能源安全與綠色轉(zhuǎn)型Energy Security and The Green Transition 2024

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EnergySecurityandTheGreenTransition

JadenKim,AugustusJ.Panton,andGregorSchwerhoff

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*TheauthorswouldliketothankFlorenceJaumotteforhelpfulcomments,andSnehaThubeandHugoRojas-Romagosaformodelsimulations.

?2024InternationalMonetaryFund

WP/24/6

IMFWorkingPaper

ResearchDepartment

EnergySecurityandTheGreenTransition

PreparedbyJadenKim,AugustusJ.PantonandGregorSchwerhoff*

AuthorizedfordistributionbyFlorenceJaumotte

January2024

IMFWorkingPapersdescriberesearchinprogressbytheauthor(s)andarepublishedtoelicit

commentsandtoencouragedebate.TheviewsexpressedinIMFWorkingPapersarethoseofthe

author(s)anddonotnecessarilyrepresenttheviewsoftheIMF,itsExecutiveBoard,orIMFmanagement.

ABSTRACT:Thecurrentenergycrisishasraisedimportantpolicyquestionsonhowtostrengthenshort-termenergysecuritywhileremainingfirmlycommittedtothegreentransition,achallengeamplifiedbytherecent

consensusatCOP28totransitionawayfromfossilfuels.Thispaperexaminesthehistoricaldeterminantsofthesecurityofenergysupplyandanalyzesthegreentransitionimplicationsforenergysecurity.Lookingback,wefindthatthediversificationofenergytradepartners,orthelackthereof,wasthemainfactorthat

underpinnedenergysecuritydynamicswithinandacrosscountriesoverthelasttwodecades.Lookingahead,thegreentransitionisexpectedtohaveanetpositiveeffectonenergysecurityprovidedinvestmentsare

alignedtoaddressnewchallengesposedbytheincreasedrelianceonrenewables.

JELClassificationNumbers:

Q43,Q47,Q48,Q54,Q55,Q58,H20

Keywords:

Energysecurity;energyindependence;greentransition;climatemitigation;geo-politicalrisks

Authors’E-MailAddress:

jkim6@;

apanton@;

gschwerhoff@;

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EnergySecurityandTheGreenTransition

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WORKINGPAPERS

EnergySecurityandTheGreen

Transition

PreparedbyJadenKim,AugustusJ.Panton*andGregorSchwerhoff

*Correspondingauthor:AugustusJ.Panton,InternationalMonetaryFund,70019th,St.NW,Washington,DC,20431,USA.Email:

apanton@

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Contents

Introduction

5

Trendsinenergysecurity

6

Whatisenergysecurity?

6

Historicaltrendsindiversificationandpoliticalriskindicators

6

Measurementofenergysecurity

11

Energysecurityatthegloballevel

11

Trendsincountry-specificenergysecurity

13

Energysecuritymeasuresandrecentmacroeconomicdevelopments

16

Thenetzerotransition:Outofexistingchallenges?

17

Impactofclimatepoliciesonenergysecurity:Channels

17

Impactofclimatepoliciesonenergysecurity:amodel-basedexperiment

18

Thenetzerotransition:Intonewchallenges?

21

Thesupplyof“transitionmetals”

21

Electricitysupply

24

Conclusion

26

References

28

Annex1:Thedecompositionofchangesinenergysecurity

32

Annex2.Decompositionofenergysecurityriskindexwithdifferentpoliticalriskindicators

33

Box

1.WhatisEnergySecurity?Areviewoftherelevantliterature

8

Figures

1:Compositionoffossilfuelproductionbyfuelandcountry

7

2:Politicalriskscoresamongmajorfossilfuelproducers

9

3:Politicalriskandchangeinproductioninfossilfuels

10

4:Energyproductionbypoliticalfreedom

11

5:Decompositionofglobalenergysecurityriskindexforproductionsofindividualfuels

13

6:EnergysecurityasmeasuredbyICRGpolitical-risksweightedcountrydiversificationindices

14

7:EnergyIntensityasamagnifierofenergysecurityrisks

14

8DecompositionofICRG-politicalriskadjustedindex,2010-2020

16

9:RisksfromRelianceonRussianEnergy

17

10:Renewableenergyuseandfossilfuelimports

18

11:GlobalenergysecurityinthebaselineandInternationalCarbonPriceFloor(ICPF)scenarios

19

12:Globalelectricitygeneration(barcharts)andfossilfuelproduction(blackline)

