Canadians Want a Clean Energy Future

One goal of the Premier’s conference last month was to develop a national energy strategy. That did not happen. According to news reports, this failure occurred because Premier Christy Clark would not agree to any general energy strategy unless BC and Alberta could reach some agreement in their current dispute. Clark had laid down five conditions that would need to be met if the proposed Keystone oil pipeline, promoted by Alberta, was to pass through BC. The single condition that is generating the most controversy has to do with the sharing of the revenues resulting from the export of the bitumen/oil. 

At first glance there seems to be much wisdom in such a stance: if we can’t agree on the detail on this specific aspect of energy development, what’s the point of talking about general agreements. The devil is in the detail.

But on second thought, much of that wisdom evaporates. The dispute seems to be about who gets what revenue. The dispute framed that way assumes the resource, bitumen/oil, ought to be developed, exported and sold. But should and do Canadians accept this assumption?

A new survey commissioned by Tides Canada speaks to this. The results are striking. According to this new poll, Canadians believe the country needs an energy plan that reduces fossil fuel dependence, cuts energy waste, creates more clean-energy jobs, fights climate change, and sets aside a portion of oil wealth to help prepare for a clean and renewable energy future.

“Citizens are hungry for a smart plan that will move the nation forward on the emerging global clean-energy opportunity and tackle climate change at the same time,” says Merran Smith, director of the energy initiative at Tides Canada.

Tides Canada commissioned Harris/Decima to do the survey. Canadians were asked to indicate to what degree they would prioritize a series of objectives for a potential Canadian energy strategy. They identified as a “top” or “high” priority “improving energy efficiency” (82 percent), “creating more jobs in clean energy” (75 percent), “reducing Canada’s carbon pollution to slow down climate change” (66 percent), and “reducing our reliance on fossil fuels like oil, gas and coal” (66 percent).

In contrast, only 33 percent of those surveyed placed a “top” or “high” priority on “exporting more of Canada’s oil and gas resources.” 

 

Meanwhile, 82 percent of those surveyed said that they either “strongly agree” or “somewhat agree” that “Canada should set aside a portion of its oil wealth to help prepare the nation for a clean and renewable energy future.”

The idea of a Canadian energy strategy resonates strongly with citizens. Fully 87 percent of those surveyed either “strongly” or “somewhat” agree with the statement “the nation needs a Canadian energy strategy to plan its energy future.” 

Oh that our governments would listen!

Eric Rempel

Fish Lip Service

Imagine that your government would only protect you if you were proven to be valuable to the economy.  Imagine that even if you were valuable to your economy, and therefore legally had the protection of the government, they are careful to point out that they will only protect you, not your home.  Would you feel protected?

This is what has happened to the fisheries act under Bill C-38: the government has been careful to clarify which fish they will protect (only those with commercial value), and they've removed protection for the habitat of fish.  This has all been done for the sake of cutting red tape for development projects, and the government insists that it has not reduced actual protection, just bureaucracy.  But how can they single out a few types of fish to protect in the midst of an ecosystem?  And how can they expect to protect those fish without protecting the places where those fish live, breathe, eat, and spawn?  In this regard, what is true of a fish is also true of you and me: how can we be healthy and safe if our environment, which provides the air we breathe, the food we eat, the water we drink, and the materials for our shelter, clothing, and other consumer goods, is not itself healthy and safe?

Of course, just because the government no longer protects the habitat of fish doesn't necessarily mean that they are at risk.  Development projects still must undergo environmental reviews, even though those have been streamlined significantly (read: sped up).  But new legislation actually gives a minister the ability to circumvent the assessment process, if the project is significant enough.  

So we have protection of fish, but without protection of streams; and we have (fast) environmental assessments, unless it's a really big project, in which case it can be skipped.  This speaks volumes about the Harper government's commitment to a growing economy at all costs, as well as its belief that economy and environment are opposed to one another and economy must triumph over environment.  These assumptions are simply untrue.

There is a belief, common in our government, that environmentalists are against the economy.  What an absurd claim!  We have jobs, pay taxes, buy the products we need (and want), give to charity, and volunteer in our communities, just like everyone else.  While we may debate over whether continual growth is positive (or even possible), we know we need an economy to survive as a community, as a nation.  What environmentalists don't believe in is a growing economy at all costs.   

