Markets go hand in hand with sensible and impartial regulation to address efficiency standards, full fuel cost accounting, market power, and energy trade. The Kyoto Protocol has put greenhouse gas emissions on the political radar screen, but developing countries are right to focus on energy poverty and local pollution rather than concern themselves with the imperfect science of global warming. WEC is not holding its breath that governments will achieve a breakthrough on the issues of emissions trading and clean development mechanisms in the near future. WEC and oil and natural gas producers must get on with the job of linking energy accessibility investments in developing countries with quantifiable emissions reductions using the latest technologies. Competition and customer choice, coupled with appropriate regulation, will promote the acceleration of technology transfer to achieve this.
Time is of the essence.
I am impressed with how deeply this message has penetrated the thinking of political leaders in both developed and developing countries, as well as the energy utility and service executives with whom they work. Recent experience in California may be tempting some countries to reconsider market reform, but it is hoped that this will not be widespread. How they manage the public debate on security, ownership, and pricing issues is critical, but they seem to realize there is a need to act now rather than postpone difficult decisions until later. Energy companies have moved to implement business strategies to manage emissions in a cost-effective and sustainable way, not just in the developing countries but in their own backyards. Fostering financial partnerships between developed and developing countries in the form of sound business investment in energy infrastructure or distributed generation systems to achieve environmental goals is a big piece of the sustainability puzzle.