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Nonetheless, the indicators taken together and in context, allowing for inherent
differences between countries, give a good picture of a country’s energy system. As
the indicators change over time, they will be good markers of progress and underlying
changes. This will guide policy and help guide decisions on investments in energy,
pollution control and industry.
Finally, the use of indicators can help answer questions about external costs, which
are often difficult to quantify. Energy markets can and do accommodate the
internalization of some of the ‘external costs’ of energy through more or less efficient
responses to more or less correct economic and regulatory incentives. However, some
external costs are difficult to internalize, with the result that they will be borne by
society. Such externalities include ill health, environmental damage and decline in
property values caused by oil refineries, power lines and other energy facilities.
What cost is placed on a tonne of nitrous oxides emitted from a gas or coal power
station, a tonne of radioactive waste from a nuclear power station or a landscape
disrupted by wind turbines? What penalties or subsidies
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does one give to each energy
technology? By quantifying energy intensity, accidents per unit of energy and
environmental consequences per unit of energy, indicators can permit comparative
assessment of alternatives and strategies, and help policymakers to decide on
appropriate measures, including penalties or subsidies, to promote efficient and
sustainable energy development. Indicators to reflect the extent of internalization of
external costs are being developed and may be incorporated into the EISD in due
time.
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