Protection of the environment is not about being a bleeding-heart animal lover, or coveting our favourite canoeing spots.  Economy cannot exist without environment, which is the source of all of our goods and resources.  To pay lip service to protection of the environment while allowing major industrial projects to skip even an assessment is disingenuous, and will ultimately cut the legs of our economy (that is, our environment) out from under us.

Jeff Wheeldon

Measuring Wellbeing

Last week I lamented the continuing emphasis on GNP and growth, not only by our governments at all levels, but also within our news media. The media is educating us in the inadequacy of GNP as a measure of our wellbeing, and then that same media floods us with information about GNP as if that is the only measurable indicator of wellbeing.

As long as we focus on GNP, our concern will be the amount of money changing hands each quarter, not the actual well-being delivered by the economy. Taking seriously a different way of measuring wellbeing is crucial to establishing a sane, sustainable, steady state economy.

The unlikely country of Bhutan, a kingdom in the Himalayas with a population about that of Winnipeg, is giving world leadership in the development of a “Gross National Happiness” indicator. By the standard measurements of wealth, Bhutan is not a rich country. In terms of GNP per capita, Bhutan is ranked 130 in the world. But they have established as a national goal, to become happy, rather than to become rich. As early as 2007, Business Week ranked Bhutan as the happiest country in Asia, and the eighth happiest in the world.

At a recent UN conference, the Prime Minister of Bhutan observed that GDP growth is killing the planet, destroying our future, and making humanity less equitable and, on the whole, more miserable. I think he’s right.

Any attempt to measure happiness will, without a doubt, draw the skeptical response that any such measure must, by its nature, be subjective. While this is true, the implied inference that such a measurement is then unreliable and of little value needs to be challenged. If we limit our pursuits to the attainment of indicators that are easily measured (economic growth), we are doomed to pursue that which is unattainable: perpetual growth.

Remember, if you hang your laundry out to dry, letting the sun and wind do the drying, you do not contribute to GNP. But if you throw it in the dryer and use electricity, you give the GNP a nudge upward. If one parent stays home to care for children, the GNP index is not happy. If both parents take a job and place their children in daycare, the GNP smiles.

It is interesting to note that following Bhutan’s lead, Britain's David Cameron, and France's Nicolas Sarkozy have become supporters of adding well-being to raw economic indicators. Australia, New Zealand, China, Italy, Japan and South Africa are some other countries that are considering measuring wellbeing as a way of informing policy.

Here we have the Canadian Index of Wellbeing. Data for this is being collected by a non-government group, which may be a good thing in that it makes it independent of political bias.

Unfortunately however, any reading of the federal omnibus budget bill now before the house must conclude that the only interest this federal government has, is in economic growth. This bias could be offset by greater enlightenment at the provincial or municipal level. But it is lacking there too.

Eric Rempel

Why the Continuing Emphasis on GNP?

It happened again last night. The national news reported “Canada's gross national product [GNP] grew at a 1.9 per cent annual pace in the first three months of the year, the same pace seen at the end of 2011.” So what does this tell us? Well it tells us that the total value of everything produced by enterprises in Canada grew by 1.9% annually. What it does not tell us is whether this growth was good or bad.

I find this discouraging! Discouraging because 30 years ago, in 1992, the same broadcaster, the CBC, first showed me how inadequate and potentially misleading reporting GNP is. 1992 was the year of the Earth Summit in Rio de Janeiro. If you don’t remember it, google for it. This was the first UN conference on the Environment and Development. The CBC, and other media covered it extensively. It was because of that conference and that reporting that conference, that many of us first realized the fragility of the environment we depend on, and the negative impact human activity is having on the very resources we depend on for life.

Specifically on the GNP, I came to realize that an oil spill off the coast of British Columbia does more to raise the GNP than the discovery of a new cure for cancer. We were told then, of the need for more meaningful indicators of well-being than GNP.

And much as been done to develop a new index. Best known is the Canadian Index of Wellbeing (CIW). But it is hardly well known. It is ironical that the same media that covers and applauds the existence of this index, does not use it.

I find it discouraging that the media, in spite of giving us these stories about the need and development of better indicators of national well-being, continue to use GNP in their reporting as if it is the only indicator of our nation’s economic health with any value.

No doubt the GNP is easier to measure than the CIW. I suspect it is realistic to expect a report on GNP every quarter, whereas a quarterly report on CIW is probably not possible. Nevertheless, I think it is reasonable to expect a news item on GNP to include some comment on more meaningful context. For example “GNP rose slightly this month, but we don’t expect that to have an effect on the CIW because . . .” I think our news media is guilty of biased reporting whenever it reports on GNP and doesn’t place that in the context of wellbeing.

