The Economics of Energy Security

31 Pages Posted: 13 Dec 2013

See all articles by Gilbert E. Metcalf

Gilbert E. Metcalf

Tufts University - Department of Economics; National Bureau of Economic Research (NBER)

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Date Written: December 2013

Abstract

Energy security is the ability of households, businesses, and government to accommodate disruptions in supply in energy markets. This survey considers the economic dimensions of energy security, political and other non-economic security concerns and discusses policy approaches that could enhance U.S. energy security. A number of points emerge. First, energy security is enhanced by reducing consumption, not imports. A policy to eliminate oil imports, for example, will not enhance U.S. energy security whereas policies to reduce energy consumption can improve energy security. Second, energy security is distinct from considerations of energy externalities. Energy security taxes are appealing on political grounds but more difficult to justify on economic grounds. Finally, the contrasting concerns over energy security between policy makers and economists is striking. The survey notes some possible reasons for these differing views and suggests possible research opportunities in this area.

Suggested Citation

Metcalf, Gilbert E., The Economics of Energy Security (December 2013). NBER Working Paper No. w19729. Available at SSRN: https://ssrn.com/abstract=2367139

Gilbert E. Metcalf (Contact Author)

Tufts University - Department of Economics ( email )

Medford, MA 02155
United States
617-627-3685 (Phone)
617-627-3917 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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