20

14:Theshareoftheproductionoftopthreeproducerstoglobaltotal,2021

22

15Supplysecurityindexforcopperandnickelovertime

23

5

Introduction

TheongoingenergycrisisamidRussia’sinvasionofUkrainehasexposedthelongstanding

vulnerabilitiesfromfossil-fuelrelianceandrekindlednationalenergysecurityconcerns.Accordingto

theInternationalEnergyAgency(IEA,2023),energysecurityistheuninterruptedavailabilityofenergysourcesatanaffordableprice.Despitetheimportanceofotherdimensionsofenergysecurity,especiallyaffordability

amidgrowingconcernsaboutenergypoverty,thefocusinthispaperisontheuninterruptedavailabilityof

energysupply.Insuchcontext,weexaminekeydriversofenergysecurity—diversificationofsupplyandpoliticalriskofsuppliers—tounderstandthehistoricalevolutionofenergysecurityanddifferencesacrosscountries.Wealsoexaminehowthegreentransition—towhichmanycountrieshavecommittedand

reconfirmedatCOP28—couldimpactenergysecuritygoingforward,consideringbothreducedrelianceonfossilfuelsandnewchallengesfromrenewableenergysources.

Tothisend,weproceedinthreesteps.First,lookingback,weanalyzehowthediversificationofenergy

tradepartnersandthepoliticalrisksofthosepartners,thetwomaindeterminantsofenergysecurity,

contributedtochangingenergysecuritydynamicsoverthelasttwodecades.UsingtheHerfindahl-HirschmanIndex(HHI)adjustedforthepoliticalrisksanddiversificationoftradepartners,weanalyzeenergysecurityof

coal,oil,andnaturalgasfortheperiod2000to2020bothattheglobalandtheindividualcountrylevels.We

accountforpoliticalrisksfromtwoperspectives:risksofsupplydisruptionduetopoliticalreasonsinenergy-

exportingeconomiesversusrisksstemmingfromweakpoliticalalignment(measuredasgeo-politicaldistance)betweenenergy-exportingandimportingeconomies.Second,takingaforward-lookingperspective,weemployamodel-basedexperimenttoanalyzehowthegreentransition—underpinnedbyagloballycoordinatedcarbon

pricefloorarrangement—canbeexpectedtoaffectenergysecurityglobally.Finally,wediscussnewchallengestoenergysecuritythatcouldarisefromtheuseofrenewables.

Thispapercontributestotheenergysecurityliteratureintwoways.Onthehistoricalfront,we

decomposeenergysecurityrisksintotwomaindeterminants:adiversificationeffectthatshowshowchangingconcentrationofenergyimportsourcesaffectedenergysecurityandariskeffectthatquantifiestheimpactofpoliticalrisksonenergysecurity.Fromthisdecomposition,wethenquantifythecontributionofeachofthetwoeffectsonenergysecuritybothattheglobalandnationallevels.Asecondcontributionisacomprehensive

analysisofenergysecurityunderthegreentransition.Specifically,weprovidemodel-basedevidenceonhowclimatepolicycanbeexpectedtoweakenenergysecurityforindividualfossilfuelsbutstrengthenenergy

independenceandsecurityontheaggregatethroughmoredomesticenergyproduction.

Threecoreresultsareworthhighlighting.First,wefindthatdiversificationoftradepartners,orthelackthereof,wasthemainfactorthatunderpinnedglobalenergysecurityoverthelastdecade,althoughto

differentdegreesforindividualfossilfuels.Thiswasparticularlythecaseforcoalandoilwhosesupplywaslargelyconcentratedamongstafewlargeproducers.Increasingpoliticalrisksandreduceddiversification

equallycontributedtotherelativelymodestdeteriorationexperiencedinthesecurityofnaturalgassupply.

Acrossallfuels,concentrationofenergytradeamonggeopoliticallyalignedeconomieswouldweakendiversificationandheightenenergyinsecurity.

Second,ourmodel-basedevidencesuggeststhatthegreentransitionisexpectedtohaveanet

positiveeffectonenergysecuritybyreducingfossilfueldependence.Ontheonehand,climatemitigationpolicieswillreducefossilfueldemand,forcinghigh-costfossil-fuelproducerstoexittheenergymarket.The

resultingincreaseinmarketconcentrationwouldweakenenergysecurity.Butontheotherhand,increased

renewableenergypenetrationamidclimatepolicywillreduceenergyimportdependenceandimproveenergy

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security.Renewableenergydoesnotrequireongoingfuelimportsorproduction,asenergygenerationwithfossilfuelsdoes.Thismeansthatcurrentfuelimporterscansteadilyreducetheshareoffuelstheyimport,aprocessthatresultsfromboththeexpansionofrenewableenergyinelectricityproductionandelectrification(i.e.,theextensionofelectricitytoadditionaluses).Onnet,thelatterchannelisexpectedtodominate.