Somewhere within us, we all know that some growth is good, and some is not good. When reporting growth, the media has a responsibility to help us discern the likely effect that growth is having on our wellbeing. Were the media to do that, we all would be more critical, in a good sort of way, of any growth occurring around us. And were we all to have that critical capacity, it would affect the policies favoured by our politicians.

 Eric Rempel

Rethinking Global Finance (I)

Most of the time we find ourselves preoccupied with personal and local issues with reference to developing sustainable lifestyles. In one sense that is appropriate because it is the sum of many individual choices that changes lifestyles generally in a region like Southeastern Manitoba. On occasion it is helpful, however, to raise our eyes to the global dynamics that either hinder or enhance sustainable lifestyles around the world.

Ever since World War II, two agencies that have impacted millions around the world are the World Bank and the International Monetary Fund (IMF). They were created to assist developing countries to become economically viable. The World Bank would loan developing countries money for major projects designed to stimulate their economies. If a country had difficulty paying its debt, the IMF could be called upon for advice, additional monies or loan guarantees.

That was the theory. In reality it quickly became apparent that these agencies were the handmaidens of established governments and large corporations. In short, the following story was repeated around the globe: The World Bank persuaded developing countries to borrow money for projects to boost their economies. The money went directly to international corporations to build the projects but the debt was unloaded onto the developing country. When these loans could not be paid, the IMF came in to call for “structural adjustments” in exchange for debt reduction or further loan guarantees. These adjustments consisted of the three kingpins of neo-liberalism: privatization of public utilities, deregulation of industries and cuts to social spending. This, in turn, created an environment for international corporations to move in for the kill. (If you don’t believe this scenario, read “Confessions of an Economic Hitman,” by John Perkins, and “Shock Doctrine,” by Naomi Klein.)

This environment created a dynamic in which wealth inevitably flowed upward. The number of billionaires around the world began to mushroom while abject poverty continued largely unabated. And now even developed countries are beginning to look to the IMF to rescue their faltering economies. With most of the world’s wealth now in a few private hands, it is becoming clear that economies around the world are in deep trouble.

It is in this context that the World Bank and the IMF are attempting to re-invent themselves because the present trajectory is simply not sustainable. For the first time in history the president of the World Bank, Jim Yong Kim, is not an economist but an anthropologist and medical doctor who appears to be prepared to challenge status quo thinking at the World Bank. And the IMF is presently studying a paper proposing that extractive industries like oil and mining be taxed at a higher rate than other industries.

The IMF and the World Bank have a virtual monopoly on giving advice to governments about public finance and a whole lot else. So there is reason for optimism that the new winds blowing through these organizations will help to bring a greater degree of sustainability for economies around the world. More about this in two weeks.

Jack Heppner

Oil Development = Wellbeing?

Canada has become an energy giant – at least this is what Wikipedia says. According to the US Energy Information Administration, Canadian oil reserves are the second largest in the world. Only Saudi Arabia has greater assessed reserves. Mind you, much of Canadian oil is hard to get. It is either tied up as bitumen in the Athabasca Oil Sands, it is in the frigid north, or it is off shore where drilling is difficult.

As world oil supplies become more and more scarce, there is, and will continue to be increasing interest in these Canadian deposits. The question is: how should Canada as a nation respond to this growing interest? Conventional wisdom seems to say that we view this as a bonanza: we need to cash in on it as quickly as possible. But why? Last week I suggested that the market for our oil will not disappear, and the price of oil will only go up.

We know that oil companies need to show their investors a quick return on investment, but this is not true of governments. Our government needs to take a longer term, broader perspective on the development of such a resource. It is probably not reasonable to expect an oil company to consider what is best for our children and grandchildren in its long term strategy. However, I think it is the responsibility of a government to take such a long term perspective.

This is simply good conservative thinking. I am very disappointed that our current government, which claims to be conservative, applies what I call “company thought” to an issue that requires “nation thought.”

Furthermore, because the oil reserves we will be wishing to develop in the future will be hard to get at, their development will be more labour intensive than the oil developments of the past. We see this already. Labour demand in Alberta is high, and anecdotes of problems associated with this high labour demand are abundant – a shortage of housing, weak communities, and jobs simply not being filled. At the same time, some of the cities in eastern Canada are in recession.

