Nobody Wants to Pay the Price of Going Green

So says Tyler Hamilton of the Star and Clean Break. He points out that when the local utility in Toronto applied to raise the average bill 1.7% to cover the cost of convservation programs, "many ratepayers went ballistic. Callers on radio talk shows called it a "government cash grab" and "slap in the face," even though ratepayers who participate in such conservation programs can reduce their bill by up to 20 per cent."

He then notes that we don't pay very much for electricity here compared to other countries like Denmark. Applying the Economist's famous Big Mac purchasing power parity index to the price of power, Danish electricity is three times as expensive as ours (or their Big Mac's are really cheap!) Yet their economy is booming and their poverty rate is half that of Canada. The fact is, if you price electricity at what it costs to produce clean energy, there are enough bucks to buy turbines and photovoltaics and there is lots of incentive to use less energy and run houses and businesses more efficiently. We quote Tyler from his article:

Denmark also leads the world with the deployment of renewable and low-emission energy production. More than 40 per cent of electricity in Denmark comes from the country's hundreds of combined heat and power systems, which produce electricity from municipal waste, waste gases, biomass and natural gas, then use leftover energy for district heating.

Denmark is also the world leader in both onshore and offshore wind development and, unlike Canada, no longer depends on big, centralized power plants that represent major points of failure and massive upfront investments (not to mention huge risk shouldered by taxpayers).

By focusing on distributed generation, Denmark has allowed communities to take their power needs into their own hands while making its national electricity system more reliable and secure.

The message here is that we shouldn't be afraid of rising electricity rates. Indeed, we should encourage it. By doing so, we motivate our communities to become more efficient, competitive and productive, and we end up achieving a level of energy savings that counteracts the higher costs we impose on ourselves. It also reduces the need for new power plants, translating into additional cost savings.

Higher electricity rates "would appear to be a competitive strike against business," wrote economists from TD Bank Financial Group in a 2005 report. "However, to the extent that prices increase in the short run, they will ultimately help to raise efficiency, attract investment in new generation capacity and hence assist in averting a full-blown power crisis."

All this doesn't really require a change in lifestyle, or force us to give up the luxuries we enjoy in Canada. It just means we have to deliver that lifestyle and those luxuries in different ways. ::The Star

Tags: Alternative Energy | Electricity | Toronto