Dave B wrote:On the BBC World Service "Forum" prog they are talking about scarcity and abundance.
I didn't hear the programme, but...
Inevitably energy was a subject in this debate and one of the talkers said that it should be priced so that the less you used the cheaper it was [per unit I assume]. The principle of "Buy more, get it cheaper" is exactly what we do not need, it does not encourage careful use.[/quote]I can see the reasoning behind this, but think it is worth pointing out some underlying factors.
First of all, the marginal cost of supplying a small amount of energy is very high. You still need pipes, or wires or whatever, no matter how low your usage. To a large extent, the energyproviders seek to cover their fixed costs first, and then account for the energy used.
But, "pile it high, sell it cheap" has been a common marketing ploy - with every company aiming to get a better share of the market, and therefore higher profits.
That rather goes against the idea of energy companies being money grabbing oligopolists, doesn't it?
Thus I pay more for the first so many units and then the price reduces, making it "less worrying" that I leave the heating on for longer when I am not at home.
Further to my explanation above, it still remains true that energy companies make some
profit on your last unit consumed. True, they may not be deterring you from using energy, but it is difficult to determine "wasted" or "unnecessary" energy usage. In a free society, price is perhaps the only available mechanism. And while it might seem a good idea to increase price to reduce usage, many old biddies in "fuel poverty" will not thank you.
There is also a problem with having uniform energy costs over all levels of consumption. Some industries are, by their very nature, high energy users, especially some manufacturing industries, so beloved of the left. This would be sure to make them less viable in the medium term.
So, it might seem that the privatisation of energy was yet another body blow to the future of our way of living.
Not at all. Pricing can be and is regulated by government agencies. They could, if they so wished, abolish standing charges in the energy sector. It would not have to be nationalised to accomplish this.
Access to "sufficient" energy is seen as a right in any developed or developing country. Perhaps we are going to have to put up with "ugliness", in the form of dams, wind generators, acres of photo-voltaic cells or solar steam generators etc., or the problems of nuclear energy to be sure of the future.
People have a nack of willing the ends, without wanting to consider the means.