World Energy Outlook 2006

fossil-fuel and renewable energy sources, 6 an address followed by many
initiatives at State level. In March 2006, the European Commission released a
green paper addressing energy security (EC, 2006). In May 2006, Japan
released the New National Energy Strategy which has energy security as its core
(METI, 2006). The UK government has released an energy review to reinforce
the United Kingdom’s long-term energy policy in the face of the mounting
threat to the global climate and to energy security (DTI, 2006).
Several countries have declared their intention to step up production of
biofuels (Chapter 14). Others have announced plans to revive investment in
nuclear power (Chapter 13). Interest in policies to improve energy efficiency
and to boost the role of renewables has grown. Although high energy prices and
considerations of energy security are the principal drivers of these
developments, their policy design is invariably influenced by the implications
for greenhouse-gas emissions – especially in OECD countries.
There have also been important developments in the field of climate-change
policy since 2004. The Kyoto Protocol entered into force on 16 February 2005.
All Kyoto Protocol Annex B countries have taken concrete steps to meet their
commitments, although the measures adopted have, so far, met with varying
degrees of success. A notable measure, the EU Greenhouse Gas Emissions
Trading Scheme, which involves capping the emissions of electricity generation
and of the major industrial sectors and the trading of emission allowances,
came into operation in January 2005.
Australia, India, Japan, China, the Republic of Korea and the United States
agreed in January 2006 to co-operate on the development and transfer of
technology to enable greenhouse-gas emissions to be reduced. Under this
agreement, known as the Asia-Pacific Partnership on Clean Development and
Climate (AP6), member countries are working with private-sector partners in
several industry and energy sectors to voluntarily reduce emissions.
The new policy environment is reflected in the increased number and breadth
of the policies and measures that have been analysed beyond those in the
Alternative Policy Scenario of WEO-2004. A selective list of policies included
this time is provided in Table 7.1. The list, which is far from exhaustive, offers
a general sense of the geographical and sectoral coverage of the policies. As with
the Reference Scenario, a degree of judgment is inevitably involved in
translating those proposed policies into formal assumptions for modelling.
Box 7.1 illustrates how one policy is categorised and modelled. The main
policies incorporated in the Alternative Policy Scenario by sector are detailed
in Chapter 9.
6. The text of the 31 January 2006 State of the Union address by President Bush can be found at
http://www.whitehouse.gov/stateoftheunion/2006/index.html
166 World Energy Outlook 2006 - THE ALTERNATIVE POLICY SCENARIO
© OECD/IEA, 2007