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Published in:
2017 | OriginalPaper | Chapter
How Can We Include External Costs in the Price of Energy?
Authors : Ian Dickie, Lawrie Harper-Simmonds
Published in: Towards 100% Renewable Energy
Publisher: Springer International Publishing
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Abstract
Demonstrating the external costs of fossil fuels and external benefits of renewable energy sources is not sufficient to achieve a sustainable energy policy. This value evidence needs to be used in decision-making and changing investor and consumer behaviour. The policy instruments that are available for this purpose include:
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Investment appraisal that incorporates both internal and external costs and benefits
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Externality taxes that increase the price of electricity from each source according to the scale of the external cost
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Information—policy frameworks and technology transfer
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Carbon trading to increase the cost of carbon emissions and reward reductions
Pros and cons of each tool are discussed in the context of energy generation.