1 - Principles for Energy Policy

1.1 - Co-operation

Coherent, effective energy policy requires the co-operation of all levels of government.

This document is deliberately ignoring distinctions among federal, provincial, and municipal jurisdictions.

1.2 - For environmental sustainability to be politically sustainable, it must be economically sustainable

·         Improving the economic productivity of energy is an investment opportunity that will contribute to economic growth.

·         Improving energy productivity creates sustainable jobs.

·         Improving energy productivity reduces air pollution.

·         Improving energy productivity reduces the vulnerability of an economy to disruptions in energy supply.

·         Revenue from energy management charges (carbon tax, congestion charges) do not go into general revenue.  These revenue streams are dedicated to energy management activities in the area where the revenue was generated.

1.3 - Improving energy productivity

Historically, investors made a profit by using capital to organize technology and energy to improve the productivity of labour.  In the future, profits will be made by using capital to organize technology and labour to improve the productivity of energy.

Since 1991 (when Ontario Hydro Chair Marc Ellison was publicly musing about 44% rate increases to pay for the just commissioned Darlington nuclear station - increases that never happened) the economic productivity of electricity in Ontario ($ of provincial GDP /  Kwh.) has improved over 35%.  Given the size of the Ontario electricity system, this means that improvements in energy productivity built two Darlington nuclear stations.

1.4 - Least Cost Energy Strategy. 

The issue is not, “Where do we get more energy?”  The issue instead is, “What is the  most economical way of providing comfort, hot water, cold beer, TV, torque, and mobility.

Replace, “How do we reduce the cost of energy?” with, “How do we lower the cost of the services provided by energy?”

Providing energy services to the public at the lowest cost also happens to be the best thing for the environment, the economy, and national security.

1.5 - Don’t get tangled up in climate change

Economics is a more reliable and durable motivator than concern for the environment.

If improving the economic productivity of energy provides returns for investors, improves national security, creates jobs, and reduces air pollution, the reductions in global warming gases will be an agreeable (and free) side effect.

Since there are so many benefits from improved energy productivity, it may be tactically advantageous to avoid the climate change discussion to avoid getting side tracked by a debate about the legitimacy of climate science.

Nuclear power may possibly be safe and good for the environment.  However, it is so expensive that the issue of safety is moot.  As long as improving energy productivity makes money for investors, the legitimacy of climate science is also moot.

1.6 - Collateral damage

There is no conceivable environment policy worse than encouraging cheap energy.  Any successful effort to reduce fuel consumption and emissions involves energy price increases.

A small fraction of energy consumers - the pensioner in an electrically heated home - are especially vulnerable.

There should be a provision for a needs based energy subsidy.  It should be considered a part of social policy rather than as energy market policy.