World Energy Outlook 2007

CHAPTER 6
ENERGY POLICY RAMIFICATIONS
HIGHLIGHTS
The emergence of China and India as major players in global energy
markets makes it all the more important that all countries take decisive and
urgent action to reconcile the need to meet rising demand for energy
services worldwide with ensuring energy security and protection of the
environment. The rest of the world needs to engage constructively with
China and India to address this common challenge in a mutually beneficial
way.
Many of the policies available to alleviate energy insecurity can also help to
mitigate local pollution and climate change, and vice versa. In many cases,
those policies bring economic benefits too, by lowering energy costs – a
“triple-win” outcome. An integrated approach to policy formulation is
therefore essential. The right mix of policies to address both energy-security
and climate concerns depends on the balance of costs and benefits, which
vary among countries.
Collective responses to these global challenges are needed. No major energy
consumer can be confident of secure supply if supplies to others are at risk.
And there can be no effective long-term solution to the threat of climate
change unless all major energy consumers, including China and India,
contribute. There are large potential gains to IEA countries, on the one
hand, and to China and India, on the other, from policy co-operation.
Collaboration between IEA countries and developing countries is
contributing to speeding-up the widespread deployment of new
technologies. A portfolio approach to developing new technologies is
indispensable. Energy efficiency needs to play a central role. Clean coal
technology, notably CO 2
capture and storage, is one of the most
promising routes for mitigating emissions in the longer term – especially
in the United States, China and India, where coal use is growing the
most. China and India stand to benefit from experience of best practice
in other countries.
Given the scale of the energy challenge facing the world, a substantial
increase in public and private funding for research, development and
demonstration is called for. Public budgets for energy research and
development in IEA countries fell sharply in the 1980s and the early 1990s
and have barely recovered since. The financial burden of supporting
research efforts will continue to fall largely on IEA countries.
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