Recycling and reusing talking points

by Aaron Wherry

Clare Demerse provides a very useful overview of policy options for reducing greenhouse gas emissions (if it had been published earlier I would’ve included it in my rough guide).

The Conservatives clearly believe that a good offense is the best defense. But the flurry of talking points should not obscure another unfortunate reality about curbing pollution: the Conservatives’ preferred approach could cost Canada’s economy more than either cap-and-trade or carbon taxes. Rather than pricing carbon — the approach favoured by the Canadian Council of Chief Executives and a who’s who of Canadian industry players — the Harper government now says it will cut greenhouse gas pollution through sector-by-sector regulations on Canada’s industries.

If you polled economists, you’d find virtual unanimity that regulations are less efficient, and thus cost more, than a carbon price. That’s because they’re less flexible, making changes by decree rather than tapping into companies’ ingenuity by giving them a goal to meet in whatever way works best for them. But regulations only cost more than a price on carbon if you’re using them to reach the same environmental goal … So far, Ottawa has put precious few new regulations on the books. The federal government’s most recent announcement — a set of regulations to cut pollution from coal-fired power plants — have been weakened to the point that they will now allow the oldest and dirtiest coal plants in Canada to run for up to half a century from the date they were commissioned without any limit on their greenhouse gas pollution.




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Recycling and reusing talking points

  1. I’d personally favour a regulation approach if I actually believed the Conservatives were going to do it. My concern about both cap and trade and carbon taxes is that it won’t change decision making either by consumers or by corporations, or at least not enough to actually reduce emissions.
    Canadian consumers already make plenty of economically poor decisions because they are affluent enough that they can prefer convenience or status over price and quality. Canadian corporations make plenty of poor economic decisions, not just environmental ones, and mnay if not most will purchase increasingly expensive credits rather than invest in emissions reduction.
    I expect they will behave similar to many pulp mills and mines which have in the recent past discarded expensive chemicals and their actual product in effluent and taillings for decades until governments forced them to stop wasting with treatment and controls.
    Lots of loopholes in emissions trading, for instance claiming credits for an economic downturn that slows production, which is what many nations are doing right now. Lots of fake calculations to keep the auditors busy until the icecap melts entirely.

    • No reason you couldn’t have good regs and a CT or cap and trade. A trading system is credited with cleaning up acid rain in the Mulroney period. Although i suspect tougher regs played a part too. It just depends to some degree on how serious the players are. If the smarter brand of CEO isn’t getting nervous about CC by now or pretty soon, we’re all screwed anyway.

      • Yes, good point. Why not do both, or all?
        My perspective is fairly jaded by the government and corporate response in the two decades since Kyoto. We had a massive exercise in consulting industry and the public about how to achieve Kyoto but didn’t implement the recommendations.
        If Canadian governments (federal, provincial and municipal) and the Industries represented on the National Air Issues panels had only implemented the recommendations with a net revenue benefit (just the net revenue benefit and never mind the revenue neutral and costed recommendations) we’d have made it halfway to Kyoto AND improved productivity by reducing the energy inputs.
        If a fraction of what was invested in pure market speculation during those same two decades had gone into energy efficiency projects, we’d be acheiving the target for ghg reductions, not trying to slow the rapid growth somewhere 20% over Kyoto and wondering about the economic impact of our timid plans to address the issue.

      • Regulations are the “Cap” in Cap and Trade. They set how much carbon (or any other pollution) can be dumped into the air (or water), That is a cap.

        The “Trade” is a system that allows meeting these regulations in a less expensive, somewhat more flexible way.

        • Makes sense.

  2. Good post. The Tories are becoming more and more like the old liberals with every passing day. I’m sure SH must have a portrait put away somewhere that ages for him.
    I’m a Liberal. But i always hated this side of the LPC, and it came back to haunt them in the end. I think they’ve finally realized that. Meanwhile somewhere Harper’s image starts to resemble Martin and Chretien with each move he makes or pretends to make.

  3. Ah…the problem here is in relying on the expertise of “polled economists [among whom] you’d find virtual unanimity”. The only indisputable authority in the Con universe is Stephen Harper himself who is, as they miss no opportunity to remind us, an (trumpet fanfare here) *ECONOMIST*.

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