Electric utility deregulation offers the great promise of market forces leading to lower electric rates, lower air pollution environment, greater energy (and economic) efficiency, and perhaps greater use of renewable energy sources. Ideally, deregulation involves the restructuring of a previously monopolized or nationalized electric utility into separate generation, transmission, distribution, and marketing companies, and allowing wholesale and retail choice of generation company or power marketer. Deregulation has occurred to varying degrees since 1989 in the United Kingdom, Norway, Australia, New Zealand, Chile, Argentina, and about 20 states in the United States. There have been promising results in a few countries and in some U.S. states in some respects, especially lower rates and lower air pollution problems. In most cases, competitive markets have yet to be realized and lower rates can be attributed to other causes, such as previously planned amortization or retirement of expensive power plants, unexpected surplus in natural gas, rate caps, etc. In addition, deregulation has had only a slight beneficial effect on the use of renewable electricity sources. The promise of electric utility deregulation is thus unfulfilled and deserves further study.
Geopolitical considerations have played a major role in many renewable energy policy decisions, e.g., in domestic debates over gasoline taxes, pipeline construction, radioactive waste disposal, and acid rain control legislation in the United States, and in petroleumrelated violence in Nigeria. The most prominent role for geopolitics in energy policy has probably involved international discussions on controlling greenhouse gas emissions, and in oil markets. In the cases of the Kyoto Protocol of 1997 and the 1992 Framework Convention on Climate Change, nations carefully considered their national economic interests, domestic politics, and international trade during the negotiations. European countries, with the lowest rates of population and economic growth along with strong domestic environmental lobbies, have pursued a greater rate of greenhouse gas reduction.
The United States, in contrast, has been stubbornly cautious and backed out of the treaty in 2001 (arguing it is not in its economic best interests), and the oil-rich nations of the Middle East have been least supportive of any emissions controls. In the case of oil markets, with the United States now dependent on imports for over half its supply, energy policy and trade strategy have played major roles in the pursuit of new oil discoveries in Alaska and in warfare in Kuwait, Iraq, and perhaps Afghanistan.
