Every year, I sit down with Vaclav Smil from the University of Manitoba to discuss “the year in energy.” Vaclav is one of the world’s foremost experts on energy issues, and has written over 30 books and 300 papers on the subject. In this Comment, we walk through what Vaclav identified as the five notable energy developments of 2012: energy independence initiatives in the United States, Europe, and Japan; geopolitical implications of rising Chinese oil demand; and another rough year for the electric car.

With the world facing energy shortages, unstable prices, geopolitical struggles over energy supply, and dramatic climate changes that demand less fossil fuel consumption and reduced carbon emissions, Europeans have embarked on changes in their energy regime that over the course of the next half century will have as profound an effect on society as coal and steam power did in the 19th century.

For good or ill, the United States seems more like a western European country every day, but the contrast could not be starker when it comes to renewable energy policy. Many countries in Europe get over one third—and some, over one-half—of their electricity from renewable sources such as wind and solar. Europeans across the political spectrum support government policies to promote renewal energy, but government support for renewable energy is deeply controversial in the United States.

Cities have great advantages. They provide good jobs and are the most efficient form for delivery of services such as waste disposal, power, education, fire protection, and transportation, when compared with rural areas. City dwellers also use less energy than their counterparts in the countryside. Many experts envision that cities of the future will utilize more sustainable water, waste, energy, and transportation infrastructures. But what will drive the innovation needed to create these cities? And what role will government, industry, and NGOs play in bringing about this change?