By Kenzie Lewis

Did you know the energy sector is responsible for over 10% of Canada’s Gross Domestic Product? As the sixth largest energy producer in the world, energy is an integral part of the Canadian economy [1]. Read on to find out more about how economic policy plays into the energy industry!

What is energy economics and energy policy?

At its core, energy economics is all about managing the supply and demand for energy. This includes creating business and economic models for energy systems, analyzing and forecasting trends for different kinds of energy, investing and trading of energy stock, and pricing energy resources [2].

Energy policy refers to rules and guidelines that are designed to combat issues affecting energy production and use. Energy policy relies heavily on energy economics in order to regulate prices and ensure that there is enough energy supply to meet demand. The economic models and analyses that are conducted are used by the government to properly manage energy resources [3]. To learn more about energy and the economy in Canada, click here.

How can economic policies affect energy usage?

Energy policies are often written when the population is worried about an issue like climate change, resource depletion, or rising energy prices. For the issue of climate change, policies can help by offering tax subsidies to companies that are energy efficient or using renewable energy, which drives companies to conserve more energy in order to increase their profits. Economic policies also guide areas of research and development by funding initiatives, which can help to drive renewable energy technology or lead to more sustainable products like fuel efficient vehicles. Policies can also create consequences for companies that produce a lot of emissions or use a lot of energy, which is done by implementing carbon taxes (taxing businesses based on how much greenhouse gas emissions are produced) or cap and trade systems (setting a “cap” on the amount of pollution that a company can produce, but allowing them to “trade” allowances that would effectively increase or decrease this cap). Click here to learn about the latest energy policies in Canada!

What kind of people work in energy economics and policy?

There are many jobs and opportunities involved in energy economics and policy making! Policy-making positions involve working with the government to create and enforce energy policies. Policy-analysis positions work with public or private companies to identify trends in energy policy and ensure that the necessary conditions laid out by existing policies are met. Policy researchers work for nonprofits to look at more general energy policy trends, and sometimes conduct research on a global scale to ensure international cooperation between energy companies all over the world. These positions may prefer a business background, and taking classes in energy and the environment can give students a competitive edge in this field [4]. More information on careers in Canada’s energy sector can be found here!

References

[1] “Energy and the economy. ”Government of Canada. https://www.nrcan.gc.ca/science-data/data-analysis/energy-data-analysis/energy-facts/energy-and-economy/20062 (Retrieved December 29, 2020).

[2] “Energy Economics and Policy.” MDPI. https://www.mdpi.com/journal/energies/sections/energy_economics_policy (Retrieved December 29, 2020).

[3] Z. Chen, “Energy Economics and Policy,” The Scientific World Journal, vol. 2013, May, 2013. Accessed: December 29, 2020, doi: 10.1155/2013/536517. [Online]. Available: https://www.hindawi.com/journals/tswj/2013/536517/

[4] “Energy Policy Careers”. Yale Jackson Institute for Global Affairs. https://jackson.yale.edu/beyond-jackson/career-support/energy-policy-careers/ (Retrieved December 29, 2020).

Tech Breakdown: Energy and Economic Policy