Energy policy

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Energy policies are the government's strategies and decisions regarding the production, distribution, and consumption of energy within a specific jurisdiction. Energy is essential for the functioning of modern economies because they require energy for many sectors, such as industry, transport, agriculture, housing. The main components of energy policy include legislation, international treaties, energy subsidies and other public policy techniques.

The energy sector emits more greenhouse gas worldwide than any other sector.^[1] Therefore, energy policies are closely related to climate policies. These decisions affect how high the greenhouse gas emissions by that country are.

The main components of energy policy include:

• Legislation and regulation – Governments implement laws to promote renewable energy, set efficiency standards, and regulate fossil fuel extraction.^[2]
• International treaties – Agreements like the Paris Climate Accord influence national energy strategies by setting emission reduction targets.^[3]
• Subsidies and incentives – Many governments provide financial support for clean energy technologies while phasing out fossil fuel subsidies.^[4]
• Public policy techniques – These include carbon pricing, renewable portfolio standards, and energy efficiency mandates.^[5]

The energy sector is the largest contributor to global greenhouse gas (GHG) emissions, accounting for over 73% of total CO₂ emissions worldwide. As a result, energy policies are intrinsically linked to climate policies. Decisions regarding energy infrastructure—such as reliance on coal versus renewables—determine a nation's carbon footprint and its ability to meet international climate commitments (Intergovernmental Panel on Climate Change. For instance, countries investing in wind, solar, and nuclear energy typically achieve faster decarbonization than those dependent on coal and oil.

Given the urgency of climate change, many nations are transitioning toward low-carbon energy systems through policies like the U.S. Inflation Reduction Act (IRA) and the European Green Deal, which incentivize renewable energy adoption while reducing fossil fuel dependence.^[6]

Access to energy is critical for basic social needs, such as lighting, heating, cooking, and healthcare. Given the importance of energy, the price of energy has a direct effect on jobs, economic productivity, business competitiveness, and the cost of goods and services.

Frequently the dominant issue of energy policy is the risk of supply-demand mismatch (see: energy crisis). Current energy policies also address environmental issues (see: climate change), particularly challenging because of the need to reconcile global objectives and international rules with domestic needs and laws.^[7]

The "human dimensions" of energy use are of increasing interest to business, utilities, and policymakers. Using the social sciences to gain insights into energy consumer behavior can help policymakers to make better decisions about broad-based climate and energy options.^[8] This could facilitate more efficient energy use, renewable-energy commercialization, and carbon-emission reductions.^[9]

The attributes of energy policy may include legislation, international treaties, incentives to investment, guidelines for energy conservation, taxation and other public policy techniques. Economic and energy modelling can be used by governmental or inter-governmental bodies as an advisory and analysis tool.

Energy planning is more detailed than energy policy.

Some governments state an explicit energy policy. Others do not but in any case, each government practices some type of energy policy. A national energy policy comprises a set of measures involving that country's laws, treaties and agency directives.

There are a number of elements that are contained in a national energy policy. Some important elements intrinsic to an energy policy include:^[10]

• What is the extent of energy self-sufficiency for this nation
• Where future energy sources will derive
• How future energy will be consumed (e.g. among sectors)
• What are the goals for future energy intensity, ratio of energy consumed to GDP
• How can the national policy drive province, state and municipal functions
• What specific mechanisms (e.g. taxes, incentives, manufacturing standards) are in place to implement the total policy
• Do you want to develop and promote a plan for how to get the world to net zero emissions?
• What fiscal policies related to energy products and services should be used (taxes, exemptions, subsidies, etc.)?
• What legislation affecting energy use, such as efficiency standards, emission standards, is needed?

Energy policy sometimes dominates and sometimes is dominated by other government policies. For example energy policy may dominate, supplying free coal to poor families and schools thus supporting social policy,^[11] but thus causing air pollution and so impeding heath policy and environmental policy.^[12]: 13 On the other hand energy policy may be dominated by defense policy, for example some counties started building expensive nuclear power plants to supply material for bombs.^[13] Or defense policy may be dominated for a while, eventually resulting in stranded assets, such as Nord Stream 2.

Energy policy is closely related to climate change policy because totalled worldwide the energy sector emits more greenhouse gas than other sectors.^[1]

Energy policy decisions are sometimes not taken democratically.^[14]

In 2019, some companies "have committed to set climate targets across their operations and value chains aligned with limiting global temperature rise to 1.5°C above pre-industrial levels and reaching net-zero emissions by no later than 2050".^[15] Corporate power purchase agreements can kickstart renewable energy projects,^[16] but the energy policies of some countries do not allow or discourage them.^[17]

Energy policies vary by country, see tables below. Script error: No such module "World topic". Script error: No such module "World topic".

• Energy balance
• Energy industry
• Energy security
• Energy supply
• Energy transition
• Environmental policy
• Petroleum politics
• Sustainable energy
• All pages with titles containing Energy policy of

• "Energy Policies of (Country x)" series, International Energy Agency
• UN-Energy - Global energy policy co-ordination
• Renewable Energy Policy Network (REN21)
• Information on energy institutions, policies and local energy companies by country, Enerdata Publications

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