The Economics of Energy Security

Posted: 8 Oct 2014

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: November 2014


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 and political and other noneconomic security concerns and discusses policy approaches that could enhance US 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 US 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 are more difficult to justify on economic grounds. Finally, the contrasting concerns over energy security between policy makers and economists are striking. The article 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 (November 2014). Annual Review of Resource Economics, Vol. 6, Issue 1, pp. 155-174, 2014. Available at SSRN: or

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)

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Cambridge, MA 02138
United States

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