The economics of promoting security of energy supply
AbstractThis paper analyses the welfare effects of two policies directed at the security of energy supply: investments in strategic petroleum reserves and a cap on the production of gas from the largest Dutch gas field. Market failures can justify such policies, in particular failure of individual consumers to account for their impact on energy prices and import dependency and, hence, the vulnerability of a country to geopolitical conflicts. But as the costs of investing in strategic reserves and capping gas production are not negligible, these options are welfare enhancing only in specific circumstances. Generally, measures to improve the functioning of energy markets promise to achieve more than investment-intensive measures or those restricting options of profit-maximising agents. However, policy makers might find it politically expedient to adopt rather than reject inefficient security-of-supply policies.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by European Investment Bank, Economics Department in its series EIB Papers with number 8/2007.
Length: 24 pages
Date of creation: 25 Jun 2007
Date of revision:
Contact details of provider:
Postal: 100, boulevard Konrad Adenauer, L-2950 Luxembourg
Phone: (+352) 43 79 1
Fax: (+352) 43 79 68 895
Web page: http://www.eib.org/efs/
More information through EDIRC
Strategic reserve; energy policy; cost-benefit analysis;
Find related papers by JEL classification:
- Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
- Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
- Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
- Q49 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Other
This paper has been announced in the following NEP Reports:
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Arie ten Cate, 2010. "Hourglass models of world-wide problems such as climate change," CPB Memorandum 238, CPB Netherlands Bureau for Economic Policy Analysis.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Anna Schumacher).
If references are entirely missing, you can add them using this form.