A recent Worldwatch Institute publication, "Empowering Development: the New Energy Equation", points to the need for an international energy agency to superintend the move to a sustainable energy path. The following extracts from the paper highlight the problem.

A glaring weakness of the UN is the lack of a central energy agency other than the International Atomic Energy Agency - which, as well as monitoring nuclear proliferation, promotes the export of nuclear power to developing nations. To shift the world community towards a sustainable energy economy will require additional new leadership. A new international energy agency could take the lead in promoting efficient energy systems. It should be decentralised, incorporating a series of research stations in key regions around the world. These centres could help develop and demonstrate renewable and efficient technologies, gather and disseminate information, and train technicians and professionals, particularly in the smaller developing countries.

The shortcomings of existing international agencies are replicated at the country level. Reflecting the World Bank's policy of isolating energy projects from broader development needs, and the UN's lack of an integrated energy agency, individual countries have little co-ordination among various ministries and the private sector. Yet, to ensure that sufficient data on energy needs are obtained, and to guarantee that locally based research and development is undertaken, such co-ordination is essential.

Electric power utilities are in need of major reform. Whether privately or publicly owned, the utilities have traditionally been controlled by governments that serve narrow political interests, hence keeping the price artificially low.

While privatising utilities - as recommended by many development and finance experts - can increase capital flow to the electric power sector, it does not necessarily solve the underlying problem of the sector, namely the over-emphasis on building new power plants, leading to the neglect of the maintenance and end-use efficiency of the existing ones.

Nor does privatisation necessarily mean more competition, or even the absence of political interference with the utility's activities. Strong independent regulatory bodies are needed, to ensure that efficiency becomes a central concern, that integrated resource planning is adopted, and that private energy producers like sugar mills can sell excess electricity at fair prices.

If the World Bank can restructure its funding priorities, national governments are likely to follow suit - in order to attract their share of international support. Until then, however, many national programmes may have to be self-sustaining, applying the principles of a new energy economics in a more limited way.

National programmes can be funded by energy taxes or by carbon taxes, which are based on the carbon content of the fuel. In early 1992 the Thai parliament levied a tax on petroleum products and natural gas, equivalent to just over one cent per litre of petroleum product, which will provide some fifty to sixty million dollars annually for investment in efficiency and renewables. Over five years the Thai government expects the tax, along with private businesses, utilities, and a proposed UN-funded project, to push total investment in energy efficiency and renewables up to $500 million.

Such investments may not be feasible without the savings generated by a more efficient energy system. Indeed, an energy strategy based on efficiency and low-polluting sources is a cornerstone of the sustainable development process - and a necessity if developing countries are to improve living standards for all their citizens. As countries move to this new strategy, their energy economies will shift from obstructing development to enabling it.