General Discussion:
Burden of Energy Investments Vector:
- 1 : 10% of government investment in non-renewable energy
as a fraction of GDP
- 0 : 0% of government investment in non-renewable energy as
a fraction of GDP
If governments invest a large fraction of public money in energy
supply and infrastructure it diverts investment from other public
needs. A dollar can only be invested once. Energy development, whether
by governments or by the private sector, is typically done by flooding
the economy on a rising sea of energy commodities, thus ignoring
the fact that economic progress requires the productive use
of energy services. Services such as comfortable buildings, food
storage, good lighting, shaft power, and mobility, for example,
not simply more lumps of coal, black oil, or whirling electrons.
Excessive energy investments therefore often represent lost opportunities
to promote meaningful public productive investment and welfare,
as well as an increased public debt. This indicator compares
government investment in non-renewable energy supply to total
Gross Domestic Product as a measure of the burden of energy development
on the economy. The primary purpose of this indicator is to get
public funds out of the energy supply sector and to incentivise
investment in cost-effective renewable energy supplies and end-use
efficiency. Government enterprises and deals with private entities
tend to shift scarce resources into capital-intensive buys. Such
investment should either decrease or be shifted to the private
sector or both.
In this indicator all government-Federal, provincial, regional,
municipal, and local-energy-sector expenditures and investments
in non-renewables are included. Only government expenditures for
energy consumed in its own buildings, facilities, and operations
are not included. All investment on behalf of the non-renewable
energy supply and distribution industries are to be counted, such
as research and development, regulatory agencies, powerplant construction,
transmission and distribution systems, oil and gas extraction
and refinery operations, coal mines, energy commodity transport
systems, decommissioning and related investments using either
domestic public funds or current-year investments by multilateral
lending institutions. Direct expenditures-typically published
in government budgets-as well as indirect expenditures-such as
tax incentives, loans, loan guarantees, off-budget programs, and
related government investments-are included to the extent data
are available.
Include investment by national, state or provincial, and local
governments as well as budgets of state enterprises. The required
data is typically published by national governments, state electricity
and fuels enterprises, energy ministries, petroleum and power
sector trade associations, electric boards, or government-owned
electric utilities. The United Nations Statistical Office, United
Nations Development Programme, the International Energy Agency,
and the World Bank publish some of the required data for each
country. Include international financing assistance from the World
Bank, regional development banks, and other multilateral assistance.
Since so many government entities and programs are involved, and
since the limited amount of time available for research will reveal
only portions of the total investment by government agencies,
the Observer-Reporter must carefully note what type of investments
are included. It is expected that the accounting will in fact
be incomplete; future Observer-Reporters will need to know the
details of what has been included as well as useful sources and
contacts, etc.
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Examples:
The government of India (including multilateral
aid) invested $13.7 billion in nuclear and coal-fired powerplants,
coal mines, related research and development, oil and gas fields,
processing and refineries, and commodity transportation systems
in 1995. The government also invested an additional $3.4 billion
in large-scale hydroelectric and windpower facilities, which are
not counted here. Dividing $13.7 billion by India's 1995 GDP of
$319.7 billion = 0.0429 (4.29%), then multiply by ten = 0.429;
hence India's 1995 vector equals 0.429.
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