Accessing affordable, clean energy is essential to economic development and human wellbeing. Transitioning away from fossil fuels towards renewables necessitates policies which promote innovation while addressing technical hurdles – while keeping this transition as just and equitable as possible.
This Tracker highlights publicly available government policies related to energy production, consumption and storage as of January 1st 2020. Our coverage encompasses both new initiatives as well as policies already in effect as of 1 January.
Definition
Energy policies are set of government regulations designed to oversee energy production, distribution and consumption. They set goals and regulate markets to foster sustainable development while protecting the environment. Governments may offer subsidies or incentives for particular forms of energy production or consumption such as renewable sources or more energy-efficient technologies that help promote their adoption; furthermore they conduct research to enhance energy efficiency while decreasing greenhouse gas emissions.
Energy policies take many forms, from legislation and international agreements, tax codes and subsidies, to subsidies. Each form may involve complex tradeoffs that necessitate participation from various stakeholders; policymakers must carefully balance these groups – such as environmental organizations and energy industries – in order to create policies which are feasible.
Energy policies encompass policies which promote renewable energy technologies, regulate energy markets, and impose carbon pricing. However, the Tracker does not include policies which automatically adjust fuel prices to reflect global prices (e.g. Egypt, Nigeria and Ecuador); changes to existing fuel pricing mechanisms however are included as new energy policies.
Goals
Energy policy’s primary objective is to provide reliable, clean and affordable energy sources to individuals. This can be accomplished through measures like reducing emissions, improving efficiency and increasing renewable sources; other goals of note include providing access to electricity in developing nations while increasing security measures as well as investing in research and development projects.
Governments develop energy policies at all levels – from national to local – that regulate energy markets, establish environmental standards or provide incentives and subsidies for certain forms of energy use. They may also conduct research and development work in support of technological advances within the energy industry.
Energy policy can be affected by political considerations, including interest group interests and public opinion, as well as international factors like global energy markets and climate change agreements. Therefore, its goals may change over time – for instance following the oil disaster in the Gulf of Mexico and Fukushima nuclear meltdown which raised awareness about climate change while prompting many governments to revisit their energy plans.
Strategies
Successful energy policies rely on cross-sector implementation and an established policy framework, including facilitation of investments in renewable technologies and support for energy efficiency measures. Promoting access and prioritizing grid modernization can reduce electricity supply disruptions while expanding strategic reserves can ensure supply stability during seasonal peak demand periods.
Subsidies Have Distorted Market Signals
Heavy subsidies to fossil fuels have helped artificially lower relative energy prices by concealing their true costs, leading consumers and producers alike to ignore opportunities to save energy. Furthermore, subsidies distort price signals by incentivizing wasteful industrial practices while discouraging investments into efficiency improvements.
An expanding global economy and mounting environmental concerns demand that we transition immediately to cleaner energy solutions. Achieve this means increasing renewables’ share, improving energy efficiency and finding innovative approaches to lower carbon emissions. Policymakers can employ various strategies to achieve these goals, such as encouraging development of energy-efficient technology, regulating energy markets and setting carbon pricing structures; in addition to setting funding mechanisms, incentives or regulatory frameworks as enablers for this transition.
Implementation
Energy Policy Implementation refers to translating policy goals into concrete actions and results. This involves setting clear objectives such as reducing carbon emissions or increasing energy security, along with specifying strategies to meet them – such as promoting renewable energy sources, setting energy efficiency standards, regulating markets or providing subsidies.
Step two is of paramount importance as any policy, no matter how carefully conceived, may become ineffective due to poor execution. Furthermore, engaging citizens in this process is often achieved via industry associations that support specific interests such as renewable energy or net-zero buildings.
At this stage, it is also crucial for statisticians to be involved as their expertise provides vital data in terms of assessing current and future energy scenarios, which then serves as the basis for energy modelling that ultimately forms part of any policies implemented.