Energy policies should support the development of low-carbon technologies that reduce greenhouse gas emissions, as well as balance protecting iconic landscapes with fair compensation for energy production on public lands.
Socially progressive energy programs can contribute to long-term equity by offering financial incentives to low-income households to make improvements that will save energy. These measures may result in substantial long-term benefits.
The United States
The United States is one of the world’s most energy-intensive economies. Its energy sector supplies lighting, heating and power across the country as well as providing transport services which cover 5 trillion passenger miles each year by car, 700 billion miles by air travel and millions of tons in cargo transportation services.
The United States government has long championed clean and renewable energy technologies, such as building energy efficiency programs and solar air conditioning installations. Under the Energy Independence and Security Act of 2007 there was also funding provided for building energy efficiency measures as well as setting an ambitious Corporate Average Fuel Economy standard of 35 mpg by 2020.
Since President Donald Trump took office, many energy policies have been reversed and this could have serious repercussions for US climate, economic and national security goals. State and city governments will need to continue leading policies which support cleaner energy transitions while providing a diverse, affordable and secure energy infrastructure system.
The United Kingdom
In 2003, the UK government unveiled its energy policy through the White Paper Our Energy Future. This document acknowledged the need to limit carbon dioxide emissions in order to meet climate change targets and provided plans for decarbonisation of UK energy sectors in order to meet them.
The White Paper proposed three policies designed to encourage decarbonisation in electricity generation: a Carbon Price Floor; Feed-in Tariffs that will eventually replace Renewables Obligation and an Emissions Performance Standard. Furthermore, it presented a vision of energy wholesale markets which are competitive, transparent and liquid.
The policy also sets a goal to reduce fuel poverty through home improvements, which includes supporting Winter Fuel Payments, Warm Front Scheme in England, central heating schemes in Wales and Scotland as well as central heating schemes in Wales and Scotland. Furthermore, H.M. Government is creating the National Energy Systems Operator (NESO), to act as whole system planner, operator and expert advisor to both government and Ofgem.
The European Union
As Europe struggles through an energy crisis, energy policy has changed dramatically. The European Commission’s new Guidelines on State Aid for Environmental Protection and Energy offer various policy tradeoffs ranging from supporting coal-fired power stations to capacity remuneration mechanisms.
Redesign of the electricity market to reflect low-carbon priorities involves restructuring its costs to be predominantly fixed and not variable, leading to substantial reform of market design by installing new remuneration instruments and adding storage capacities into grid capacities.
To address these challenges, the French government led by President Francois Hollande has put forward innovative proposals. These include legal commitments to reduce industrial energy consumption by 38 per cent and veto rights for government representatives on EdF’s board whenever their strategy conflicts with national planning objectives (namely reducing nuclear power). At Grenelle Summit also included calls to strengthen energy efficiency policies.
The Council on Economic Policies
Energy policy is determined by numerous factors, including economic productivity, competitiveness and cost of living. Governments use various policy tools such as legislation, international treaties, incentives for investment and energy modeling to address these concerns.
Energy policies often overlap with climate policies because reliance on fossil fuels or renewables affects greenhouse gas emissions; energy policies thus often intersect with climate policy. Regulation in seemingly unrelated areas such as building energy codes or appliance standards may have even greater effects.
CEA staff and members often exhibit higher technical economic sophistication than other cabinet agencies, which helps it quickly identify misguided ideas that fail to achieve their stated goals or do so at unacceptable economic costs. CEA often “defangs” legislative proposals from both internal departmental ideas as well as those coming directly from Congress.