in Environment, News

Energy use, externalities and climate change

I’ve been thinking about the WB40 podcast discussion on energy use and the difficulty of changing behaviour, as well as the recent news about avoiding climate change. I am sure there is something in the fact that energy is so cheap relative to income that isn’t helping right now. I distinctly remember my dad in the 1980s and early 1990s battling with us over the thermostat and being concerned about the cost of all of our utility bills. We’re all a bit older now, but when I go to my parents house these days — the same house I grew up in — it’s always cosy. I can’t say that I’ve ever not put the heating on due to how much it will cost me. A privileged position perhaps, but I am sure I’m not the only one.

In our school Economics lessons we learned about externalities, defined as ”the cost or benefit that affects a party who did not choose to incur that cost or benefit.” They are a form of market failure. As the externalities to our energy consumption are so incredibly massive, wouldn’t it make sense for governments to tax fossil fuel energy consumption to accelerate the switch to renewables?

I’ve been with Bulb, a UK renewable energy provider, for a little while now. Whilst their service is great, I don’t see a great deal of difference in cost from other suppliers. If taxes were ramped up over time to give people the time to switch (and for the country to build capacity), and if taxes were progressive in nature to that bigger users had to bear proportionally more, wouldn’t that make it a no-brainer for people to both switch and use less? Costs of goods and services would go up, but the truth is that those costs are already there — we are just all paying for them together in the form of what’s coming.

I’m sure there are a million reasons why things are a lot more complicated than this. But if we can completely stop the production and use of products containing chlorofluorocarbons worldwide, surely something like this isn’t beyond our reach?