Erb Institute | Business for Sustainability Director Joe Arvai - What is (and, is not) an Energy Strategy?

Sep 29, 2017 2:25 AM ET

What Defines a "Good" Energy Strategy?

When most people talk about energy strategies, they’re actually not talking about strategy at all.  Oftentimes, narratives are about what companies and policy makers could or should be doing when it comes to energy transitions are framed as “strategy”.  For example, I’ve heard people say that putting a price on carbon, or the need to transition to an electrified economy that does not depend upon fossil fuels, is an “energy strategy.”

But here’s the thing: A strategy for facilitating an energy transition isn’t the same thing as discussions about all the things we could or should do, or that we have done. Putting it another way, energy strategies should not be mistaken for the promotion of specific options, such as the deployment of electric vehicles, the construction of wind farms, R&D in carbon capture and storage or renewed investment in nuclear power.

Don’t get me wrong: Discussions about options are necessary to fuel the imagination with images of what might be. But at the same time, when strategic discussions focus with too much exclusivity on specific options, it’s far too easy to respond with what I have come call the litany of “no, because…” arguments. No, we can’t have electric cars because the electricity to power them comes from coal. No, we can’t have wind farms because they are unsightly and are hazardous to birds and bats. No, we can’t invest in CCS because of the risks of leakage, or because the required price threshold for carbon has yet to be reached.

There’s also a flip side to the “no, because…” argument. It’s that, when it comes to decision-making within complex systems, saying no to something implicitly removes an opportunity to make an informed, evidence-based decision. When considering energy transitions, for example, saying no to nuclear power implicitly means saying yes to something else — to a default, such as coal or gas — without thinking in detail about the default’s merits relative to the wider range of options that otherwise might be considered. Ultimately, when it comes to things like infrastructure and policy, saying no to something usually means saying yes to sunk costs and the status quo.

The Cornerstone of a Good Energy Strategy
So, if all of this is represents a bad substitute for the development of an energy strategy, what might count as a good one?

The cornerstone of an effective energy strategy — or any kind of business or public sector strategy, for that matter — is smart and forward-thinking decision-making. That is, a process for organizing analysis, encouraging deliberation and generating and evaluating options in a scientifically rigorous, transparent and defensible manner.

An energy strategy, therefore, isn’t a report that can be released to elected officials, citizens or shareholders. Rather, it is a living process that hinges on organizing information and dialogue about the risks, costs and benefits of a wide array of energy options. Likewise, it offers a mechanism for understanding — and making choices in light of — path dependency; certain decisions and investments made today will open and close doors in terms of future decisions and investments. An effective energy strategy structures decision-making about energy options in a manner that facilitates tradeoffs when objectives conflict.

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More from Joe Arvai’s blog, Decisions4Good can be found here.

Joe Arvai can be reached on Twitter at @DecisionLab