Press Release 14 September 2010

Pursuing sustainability.

The World Energy Council's 2010 Assessment of energy and climate policies

In order to face  the challenges of energy sustainability - energy security, social equity, and environmental impact mitigation - we will have to put in place sustainable energy and climate policies. Therefore we need to first understand and characterise what a "good" energy and climate policy is. In this perspective, the World Energy Council has, for its second edition of the study and in partnership with Oliver Wyman, developed a unique methodology aimed to identify, in a bottom-up appoach, effective polices around the world and to examine how they can be transferred from one country to another.

"Even as we speak, all countries are working to develop strategies for putting the crisis behind them. Economic growth is an entirely and worthwile goal for all countries. And because energy goes hand in hand with development, the question of inequalities is another central concern. We need effective rules and smart policy frameworks to update our energy policies and rise to these three challenges", says Pierre Gadonneix, Chair of the World Energy Council. "Our report on Energy and Climate Policies stresses the fact that energy players need long term horizons; that there is also a need for real prices, that effectively reflect all costs, including CO2; and that tailoring policies to the maturity of technologies will be key to keep the transition costs to a minimum".

"Policymakers need to embrace the complexity introduced by the often conflicting agendas of developing secure, affordable and clean energy," says John Drzik, CEO of Oliver Wyman Group. "To achieve this, they should conduct a much fuller cost benefit analysis that examines measures to improve both their energy supply and demand."

The review of country policy frameworks and their implementation underdone in the past 12 months has revealed a wide range of successful approaches.

In terms of fossil fuel-based energy security policies, China, Japan, and Russia have effective, yet different, approaches to developing resource-oriented partnerships with other countries, based on strategic alliances, technological expertise, and financial strength. US technology investments have resulted in rapid advances in opening up new domestic natural gas resources through the hydraulic fracturing of deep shale, and the ability to take advantage of that expertise overseas.

In terms of alternative energy supply, several regimes stand out. Using different policy approaches, Germany and Texas (US) have made strong progress in the deployment of renewable energy within their transmission infrastructure. Brazil and Ghana have been particularly successful in using off-grid renewable energy to increase access to electricity for rural populations. France's carefully planned approach to renewing and enhancing its nuclear capacity is a model for an established nuclear nation.

In terms of energy efficiency and demand-side management, Japan's programmes, directed largely at industry, have achieved significant reductions in consumption, while innovative schemes in Brazil have encouraged domestic manufacturers to develop low energy consumption appliances. Denmark provides a benchmark for building design standards, and California (US) and Ontario (Canada) are front-runners in the development of smart grids.

The world has reached a critical juncture for energy policymaking. Energy demand is rising from non-OECD countries that are undergoing both rapid population growth and economic development, while domestic fossil fuel reserves are declining, and the remaining large-scale oil reserves are difficult to access. Strong measures are needed to mitigate the impacts of climate change. Much energy infrastructure in OECD countries needs to be renewed, while many non-OECD countries are still seeking to extend access to energy across their populations.

Both the recent economic downturn and the failure to reach a binding international consensus on reducing greenhouse gas emissions have impeded policy solutions to these issues. Although the global financial crisis caused a dip in global energy consumption and a temporary stabilisation of emissions, it also reduced the availability of investment capital and increased uncertainty about infrastructure project economics.
At this critical juncture in global policymaking, when hard choices have to be made and multiple benefits secured, there is great value in international dialogue around the pursuit of sustainable energy solutions. As its policy assessment work continues, the World Energy Council will look to facilitate such interactions among policymakers and the energy industry, hoping to deepen the current extensive exchange of ideas.

The full report can be downloaded from:
http://www.worldenergy.org/publications/2841.asp

WEC Media contact:
Theresa Hedberg
Manager, Media & Communications
Email: hedberg@worldenergy.org