Can taxation help governments achieve environmental goals with respect to energy use and emissions? Yes, with conditions.

Global warming, finite fossil fuels and geopolitical risks make a shift to renewable energies inevitable. Though it is a challenge fraught with uncertainties, no action would be worse. An alternative, workable energy strategy is within reach.

Transport is the main cause of carbon dioxide emissions, ahead of power generation or industry. While aviation accounts for 14% of transport-based CO2 emissions in the EU, roads have a larger effect. In OECD countries, road transport accounts for over 80% of all transport-related energy consumption, for most of the accidents and the majority of air pollutant emissions, noise and habitat degradation.

Are we about to switch to new energy sources? Grandiose plans are being drawn up for installing veritable forests of giant wind turbines, turning crops and straw into fuel ethanol and biodiesel, and for tapping solar radiation by fields of photovoltaic cells. As with most innovations, there is excitement and high expectation. Will these developments and other renewable energy conversions one day replace fossil fuels? Eventually they will have to, but a reality check is in order.

Energy has moved to the top of our policy agendas, and with good reason. First, there is the price of oil, which though easing a little in recent months, remains historically high. This has pushed up costs for producers and consumers alike.

OECD countries share the same goals of sustainable development, but differ in their views on the role of nuclear energy in achieving those goals. Indeed, few energy sources have been scrutinised in the public spotlight over the years quite as much. The question is simple: is nuclear really a sustainable energy?

What actions are you taking to make energy more secure, cleaner and cost-effective? OECD Observer Ministers' Roundtable

The possibility of using renewable energy to produce electricity on a significant scale is a heated debate. The potential of hydropower is well established, and other sources such as geothermal, biomass, solar and wind, even ocean energy, now hold promise. Moreover, they are attractive because they reduce reliance on imported fossil fuels and help cut CO2 emissions. On a micro-scale, to heat home water for instance or run farms, these sources are starting to prove themselves.

The Chernobyl accident was the worst in the history of commercial nuclear power and contaminated large territories in the former Soviet Union and Europe. Twenty years later, its consequences still affect the daily lives of many people.

Construction of Finland’s first nuclear reactor in three decades got under way in September 2005. When completed, the French-built third generation reactor will be the first in western Europe since 1991. Is this the beginning of a new expansion phase?

The development of wind power has accelerated in recent years, thanks to lower costs and better technology. Within the 19 countries participating in wind energy projects in the International Energy Agency (IEA), a sister organisation of the OECD, wind energy has now seen an average growth rate of 28% over the last nine years. According to the latest IEA Wind annual report, at end-2004, total wind capacity reached 47.9 GW.

When the lights go out, our usual solution is to check the light bulbs, the connections, the fuse box, and often relieve the overload by switching something off. Likewise, when a blackout occurs because of a drag on the grid, a quick fix means cutting consumption.

I am happy to see the efforts made by the OECD and other international agencies to bring forth suggestions to streamline the global oil shocks (No. 245, November 2004 and various editions). We at The Indian Institute of Finance (IIF) have been working extensively to provide possible solutions to economies and international agencies since 1987. Some of our suggestions and research forecasts have been very apt and have helped nations to build shields against oil shocks.

France is a country with more than its fair share of great industrial leaders. This is largely due to its steadfast policies in favour of growth and corporate mergers, which have produced world leaders in the pharmaceuticals, banking, steel, automobile and oil industries. So why the surprise or concern at the profits they are making? Should we not, on the contrary, be rejoicing in their success? Their profits, on a par with those of their competitors, are the only real guarantee of their independence.

Can biofuels truly compete with petrol? Recent projections suggest that ethanol could represent up to 5% of the world’s transport fuel by 2010. That figure may seem modest at first glance, but it is significant, considering no other alternative fuel has had an equivalent impact on the gasoline market in over 100 years.

Oil prices may be high, causing more than a little anxiety among governments and the public. Yet, it is precisely at such times that a calm look at the energy situation is needed.

If ever there was an industry that should depend on the supply of a highly skilled and competent workforce, nuclear energy must be it. From operations and process, to oversight and safety, slip-ups are not an option. The skill levels required are high and take time to learn. Yet, though it gets relatively little public attention, the loss of experienced and competent personnel in nuclear technology is a growing concern to both regulators and the nuclear industry.