Finally,thegreentransitionbringsnewchallengestoenergysecuritywhichwillrequireinvestmentsininfrastructurecompatiblewiththerenewableenergyandelectricmobilityera.Ascountriesexpandtheirrenewableenergyproductioncapacities,newriskstoenergysecuritywouldemerge,includingpotentialimportdependencyfortransitionmetals.Strengtheningenergysecurityintherenewableenergyerawillthusrequireastrategicsupportofproductioncapacitiesinavarietyofcountriestofacilitateimportdiversification.

Furthermore,theintermittencyofrenewableenergy,likesolarandwindpower,posesachallengefor

uninterruptedenergysupply.Awiderangeofsolutionsforthischallengeexists,includingenergystorageand

gridextensions.Thesesolutionsrequireinvestmentsininfrastructureaswell.Giventhatthehigherupfront

costsofrenewableenergyarecompensatedbylowoperatingcost,energysystemswithrenewableenergyandsupportinginfrastructureareestimatedtohaveasimilarcostasenergysystemsbuiltonfossilfuels.

Therestofthepaperisorganizedasfollows.Thenextsectionpresentsglobalaggregatetrendsinenergysecuritywhilesection3focusesoncountry-specifictrendsandtheirmaindrivers.Thefourthsectionemploysaglobalcomputablegeneralequilibrium(CGE)modeltoexaminetheimpactofclimatemitigationpolicieson

energysecurity.Insection5,newchallengesamidthegreentransition,includingincreaseddependenceongreenmetalimportsandintermittentenergysupply,arediscussed.Section6sumsupthepaper.

Trendsinenergysecurity

Thegoalinthissectionistwofold.First,wedefineenergysecurity.Second,wepresentstylizedfactsonthehistoricalglobaltrendsofitsdrivers,namelychangingenergysupplydiversificationontheonehandandthepoliticalrisksofsuppliersontheother.

Whatisenergysecurity?

Energysecurityisdeterminedbyhowdiversifiedandpoliticallysecureacountry’senergysourcesare.

Forourpurpose,energysecurityisdefinedasthesecurityofsupply.Thatis,thatallelseequal,thereishighenergysecurityifthereisadiversifiedportfolioofsuppliers(Cohen,Joutz,andLoungani2011)withlow

politicalrisks(LeCoqandPaltseva2009).Box1presentsasummaryoftherelevantliteraturewithseveralotherdimensionsthatunderpinenergysecurity.

Historicaltrendsindiversificationandpoliticalriskindicators

Coalandoilproductionshavebecomemoreconcentratedoverthelasttwodecades.Figure1showstheevolutionofglobalproductionsharesoftopsuppliersinthevariousfossilfuels.Together,thelargestcoal

producershavecapturedanincreasingshareoftheglobalcoalmarket,drivenbyrisingsharesofChinaand,to

alesserextent,Indonesia(from33%ofglobalproductionin2000to60%in2020).Foroil,thereisalsoa

noticeableshifttowardmoreconcentratedoutputmarketsduringthelastdecade,withtheUnitedStates,

CanadaandIraqgainingmarketshares.Butwhilethejointmarketshareofthetop7producersincreased,itstayedbelow60percent.Incontrast,theglobalnaturalgasmarketdidnotexperienceanymaterialchangeinconcentrationoverthelasttwodecades,despitesomemodestshiftsinmarketsharesforafewnaturalgas

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producers(e.g.,Qatar,Iran,andChina)matchedbysomedecreasesinRussia’sandCanada’sshares.Thepictureremainslargelythesamewithrespecttoglobalexportshares.

Figure1:Compositionoffossilfuelproductionbyfuelandcountry

(Percentofglobalproduction)

CoalproductionOilproductionNaturalgasproduction

100

80

60

40

20

0

china

Unitedstates

ndonesia

Austraia

ndia

RussianFederation

southAfrica

other

100

80

60

40

20

0

20002005201020152020

UnitedstatesRussianFederationsaudiArabia

raq

UAE

other

canada

china

100

80

60

40

20

0

2000200520102015

Unitedstates

RussianFederation

ran

canada

Qatar

china

Austraia

other

20002005201020152020

Source:InternationalEnergyAgency,WorldEnergyBalances;andIMFstaffcalculations.

