A longterm energy strategy

Before presenting details of the implementation, I want to step back and consider how the choices between the great variety of proposed solutions and potential technologies are to be made. It is relatively easy to present paper solutions, but how do we decide between them and find the best way forward? There is no one solution to the problem and no obviously best technology; different solutions will be appropriate in different countries or regions. Simplistic answers I have often heard are: Leave it to the market to provide, or The three solutions are Technology, Technology, and Technology. The market and technology are essential and effective tools, but poor masters. Solutions need to be more carefully crafted than those tools that provide on their own.

Let me take the analogy of a motor boat with the engine representing technology, and the propeller market forces (Figure 11.6). But where is the boat heading? Without a rudder and someone steering, the course will be arbitrary or even disastrous. Every voyage needs a destination and a strategy to reach it. Some of the components of the necessary energy strategy are listed in the box on the following page.

Absolutely key is the relationship between the economy and the environment; they must be addressed together. It has been said that the economy is a wholly owned subsidiary of the environment a view echoed by Gordon Brown, then the UK 's Chancellor of the Exchequer, in a speech in 2005.9

Take the market. It responds overwhelmingly to price and the short term. It has been effective in reducing energy prices over the last two decades. But in its raw form it takes no account of environmental or other external factors. Economists for many years have agreed the principle that such factors should be internalised in the market, for instance, through carbon taxes or cap and trade arrangements, but most governments have been slow to introduce such measures. An example where it is working comes from Norway where a carbon tax makes it economic to pump carbon dioxide back into the strata from where gas is extracted (see page 327). Aviation presents a contrary example where the absence of economic measures is allowing global aviation to expand at a highly unsustainable rate.

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