A friend wrote to me this morning with a simple question about New Energy Economy's ongoing fight for carbon caps on electric utilities. Here is my response.
The problem with setting a cap and creating a market for carbon is that there are too many loopholes, leaving too much room for the same shenanigans we’ve always seen from utilities. Utilities are loophole specialists. They are only fighting this fight out of instinct, and because they love it when their very, very highly paid lawyers can be reimbursed by ratepayers. ;o) A colleague of mine affectionately calls this "paying for the stick they beat us with". Nice!
Here are some of the specific problems with a law mandating that utilities reduce carbon emissions:
Electric utilities...
...want to go nuclear anyway, and everyone seems to think that nukes are carbon-free.
...pass their costs on to ratepayers on everything they do, no matter how stupid.
...are prepared to game the carbon market, just like they game every market they are given.
There are many avenues for addressing the horror that is the electric utility industry, including...
...separating genco’s from disco’s/transco’s (no company can own both wires and generators).
...granting citizens a right-of-access for uploading energy to the grid (currently we can only download).
...applying feed-in tariffs that reward strategic implementation of distributed generation.
...mandating a fuel-to-wire efficiency standard that increases over time.
The last one (the efficiency standard) is interesting to me, and I’ve never heard it proposed. It’s easy to implement and track, and it would expose the insane inefficiency of the central generation model (the main reason utilities pollute so heavily). It would also yield immediate carbon reductions, and there is precedent (automobile fuel standards).
But the real solutions are so boring...I can hear the yawns out there already.
Think I’ll head back into my stupor now! Much love, - Mark