Towards sustainable energy tariffs

Citation

(2009), "Towards sustainable energy tariffs", Management of Environmental Quality, Vol. 20 No. 6. https://doi.org/10.1108/meq.2009.08320faf.001

Towards sustainable energy tariffs

Article Type: Feature From: Management of Environmental Quality: An International Journal, Volume 20, Issue 6

One of the ways for energy suppliers to promote lower energy use among their customers – and thereby to meet their statutory obligations to reduce carbon emissions – is by changing the way they price their gas or electricity. A study available on the net and produced by the Centre for Sustainable Energy explores whether this could be done in a way that would be both fair to low-income consumers and financially viable for the companies involved.

The report identifies three possible options by which tariffs and non-tariff policies could improve energy sustainability: a further development of existing policy, by which suppliers are encouraged to offer more meaningful incentives to their better-off customers to reduce consumption and more extensive social tariffs for low-income customers; rising block tariffs, by which the first block of a household’s energy consumption is offered at a low rate, with subsequent blocks costing progressively more; and variable VAT rates, through which energy consumption is taxed at for example 5 per cent up to a certain threshold and 17.5 per cent above this, and possibly even at a greater rate for higher levels of consumption. Along with these three recommendations, the report suggests the introduction of a feed-in tariff for small-scale renewable electricity and heat generation – conditional upon investment in energy efficiency measures in the property.

The report is available at: www.cse.org.uk/cgi-bin/news.cgi