Global Policy Recommendations
If the Energy [R]evolution is to happen, then governments around the world need to play a major part. Their contribution will include regulating the energy market, both on the supply and demand side, educating everyone from consumers to industrialists, and stimulating the market for renewable energy and energy efficiency by a range of economic mechanisms. They can also build on the successful policies already adopted by other countries.
To start with they need to agree on further binding emission reduction commitments in the second phase of the Kyoto Protocol. Only by setting stringent greenhouse gas emission reduction targets will the cost of carbon become sufficiently high to properly reflect its impact on society. This will in turn stimulate investments in renewable energy. Through massive funding for mitigation and technology cooperation, industrialised countries will also stimulate the development of renewable energy and energy efficiency in developing countries.
Alongside these measures specific support for the introduction of feed-in tariffs in the developing world - the extra costs of which could be funded by industrialised countries - could create similar incentives to those in countries like Germany and Spain, where the growth of renewable energy has boomed. Energy efficiency measures should be more strongly supported through the Kyoto process and its financial mechanisms.
Carbon markets can also play a distinctive role in making the Energy [R]evolution happen, although the functioning of the carbon market needs a thorough revision in order to ensure that the price of carbon is sufficiently high to reflect its real cost. Only then can we create a level playing field for renewable energy and be able to calculate the economic benefits of energy efficiency.
Industrialised countries should ensure that all financial flows to energy projects in developing countries are targeted towards renewable energy and energy efficiency. All financial assistance, whether through grants, loans or trade guarantees, directed towards supporting fossil fuel and nuclear power production, should be phased out in the next two to five years. International financial institutions, export credit agencies and development agencies should provide the required finance and infrastructure to create systems and networks to deliver the seed capital, institutional support and capacity to facilitate the implementation of the Energy [R]evolution in developing countries.
While any energy policy needs to be adapted to the local situation, we are proposing the following policies to encourage the Energy [R]evolution that all countries should adopt.
Read more in Chapter 12 of the energy [r]evolution report