Hostname: page-component-5d59c44645-7l5rh Total loading time: 0 Render date: 2024-02-27T11:54:22.061Z Has data issue: false hasContentIssue false

Diversification and Energy Security Risks: The Japanese Case

Published online by Cambridge University Press:  06 October 2004

S. HAYDEN LESBIREL
Affiliation:
School of Humanities, James Cook University, Townsville, QLD, 4811 hayden.lesbirel@jcu.edu.au

Abstract

This article explores the relationship between diversification and energy security risks. It uses portfolio theory to conceptualise energy security as an insurance mechanism against disruptions to energy import markets. It provides quantitative measures of systematic and specific risks associated with Japanese energy imports during the period 1970—99. It suggests that Japan's policy of diversification of energy import sources has reduced specific risks, although fundamental changes in the political and economic structure of international energy and, in particular, oil markets have also significantly reduced systematic risks. The article concludes that, despite their limitations, portfolio measures provide a much more theoretically and methodologically robust indicator of energy import security than traditional measures of dependence.

Type
Research Article
Copyright
© 2004 Cambridge University Press

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)