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Energy Security Risks and Risks Mitigation: an Overview

Author

Listed:
  • George Kowalski
  • Sead Vilogorac

    () (United Nations Economic Commission for Europe)

Abstract

Central to the goals of competitiveness and sustainable development is the issue of energy. Is there enough? Where will it come from? What will it costs? Is its production and use environmentally sustainable? Many of these questions are now discussed under the general topic commonly referred to as “energy security.” This paper discusses more specifically what is meant by “energy security” and provide some reasons why it has been so difficult to forge a common approach to its achievement. A key factor includes substantively different views amongst countries on the optimal role of the market mechanism, the private sector, and governments either as an owner or regulator. Although different types of insecurity are discussed the focus in this paper is on the long-term physical availability of energy supplies. Interestingly, it appears that long-term security is not just an issue for consuming nations but also for the supplying nations due to concerns that future markets might not exist which would justify massive long-term investments today. However, long-term commitments by consuming and producing nations could lower the risks faced by each. In order to achieve increased security, the consuming countries need to diversify the types of energy used and their geographical sources, yet in many ways the trends have been the opposite as the geographic concentration of energy reserves, especially oil and gas are projected to increase. The ability of countries to increase alternative sources, such as renewables or nuclear, have considerable potential in the long term but in the medium term are limited by technological, environmental and political constraints. For oil and gas which will remain for the near future the most important energy sources, the most immediate problem is not one of insufficient supplies under the ground, but the lack of either government resources for public development or of a sufficiently investment friendly environment for private sector development in those countries that have the reserves. In addition there are a number of other complementary issues that need to be addressed such as improving the transport infrastructure and enhancements for research activities and technology transfer.

Suggested Citation

  • George Kowalski & Sead Vilogorac, 2008. "Energy Security Risks and Risks Mitigation: an Overview," UNECE Annual Report Economic Essays 2008_9, UNECE.
  • Handle: RePEc:ece:annrep:2008_9
    as

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    File URL: http://www.unece.org/fileadmin/DAM/oes/nutshell/2008/9_Energy_Security_Risks.pdf
    File Function: First version, 2008
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    Citations

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    Cited by:

    1. Shadman, F. & Sadeghipour, S. & Moghavvemi, M. & Saidur, R., 2016. "Drought and energy security in key ASEAN countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 53(C), pages 50-58.

    More about this item

    Keywords

    competitiveness; Europe; transition economies; environmental policy; energy security; sustainable development;

    JEL classification:

    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • L71 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Hydrocarbon Fuels
    • L72 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Other Nonrenewable Resources
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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