Daily Archives: September 12, 2008

Energy inefficiency

I got an unsolicited package through the post: four “low-energy” light bulbs.  They’re from British Gas (a domestic energy supplier), and no doubt part of an effort to play “green”.  I guess they can join the spare bulbs I already have sitting in a drawer.

As feelgreen efforts go, it seems mostly harmless: a low-cost effort that could have a very marginal positive outcome.  But as ever, there’s a downside: these are old-fashioned, ugly bulbs, and could reinforce prejudices about “energy-saving” bulbs being horrible in people like my mother.

More problematic is the government’s latest: free or subsidised improvements to the insulation of some peoples homes.  Again, on a narrow view there should be a positive outcome, but this time it’s not cheap&easy: the energy companies could more usefully direct their resources to clean energy.  Rising energy costs are the right stimulus to home insulation.  And, unlike the light bulbs, free home insulation is limited to homeowners, and so completely excludes the poor.

Having said that, there is at least an argument that the government is doing the right thing.  Namely, political expedience.  The fact that energy companies will be paying helps defuse the pressure for a so-called windfall tax: something that would damage their ability to invest in the future, not so much in direct costs, but in scaring investors away.  It could even do collateral damage in other industries.

Alas, none of this does anything for clean energy.  The Alice-in-Wonderland windfall handed to energy generators[1] in free CO2 allowances is genuine and very wrong.  If we accept the carbon market, it should be operated by auction to the highest bidders.  If relief to polluters is considered necessary, give them some measure of corporation tax relief tied to the energy they produce, so clean energy gets the benefits.

[1] who are not the same as domestic providers – something the commentators seem to overlook.