Will there be any real winners if jobs continue to be lost in Eastern Canada and people wanting work need to continue to move to those areas where the oil is? Will there be any real winners if some of the areas we have considered part of Canada’s natural heritage become tailings ponds and other scars of open pit mining for oil.

Once wealth, whether it is national or individual has risen beyond a certain point, happiness is not a function of GDP or income. Happiness then is a function of family and community stability. Happiness is consistent with a country has stable communities and a diversified economy exporting a variety of products.

Given that we are dealing with a much sought after, but also very limited resource, the role of a conservative government needs to be to temper and guide the development of that resource. Instead, we see our government cheerleading the unfettered development and export of our non-renewable [once it is gone it is gone!] oil resource.

By Eric Rempel

When in Doubt, Use Caution

When in doubt, proceed with caution! When an input is scarce, use it sparingly! To my way of thinking, these are two core conservative values. I believe in these values, and find it puzzling that these values seem absent from many of the policies and actions of our current conservative government.

Take the promise, in the recent federal budget, to streamline environmental approvals. In general we all agree that streamlining is good thing. It removes unnecessary bureaucratic blockages. But if statements made by Joe Oliver, Minister of Natural Resources, are any indication of government intent, the intent of this streamlining is to not to assess the process. Instead, it seems, the government simply wants to get the environmental review process out of the way as quickly as possible so it can get on with its real agenda. Where is the caution here?

Why the rush? A successful business needs to know when to bring its product onto the market. It is not uncommon for a business enterprise to have to make a choice. It can choose to bring an inadequately developed product onto the market early and capitalize on an “early delivery” premium. Or it can spend more time on product development, sacrifice the “early delivery” premium, but deliver a good product.

I can understand why the oil companies are in a hurry to get things done. Each company wants to get in ahead of the other company because there is a premium in that. I can understand why the oil importing countries are lining up to fund the building of Canada’s pipelines. If they get in early, they have a better chance to get Canada’s oil.

But I can see no reason why Canada needs to be in a hurry. Why the hurry in exporting Canada’s oil resources? Why the desire to shorten the environmental approval process? Why the desire to attract non-Canadians to invest in the extraction of Canada’s oil? Why create jobs in the oil industry, when the jobs need to be filled by attracting immigrants? I could understand the hurry if it would be likely that we would lose if there were a delay in getting our oil onto the market.

But Canada won’t lose if we take our time in getting our oil onto the market, if we “take the time to develop a good product.” As the world oil supplies become harder to get; as the oil the world depends on comes increasingly from sources hard to get at (such a deep sea wells and Alberta’s tar sands), the price of oil will only go in one direction – up. The longer we delay in bringing this resource to the market, the higher will be the price. What’s to lose?

If Canada slows the delivery of tar sand derived oil onto the market, this delay will accelerate the rise in world oil prices. And this will affect what we pay at the pumps. That will hurt. It always does. Be that as it may, a substantial increase in the price of oil is inevitable. If not sooner, then it will be more later. Higher prices mean more pressure to find alternatives. We need that pressure. We need it soon.


By Eric Rempel

The Keystone XL Pipeline is Rejected: So?

So President Obama has rejected the Keystone XL Pipeline. I think the President must feel good since he has finally lived up to the spirit of his election promises, environmentalists in the US are celebrating a victory, the Republicans seem to think they have an issue to take to the fall election, and Canadians, by and large, don’t know what to think.

The stance of our present Conservative government in this respect is puzzling. Apparently it is acceptable to this government (as it has been to previous liberal governments) to treat our oil sands as a renewable resource that will go on yielding oil forever. For a government to take this stance is not new – it seems to have been the government stance of choice all over the world again and again and again. However, such a stance can hardly be considered a conservative approach to resource management.

One hardly needs data to support an argument that all non-renewable resources will diminish and become harder to get if such a resource is consumed in large quantities. Nevertheless, here is some data. The oil Alberta was pumping in the 1930s required the input of one unit of energy to get 100 units of energy [for the powering of cars and the heating of homes]. The oil was close to the surface; easy to get at. Conventional oil in 1970 yielded about 30 units of energy for every unit of energy expended. The oil sands today deliver only five units of energy for every energy unit expended.

Clearly we are witnessing the depletion of a non-renewable resource. Why would a rational, conservative government try to sell this resource as rapidly as possible? It makes no sense to me.

