INTRODUCTION

The restructuring of electricity markets is a worldwide phenomenon driven by broader programs of microeconomic reform. Since the 1970s, governments, driven by free market economics, have endorsed the introduction of competition in various sectors of the economy, including transport, telecommunications, water, gas, electricity, health services, and prisons. Extensive international research conducted by the author indicates that electricity restructuring has had indisputably serious environmental consequences. These include measurable increases in air pollution from sulphur dioxide and nitrous oxide emissions, and a marked escalation in greenhouse gas emissions. This chapter is concerned principally with the correlation between restructuring and increased greenhouse gas emissions, as well as the legal measures that should be enacted to counteract this phenomenon.

Given these well-documented environmental impacts, there is cause for concern about the future sustainability of the planet unless energy policies, which include electricity restructuring, actively counteract these impacts. Energy policy, which provides a framework for regulatory activity, cannot be developed in isolation. It must incorporate the principles contained in the international framework for ecologically sustainable development (ESD). The principles of ESD – intergenerational equity, the polluter pays principle, the precautionary principle, and conservation of biological diversity – are now well known. They were clearly articulated in the documents which emanated from the 1992 United Nations Conference on Environment and Development (the Rio Conference). These include the Rio Declaration and Agenda 21.