Life, Liberty, And the Pursuit Of the kWh

January 21, 2011

Earlier this week the British Parliament released a report detailing a possible framework for Tradable Energy Quotas (TEQs). These are analogous to Renewable Energy Certificates that U.S. companies currently trade, but TEQs are designed for end-user consumers as well.

In their press release the report’s lead authors state:

The report proposes an electronic energy rationing system called TEQs (Tradable Energy Quotas). Under TEQs, units of ‘energy credit’ are distributed free to all adults. Surplus units can be bought and sold, meaning that there is no upper limit set on the number of units owned by one person.

What first caught my eye was the liberal use of the words “entitlement” and “access”. By 2020, the report states,  fuel rationing could be a way of life for all Britons (and presumably other developed & developing countries); TEQs are meant to ensure that end-users can access the energy to which they’re entitled.

I like the way this framework is set up because it could allow governments to move away from cash subsidies for green purchases like hybrid cars or ENERGY STAR televisions (cars & TVs being other entitlements of course). Instead of offering cash back or tax rebates, consumers might be credited with a few more TEQ credits. Consumers would use less of their existing TEQ allotment after their purchase so the balance in their “energy savings account” would see both immediate and long-term increases. These extra credits could be sold at a competitive price or saved for a rainy day (pun intended).

I also appreciate the authors’ insight into what motivates consumers to do more with less. “What motivates people to carry out a difficult task is, above all, confidence that the task is an interesting and worthwhile one.” This proposal, then, is less about a policy and more about a framework for driving consumer creativity. That appeals to me greatly, as all energy policies (in a market-driven economy) are supposed to have a built-in obsolescence.

The report is available here [pdf]. Thanks to @PeakOilNews.

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