Why Can't I Use the '^' Operator? Error CS0019

In C# the ^ operator is the bitwise xor operator and does not calculate the power. Like finnjwohner said to calculate an arbitrary power you would use Mathf.Pow.

However in this case it would be unnecessary overhead. First of all Unity already has a method to calculate the distance between two points: Vector3.Distance so writing your own is unnecessary. In your case it seems you are only interested in the x-z plane distance. So the easiest solution would be to cancel the y difference and use Vector3.Distance or do something like this:

 public static float Distance(Vector3 a, Vector3 b)
 {
     a.y = b.y = 0f;
     return Vector3.Distance(a, b);
 }
 
 // or this
 
 public static float Distance(Vector3 a, Vector3 b)
 {
     Vector3 d = a - b;
     return Mathf.Sqrt(d.x*d.x + d.z*d.z);
 }