Nuclear energy generation has come a long way since the first large-scale nuclear power plant flipped the switch in Shippingport, Pennsylvania in December 1957. Today, nuclear energy generates about 16% of the world’s electricity.

The light from the reading lamp in your living room demonstrates home delivery at its most convenient – but did you know that the electricity to power the lamp may have come from another country? Most of the time we do not even think about the complex networks that keep the lights and heating going in a cold snap or the air-conditioning in a heat wave. It takes an event such as the massive power blackout that affected more than 50 million people in the US and Canada in August to remind us.

Whenever oil prices rise, we set about thinking of alternative sources of energy. What if plants and animal waste could be harnessed better, would this be a viable option? Yes, if governments changed strategies, according to a new report out now called Biomass and agriculture: sustainability, markets and policies.

While energy demand in IEA countries has increased steadily since 1973, with only two interruptions, energy savings have been substantial, according to Oil Crises and Climate Challenges: 30 Years of Energy Use in IEA Countries. Compared to 1973, it takes a third less energy to produce a unit of GDP, thanks in part to improved energy efficiency.

Predicting the future is all very well, but how much will it cost to keep the world’s engines running? This publication is the first-ever attempt to comprehensively examine future investment needs, worldwide, in all parts of the energy-supply chain.

The archipelago that makes up Japan is two-thirds mountains, with few indigenous energy resources. As the fourth largest energy consumer in the world, with relatively high energy prices, the most important energy challenge for Japan is security of supply.

After the recent North American blackouts, US energy secretary Bill Richard told CNN that “the United States is a world power, but it has the electricity grid of a third world country”. Slate.com begged to differ, observing that third world countries can generally put up with frequent minor blackouts, whereas OECD countries require a very reliable, interconnected, very first world grid.

The efficiency of power grids may be in the spotlight now, but the availability of energy resources is also a burning and divisive question. Renewables Information 2003, from the International Energy Agency, shows that in the past decade, renewable energy sources, such as solar power, hydro, wind and combustible biomass resources have been gaining ground.

Did you think twice before you switched on the air conditioning this summer? For many living in hot, humid cities and regions, air conditioning is seen as the greatest invention of all time. But being slightly cooler has a high price as far as energy consumption is concerned.

Claude Mandil of France is the new executive director of the International Energy Agency (IEA), a sister organisation of the OECD. He replaces Robert Priddle, who retired in December 2002 after eight years in the post.

In his article, Global warming: What comes after Kyoto?, Professor Burton Richter’s arguments are based on two incorrect premises – one explicit, the other implied (OECD Observer No. 233, August 2002). His very first sentence asserts “Every study of global climate change has concluded that world average temperatures are rising…” This is quite clearly contradicted by the best available data, which come from weather satellites: Global atmospheric temperatures show no perceptible warming trend since

What are the realistic prospects for sustainable development in the first decade of the new millennium? The short answer is that they will be a lot brighter if those who rally behind the sustainable development banner – particularly in developed countries – confine themselves to a less rather than a more ambitious agenda. Why?

Nuclear energy is back in the public eye in light of the concerns about climate change and the need for a sustainable energy supply. Some powerful public voices are unconvinced about the technology’s competitiveness and safety. For Luis Echávarri, Director-General, OECD Nuclear Energy Agency, these doubts should be put to rest.

California is famous for blue skies and leading-edge technology parks. Combine the two and, no surprise, you will find that the state may be taking a lead in solar energy too. Then consider the fact that housing developers are simply replacing traditional roof materials with solar panels as part of new buildings and below the cost of a normal mortgage, and this all begins to sound like a movie script from… California.

Energy security is also about energy access. And that means equity, since energy is vital for human survival. About a third of the world’s population do not have access to electricity and rely almost exclusively on fuelwood, agricultural residues and animal dung to meet their energy needs. (The outlook for energy demand in the poorest developing countries and for the rate of electrification over the next three decades will be analysed in detail in the forthcoming World Energy Outlook 2002 – see Books section.) There is a clear link between poverty and low electricity access, as the graph shows.

Energy production and consumption patterns are shifting. So are the challenges for investment and global energy policy.

Nuclear energy could help in the battle to reduce greenhouse gas emissions, but for many the production of nuclear waste outweighs this advantage. One important challenge is to convince an often reluctant public that with new waste disposal techniques, nuclear energy is worth a second look in the interests of sustainable development.