July 16, 2007
A proposal to foster better land use and less greenhouse gas emissions … by "progressive" electricity pricing …
What major effects on land use will be generated by efforts to ameliorate global climate change? There will be many, through steps such as underground carbon sequestration, vegetation/carbon-sink forests, and fields planted for biofuel material. One of the most straightforward suggestions for fighting global warming -- the upgrading of carbon-emitting electrical power plants -- would cause some indirect, but significant, effects on land use. I propose here a way that this could done effectively and fairly, though changes in electricity pricing.
There is little doubt that requiring big burners of coal, oil, and gas to install hi-tech and expensive emissions controls would be a major step in limiting the United States' contribution to the greenhouse gas problem. It is also true that the costs of this step, unlike some of the others, would be spread widely across our society; everyone's electrical rates (and Americans enjoy some of the cheapest electricity in the world) would rise somewhat. But some policymakers are concerned that higher rates would be "regressive" on poorer people. After all, rich families spend a far smaller percentage of their income on electricity than do poor families.
How to ameliorate this perceived unfairness? I suggest a pricing system patterned after "progressive" income taxation. Each household would be granted a very low rate up to a fixed amount of electricity per month, based on the expected typical usage of a small residence (maybe 800 square feet with basic appliances). For usage above this level, the rates would be increased dramtically. Thus, poorer families in smaller households would be likely to pay much, much less for their electricity than would rich families in huge houses.
How would this affect land use? It would encourage smaller houses and discourage the trend toward McMansions. (Size of residence, after all, correlates closely with electricity usage.) How would this affect greenhouse gases. It would discourage "luxury" electrical usage. This sounds fair, doesn't it?