Industry insights

The Pitfalls of Short-Term Energy Policies and How to Avoid Them

Alan Mourgues
September 12, 2023

The Systemic Factors Leading to Short-Term Energy Policies

Short-term energy policies are often driven by systemic factors, such as the need for immediate economic gains, political expediency, and the influence of special interests. Politicians, in particular, are often drawn to short-term energy policies that promise quick rewards, such as increased revenue and job creation. These short-term gains can be attractive for politicians looking to make a lasting impression on their constituents.

The pursuit of short-term economic gains can also lead to the neglect of long-term sustainability. This can be seen in the way energy policies are often created in response to the current economic climate, without consideration for the potential environmental or long-term economic impacts. The focus on short-term gains can also lead to the adoption of policies that are not based on sound scientific evidence, such as policies that favor the use of fossil fuels over renewable energy sources.

The influence of special interests can also play a role in the decision-making process. Special interests, such as energy companies, can have a significant influence on the outcome of energy policy debates. They can use their financial resources to lobby for policies that favor their own interests, often at the expense of long-term sustainability.

Finally, the lack of public awareness of the importance of long-term sustainability can contribute to the adoption of short-term energy policies. The public often lacks the knowledge and understanding of the potential impacts of energy policies, and this lack of understanding can lead to the adoption of policies that prioritize short-term gains over long-term sustainability.

Unfriendly Policies Toward Fossil Fuels

The relationship between policies toward fossil fuels, investment behavior, and high energy prices is a complex and nuanced issue that can't be fully explained by a single cause-and-effect chain. However, there are legitimate concerns that are worthy of exploration.

Potential Impact of Unfriendly Policies Toward Fossil Fuels:

  1. Reduced Investment: Stricter regulations and negative sentiment around fossil fuels could discourage investment in this sector.
  2. Asset Stranding: As policies change, companies may find that their fossil fuel assets become "stranded," or worthless, causing a reluctance to invest in new infrastructure or even maintenance.
  3. Transition Costs: Moving to renewable sources of energy involves upfront costs that might not be immediately offset by the benefits, especially if the technology is not yet fully scalable or economically viable.
  4. Increased Uncertainty: Unfavorable or rapidly-changing policies can introduce uncertainty into the market, which is often a deterrent for long-term investments.

Potential Causes of High Prices:

  1. Supply Shortage: Reduced investment can indeed lead to supply shortages, especially during times of high demand, leading to high prices.
  2. Transition Gaps: As you noted, if the transition to renewables is not properly managed, there could be a period where the supply from fossil fuels diminishes before renewables can pick up the slack.
  3. Global Factors: Energy is a global market, and supply disruptions or geopolitical tensions elsewhere can also drive up prices irrespective of domestic policy.

Other Contributing Factors:

  1. Market Dynamics: Monopolies or limited competition can also contribute to high prices.
  2. Technological Lag: Sometimes, even with the best policies in place, technology adoption takes time and can lag behind the rate at which fossil fuel sources are phased out.
  3. Economic Conditions: Inflation, currency valuation, and other macroeconomic factors can also contribute to high energy prices.

Balanced Approach:

To avoid the pitfalls of high prices and ensure a stable transition, a balanced approach might be most effective. This could involve:

  1. Strategic Planning: Ensuring that policies are phased in gradually to give the market time to adjust.
  2. Public and Private Investment: Encouraging investment in renewable energy sources while also maintaining sufficient investment in existing energy infrastructure to meet short-term needs.
  3. Market Incentives: Providing incentives for both consumers and producers to transition more smoothly to renewable energy sources.
  4. International Collaboration: Coordinating with other countries can help mitigate the impact of global supply shortages or price hikes.

While unfriendly policies toward fossil fuels could potentially contribute to reduced investment and subsequent high prices, they are rarely the sole or even primary cause. A multiplicity of factors, both domestic and international, contribute to energy pricing, and each needs to be considered in the context of a complex and interconnected system.

Strategies to Develop Long-Term Energy Solutions

The development of long-term energy solutions requires a shift in mindset. The first step is to identify the systemic factors that lead to short-sighted energy policies. These factors can include political pressure from special interests, limited resources, and a lack of public engagement. It is also essential to recognize the mental models that support short-term policies, such as the belief that short-term gains are more beneficial than long-term investments.

Once these systemic factors and mental models have been identified, they can be addressed through targeted strategies. For example, increased public engagement and education can help to create a more informed public that is more likely to support long-term solutions. Additionally, governments can create incentives for businesses and individuals to invest in long-term solutions. This could include tax credits, grants, or other forms of financial support.

Finally, governments and businesses need to be held accountable for their actions and investments. This requires an oversight system that ensures that long-term solutions are prioritized over short-term gains. Additionally, there should be a mechanism for tracking the progress of long-term energy solutions, so that any potential problems can be identified and addressed quickly.

By understanding the systemic factors and mental models that lead to short-term energy policies, and by implementing targeted strategies to develop long-term solutions, governments and businesses can ensure that their energy policies are sustainable and effective.


Politicians enacting short-sighted policies for immediate gain is a concern that has been noted across various sectors, not just energy. The tendency to focus on short-term outcomes at the expense of long-term solutions can be traced back to several systemic issues and mental models.

Underlying Factors


Potential Solutions

The issue of politicians focusing on short-term gains at the expense of long-term solutions is complex and challenging to address. However, understanding the systemic factors and mental models contributing to this tendency can help in crafting strategies to mitigate its detrimental effects.

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Alan is a Consulting Petroleum Reservoir Engineer with 20+ years of international industry experience. Alan is the founder of CrowdField, a marketplace that connects Oil & Gas and Energy businesses with a global network of niche talent for task-based freelance solutions. His mission is to help skilled individuals monetize their knowledge as the Energy transition unfolds, by bringing their expertise to the open market and creating digital products to sell in CrowdField's Digital Store.


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