Energy Policy
Exploring Our Content
Fast Facts
View our summary of key facts and information.
(Printable PDF, 150KB)
Before You Watch Our Lecture
Maximize your learning experience by reviewing these carefully curated videos and readings we assign to our students.
Our Lecture
Watch the Stanford course lecture.
Test Your Knowledge
Take our quiz to test what you've learned.
Additional Resources
Find out where to explore beyond our site.
Check out our newsletter on U.S. Energy Policy!
Fast Facts About
Energy Policy
Policies shape decisions about energy production and use. Institutions ranging from local governments to international trade organizations use different types of policy instruments, such as building energy codes, tax credits, and air quality standards, to influence energy-related behaviors.
More than 7,000 energy policies have been reported by countries to the International Energy Agency. Those are just the tip of a cascade of energy policies enacted by provincial and municipal governments as well. In the U.S., states have enacted energy policies in several categories that are tracked in every state, and both existing state laws and newly introduced bills shed light on frontiers of policy innovation. In addition, more than 60 major cities around the world have shared their policies and plans for a rapid transition to clean energy.
Energy policies are forged by pressure from stakeholders with a host of interests including economic development, geopolitical security, climate action, and rapid deployment of new technology. The capacity of each group of stakeholders to influence decision-makers and hold them to account is different, and political science is a field that helps explain how differences in influence affect policy. For example, incumbent energy interests in the U.S. have historically spent 10 times more every year to influence policy through lobbying than clean energy interests. More recently, spending by champions for clean energy on political influence in U.S. federal policy surged in the election cycle that then led to landmark U.S. policies accelerating deployment of electric vehicles and renewable energy.
Some policies use financial incentives to affect the relative price of energy products or end uses. Subsidies to fossil fuels, for example, have reached a record-breaking high of $7 trillion according to the International Monetary Fund, and it is a top international policy issue among world leaders who are also grappling with catastrophic effects of a changing climate. Tax credits, direct spending, and support for research are among other types of financial incentives that affect how energy systems develop. The U.S. estimated these explicit subsidies across all energy types cost $30 billion in 2022. In at least 40 countries, some energy markets are affected by a different type of financial instrument, a price on carbon dioxide pollution. This policy shifts to producers and consumers of fossil fuels a fraction of the estimated costs paid by societies for damages from climate change.
Regulation is another large category of policies that affect the decisions of producers or consumers of energy. For example, regulations on air pollution from cars and power plants are powerful drivers for transitions to electric mobility and renewable energy. Building energy codes and appliance standards are other types of regulations that, along with other policies, have helped make energy efficiency the “first fuel” in clean energy transitions. Regulations in areas seemingly unrelated to energy, such as wildlife protection or waste management, also can affect decisions about energy, such as siting of renewable energy or treatment of coal ash.
The United Nations Framework Convention on Climate Change (UNFCCC) is a vital structure for negotiating agreements between nations, and the Convention is neither a set of regulations nor pricing policies. Under the Paris Agreement among participating countries, each country pledges to adopt and enforce their own policies as nationally determined contributions to action on climate change. The differences between nations in responsibility for climate changing pollution and respective capacities to take action justifies a critical policy category for global energy transition known as international climate finance. Pledges to pay $100 billion per year for climate finance were offered by wealthier countries to countries with less capacity; however, they have not yet been fulfilled, and that makes finance one of the most significant policy issues for climate justice.
Key Terms
Policy
Set of ideas or plans used for making decisions, especially in politics, economics, or business
Politics
Process of determining who gets what, when, and how
Political Power
Ability to change (or prevent change) to conditions and processes shaping policy
Typical Policy Attributes
Jurisdictional Boundary
Defined scope of a policy
Record of Decision
Formal record of decisions that govern oversight and implementation of a policy
Enforcement Provision
Identification of the ramifications that may occur in cases of policy non-compliance
Assigned Authority
Identification of who has the ability to oversee the policy
Covered Entity
Identification of who is subject to the policy and who may be exempt
Compliance Obligation
Specifications regarding how the policy is to be enforced
Examples of Policy Mechanisms
Subsidy
A sum of money granted by the government or a public body to assist an industry or business
Rebate
Partial refund to someone after paying for goods or services in order to make the sale more attractive; does not require filing of taxes
Loan
When the government guarantees loans issued by banks or makes loans from its own loan office
Tax Credit
An amount of money that certain taxpayers can subtract from the taxes they owe
Grant
A sum of money granted by the government or a public body for a defined purpose
Carbon Tax
Puts a price on emissions to encourage consumers, businesses, and governments to produce less of them
Levels of Governmental Policies
International |
|
Tribal (U.S.) |
|
Federal (U.S.) |
|
State (U.S.) |
|
Local (U.S.) |
|
Effects of Policies
Trade Offs
A kind of compromise that involves giving up something in return for getting something else
Example:
A government spending bill that is limited by a spending cap. Policymakers have to decide what to invest in and what to leave out.
