1.5. Rational approaches to identifying policy objectives

This paper focuses on the broad problem of specifying objectives or utility functions when making decisions about energy or related fields. Decisions of all sorts from the design of analysis through to global policymaking all depend on objectives, implicitly or explicitly. This paper begins by describing how objectives are commonly specified in bureaucracies, and how this affects decisions in practice. It evaluates these conflicting approaches, and suggests a way of trying to bring them more into harmony. It then applies this approach by developing substantive priorities which I would propose as a first cut for rational decision-making related to energy. The substantive analysis begins by revisiting the issue of discount rates, and suggesting that lower rates should be used than are commonly used today. It then discusses what we can learn from global energy models regarding the possibility of (and prerequisites to) long-term economic growth; it begins with a brief summary of the substantive lessons to be learned, and procedes to a discussion of how these models could be used to help establish priorities in more detail.