Energy policy refers to how a country develops, distributes and consumes energy in order to promote economic development and environmental sustainability. Energy policies may involve regulating markets or setting prices; offering financial incentives or subsidies may all play a part.
Renewable sources of energy can help consumers reduce dependence on fossil fuels while simultaneously helping curb greenhouse gas emissions and other air pollution issues. But new technologies present unique challenges.
Cost
The energy domain encompasses policies and programs related to energy production, pricing and climate/environmental aspects of its production/use. As it affects multiple policy domains simultaneously, decisions made here can have wide-reaching ramifications.
Government policies that prioritize research into alternative energy sources have an immediate impact on how much greenhouse gases the United States emits, as well as contributing directly to public good.
One of the most crucial energy policies is one designed to reduce consumption and waste, such as appliance standards, building energy codes, financial incentives and government lead-by-example programs. These can be implemented at all levels of government through various strategies; key among them being top management’s commitment as evidenced in written decisions (Step 1.8). Once adopted by on-site employees it must also be communicated internally via an effective communications plan.
Environmental Impact
Energy production, distribution and use all have environmental repercussions that must be evaluated. One method of assessment includes looking at an energy source’s life cycle before comparing its impact against alternatives; other tools may include legislation, international treaties, economic incentive structures, taxation or other public policy tools.
Effective energy policies should embody a commitment to public good, including environmental protection, energy affordability and security, social equity and infrastructure resilience. Government and industry leaders can collaborate on expanding access to clean technology programs such as renewable energy production while modernizing infrastructure by eliminating leak-prone pipelines or outdated power lines – this will reduce consumer costs while increasing resilience against climate change emissions.
As the global community shifts toward a low carbon economy, this transition will generate about 30 million new jobs in clean energy and efficiency industries – offering significant opportunity to address social equity by creating jobs and skills for traditionally underrepresented communities.
Technological Feasibility
Energy policy involves making decisions regarding energy options such as developing alternative energies, reducing emissions and improving security of supply, which all affect public good. These decisions have wide ranging repercussions.
Governments provide financial incentives to encourage or dissuade certain types of energy use, including tax breaks, exemptions, rebates and loans. Fossil fuel subsidies cost the global economy an estimated $7 trillion each year while other financial incentives such as investing in research and development, interconnection development or diversifying routes of supply also exist.
Develop an energy policy requires the expertise of a multidisciplinary team consisting of engineers, economists, scientists and social scientists. This team must evaluate both technical and economic feasibility before considering affordability, scalability and sustainability factors when devising any solutions proposed. Furthermore, this team must determine potential for stranded assets, environmental risks as well as feasibility issues when implementing such solutions – before finally considering the impact it will have on consumers and businesses alike.
Political Reality
Energy policy must strike a delicate balance between short-term goals such as cost-cutting to increase economic growth and foster U.S. competitiveness, and long-term ones like social equity, environmental protection, national security and infrastructure resilience. This can be accomplished using tax credits and direct spending among other forms of financial incentive.
These incentives may be tailored specifically towards certain energy technologies or used to offset market barriers that prevent renewables from entering the market. For instance, federal and multilateral development agencies could set up a revolving fund dedicated to projects with potential for reducing dependence on fossil fuels by providing debt or equity capital through loans or equity capital injection.
Energy should no longer be seen as just another commodity but valued for public good, and pricing regulation can help achieve this objective. Companies could offer their first X amount of energy free or at greatly discounted prices and charge higher rates after this threshold has been passed.