Assessing energy trilemma-related policies: The world's large energy user evidence

Abstract

Energy systems are sensitive to energy trilemma, e.g., energy equity, energy security, and environmental sustainability, and related policies. This interaction affects countries' competitiveness and prosperity, shaping geopolitics and contributing to global sustainable economic development. Accordingly, this research uses the Markov-switching panel vector autoregressive model to cover the knowledge gap by exploring how energy trilemma is affected in large energy-users through (i) complexity-based policies, e.g., sharing economy and economic complexity, and (ii) resource-portfolio-decision policies, e.g., “diversification of primary energy demand and supply”, switching to “non-carbon-based fuel portfolio”, and energy prices. Findings reveal that energy security is more challenging to achieve than the rest through energy-related policies. Hence, the opportunity costs of the policies associated with energy security are high for large energy-consumers. It is considered one of the drawbacks to providing energy demands for current and future activities that are needed to improve the capability of countries for responding to disruptions. Further, an overall a-cyclical pattern of energy trilemma dimensions is formed in response to the suggested policies, contributing to lower risks and higher resilience of the panel's energy systems. Consequently, a dynamic interaction between energy policies is suggested for balanced growth of energy trilemma when shocks occur in energy systems.