Note:Productioncomprisestheproductionofprimaryenergy.

Indicatorsofpoliticalrisksanddemocraticfreedomhaveworsenedinmostfossilfuelproducing

economiesduringthelastdecade.Followingtheliterature,weemploytheDemocracyIndexcompiledbytheEconomistIntelligenceUnitasproxyfordemocraticfreedomandtwoseparateindicatorsforpoliticalrisks:(i)

theInternationalCountryRiskGuide(ICRG)indexofthePoliticalRiskServicesGroup(PRSG)and(ii)the

IdealPointDistance(IDP)measureconstructedbyBailey,Strezhnev,andVoeten(2017).Theycomplement

eachotherbyhighlightingdifferentaspectsofrisk.TheDemocracyIndexisbasedonelectoralprocessand

pluralism,civilliberties,functioningofgovernment,politicalparticipationandpoliticalculture(EIU2022).Among

thelargestcomponentsoftheICRGindexaregovernmentstability,socioeconomicconditions,aswellasinternalandexternalconflict(PRS2018).Politicalrisksappeartohaveincreasedforcoalandnaturalgas,whilethepictureismoremixedforoilproducers.

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Box1.WhatisEnergySecurity?Areviewoftherelevantliterature

Energysecurityisabroadconceptthatisdifficulttodefine.Guaranteeingenergysecurityremainsatthe

heartofnationalsecurityandenergypoliciesinmanyeconomies.Yet,whatconstitutesenergysecurity

remainsamatterofdebateintheliterature(Chester,2010).AccordingtoWillrich(1976)andLuftandKorin

(2009),energysecuritycanbedefinedfromtwopolarangles:forenergyexportingandimportingeconomies.Fromthestandpointofenergyexporters,itisthesecurityofdemand—guaranteedaccesstodiverseforeign

markets—thatmatters.Fromthestandpointofenergyimportingeconomies,thereliabilityofenergysupplyisparamount.TheInternationalEnergyAgency(IEA)definesenergysecurityastheuninterruptedavailabilityofenergysourcesatanaffordableprice(IEA2014).Apartfromthesecurityofdemandversussupplydichotomy,energysecurityisusuallydefinedalongseveralotherdimensions,includingthesustainabilityofsupply(BlumandLegey,2012).

Securityofsupplyisthedominantthemeintheenergysecurityliterature.Theuninterruptedavailabilityandaffordabilityofenergysupplyiscontingentuponseveralfactors,notablythediversityandthepolitical

risksofsupplysources(LeCoqandPaltseva2009).Borrowedfromportfoliotheoryinfinance,theconceptofenergysupplydiversityimpliesthatallelseequal,thereishighenergysecurityifthereisadiversifiedportfolioofsuppliers(Gupta2008;Cohen,Joutz,andLoungani2011;M?nsson,Johansson,andNilsson2014).For

fuelslikenaturalgas,diversificationgoesbeyondcountryofsupplyorigin.Therouteoftransport—pipelineorseaborneshipment—alsomatters.Whilethereismoreconcentratedsupplywheninfrastructuralconstraintslimitnaturalgasimportsviapipeline,liquefiednaturalgas(LNG)canstrengthenenergysecurityby

broadeningsupplysources(Vivoda2019).SuchstrategicimportanceofLNGhasunderpinnedtheincreasingroleofLNGintheenergysecuritydebate,withcontractsfordeliveringLNGbecomingmoreflexibleandan

increasingshareofLNGtradedinspottradingtransactionsinsteadoflong-termcontracts(IEA2019).

Renewableenergyisgainingincreasingimportanceintheanalysisofenergysecurity.Renewablesare

replacingenergyimports(G?kg?zandGüvercin2018).Atthesametime,renewablesarecreatingnew

challengesforenergysecurity.Renewablescandecreaseelectricitypricevolatilityinsomecountries,but

increaseitinothers(Ketterer2014;Rintam?ki,Siddiqui,andSalo2017).Asenergysecurityalsodependsonaffordability,pricevolatilityisaconcernforenergysecurity.However,thereareexamplesforhowprice

volatilitycanbehandledincountrieswithahighshareofrenewables.Germanyhasalreadytakenregulatoryandpolicymeasurestoreducepricevolatilitycausedbyrenewableenergyandtheseareshowingsuccess(Ketterer2014).Azzunietal.(2020)showthatanelectricitysystembasedentirelyonrenewableenergy(asopposedtothecurrentenergymixbasedmainlyonoilandnaturalgas)wouldimproveenergysecurityin

Jordansignificantlyalongthedimensionsofavailability,cost,environment,andhealthandkeepthelevelofdiversityconstant.

