Efficiency and environment

If 'access' as an objective is discursively constructed around ideas related to public service, and 'security' is constructed around nationalist ideas, 'efficiency' is discursively constructed around two storylines: one informed by physics, and the other by economics. A physical definition of efficient technologies and systems is based around operation or throughput that maximises performance and minimises waste.

The notoriously low efficiency of conversion and distribution of energy, and its use (or non-use, in the case of the heat co-generated with electricity), and the historical maintenance of substantial redundant generating capacity, suggest that the physical conception of efficiency has not been the paramount consideration in the creation of our energy systems. One might say that physicists' efficiency discourse has been locally salient, but that access and security concerns have created a context that has limited its scope to shape our energy system. Wasting energy, one might conclude, is not a major threat to core government imperatives.

For economists, whose position in energy policy communities in many industrialised nations appears to be some way up the pecking order from that of physicists, efficiency is also central but has a different meaning. This relates to the functioning of markets, rather than technologies and infrastructure. An 'efficient' market in economic terms is one in which value is maximised, which is commonly understood by economists to occur where prices equal marginal costs of production. For energy consumers this means prices are as low as possible; for energy suppliers it means profits are adequate to continue in business. A situation where a monopoly supplier can charge well over its costs of production is therefore inefficient.

There is not sufficient space here to relate the complete storyline of economic efficiency, but it is fundamental to mainstream (so-called 'neoclassical') economic thinking that 'getting the prices right' will maximise social welfare without further government 'intervention': the 'invisible hand' of efficient markets, in Adam Smith's words, requires no more than market actors pursuing their own interests. In institutional terms the way to ensure that prices reflect costs is to promote competition: anyone charging more will be undercut by competitors and go out of business. Great efforts therefore go into opening up energy markets to competition, and to 'levelling the playing field' for competitors such that none has an unfair advantage created by policy or regulatory 'distortions' of the free market. It is worth noting, however, that one person's level playing field is another person's rigged market. For example, as highlighted in Chapter 8, market-based incentives introduced in the UK to encourage the development and deployment of renewable technologies actually create an incentive structure that favours technologies that are already commercial or near commercial.

The discursive construction of the efficiency goal in energy policy around the storyline of economic efficiency clearly speaks directly to the core government imperative of economic growth. It is not surprising, then, that the approach to tackling the 'environment' goal in energy policy has also been framed in economic terms. Climate change has been accorded a predominant position as the overriding environmental problem that energy policy needs to address. This explains the situation today whereby environmentalist opponents of nuclear power can be portrayed through the dominant discourse as ideologically driven and as undermining their own cause, since nuclear power is low carbon.

Moreover, climate change is interpreted as a 'market failure', to be corrected through a carbon price, and to be tackled as an insurance policy against future economic impacts of climate change (Stern, 2006b). The idea is that by failing to reflect the future cost to society of carbon emissions, the energy market does not properly account for the cost of producing energy and is therefore economically inefficient. This approach to constructing environmental problems in economic terms requires us 'first, to treat desired features of the environment like clean air, unpolluted water, open spaces, climatic stability etc. as if they were variously preferred goods. Correspondingly, environmental harms are treated as externalities - damage caused by the inadvertent clumsiness of the "invisible elbow" attached to Adam Smith's "Invisible Hand"' (Foster, 1997, p. 6). If 'externalities' are large (that is, large costs are imposed on society in the form of environmental harm, but these are not reflected in prices) then the efficient (sometimes 'correct') price is much higher than direct production costs. Various fiscal and market instruments are then invoked to raise prices and restore efficiency to the market in question.

The whole environmental policy sphere is complex and replete with competing discourses, though in energy policy circles economic, physics and engineering discourses are so dominant that this complexity is poorly articulated and largely invisible to the general public. A simple illustration of this discursive complexity in wider society can be conducted with any group of people: ask them what the word 'environment' means to them and answers will include images that evoke storylines concerning wild nature, clean air and water, recycling, park benches and litter collection, noisy neighbours, the Gaia hypothesis, sustainable development, corporate greed, the evils of industrialism, natural capital, quality of life and the list goes on. Dryzek (1997) brings some conceptual order to the different underlying environmental discourses that can be observed in modern society by distinguishing between reformist and radical environmental discourses, and within these, those that are prosaic and those that are more imaginative.

Treating environmental impacts as market externalities is part of a prosaic reformist repertoire, which also includes administrative measures (such as banning particular practices or products) and limited pragmatic efforts at democratic decision-making, for example through policy consultations or planning procedures. 'Survivalist' environmen-talism, which calls for zero economic growth and a planned economy run by an enlightened elite, Dryzek identifies as prosaic (in that it merely wishes to freeze industrialism's advance) but also radical since zero economic growth implies a wholesale redistribution of political and economic power. The imaginative discourses of environmental politics, for Dryzek, are labelled 'sustainability', 'ecological modernisation' (both of which seek ways to dissolve the conflicts between economic and environmental values) and 'green radicalism'. Romantic and rationalist green radical discourses question the basic structure of industrial society and advance new ways of understanding the environment and society.

The construction of environmental problems as an issue of economic efficiency is therefore by no means the only way of framing the issues involved. Nevertheless, by speaking directly to the government imperative of economic growth it represents a powerful discursive construction that has been very successful in dominating energy and environmental policy in the UK. This is reflected in the framing of the Stern review (Stern, 2006b) that pitched the need for international action on climate change in terms of economic costs and benefits. Alternative discursive constructions, by failing to speak to core government imperatives, are not accorded the same level of policy influence.

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