What is there to gain from a common energy policy?
I think that there is much to gain – potentially – from a common energy policy. (Please note that by ‘common energy policy’, I do not necessarily mean ‘identical energy policies across various jurisdictions’. Instead, I mean something more akin to ‘coordinated energy policies across various jurisdictions’ – in other words, provincial-level energy policy decisions are made with other jurisdictions’ decision-making processes ‘in mind’.)
At a ‘high level’, I envision a range of possible economic, political and social benefits. Economically, the prospects of a larger market – geographically – lead to the possibilities of lower prices for energy (and energy efficiency). The greater diversity of resources available for energy production (by virtue of this larger geographical area being ‘in play’) could lead to ‘load-smoothing’, which could also increase economic efficiency. Such diversity may also enhance reliability (and security), and provide openings for increased access for renewable resources in energy supply. Increased coordination could spark innovation more broadly; cross-jurisdictional learning could also be facilitated.
Indeed, I believe that we have analogies from around the world that would suggest that there are numerous potential benefits arising from a coordinated response to energy challenges and opportunities. This would include other sets of contiguous jurisdictions as well as international energy organisations (IEA, IRENA, etc.) and the emerging literature on global energy governance.
What are the technical, political and economic hurdles, challenges and transformations toward the optimal solution?
There are many. The desire to move from (predominantly) provincially-based energy decision-making to regionally-based energy decision-making is, in many ways, akin to a collective action problem. Consequently, insights that have been offered in the past as to how coordinated activity – divergent from the path usually taken (the path wrought with inertia) – can be difficult to achieve would prove insightful here. I return to this point below.
More immediately, however, for our particular issue under consideration it is important to think not just about ‘the challenges of (say) transforming an energy system to one that is more sustainable’, but instead to focus upon those aspects of the issue that arise from the dispersed nature of the decision-making points.
Thus, technically, a challenge could be the ways in which real-time information flows (about, for instance, supply and demand characteristics in different energy systems) are facilitated between different grids, when those same grids have not been designed to share such information swiftly and securely.
Politically, energy issues are never solely ‘energy issues’ – they are often also ‘local economic development issues’ and/or ‘cultural issues’ and/or ‘security issues’ and so on. Consequently, energy issues are usually quite emotive, and citizens are (rightly) concerned about the impacts – beyond solely reliability (which, itself, is critically important) – when others exert, or are even perceived to exert, control. Consequently, there will have to be a ‘political case’ made for any increased ‘regionality’, and this will inevitably face an ‘uphill battle’.
Economically, even if there is – on the whole – a ‘net gain’ associated with moving from a provincially-based energy decision-making system to a regionally-based one, there would undoubtedly still be individual ‘losers’ (as well as ‘winners’). How these losses would be managed, as well as how the gains would be distributed would inevitably be contentious (and, of course, this question also has important political dimensions).
To advance thinking about such hurdles, and how they might be cleared, the analysis of relevant analogies might again provide useful. In the case of energy (as in many other issues), Canada is like an international region – the provinces are analogous to countries, and the federal government analogous to an international organization, able to encourage/cajole its members, but not in a position to necessarily impose a particular arrangement. Thus, the experiences that others have had in advancing international cooperation might well prove insightful for our Canadian case.
Finally, I will also highlight the importance of ‘multiple levels’ (e.g., household, community/municipality, provincial, federal, international) in this issue. Successful implementation of sustainable energy policies will, I believe, require the careful construction of interconnections across these levels. They must work in a mutually-supportive manner. Perhaps literatures on ‘subsidiarity’, ‘polycentric forms of action’, ‘multi-level governance’, ‘transitions’ and the like could prove useful here.
Ian Rowlands, 15 October 2014