Energysecurityandenergyindependencearestronglyinter-related,buttheincreaseindomestic

fossilfuelproductiontoachieveenergyindependencedelaysthegreentransition.Cohen,Joutz,and

Loungani(2011)distinguishbetweenenergyindependenceandenergysecurity,withtheformeronlyfocusedonreducingtheshareofimportedenergyinthenationalenergymix.Increasingenergyindependencethroughinvestmentsintodomesticfossilfuelproduction,however,conflictswiththeParisAgreementandeffortsto

reachnetzeroemissions.Thismeansthatenergysecurityandsustainableinvestmentcanbeachievedjointlyonlythroughinvestmentsintorenewableenergycapacity(Cevik2022).

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Thepoliticaldistancebetweenfossilfuelproducersandconsumershasdeclinedoverall.TheIDP

measureisbasedonvotesattheUnitedNationsGeneralAssemblyviaaBayesian-basedlogitmodeloverthethreevotingchoices(yea,abstain,nay).1ThehighertheabsolutevalueoftheIDPbetweenacountrypair,thehigherthepoliticalrisksandpotentialfordisruptiontoenergysupplyifonecountryisdependentontheother

foritsenergyneeds(seeIMF2023).However,duetotherestrictedavailabilityofbilateraltradedatabyfuel,itisconstructedonlyforOECDeconomiesandtheirimportsfromfossilfuelsuppliers.Aninterestingfactisthatthegeo-politicaldistancebetweennaturalgasexportingandimportingeconomieshasincreasedsince2010,possiblyreflectingtheplateauingofglobalizationfollowingtheglobalfinancialcrisisandtheheightenedtradeandfinancialbarriers(Aiyaretal.2023)sincethen(Figure2).

Figure2:Politicalriskscoresamongmajorfossilfuelproducers

(0-1,1:highest,0:lowest)

DemocracyindexICRGriskscoresIdealpointdistance2

coalNaturalgasoil

0.60

0.55

0.50

0.45

0.40

20062008201020122014201620182020

coalNaturalgasoil

0.40

0.35

0.30

0.25

0.20

200020042008201220162020

coal&coalproductsNaturalgasoil,primary

0.4

0.3

0.2

0.1

0.0

200020042008201220162020

Source:InternationalInternationalCountryRiskGuide,ThePRSGroup;EconomistIntelligenceUnit;Voeten,Strezhnev,andBailey,2009,UnitedNationsGeneralAssemblyVotingData;InternationalEnergyAgency,Coal,NaturalGas,andOilInformationStatistics;andIMFstaffcalculations.

Note:ThefirsttwochartsdisplaytheweightedaverageofconverteddemocracyindexandICRG.Conversionismadeby1?

and1?Irespectively.Theindexisweightedbydomesticproductionforeachyear.Thethirdchartdisplaystheweightedaverageof

convertedidealpointdistancebetweenselectedOECDcountriesandtheirfossilfuelsuppliers.Conversionismadeby1?.SamplesarelimitedtoOECDcountriesduetothecoverageofthedata.IdealpointdistanceisweightedbyimportingvaluesforeachOECDcountry,thenbyGDPvaluefortheaverageacrossOECDcountries.

Energysecurityrisks,amidconcentratedproductionandheightenedpoliticalrisks,havevariedacrossfueltypesinrecentyears.WhileFigure2showsthepoliticalrisksofmajorfossilfuelproducersovertime,

Figure3examinesifproductionhasrisenmoreinhighorlowpolitical-riskproducersacrossdifferent

dimensions.Overall,themagnitudesoftheshiftsinmarketsharestowards(orawayfrom)high-politicalriskproducers(in2019/2020relativeto2000)havedifferedacrossfuelsanddimensionsofpoliticalrisks.For

example,coalandnaturalgasproductionshaveshiftedtowardsregionswithlowerscoresondemocratic

freedom,higherrisksofinternalpoliticalinstabilityandlongergeo-politicaldistancebetweenproducingandimportingeconomies.However,thepictureforoilislessclear.Productionappearstohaveshiftedtowardcountrieswithbothlowandhighdemocraticfreedom,andtowardregionswithlowerpoliticalrisk,thelatterlargelyreflectingtheincreasedmarketsharesoftheUnitedStatesandCanada(Figure1).

