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Published: September 4, 2007

 
 

The Other Energy Crisis

With the globalization of economic and social activities comes new global risks, which need to be addressed through well-defined global responses. In that sense, the real crisis we are facing is not merely energy independence, but rather energy interdependence across nations. And, as is often the case, the leaders of a response will be the first ones to glean the benefits of action. Although this concept has been developed in the context of nuclear fuel supplies, there is nothing to stop it from being expanded into a larger mutual insurance company that focuses on interdependence across different sources of energy. The impact on foreign policy could be considerable, and the market opportunities are undoubtedly significant.

Author Profiles:


Debra Decker (decker_debra@bah.com) is an associate with Booz Allen Hamilton in McLean, Va., and a research associate at Harvard University’s Belfer Center for Science and International Affairs at the John F. Kennedy School of Government. She specializes in strategic planning and focuses on nuclear energy and national security issues.
Erwann Michel-Kerjan (erwannmk@wharton.upenn.edu) is managing director of the Risk Management and Decision Processes Center at the Wharton School, where his work focuses on managing and financing extreme events. In 2007, he was named a Young Global Leader by the World Economic Forum, an honor recognizing the most extraordinary leaders of the world under the age of 40.
 
 
 
 
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Resources

  1. “A New Plan to Insure the Supply — and Safe Use — of Uranium in the Nuclear Energy Market,” Knowledge@Wharton Web site, April 18, 2007: A Q&A with the authors of this article that delves into the specifics of their proposal. Click here.
  2. Graham Allison, Nuclear Terrorism: The Ultimate Preventable Catastrophe (Owl Books, 2005): A good source for background on broader nuclear nonproliferation issues. Click here.
  3. Debra Decker and Erwann Michel-Kerjan, “A New Energy Paradigm: Ensuring Nuclear Fuel Supply and Nonproliferation through International Collaboration with Insurance and Financial Markets,” Belfer Center for Science and International Affairs Discussion Paper 2007-02, March 2007: A more in-depth description of the nuclear fund proposal and its feasibility. This was first published by the authors as “Ensuring Global Nuclear Fuel Supplies” in the International Herald Tribune. PDF download.
  4. Energy Information Administration, “International Energy Outlook 2007,” May 2007: The EIA’s annual overview of how much energy is being used globally and from what sources, as well as international energy projections through 2030 and outlooks for major energy fuels and associated emissions. PDF download.
  5. Nuclear Threat Initiative Web site: A nonprofit organization led by Ted Turner and Sam Nunn, with the goal of reducing the nuclear threat. Click here.