ExternE-Pol Externalities of Energy: Extension of Accounting Framework and Policy Applications

We define energy security as “a state in which consumers and their governments believe, and have reason to believe, that there are adequate reserves and production and distribution facilities available to meet their requirements in the foreseeable futures, from sources at home and abroad, at costs which do not put them at a competitive disadvantage or otherwise threaten their well-being. Insecurity arises as a result of physical failure of supplies or as a result of sudden and major price changes” (Belgrave, 1987 cited in Lockwood, 1997). This accords with the International Energy Agency definition as being the “availability of regular supply of energy at a reasonable price” (IEA: 2001).