Decision Support for Developing Energy Strategies: Policymakers and the Public Need a Mechanism for Making a Series of Difficult and Interrelated Choices over Time, and Research in Decision Science Offers a Promising Way Forward

Article excerpt

The United States clearly needs a new energy strategy. In fact, many industrialized nations are in the same position. But this raises an obvious question: What is an energy strategy? In our view, it is a framework that will guide comprehensive and logical discussions about energy development and delivery. It is a deliberative process that encourages involvement from all key stakeholders and gives each of them a legitimate voice in the decisions at hand. It is a way to organize information and dialogue about energy options and their anticipated consequences. And it is a way to structure decisionmaking about energy choices in a manner that facilitates and easily incorporates learning.

What is not an energy strategy? In contrast to most efforts now under way in North America, it is not about promoting specific actions, such as drilling for oil offshore or exploiting unconventional oil and gas resources on land. It is not about advocating energy transportation options, such as oil and gas pipelines. It is not a plan to build infrastructure for renewable energy sources, such as wind or solar farms, or a rationale for providing subsidies for ethanol producers or for setting a price on carbon emissions. It is not a way to advance efficiency standards or carbon capture and storage, or an education plan aimed at demand-side management. Overall, an energy strategy is not about what can be done or (in the eyes of some observers) should be done. Instead, it is a process for organizing analyses, encouraging deliberations, and making decisions in a scientifically rigorous, transparent, and defensible manner.

A good analogy for an energy strategy is that of an individual's financial investments: Different people have different investment objectives and different tolerances for accepting risks, both of which change through time. So it makes sense that investment strategies will differ across individuals and through time. An energy strategy is also specific to the objectives of the decision participants, and a useful strategy is one that establishes a framework for helping people--policymakers, scientists and innovators, and the public--to answer questions about which components of an energy system are preferred. Specifically, an energy strategy should inform choices about the desired level of investment in each element of an energy portfolio, where these investments should be made geographically, and the signals or tipping points that will trigger the reallocation of funds and attention from one resource (coal, for example) to another (say, renewables) over time. It should distinguish between sources that are ready for development and those that require additional research. Overlaid on these questions, which themselves are not easy to answer, are questions about the level of risk and uncertainty that policymakers and the public are willing to tolerate.

Barriers to good decisionmaking

Decisionmaking, although seemingly intuitive, is fraught with complexity. Staying with the example of financial planning, consider the choices that people must make about their investment portfolio. Most people have a sense of what they want to achieve with their decisions--for example, high rates of return, stability, low uncertainty, and social responsibility. People tend also to know what a subset of their options is. But despite this knowledge, the vast majority of people have made investment decisions that they have regretted. In our view, such behavior has five main causes, as demonstrated by a wealth of research:

First, people are not strict maximizers of overall utility during decisionmaking. Rather than evaluating alternatives by carefully weighing the importance of the various attributes--costs and benefits in terms of economic, environmental, health-related, and social considerations, for example--people take shortcuts. Even though these shortcuts are commonplace, many people fail to recognize their existence or the systematic biases that accompany them. …