Thursday, September 16, 2010

Government Energy Policy the Environment and the Economy

What a government does, or does not do, on energy policy will have major implications for the future. Rather than allowing the markets to dictate the price of energy, the confluence of environmental and economic concerns are putting pressure on governments to engage the issue of energy.

China recently unveiled a $700-billion program to promote clean energy investment. The U.S. government is seeking greater automotive efficiency and Germany is considering the development of nuclear power. In countries like Brazil Government policy has enabled the country to go from being a net importer to a net exporter of energy.

China, already the largest energy consumer in the world, is planning a major expansion of its greenhouse gas causing coal-fired generating plants. The challenge is the same in India and everywhere in the world because coal is cheap and easily readily available.

The growing energy demands of countries like China and India are widely believed to be a major threat to the environment. However, countries like Canada are also a target of criticism because of their massive oil sand reserves.

Fossil fuel powered energy is a major emitter of GHGs and it drives down the price of energy thereby impeding the growth of renewable sources of power. Fossil fuels are relatively cheap which is why governments must not allow price to dictate energy choice.

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