Policy Papers - May 14, 2007
Energy Security: Investment or Insecurity
The world is facing twin energy-related threats: that of not having adequate and secure supplies of energy at affordable prices and that of environmental harm caused by consuming too much of it.
Soaring energy prices and recent geopolitical events have reminded us of the essential role energy plays in economic growth and development and of the vulnerability of the energy system to supply disruptions. Safeguarding energy supplies is once again at the top of the international policy agenda. Yet the current pattern of energy supply carries the threat of severe and irreversible environmental damage, including changes in global climate. Reconciling the goals of energy security and environmental protection requires strong and coordinated government action and public support. In recent years, demand for energy has surged. This unrelenting increase has helped fuel global economic growth but placed considerable pressure on suppliers buffeted by geopolitics, violent weather conditions and other potentially disruptive factors. On the demand side, increased energy security and environmental concerns may lead to changes in consuming countries' energy policies. These uncertainties have been reflected in the market through volatility and high prices.
Is the world running out of energy? Where will future supplies come from? Will sufficient investment be made to make available adequate energy supplies to meet future demand? What role will governments play? At the same time, the need to curb the growth in energy demand, to increase geographic and fuel diversity and to mitigate climate change is more urgent than ever.
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