Over the past year I have suggested emitting jurisdictions become involved in cap-and-trade systems. Even though the European Emission Trading Scheme, or ETS, is deeply flawed and in desperate need of stronger support from the member countries that tout it (see article), I recommended becoming involved in cap-and-trade as a way of easing into a world where carbon and pollution emissions cost something. The aim is to encourage a shift from emitting to non-emitting electricity by making the costs of running new coal- and gas-fired power generating plants less competitive compared with the costs of building plants that don’t emit anything, i.e., nuclear plants.
We should still look at cap-and-trade, but let’s not fool ourselves into thinking higher power costs will encourage electricity consumers to use less. They won’t, any more than ridiculous gasoline prices in Europe have encouraged Europeans to drive less.
Rather, we should use the proceeds of carbon sales to pay for non-emitting power plants. But however we proceed, it is unavoidable that some government, somewhere, is going to have to impose a cap on emissions. Caps in regulated areas mean regulated utilities should be able to finance the cost of building a new nuclear plant at least partly by increasing rates.
Emission caps in deregulated systems would be a bit trickier, but perhaps the operators of deregulated systems could apply the costs evenly across all types of generation in order to achieve a system-wide emission intensity of so many grams per kilowatt-hour. That cost would be a permanent component of the market price of power.
This of course would require a sales job. An integral part of this would be framing the cost increase properly. In Ontario, power consumers are still paying for our most recent nuclear plant, Darlington. This appears as the “Debt Retirement Charge” on every consumer’s power bill. This label appears to have been deliberately designed to antagonize tax-hating conservatives and anti-nuclear greens. Change it to “Climate Change Contribution,” and everybody would calm down.