Energy Conservation versus Supply Strategies: Implications for Industrial Policy

Abstract

Many strategies were developed by energy-importing countries to cope with oil shocks. Some mainly adapted to the new constraints of the energy environment and tried to make up for a relative disadvantage in the energy field by obtaining a relative advantage in industry or trade. The main effect of these adaptation strategies has been to offset growing energy deficits with steadily increasing industrial surpluses. On the other hand, other strategies were adopted which aimed above all at restructuring the domestic energy system through a voluntaristic policy of promoting domestic energy supply. In these cases, investment in the energy sector was given a high priority, sometimes at the expense of other industrial sectors.