Energy Policy, Vol.38, No.4, 1609-1613, 2010
Energy security, energy modelling and uncertainty
The paper develops a framework to analyze energy security in an expected utility framework, where there is a risk of disruption of imported energy. The analysis shows the importance of an energy tax as a tool in maximizing expected utility, and how the level of that tax varies according to the key parameters of the system: risk aversion, probability of disruption, demand elasticity and cost of disruption. (C) 2009 Elsevier Ltd. All rights reserved.