability?” The clear answer - in terms of any of the plausible scenarios - is NO. It is obvious that a new level of wise energy policy, energy regulation, and energy investment is required now and in the next few years if we are to achieve energy sustainability in the 2035-2050 timeframe.

There is a critical need for unprecedented levels of cooperation and integration in both the private and public sectors if GDP growth is to continue, sustainable energy supply and end-use systems are to be achieved for the benefit of mankind, and anthropogenic climate change is to be mitigated. Public-private partnerships must become even more important than they are today.

These levels of cooperation are also essential if global energy intensity (E/GDP) is to continue to decline, but it will take some time (at least to the very end of the period) for overall energy demand to stabilise. The goal of having more rather than fewer energy primary sources and conversion options available is in fact achievable in the shorter term. The result is that the energy mix will continue to diversify.

Perhaps surprisingly, careful government regulation is desired by the private sector to ensure attractiveness and fair competition for energy industries and services, and rules of trade across national borders and globally are also supported by the private sector. However, consistent long-term signals also need to be sent, lest investments focus only on the short to medium-term.

While the level of public awareness has increased as the security of energy supplies and climate change attract attention, it needs to be markedly increased even further. People cannot make informed decisions without adequate information offered in plain language. Concerted public-private efforts need to be made to increase the public's awareness of the issues involved with energy security and sustainability.

In terms of differences between regions, Europe is generally more optimistic about its ability to decrease energy intensity than others, but it worries about the security of supply. Africa believes it will take longer to decrease energy intensity (already the highest) and expand its energy mix than other regions, owing to its position of using significantly less energy per capita than others today. Asia and Africa both see continued use of coal until late in the time period. Africa and Latin America see serious dilemmas surrounding Acceptability in the face of low levels of Accessibility. North America sees Acceptability as the largest issue in this region with the exception of Mexico, where Accessibility is still a major problem.

Policy actions to deal with this situation are:

Strong and consistent long-term signals about energy goals and policies. These signals should be designed on two principles: that all energy options are on the table, the choice depending on individual country resources and regional market integration, and that it is possible to achieve a doubling of global energy supplies and continued economic growth in harmony with a low carbon society. Clear, reliable signals are necessary for the financial community to feel confident investing in sustainable energy projects with some assurance of a return on investment. Necessary energy development depends directly on ensured investments and steady financing. Governments have tended not to send strong and consistent signals to markets about energy policies; as energy is intimately tied to other societal goals, such as the environment and standards of living, where signals have been sent, investors have tended to avoid long-term sustainable energy projects in favour of quick solutions.
Regulatory frameworks that ensure attractiveness of markets and competitiveness to industry. Energy security depends on the ability to produce and utilise energy resources efficiently and with minimal damage to the environment. For energy markets to prosper, it is necessary that governments establish basic ground rules for competition, as chaos is detrimental to markets and the population. However, too much government interference hinders the ability of industry to efficiently provide energy services to keep up with demand. Four areas for improved policy and regulatory signals are: rules of energy trade including environmental protection; renewed efforts to harmonise regulations across regions; the application of competition rules to energy companies which need scale to capture efficiencies and manage risk; and, reasonable costing of RDD&D and the timely replacement of old technology with clean technology.
Public and private sectors together identify specific RDD&D projects and outline funding frameworks to accomplish them. As political attention has been paid more and more to short-term issues intimately related to energy, pre-competitive energy research and development for longer term requirements, necessarily led by governments, has fallen to levels lower than at any time since the early 1970s. If the problems of energy sustainability (defined by Accessibility, Availability, and Acceptability) for the global population are to be met, then much more, and much better integrated (government and industry) funding for research, development, and demonstration of sustainable energy technologies are needed, and now. Because R&D process takes both time and consistent investment, global society cannot wait until the problem becomes acute.
Coordinated international transportation research, development and demonstrations, and incentives supporting market penetration of new technologies. The transportation end-use sector is the most vexing of all energy sectors if secure energy supplies and energy-related emissions are to be stabilised and then reduced. Bold and unconventional steps are called for. Governments - working with industry - must identify the issues, available technologies, R&D needs, and the paths forward, with the goal of ensuring the security of clean energy for transportation and its conversion and to deal with the difficult problem of greenhouse gas emissions from this sector.

These policy actions will go a long way toward ensuring that sustainable energy development, with its derivative benefits for mankind, can go forward without the detrimental effects often associated with production or use of different energy sources or carriers.

New paradigms for technology transfer. These must recognise that success may be either way (developed to developing or vice versa) and vary in terms of time. Developing an international framework to assure the smooth transfer of technology is critical to energy sustainability.
Strong and coordinated steps to educate people about energy, from basic principles to critical decisions that must be made. Without public awareness and understanding of the importance of energy and the issues surrounding it, people cannot make informed decisions about the course societies are to follow.