Environmental Engineering Reference
In-Depth Information
Very exceptionally, a private energy-saving initiative can influence gov-
ernments. The leading politicians of Britain's three main political parties
have joined many individuals and organizations in the 10:10 campaign to
pledge to reduce emissions by ten percent in 2010, though it remains to
be seen with what result.
Financial incentives and penalties
These are a crucial bridge to a new energy world because, if applied cor-
rectly, they give renewable energy sources some of the advantages of cost
that fossil fuels currently have over them. The most obvious way of doing
this is to make fossil-fuel users pay for the environmental damage they
cause. The successful implementation of low-carbon energy sources, such
as renewables and nuclear power, or decarbonizing techniques like CCS
will depend on subsidies to make them competitive with fossil fuels, or
fossil fuels being taxed to reflect the cost of the carbon they pump into
the atmosphere. Or some combination of both - subsidies for alternative
energy and more tax on fossil fuels.
Subsidies
In addressing the world's energy problems, it is of course important not
to subsidize the wrong thing. The European Union has become a leader
in renewable energy, largely as a result of the fixed prices or feed-in tariffs
which 18 of its 27 member states have guaranteed their wind-and solar-
power producers. They include Europe's three most successful renewable
energy producers - Germany, Denmark and Spain. Many governments
around the world, particularly in oil-producing countries, subsidize oil
products by keeping the prices of these products very low. It is under-
standable that governments should want to try in this way to help their
poor, or boost local jobs and industry. But the effect of these huge oil-
price subsidies, which might amount to as much as $300bn a year when
the market price for oil is very high, is almost wholly counter-productive.
Keeping oil-product prices artificially low can encourage a blasé or
wasteful attitude to petrol on a consumer level. It also discourages the
refining of oil. This is why two major oil-producers, Iran and Nigeria,
often have to
import
petrol: they have the oil, but not the incentives to
refine it into petrol. Instead of subsidizing oil, which benefits rich petrol
consumers as much as poor consumers, these countries would do better