What we are hearing from those touting the merits of the Keystone XL pipeline as well as the Northern Gateway pipeline is that the sale of oil derived from the oil sands will bring jobs to Canadians. That seems likely. However, a pertinent question is whether jobs in the oil patch are indeed the kind of jobs we want if quality of life is our goal.  Furthermore, there are other ways of generating jobs. The easiest way of creating jobs is to move away from a cheap energy policy, to a policy that would reward those with the creativity to find ways of living with less energy. A fee and dividend energy policy would transfer wealth from those intent on consuming energy to those committed to conserving energy, and would put money into the hands of Canada’s true innovators.

Without a strong and deliberate policy to reduce Canada’s dependency on fossil energy and the income derived from energy sales, we will be no better off when the oil deposited in the Athabascan sand is gone. We see feeble attempts with mandates for light bulbs and policies to encourage biofuels, but that is greenwash. As long as the government avoids full cost accounting, and promotes oil sales without considering the cost of those sales to future generations and the environment, Canadians, sadly, will not make a serious move towards renewable energy.

Eric Rempel

We Need a Resource Consumption Tax

Most taxes in Canada do not encourage the right activities. Behavior that should be encouraged is taxed, and behavior that should be discouraged has no tax. That was the assertion I made in last week’s column and applied that thinking to property tax. But this thinking is relevant to other taxes as well.

Most taxes in Canada are based on income earned, both for the corporation and for the individual. The more income the person or company earns, the more taxes are due. But why tax income? So many other things could be taxed: consumption, land, the use of resources, energy use, capital gain, inheritance, to name the most obvious. Of course, to a limited extent, all of these items are being taxed, but the heavy tax remains the income tax.

But why tax income. It only makes sense if there are no better options. But there are many better options. To make my point consider just one simplified example. A factory pays a certain amount of tax. Under today’s tax policy, most of that tax would be based on income. As the company becomes more profitable, it pays more tax; less profitable, less tax. It follows then, that there is only one incentive the tax gives to the company and that is to hire more accountants and lawyers. Their skill lies in finding ways to avoid the payment of tax.

But now assume our tax policy changes. The same amount of tax is paid, but the tax now is based on consumption. The tax could be on overall consumption (like our GST), but better would be a tax on a scarce resource, say oil. Note this tax shift would not affect the disposable return of the factory. The same amount of tax is paid. The firm still has the same freedom to invest and procure, but the more oil it consumes, the more tax it pays; the less oil it consumes, the less tax it pays. This tax shift creates a huge incentive for the factory to reduce its oil consumption and become more energy efficient. Conceivably the incentive would result in more jobs as the company re-focuses from energy efficiency to labour efficiency.

The simple tax shift from income focus to oil focus will result in other beneficial changes over time. Nobody forfeits any freedom. Those who wish to continue to consume oil at a high rate, are free to do so, but it will cost them more. Those who find ways to reduce their oil consumption, save. Obviously, factories become more efficient. Nation-wide, less oil is consumed, so more oil is left for future generations. Pollution generally accompanies oil consumption. There is less pollution. Transportation costs increase, so there is less traffic. Everyone walks and cycles more, with concomitant benefits to physical and mental health. The tax shift has redefined efficiency.

A tax shift away from income tax to a tax based on consumption benefits everyone. It is more fair, encourages more efficiency, and encourages conservation.

Tax Land, Not Buildings

Fundamentally, most tax structures in Canada are doing the very opposite of what they ought to be doing: they tax behavior that should be encouraged and don’t tax behavior that should be discouraged. This is the opinion of Frank de Jong, former leader to the Ontario Green Party. He outlined his argument at a recent meeting in Winnipeg.

De Jong’s critique could be applied to many taxes, but municipal property tax will be the focus of this column.  Property tax in southeastern Manitoba is based on property value. This means that if a property owner does something to improve the value of his property, his taxes will go up. This is true in the case of a businessperson who begins with a bare piece of land and puts a high value commercial property on it, or of a homeowner who finishes a basement in an existing house.

But ought the property improvement to trigger an increase in taxes? The property owner has just done a good thing. He has transformed a piece of land with minimal value into an asset with substantial value. This developer ought to be applauded and rewarded for that activity; instead our system penalizes him by increasing his tax bill.