1Thedistanceisnotestimatedbuttakendirectlyasavailablefromthislink:

/dataverse/Voeten

whichprovidesthemostupdatedversionofthedistanceforallthecountrypairs.

2TheIdealPointDistancerisktrendsareconstructedforOECDcountriesduetotherestrictedavailabilityofbilateraltradedatabyfuel.

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Figure3:Politicalriskandchangeinproductioninfossilfuels

(index:0-1,1=highestrisk;Percent)

Source:PRSGroup;InternationalEnergyAgency,Worldenergybalances;Voeten,Strezhnev,andBailey,2009,UnitedNationsGeneralAssemblyVotingData;InternationalEnergyAgency,Coal,NaturalGas,andOilInformationStatistics;andIMFstaff

calculation.

Note:Productioncomprisestheproductionofprimaryenergy.Thechartsshowtop50producersbasedon2000productionvalueforeachtypeoffuel,excludingoutliers.

Politicalriskinfluencesenergysecuritymainlythroughsupplydisruption.Inadditiontotheother

dimensionsofpoliticalrisksdiscussedabove(Figure2),wealsoassesstheconcentrationofenergyproductionacrossdifferentsystemsofgovernanceandculturesbasedonthewidelyusedFreedomHouseIndex

(FreedomHouse2022).Thegoalisnottodrawanycausallinkbetweendemocraticfreedomandpoliticalrisks.

Totheextentthatcivillibertiesandfreedommatterforinternalpoliticalstability(AisenandVeiga,2011),thentheirabsencemaypotentiallybemanifestedinenergysecurityrisks.Figure4showstheshareofglobal

productionoriginatingfromcountriesclassifiedasfree,partlyfree,ornotfree.Coalproduction,likeundertheotherriskindicators,hasbecomeincreasinglyconcentratedin“notfree”regions.Similartrendsareobservedfornaturalgasandoil.

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Figure4:Energyproductionbypoliticalfreedom

(percentofglobalproduction)

CoalNaturalgasOil

FreepartyFreeNotFree

100%

80%

60%

40%

20%

0%

199119962001200620112016

FreepartyFreeNotFree

100%

80%

60%

40%

20%

0%

199119962001200620112016

FreepartyFreeNotFree

100%

80%

60%

40%

20%

0%

199119962001200620112016

Source:InternationalEnergyAgency,WorldEnergyBalance;FreedomHouse;IMFstaffcalculation.

Note:Productioncomprisestheproductionofprimaryenergy.DramaticchangeinNaturalgasinearly2000isduetothechangeinthestatusofRUSfrom“PartlyFree”to“NotFree”.

Measurementofenergysecurity

Havingdefinedandidentifiedthekeydeterminantsofenergysecurityintheprecedingsection,thissectionisdevotedtothemeasurementofenergysecurity.Weproceedinthreesteps.First,wemeasureenergysecurityandquantifythecontributionofthedifferentdriverstoitsevolutionatthegloballevel.Second,werepeatthe

analysisatthecountryleveltoidentifycountry-specificdeterminantsofenergysecurity.Finally,wetestthe

predictivepowerofourindexbyillustratinghowcountry-levelmeasurescorrelatewithrecentmacroeconomicdevelopmentsinselectedeconomiesfacinganacuteenergycrisis.

Energysecurityatthegloballevel

Thereisasubstantialvarietyofenergysecurityindicesusedintheliterature.AsystematicreviewoftheenergysecurityliteraturebyGasser(2020)identifies63indices.Thesevarybyscope,numberofindicators

considered,datatreatmentapproach,multivariateanalysis,normalization,weighting,andaggregationofthe

indicators(seeliteraturereviewinBox1).Indexconstructiontypicallyfollowsastandardprocedureof

calculatingseveralindicators,normalizingthemtomakethemcomparable,weightingthemandaggregating

them.Broadly,energysecurityindicescanbegroupedintocomprehensiveandsimplemeasures.Theformeremploysarbitraryweightstocondensemultiplevariablesintoanindexwhilethelatterusessingleorfewer

variablesinadata-drivenframeworkthatavoidstheuseofarbitraryweights.Ourmeasureofenergysecurity

riskissimpleandavoidstheuseofarbitraryweights.Specifically,wefocusonthesecurityofsupplyforenergyimporters—whichisthedominantthemeintheliterature—viathelensofenergymarketconcentrationand

differentdimensionsofpoliticalrisks.Ourenergysecu