PARALLEL SESSIONS
We are planning to hold two plenary sessions and eight parallel sessions. The plenary sessions will address the key conference themes, looking at Government and market shortcomings in the new context of climate change and security and and exploring how far market processes and Government policy can be re-invented and combined in ways that will be more effective in tackling a challenging new agenda.
We have chosen themes for the parallel sessions that will unpack some of these ideas and subject them to critical scrutiny. The sessions will therefore address the following:
Liberalisation This remains an important and sometimes central theme of energy policy in many countries, including developing countries subject to World Bank lending conditions. How far has liberalisation in energy achieved its own aims (mainly efficiency)? What is the role and relevance of the liberalisation agenda in relation to climate change and security? Does it represent, as the UK Government argues, a necessary underpinning to carbon reduction and security policies, or is it either irrelevant or possibly even counter-productive? If this is the case, how else should markets be structured and regulated: is oligopoly more socially desirable in the new agenda?
Technology appraisal and transfer Developing countries are unlikely to sign up to carbon emission reduction commitments for some time, but are critical actors in the ambition to restrain climate change. Technology transfer is a key mechanism to help developing countries reduce emissions in the absence of national commitments. However, neither markets alone (because many relevant technologies are not yet commercial and there may be IPR issues) nor Governments alone (because almost all technology is privately owned) can manage the difficult processes involved. What has been the recent experience of energy technology transfer and what kinds of joint Government/market approaches, including for instance joint R&D, might work better?
Uncertainty, risk and investment (double session) Both the climate change and the energy security agendas require substantial energy investment activity in a variety of technologies. Much of this investment will be of a long-term and unusually risky character and most Governments no longer take on these risks directly. This can raise difficult problems for private investors faced with major uncertainties and the prospect of policy instability. How can this investment problem be characterised and analysed? Do we need for example portfolio frameworks rather than levelised cost methodologies? What kinds of policy frameworks will make long-term investments more probable? How can public and private sectors work together to promote investment for both security and climate change objectives while satisfying efficiency objectives?
Is small beautiful? The energy system was once apparently ruled by economies of scale and bigger always seemed cheaper. But, partly in step with new and wider developments in technology, and partly as a result of policy interventions e.g. for renewables), smaller scale technologies – whether in hydrocarbon extraction, electricity and micro-generation – are becoming more economic. Even more recently, however there has been renewed interest in large-scale technologies (nuclear power and carbon capture and storage). Are large-scale and small-scale technologies compatible? Government used to fund large-scale technologies with limited success: under liberalised markets total R&D spend has mostly fallen. How should Governments now approach technology policy? Should they aim to be universalist (eg tax credits) or should they pick winners, and if so, how? Do large-scale technologies need support alongside small-scale? How can R&D and technology policies harness the private sector?
Instruments of trading and regulation (double session) Economists usually argue for universal, non-discriminatory policy instruments such as taxes, emissions trading and tax credits on grounds of efficiency (and avoidance of corruption). In recent years, and in association with the dominance of liberalised markets, Governments have increasingly favoured universalist, market-based instruments like emissions trading and, to an extent, taxation. But evidence is emerging that pricing is a necessary, not a sufficient condition for achievement of policy objectives and there is a need for competitive (rather than ‘free’) markets to be designed and regulated by public authorities. In addition, when energy security is threatened, Government sometimes react in protectionist and interventionist ways. Some policy development is becoming less ‘economistic’ and universalist as a result. How far is it the case that competitive markets must underlie security and climate change objectives? If not, how can market power be regulated? How much can we expect from emissions trading and taxes? How far are non-market instruments needed as well, and how can they be combined effectively with market-based instruments?
Modelling and Scenarios As the issues in energy policy become more varied and often more long-term (e.g. carbon emissions to 2050) so the range of economic modelling techniques has also broadened to take account of new objectives and longer time-scales. Besides extensions of econometric techniques and input/output methods, modelling now considers issues like efficient technology portfolios (for instance via mean variance portfolio methods) and pathways to long-term low-carbon systems (for instance using scenario techniques of greater and lesser formality). How well do these various methods throw light on the big analytical issues at stake?