Synergies
Coordination in the design of multiple policy elements to improve efficiency in their implementations and achieve optimal outcomes
Example:
An energy policy that promotes energy efficiency upgrades in buildings along with the installation of rooftop solar panels. This allows the solar panels to meet a larger portion of the building's energy needs, leading to greater overall reductions in greenhouse gas emissions
Unintended Consequences
An unexpected side effect of a policy that has a negative effect on the problem the policy was created to solve
Example:
California’s 2006 clean fuel standards led to unnecessary imports and exports of corn and sugarcane ethanol, which unintentionally increased emissions due to fuel transportation
Select Key Global Energy Policies
1970: Treaty on the Non-Proliferation of Nuclear Weapons (NPT) |
|
1973: MARPOL (International Convention for the Prevention of Pollution from Ships) |
|
1987: Montreal Protocol |
|
1988: Intergovernmental Panel on Climate Change (IPCC) |
|
1997: Kyoto Protocol |
|
2015: Sustainable Development Goals |
|
2015: Paris Agreement |
|
Select Key U.S. Energy Policies
1957: Price–Anderson Nuclear Industries Indemnity Act |
|
1970: Clean Air Act Amendments |
|
1972: Clean Water Act |
|
1973-1974: Oil Embargo |
|
1975: Corporate Average Fuel Economy (CAFE) Standards |
|
1978: National Energy Act (includes PURPA) |
|
1975: Energy Policy and Conservation Act |
|
2005: Energy Policy Act |
|
2007: Energy Independence and Security Act |
|
2009: American Recovery and Reinvestment Act |
|
2015: Energy Policy and Modernization Act |
|
2021: Justice40 Initiative* |
|
2021: Bipartisan Infrastructure Law (BIL) |
|
2022: CHIPS and Science Act |
|
2022: Inflation Reduction Act (IRA) |
|
*Visit our Energy, Environment, and Justice page for more information about energy justice.
Drivers and Barriers to Clean Energy Policy
Drivers
- Demands for affordable energy
- Calls for action on climate change to protect life support systems
- Need for clean air and water and the effects of the currently polluted resources for humans and wildlife
- Attention to jobs created by energy transitions
Barriers
- Money in politics: reported oil & gas lobbying in the U.S. exceeds $100 million every year since the Energy Independence Act of 2007
- Resistance to losing high-paying jobs in the coal, oil, and gas industries
- While policies are being passed, actual implementation and permitting processes are much slower
- Fossil fuel subsidies tend to be long term and entrenched in tax codes
Before You Watch Our Lecture on
Energy Policy
We assign videos and readings to our Stanford students as pre-work for each lecture to help contextualize the lecture content. We strongly encourage you to review the Essential tools and readings below before watching our lecture on Energy Policy. Include selections from the Optional and Useful and For Reference lists based on your interests and available time.
Essential
- Climate & Economic Justice Screening Tool. US Council on Environmental Quality. November 22, 2022.
Uses US census tracts to highlight disadvantages communities that experience burdens. - What the War in Ukraine Means for Energy, Climate and Food. Nature. April 5, 2022. (5 pages)
How Russia's invasion could prompt a long-term shift towards sustainability. - Executive Order on Tackling the Climate Crisis at Home and Abroad. The White House. January 27, 2021. (18 pages)
The text of the Executive Order.
Optional and Useful
- Policies That Work: How to Build a Low-Emissions Economy. ClimateWorks Foundation. 2011. (40 pages)
Analyzes energy, transportation, and climate policies from around the world. - Center for the New Energy Economy (CNEE). Colorado State University.
Helps energy policy leaders create policies that facilitate a just and equitable transition to a clean energy economy.- Advanced Energy Legislation Tracker.
Tracks the status of legislative bills related to energy.
- Advanced Energy Legislation Tracker.
- State Policy Opportunity Tracker (SPOT) for Clean Energy. Center for the New Energy Economy (CNEE) & The Nature Conservancy (TNC).
Information on existing US state clean energy policies and future policy opportunities.
For Reference
- Final Recommendations: Justice40 Climate and Economic Justice Screening Tool & Executive Order 12898 Revisions. White House Environmental Justice Advisory Council. May 21, 2021. (92 pages)
- Fact Sheet: The American Jobs Plan. The White House. March 31, 2021. (20 pages)
- US Energy History Visualization. Center for Robust Decision-making on Climate and Energy Policy, UChicago. (1 min)
Shows energy transitions in U.S. history from 1800-2021.
Our Lecture on
Energy Policy
This is our Stanford University Understand Energy course lecture on energy policy. We strongly encourage you to watch the full lecture to understand the critical role policy plays in managing and sustaining energy systems and to be able to put this complex topic into context. For a complete learning experience, we also encourage you to review the Essential tools and readings we assign to our students before watching the lecture.

Presented by: Holmes Hummel, PhD; Energy Equity & Just Transitions, Managing Director, Precourt Institute for Energy, Stanford University
Recorded on: September 27, 2024 Duration: 55 minutes
Table of Contents
(Clicking on a timestamp will take you to YouTube.)
00:00 Introduction
06:44 Energy Policies and Instruments
14:29 Energy Justice
27:31 Clean Energy Policy Instruments
32:08 What is Policy?
35:34 Political Power and Just Transitions
44:30 Money in Politics
47:57 Interagency Intergovernmental Coordination
53:26 Concluding remarks
Lecture slides available upon request.
Test Your Knowledge

Additional Resources About
Energy Policy
Government and International Organizations
- International Energy Agency (IEA) Policies Database
- United Nations Framework Convention on Climate Change (UNFCCC)
- US Environmental Protection Agency (EPA) Clean Energy Programs
- US Environmental Protection Agency (EPA) Laws & Regulations
- US Environmental Protection Agency (EPA) White House Environmental Justice Advisory Council Recommendations
- US Federal Energy Regulatory Commission (FERC)
- US Bureau of Indian Affairs (BIA) Energy & Mineral Development Regulations
- US Department of Energy (DOE) Office of Policy
- US Department of State Bureau of Energy Resources
- The White House
- Interagency Working Group on Coal & Power Plant Communities & Economic Revitalization