I have to admit that hearing a political leader talking about market-based mechanisms for reducing carbon emissions in a way that makes sense gets me.. right.. there.. I start to get all teary and dream of the possibility that this country (or any country for that matter) might actually elect someone who can do something which is truly for the good of their people and the planet.
A lot of people are talking about the environment these days. What I think is significant is that it is finally gaining recognition not simply as an issue, but as THE issue. For anyone who understands the requirements of sustainability, not just in environmental terms, but in economic and social ones as well, it is apparent that this has been left off the agenda too long, and now needs top billing.
But is Stephane Dion going too far by saying “Canada can get rich by going green“? This has been an argument which most economics-savvy environmentalists have brought out when faced with the problematic issue of international competitiveness in light of uneven the adoption of the Kyoto accord and similar policies.
The basis for carbon trading is not “taxing” anybody, and it is not “selling” clean air. It is simply this: If we build in cost to polluting industries, we can use the same market mechanism to reward industries who are pollute less, thereby steering behaviours and consumer purchasing power towards more environmental benign products, technologies and activities. Indeed, as long as this is managed well in the short term, this could be manageable- maintaining a reasonable standard of living, while reducing emissions.
Kyoto attempted to organize this on an international scale, and threw in provisions for developing nations. This has been termed by many as “unfair” and has provided a lot of fodder for debate, though it is probably more of a red herring. The real issue, especially for Canada is the United States. With over 80% of our trade with the US, an uneven policy which increases the cost of Canadian manufacturing relative to the US threatens to greatly imbalance trade and foreign investment.
Dion’s argument, and the one that many of the ‘natural capitalism’ ilk use, is that in order to be competitive, we need to innovate, and to innovate you have to encourage technology development. Thus the creation of a carbon cap-and-trade system would place high economic value on technologies which reduce emissions. By taking an aggressive stand on reducing emissions, Canada could also become a world leader in developing environmentally friendly technologies.
I’ve found that when the issue of ‘technology’ is discussed, it often detracts from the issue of changing behaviours- which I believe is arguably more important. However, this is why the issue of economic cost is often overstated- without cost, there will be no change in behaviours towards cost avoidance. No matter how badly we want to have the best of both worlds, we have to recognize that environmental degradation and our culture of high resource use goes hand in hand.
Nevertheless, I support Dion’s argument. Here is why: International competitiveness is no longer merely an issue of resources- while Canada has benefited greatly from its resources in the past, it has failed to build economic power worldwide. Increasingly, Canadian resource companies are becoming foreign owned, while manufacturers are being threatened by rivals from less developed economies (think Bombardier vs. Embraer). Behind the US, the worlds largest economies are Japan, Germany, the UK, and France. These are not resource rich countries by any means. I would even venture that the economic competitiveness of these countries has something to do with their history of resource scarcity. Japan, has perhaps the lowest natural resources per capita (and while human resources are definitely significant, I think the point still stands), and is poised to take over the US as the world’s automotive manufacturing juggernaut (now if only we could just stop driving the things, we’d all be better off). All these countries faced serious economic and social catastrophe within the last century. Perhaps our worry about our ‘delicate’ economic position is causing us to forego valuable opportunities for development of competitive capacity in areas which are increasingly driving today’s’ more globalized economies: technology and innovation.
In my mind, sustainability is not a choice. Eventually, governments will be forced to reduce resource consumption, either compelled by environmental or economic considerations. If computers and the internet have been the innovation driving economic growth in areas such as silicon valley and south-east Asia, who will capitalize on the potential world markets for efficiency and environmental innovation? Dion’s environmental plan is also the most ambitious and bold economic strategy plan that perhaps the country has ever seen. We have reason to scrutinize such statements very carefully, but we also have reason to listen up.
