Ecology, Economics, and Ethics.


February 1, 2008

The Role of Government

Now that all the ballyhoo of the Bali climate conference is over and the carbon offsets for the delegates’ flights have been tallied, we should turn our thoughts to some of the underlying issues at the meeting. Besides a myriad of moral questions, Bali also raises fundamental questions about the role of government. A central question involves the formulation of our government’s climate policy and the influence of the electorate in shaping that policy.

Why did the Canadian government, a minority government at about 33 percent in the polls, take a position at Bali that was denounced by nearly every country in the world? And that position was only grudgingly modified at the last minute with the conference on the verge of collapse.

Was the Conservative government emboldened in its stance at Bali by public opinion polls at home? (We should remember that the present government has spent twice as much on polling as the Liberals.) Do these polls reveal our darker side: that publicly we may rate the environment at the top of our concerns, but secretly we actually oppose paying the costs of fighting global warming?

Although the Harper government is driven by ideology, it is also fixated on winning the next election. If opposing most of the world on the threat of climate change and ignoring the warnings of Nobel scientists is based on a reading of the Canadian public pulse, are we, as individuals, not complicit in the shame of Bali?

In fairness to the Conservatives, previous governments have generated far more rhetoric and hot air on curbing global warming. Jeffrey Simpson and Mark Jaccard outline with devastating clarity in Hot Air: Meeting Canada’s Climate Change Challenge, the delinquency of the Liberals in handling the Kyoto file.

However, it is our present government that recently wrote the obituary for Kyoto by abandoning Canada’s commitment of 6 percent below our 1990 greenhouse gas levels for 2008 – 2012. They moved the goalposts and unilaterally set our target at 20 percent below 2006 levels by 2020 – with remarkably little public and media opposition.

Canadians create a per capita average of 24 tonnes of greenhouse gases per year, of which roughly 6 tonnes is directly attributable to our personal lifestyles. In an earlier article, we suggested how individuals can reduce their energy consumption and emissions from 6 to 4.5 tonnes each to help meet Kyoto's goals.

The remaining 18 tonnes of our per capita emissions, resulting from industrial activity and exports, have to be reduced to 13.5 tonnes to meet our Kyoto target. As individuals, we are also part of the 18 tonnes of industrial emissions. After all, big emitters, such as Ontario Power Generation, Stelco and Shell produce consumer goods and services for us. We also benefit financially as a society from the export of Canadian products.

The Kyoto Protocol does more than mandate emission cuts. Kyoto allows countries to earn credits by funding projects that reduce greenhouse gas emissions in developing countries, such as clean energy technology and reforestation. Kyoto also permits countries to sell and trade emission credits under a regulated framework.

Kyoto's goals are not the stuff of fantasy as the media, corporations and governments have tried to portray them. The goals are achievable if individuals, corporations, and governments reduce their excessive consumption and needless waste – and the resultant emissions – and start living within the sustainable limits of the planet.

Canada can also meet its Kyoto targets by obtaining credits for sponsoring projects in developing countries. We earn billions from dirty tar sands oil that contaminates the atmosphere, both inside and outside our borders. A strong argument can be made that we, as the country with the third highest carbon footprint, are morally bound to invest in emission reduction projects in less wealthy countries. Many of these countries will be hit hardest by the climate calamities that are now looming on the horizon.

The Harper government recently cut the GST by 2 percentage points. Besides fueling more consumption, the government will also forfeit $60 billion in revenue by 2012. Imagine the range of emission reduction projects that could be funded in Canada and in poorer countries with this bounty – at minimal cost and inconvenience to us. Last year Canadians spent $15 billion on gambling. Just half this amount devoted to reduction initiatives would have met our Kyoto target for the year.

Governments have basically 3 approaches available to implement change:
• Incentives or “carrots”
• Regulations or “sticks”
• Moral suasion or “sermons.”
 
Initiating change through these policy options is not easy in a mixed market economic system and a political culture where voters have to be placated so parties can win elections. The task is doubly difficult if additional personal costs are involved.

Distressingly, authors Simpson and Jaccard argue in Hot Air that 2 of these 3 approaches have failed to modify public behaviour and curb the dramatic increase in emissions over the past decade. Appeals to individuals and corporations to voluntarily reduce their consumption have failed. Likewise, government incentives to encourage emission reductions have had no perceptible effect.

If we are going to win the climate war – an increasingly urgent task – the federal government will have to assume a decisive leadership role. The approach will require more compulsory regulations and less emphasis on incentives and voluntary appeals. Relying on market forces alone only serves to reward selfish behaviour, while setting soft emission targets that kick in decades into the future is an election ploy, not a solution.

Policies will have to be designed that combine the best of the 3 basic approaches – carrots, sticks and sermons – but that also balance command and market features. Economic tools have to be devised that send clear price signals to both individuals and corporations. These initiatives will not be politically popular. Part of the challenge will be to persuade the electorate that tough medicine is necessary to mitigate global warming.

Selected suggested policies encompassing a range of options are listed below in brief outline only:
• Initiate a carbon tax with compensatory income tax cuts.
• Set both a price and a limit (or cap) on industrial greenhouse gas emissions.
• Invest in approved emission reduction projects under the Kyoto Protocol.
• Impose a carbon tariff on imports based on their embedded greenhouse gases.
• Permit trading in national and international emissions markets.
• Divert penalties for companies exceeding their caps to the local community.
• Invest a portion of any emission penalties in a clean technology fund.
• Tighten fuel efficiency and emission standards for all vehicles.
• Mandate a minimum 10 percent renewable energy component for all utilities and then gradually increase it.
• Enhance energy efficiency standards for all residential and commercial buildings.
• Regulate efficiency standards for electrical appliances.
• Legislate reduced consumer product packaging.
• Encourage waste reduction and recycling.
• Eliminate subsidies for fossil fuels and corn-based ethanol.
• Insist on true cost pricing for all finite energy resources.
• Encourage and subsidize public transit, especially rail and bus.
• Waive sales taxes on green products.
• Provide incentives for the development of renewable energy.
• Support reforestation projects.
• Offer rebates for energy efficiency initiatives.
• Use moral suasion to encourage conservation.

But beware a wolf in sheep’s clothing.

• Nuclear energy is no panacea. The full nuclear fuel cycle is heavily dependent on fossil fuels and the industry is a major emitter of greenhouse gases.
• Going carbon neutral by buying offsets is a cop-out. Carbon offsets are modern day papal indulgences offered to absolve people from their consumption guilt.
• Encouraging and subsidizing corn-based ethanol is driving up the price of food around the world and causing deforestation.
• Burying carbon dioxide in deep geological formations is a dubious disposal method because there is no assurance that the gas will not escape to the surface or leak into the water table.

Individual Canadians can play a pivotal role in the battle for Kyoto. We can all set an example by constraining our personal consumption, we can energize our communities and we can help clean up our places of work. We can create grass roots movements across the country that will produce an irresistible groundswell and drive changes in the government’s climate policy.

An earlier article outlined suggestions to enable individuals to reduce their energy consumption by 25 percent over 5 years. If corporations and governments take up the challenge and cut their emissions by 5 percent a year for the next 5 years, we will surpass our Kyoto commitment by 2012. European countries like Denmark, Sweden and Germany – all northern countries – are meeting their targets. Canada can also be part of the Kyoto club if we all – individuals, communities, institutions, corporations and governments – redouble our efforts and pull together. To fail is to steal the future of unborn generations.