The dominance of a single-energy system inevitably leads to excessive burden on, and eventually weakening, a particular aspect of the environment, and can cause environmental fatigue and failure (permanent damage) or even catastrophe if dominated for too long; thus it inevitably poses the health and environmental risk. This is the case for our currently fossil-fuel-based energy systems. In fact, each energy system, including renewables and alternative fuels, has its own unique adverse impact on the environment, as dictated by the second law of thermodynamics. A truly sustainable development may be achieved with the diversification and localization of energy sources and systems if the adverse impact of each energy system is sufficiently small and well within the tolerance limit of the environment. Energy diversification and localization would also provide a security for the energy supply and distribution as well for the energy consumers-a specifically important issue in the wake of blackout (electric power failure) in the Northeastern states to the Midwest of the United States and part of Canada on August 14, 2003. The idea of diversified energy systems for the good of humanity and environment is similar to many analogies in other fields, such as bio-diversity is the best means to prevent the spread and damage of diseases and pests, and diversified investment is the best strategy to guarantee the overall best investment return. It is concluded that the diversification and localization of energy systems is the best future energy systems that would be environmentally compatible, and allow for sustainable development as well as energy security for both supply and distribution to the energy consumers. (c) 2004 Elsevier Ltd. All rights reserved.