Energy policies influence decisions regarding energy production and consumption, providing a key tool in combatting climate change by limiting emissions of heat-trapping pollutants while selecting energy alternatives with reduced environmental impacts.
Policy instruments may have unexpected repercussions. Academic research carefully analyses the efficacy of various energy policies using empirical evidence to refine their design and ensure desired outcomes are reached.
Renewable Energy
Attaining net-zero emissions requires taking an integrated approach to energy policy. Renewable energy (REN) can assist in the transition away from fossil fuel use, improve grid security and boost local economic development.
Renewable energy technologies generate electricity without using fuel, and have less of an environmental impact than traditional power sources like coal, oil and natural gas. They harness solar radiation, wind power, water movement or geologic heat to produce electricity or other forms of energy production that can be integrated into buildings, industry and agriculture applications.
Renewable energies can enhance energy security, as they do not rely on volatile fossil fuel markets and require less infrastructure for transport and storage. But their implementation also poses new economic risks that disrupt traditional energy industries; additionally, low-carbon technologies like REN can still produce air pollution; environmental justice movements such as Assembly in Defense of Land and Territory of Indigenous People of Isthmus of Tehuantepec or Goldman Environmental Award winner Destiny Watford have organized against projects which increase air pollution through environmental justice movements that resist such projects.
Fossil Fuels
Fossil fuels like coal, oil and natural gas are made up of fossilized plant and animal remnants which have been burned to generate energy. Their combustion contributes to climate change by releasing stored carbon dioxide (CO2). They also release harmful air pollutants which compromise health, degrade water resources and increase vector-borne diseases.
Fossil consumption subsidies may help increase affordability, but they come at the expense of considerable negative repercussions: distorting market signals and leading to greater dependence on imported oil. They also reduce energy efficiency, hamper diversification efforts and deplete tax revenues for governments.
Producer subsidies also have limited effects on energy security; they may increase production but do not ensure affordable energy for local consumers since global markets control energy pricing. Furthermore, this form of subsidy can have detrimental impacts on poorer households while diverting funds away from vital services that support energy security.
Energy Storage
Energy storage is an integral part of the movement to create clean and sustainable energy supplies for our world. It helps balance power grids while lowering greenhouse gas emissions.
Governments can improve energy policies by offering financial incentives to encourage consumers to adopt clean technologies, imposing environmental taxes and funding research and development. They may also regulate energy markets to ensure fair competition and protect consumers.
Energy storage can defer new transmission and generation investments and enhance grid reliability and stability at lower costs, providing backup power during disruptions such as blackouts or hurricanes, while helping eliminate costly fossil fuel “peaker” plants that pollute.
Energy Efficiency
Energy efficiency is an integral part of an effective energy policy, helping to decrease greenhouse gas emissions and energy costs, boost local economic development, and ensure a more sustainable energy future.
Governments can improve energy efficiency through various strategies, including encouraging renewable technologies, setting appliance standards and labels, regulating energy markets, providing subsidies or incentives, as well as other interventions tailored to each policy’s goals, objectives, social, economic and political context in which its implementation occurs.
Energy efficiency progress has recently seen rapid acceleration across Europe and North America thanks to behavioural shifts and technological innovation, though more improvements must be made to reach targets under the Net Zero Scenario – such as increasing electric vehicle and heating system deployment, improving insulation levels within buildings, or increasing industrial energy efficiency by decreasing process emissions.