Energy policy is the manner in which a given entity (often governmental) has decided to address issues of energy development including energy conversion, distribution and use as well as reduction of greenhouse gas emissions in order to contribute to climate change mitigation. The attributes of energy policy may include legislation, international treaties, incentives to investment, guidelines for energy conservation, taxation and other public policy techniques. Energy is a core component of modern economies. A functioning economy requires not only labor and capital but also energy, for manufacturing processes, transportation, communication, agriculture, and more. Energy planning is more detailed than energy policy.
Access to energy is critical for basic social needs, such as lighting, heating, cooking, and healthcare. Given the importance of energy, the price of energy has a direct effect on jobs, economic productivity, business competitiveness, and the cost of goods and services.
Frequently the dominant issue of energy policy is the risk of supply-demand mismatch (see: energy crisis). Current energy policies also address environmental issues (see: climate change), particularly challenging because of the need to reconcile global objectives and international rules with domestic needs and laws.
The "human dimensions" of energy use are of increasing interest to business, utilities, and policymakers. Using the social sciences to gain insights into energy consumer behavior can help policymakers to make better decisions about broad-based climate and energy options. This could facilitate more efficient energy use, renewable-energy commercialization, and carbon-emission reductions.
National energy policy
Some governments state an explicit energy policy. Others do not but in any case, each government practices some type of energy policy.
Measures used to produce an energy policy
A national energy policy comprises a set of measures involving that country's laws, treaties and agency directives. The energy policy of a sovereign nation may include one or more of the following measures:
- statement of national policy regarding energy planning, energy generation, transmission and usage
- legislation on commercial energy activities (trading, transport, storage, etc.)
- legislation affecting energy use, such as efficiency standards, emission standards
- instructions for state-owned energy sector assets and organizations
- active participation in, co-ordination of and incentives for mineral fuels exploration (see geological survey) and other energy-related research and development policy command
- fiscal policies related to energy products and services (taxes, exemptions, subsidies ...
- energy security and international policy measures such as:
- international energy sector treaties and alliances,
- general international trade agreements,
- special relations with energy-rich countries, including military presence and/or domination.
Factors within an energy policy
There are a number of elements that are naturally contained in a national energy policy, regardless of which of the above measures was used to arrive at the resultant policy. The chief elements intrinsic to an energy policy are:
- What is the extent of energy self-sufficiency for this nation
- Where future energy sources will derive
- How future energy will be consumed (e.g. among sectors)
- What fraction of the population will be acceptable to endure energy poverty
- What are the goals for future energy intensity, ratio of energy consumed to GDP
- What is the reliability standard for distribution reliability
- What environmental externalities are acceptable and are forecast
- What form of "portable energy" is forecast (e.g. sources of fuel for motor vehicles)
- How will energy efficient hardware (e.g. hybrid vehicles, household appliances) be encouraged
- How can the national policy drive province, state and municipal functions
- What specific mechanisms (e.g. taxes, incentives, manufacturing standards) are in place to implement the total policy
- Do you want to develop and promote a plan for how to get the world to zero CO2 emissions?
- What future consequences there will be for national security and foreign policy
Relationship to other government policies
Energy policy sometimes dominates and sometimes is dominated by other government policies. For example energy policy may dominate, supplying free coal to poor families and schools thus supporting social policy, but thus causing air pollution and so impeding heath policy and environmental policy.: 13 On the other hand energy policy may be dominated by defense policy, for example some counties started building expensive nuclear power plants to supply material for bombs. Or defense policy may be dominated for a while, eventually resulting in stranded assets, such as Nord Stream 2.
Energy policy decisions are sometimes not taken democratically.
Corporate energy policy
In 2019, some companies “have committed to set climate targets across their operations and value chains aligned with limiting global temperature rise to 1.5°C above pre-industrial levels and reaching net-zero emissions by no later than 2050”. Corporate power purchase agreements can kickstart renewable energy projects, but the energy policies of some countries do not allow or discourage them.
By type of energy
Energy sources are measured in different physical units: liquid fuels in barrels or gallons, natural gas by volume of gas such as cubic metres, solid fuel such as coal by weight such as short tons, and electricity in kilowatts and kilowatthours. But sometimes sources are compared using units such as tonne of oil equivalent or quad or joule.
