Gov't Intervention Forms

Common Forms of Government Interventions in Energy Markets

Intervention Type Description
Access‡ Policies governing the terms of access to domestic on-shore and off-shore resources (e.g., leasing).
Cross-Subsidy‡* Policies that reduce costs to particular types of customers or regions by increasing charges on other customers or regions.
Direct Spending* Direct budgetary outlays for an energy-related purpose.
Government Ownership* Government ownership of all or a significant part of an energy enterprise or supporting service organization.
Import/Export Restriction† Restrictions on the free market flow of energy products and services between countries.
Information* Provision of market-related information that would otherwise have to be purchased by private market participants.
Lending* Below-market provision of loans or loan guarantees for energy-related activities. Price Controls‡ Direct regulation of wholesale or retail energy prices.
Purchase Requirements† Required purchase of particular energy commodities, such as domestic coal, regardless of whether other choices are more economically attractive.
Research and Development* Partial or full government funding for energy-related research and development.
Regulation‡ Government regulatory efforts that substantially alter the rights and responsibilities of various parties in energy markets, or exempt certain parties from those changes.
Risk* Government-provided insurance or indemnification at below-market prices.
Tax*‡ Special tax levies or exemptions for energy-related activities.
*Interventions included within the realm of fiscal subsidies.
†Tend to increase costs to industry.
‡Can act either as a subsidy or a tax depending on program specifics.
Source: Koplow, 1998 (OECD 11/25/98).