Executive Summary

Summary

Energy is a key enabler of economic development. Its use has been steadily growing among developed and developing countries, increasing pressure on oil producing countries to increase and maintain a sustained supply. Also, supply bottlenecks and finite fuel resources against rising demands can result in higher prices with severe consequences on economic growth. This could unduly affect those developing economies least able to absorb rising costs. The use of energy is also strongly associated with rising greenhouse gas concentration in the atmosphere. Thus, the current global energy direction is not sustainable. To help mitigate these risks, governments must adopt effective policies to enhance energy security that includes energy efficiency, viable and effective conservation measures, diversification of sources, and the development of renewable sources of energy.

There is a huge opportunity for the incorporation of energy efficiency into infrastructure, especially new infrastructure. Not only does this lower energy costs, it also enhances environmental sustainability and energy security. However, innovation is still required in the technology, design, and business model aspects of energy efficiency. Governments could also endeavour to reduce regulatory and financial deterrents to greater energy efficiency.

Diversification of energy sources must include both fossil and non-fossil fuels. Today, more investments in renewable energy sources such as wind, solar, sustainable biomass, geothermal and other alternative energies such as nuclear are being undertaken in places where they are viable. However, most renewable and alternative energies are currently still at a technological and cost disadvantage to fossil fuels. Nuclear plants, for example, are costly to build and maintain, and enriched uranium carry attendant safety and security risks. Governments could adopt policies that support research and development, and provide incentives to support the deployment of renewable energy or provide clear guidelines for alternative energy solutions.

Climate change is one of the most important global environmental concerns. The Stern Review released by the U.K. Government highlights the severe economic costs of failure to mitigate global warming.