In praise of higher energy costs

An increase in the cost of fuel and electricity should lead to conservation… but will it?

By: Suzanne Elston

  The soaring prices at the gas pumps have been the focus of media attention for the past several weeks. Trucker protests have been blocking the nation's highways, while school boards are announcing dramatic increases in bussing costs. The price of food and other consumer goods will soon reflect the additional cost of bringing them to market.
  Ontario consumers will be looking at yet another increase in energy costs in about eight months. On November 1st, the Ontario Energy Board will officially open the electricity market to competition. Despite the province's promises that competition will lead to lower prices for consumers, utility analysts are predicting that the average consumer will see an immediate rate increase of at least 10 per cent.
 

Canadians consume more energy, per capita, than any other nation in the world

  The impact that all this will have on our family will be considerable. My husband makes the daily 60 km commute to Toronto, while I play chauffeur to three active kids between meetings and other commitments. The grocery budget for our family of five is already stretched beyond reasonable limits. Further increases in electricity costs will push our family finances to the breaking point - and we are not alone. The vast majority of Canadians are feeling the pinch. We are all working harder and putting in longer hours than we did a decade ago and yet we all have less disposable income. A study released this week indicates that credit card debt in this country is increasing, while personal savings are on the decline.
  Despite all this, I applaud these increases. I hold on to the slim hope that they will force us to finally take a serious look at energy efficiency and conservation. Canadians consume more energy, per capita, than any other nation in the world. The bulk of greenhouse gases, smog and acid rain are generated by our insatiable need for energy. The problem is that our energy costs are too low. They don't reflect the true cost of generation or mitigating environmental damage caused by the burning of fossil fuels. As a result, we pay little attention to the impact that our energy consumption is having on the planet.
 

Despite the howls of protest, clearly fuel costs are not high enough to alter the trend toward gas-guzzling vehicles

  A great example of this is the consumer trend toward sports utility vehicles, light trucks and minivans. An Environment Canada study released earlier this year claims that SUVs, vans and light pick-up trucks are responsible for a seven per cent increase in greenhouse gases since 1990. This is at a time when our international commitment is to reduce greenhouse gases six per cent below 1990 levels between 2008 and 2012. According to the study, any advances in fuel efficiency and design have been offset by a dramatic 34 per cent increase in the purchase of these monster vehicles. The average SUV produces about one-third more carbon dioxide, per kilometer, than the average passenger car. To put this into perspective, these vehicles are slightly more polluting than airplanes.
  Despite the howls of protest at the pumps, clearly fuel costs are not high enough to alter this trend toward gas-guzzling vehicles. In most European countries, where gas has traditionally been four or five times higher than in Canada, SUVs are almost non-existent.
  The same is true for electricity costs. Ontario Hydro was a crushing 38.5 billion dollars in debt when the Harris government moved to dismantle it. Of that amount, 23.5 billion dollars is considered a non-recoverable or stranded debt. This is as a result of the utility's creative accounting practices that kept electricity prices artificially low. The cost of nuclear construction, which in some cases took over a decade, was not included in pricing until plants were completed and on-line.
  The increase in electricity costs expected on November 1st has nothing to do with the newly privatized utilities taking advantage of competition. The increase is necessary to cover additional costs and expenses imposed on the utilities by the province. Not the least of these is a payment in lieu of taxes to assist in retiring Ontario Hydro's debt. Utilities will no longer be able to collect development charges to offset the cost of servicing new development. Add to this that fact that under the terms of de-regulation, utilities that have traditionally operated on a cost-recovery basis will now have to show a business rate of return.
  In a perfect universe, increasing energy costs would finally prompt consumers to realize the economic benefits of efficiency. What's more likely is that we'll ignore the obvious. As a society we will continue to try and squeeze more and more out of less and less, until we are as depleted as the ravaged earth. "This", T.S. Eliot wrote, "is the way the world ends. Not with a bang, but a whimper."

Suzanne Elston is a syndicated newspaper columnist, radio commentator and motivational speaker, but considers being a parent her most important job. Her most recently published work is a contribution to Sweeping the Earth: Women Taking Action for a Healthy Planet. Along with her husband Brian and their three wonderful children, she lives in their family's 1827 farmhouse. Suzanne can be contacted at selston@tvo.org.

[ Front Page ]