Supply and Demand: Barriers to a New Energy Future

Article excerpt

Symposium

INTRODUCTION

Like many fields, energy law has had its ups and downs. A period of remarkable activity in the 1970s and early 1980s focused on the efficiencies arising from deregulation of energy markets, but the field attracted much less attention during the 1990s.1 In the last decade, a new burst of activity has occurred, driven largely by the implications of energy production and use for climate change. In effect, this new scholarship is asking what efficiency means in a carbonconstrained world. Accounting for carbon has induced scholars to challenge the implicit assumption of the early scholarship that the price of energy reflects all important externalities, and that efficiency therefore can be assumed to mean the generation of the most energy at the lowest cost. Accounting for carbon also has contributed to the growing nexus between energy and environmental law, and has called on practitioners, regulators, and scholars to develop new regulatory solutions that integrate these previously distinct areas.2

This reconceptualization of energy law in light of carbon constraints has inspired two important areas of scholarship. The Vanderbilt Energy, Environment and Land Use Program, the Vanderbilt Climate Change Research Network, and the Vanderbilt Law Review organized this Symposium, Supply and Demand: Barriers to a New Energy Future, to address both areas. Robert Socolow's keynote address sets the stage for the articles that follow by explaining the urgency and priority of reducing carbon emissions.3 Socolow's address draws on the literature from numerous disciplines to demonstrate that climate change involves hard truths, and he argues that we must become better at telling those truths to ourselves. In this instance, Socolow not only talked the talk, he walked the walk: he presented his keynote by video, an approach that enabled him to deliver his message on two levels, one through the force of his ideas, and one through his personal behavior.

Following the keynote, the initial four articles in the Symposium address the first emerging area of energy and environmental law scholarship. These articles reflect the oftenoverlooked notion that in a carbon-constrained world, reducing energy demand is as important as increasing the supply of renewable energy. Although scholarship and policy tend to focus on improving and increasing renewable energy supply, it is difficult to envision how widely accepted carbon targets can be met, as well as other goals such as energy security, without bending the growth curve of energy demand. The options for new sources of low-carbon energy are simply too limited and are being developed and deployed too slowly to enable carbon targets to be met without reducing demand from projected levels.

Daniel Farber's contribution draws on the growing social science literature exploring the distinction between wealth and wellbeing to identify opportunities to reduce energy consumption at the individual level.4 Farber notes that the loose connection between income and well-being provides an opportunity for interventions that reduce energy use without reducing individual welfare. He suggests that policies ranging from traditional energy efficiency regulatory measures, to behavioral interventions, to urban planning can have positive energy and environmental effects and are more likely to be adopted and implemented because of their positive effects on wellbeing.

Michael Vandenbergh and Jim Rossi ask why efficiency and conservation programs at the household level have had only modest success to date.5 They argue that one reason for the modest success of household electricity demand reduction efforts is that electric distribution utilities are important gatekeepers for "behavioral wedge" and other programs, but rate structures in many jurisdictions create incentives for utilities to sell more, not less, of their product. As a result, utilities have focused demand-side management ("DSM") programs on load-shifting and peak-shaving, both of which shift the timing of energy use, but often do not reduce use overall and can increase emissions by increasing reliance on base load coal -fired generation. …