Public policy has a role to play in renewable energy commercialization because the free market system has some fundamental limitations. As the Stern Review points out: "In a liberalised energy market, investors, operators and consumers should face the full cost of their decisions. But this is not the case in many economies or energy sectors. Many policies distort the market in favour of existing fossil fuel technologies." The International Solar Energy Society has stated that "historical incentives for the conventional energy resources continue even today to bias markets by burying many of the real societal costs of their use".Fossil-fuel energy systems have different production, transmission, and end-use costs and characteristics than do renewable energy systems, and new promotional policies are needed to ensure that renewable systems develop as quickly and broadly as is socially desirable. Lester Brown states that the market "does not incorporate the indirect costs of providing goods or services into prices, it does not value nature's services adequately, and it does not respect the sustainable-yield thresholds of natural systems". It also favors the near term over the long term, thereby showing limited concern for future generations. Tax and subsidy shifting can help overcome these problems, though is also problematic to combine different international normative regimes regulating this issue.
Energy policies vary by country, see tables below.
This article needs to be updated.(March 2022)
This article needs to be updated.(October 2016)
This article needs to be updated. The reason given is: future statements in lead referring to past years.(June 2022)
The energy policy of the United States is determined by federal, state, and local entities in the United States, which address issues of energy production, distribution, and consumption, such as building codes and gas mileage standards. Energy policy may include legislation, international treaties, subsidies and incentives to investment, guidelines for energy conservation, taxation and other public policy techniques. Several mandates have been proposed over the years, such as "gasoline will never exceed $1.00/gallon" (Nixon) ($0.26 per liter), and "the United States will never again import as much oil as it did in 1977" (Carter), but no comprehensive long-term energy policy has been proposed, although there has been concern over this failure. Energy policy acts have been passed in 1992, 2005, 2007, 2008, and 2009 which include many provisions for conservation, such as the Energy Star program, and energy development, with grants and tax incentives for both renewable energy and non-renewable energy.There is also criticism that federal energy policies since the 1973 oil crisis have been dominated by crisis-mentality thinking, promoting expensive quick fixes and single-shot solutions that ignore market and technology realities. Instead of providing stable rules that support basic research while leaving plenty of scope for American entrepreneurship and innovation, congresses and presidents have repeatedly backed policies which promise solutions that are politically expedient, but whose prospects are doubtful, without adequate consideration of the dollar costs, environmental costs, or national security costs of their actions. By 2018, the US is on the verge of achieving energy security or self-sufficiency as the total export of coal, natural gas, crude oil and petroleum products are exceeding imports. The US had a trade surplus in the energy sector by 2018. In the second half of 2019, the US is the top producer of oil and gas in the world. After becoming net exporter of crude oil and its products for a brief period of less than one year, US is expected to become net importer of crude oil and its products in 2020 due to fall in price of crude oil.
- Energy balance
- Energy industry
- Energy law
- Energy security
- Environmental policy
- Oil Shockwave
- Renewable energy policy
- Sustainable energy
- World Forum on Energy Regulation (WFER)
- All pages with titles containing Energy policy of
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- Hamilton, Michael S. 2013. Energy Policy Analysis: A Conceptual Framework. Armonk, NY: M.E. Sharpe, Inc.
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- Robert Orttung and Indra Overland (2011) ‘A Limited Toolbox: Explaining the Constraints on Russia’s Foreign Energy Policy’, Journal of Eurasian Studies, Vol. 2, No. 1, pp. 74-85. https://www.researchgate.net/publication/251718767
- Jimmy Carter. "Crisis of Confidence Speech 1979". Cartercenter.org. Retrieved 2012-03-30.
- "CRS Report for Congress". Digital.library.unt.edu. December 21, 2004. Retrieved 2012-03-30.
- "Energy Independence and Security Act of 2007 (Enrolled as Agreed to or Passed by Both House and Senate)". Archived from the original on January 15, 2016. Retrieved 2008-01-18.
- Grossman, Peter (2013). U.S. Energy Policy and the Pursuit of Failure. Cambridge University Press. p. 416. ISBN 978-1107005174.
- Hamilton, Michael S. 2013. Energy Policy Analysis: A Conceptual Framework. Armonk, NY: M.E. Sharpe, Inc.
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- "Energy Policies of (Country x)" series, International Energy Agency
- Report of President Bush's National Energy Policy Group, May 2001
- UN-Energy - Global energy policy co-ordination
- Energy & Environmental Security Initiative (EESI)
- Renewable Energy Policy Network (REN21)
- Information on energy institutions, policies and local energy companies by country, Enerdata Publications