Abstract
When international trade in energy is restricted, several negative welfare effects may occur. Removing trade barriers, therefore, can contribute to the functioning of energy markets. This chapter first discusses the negative effects of international trade barriers on productive efficiency (i.e. costs per unit of production), allocative efficiency (i.e. intensity of competition and international differences in prices) and security of supply (Sect. 10.3). Then, Sect. 10.4 discusses what kind of international trade barriers exist in energy markets and by what kind of regulatory measures these barriers may be reduced. Among others, attention is paid to both network extension and a higher utilization of existing infrastructure. Finally, this Chapter analyses the implications of an improved international integration of markets for the effectiveness of national energy policies (Sect. 10.5).
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