There are two reasons to own land: it may bring the owner what he wants now, whether that be revenue or enjoyment; or it may be owned in expectation of an increase in value. Our current tax structure discourages the owner from taking steps to enhance the revenue earning potential of the land. By default then, the tax system encourages the holding of the land for speculation. I am not against the holding of land for speculative reasons. It has its place, but the tax system ought not to reward speculation at the expense of development.

De Jong asserts that taxing land rather than buildings has had a demonstrated good effect on cities, suburbs and towns. This has been observed in Pennsylvania, where tax on buildings is minimal. Taxing land rather than buildings has the effect of densifying cities, thereby making them more people friendly, walkable, bicycable. There is less unused land.

Taxing land rather than buildings, is neither tax relief, nor a tax grab. It is a tax shift.

Not yet convinced? Consider the new Credit Union building we will soon see in downtown Steinbach. I am not privy to the building plans, but basically the design could be one of two: the new building could be built very much like the current building, that is, two story with the entire building devoted to the business of credit unioning. Were that to occur, all the current business space in that block of Main Street would be gone permanently, taking with it all associated pedestrian traffic – probably somewhere north of the city centre. Our current property tax system encourages that kind of development – sprawl. It has been very effective. But without a tax on the building, there would an incentive to add an additional story to the building so the ground floor space could be devoted to small businesses: walaah – a more pedestrian friendly city.

By Eric Rempel

The Economy

After our last column about a Steady State Economy, I heard from David Dawson who lives at La Broquerie. David agreed with the column, but thought the language got a little too complex at places.

Here is how he put it: I am just an ordinary guy – certainly not an economist. Here are just common sense thoughts from an amateur. Mind you, I believe the economy as a whole is so complex that no one really understands it completely. Experts build computer ‘models’ but how accurate are they.

David thinks it must be obvious to any thinking person that perpetual growth of anything, anything at all, including population and economy is unsustainable. Eventually something will have to give – probably with dramatic effect.  Nevertheless, if our economy isn’t expanding we are told something is wrong. We call it a recession or even depression.  Unemployment soars and company revenues fall, leading to a drop in government revenue. We fear another depression similar to the 1930s.

Obviously, if we can’t go on growing the economy for ever, David says, there has to be a point where growth stops and we end up in a state of permanent recession/depression or at best stagnation.  Currently our lifestyle is based on continual growth, so we are, without doubt, eventually destined for a major shake-up with huge social adjustments.  Are we possibly seeing the very beginnings of this process at the present time? The USA is having great difficulty creating jobs and getting out of the last recessionary period. There are obscenely high pay levels in the financial sector which are creating a totally unbalanced sharing of the wealth of the nation with poverty rife everywhere. Is this partly responsible for the present situation?  The demonstrators all over the world seem to think so.

According to David, when we are in a period of recession our government borrows money to boost the economy to keep employment artificially high.  By borrowing, government creates or maintains a standard of living unsupportable by the economy.  The government hopes it will be able to pay back the loans when the economy returns to growth, but as you can see growth must eventually stop.  We may end up in a situation where we can never pay back the loans, with a crippled economy paying interest only on the money it has borrowed. These payments take much needed resources out of our economy. I wonder if we are in a time of human existence when we are close to, or are actually in, a period of permanent recession/depression.  If that is the case, what are we going to do about the money we have borrowed, whether it is private, individual borrowing, or government borrowing? If this is the time we are in, now is the time to change the way we do things. 

David’s solution is to learn how to cook instead of buying pre-packaged, pre-cooked, boxed meals.  Dig up that useless lawn and plant vegetables.  Learn how to make jam, preserve and freeze your produce.  Compost the waste.

You might also join us Thursday for a presentation on the Steady State Economy. October 27, 7:00PM at the Eastman Education Centre on Loewen Bld. More information at southeasttransition.com.

Eric Rempel

Presenting the Steady State Economy

Addressing the economic and ecological problems of the 21st century

The human family is about to get a little bigger. According to the United Nations, the global population will reach seven billion this Halloween – on October 31, 2011. It would be too easy to say that the coincidental alignment of this milestone with Halloween should be cause for fear. We don’t need to be afraid of a few more babies; birthrates are even decreasing in some parts of the world. What we should be deeply concerned about is the likelihood that these babies will one day aspire to Western lifestyles at a time when the planet simply can’t handle any more materially opulent aspirations.

Our way of life in the West not only puts immense pressure on the environment, it has also become a catalyst for economic volatility on a scale we’ve never seen before. We have designed our economic system to – as economist Tim Jackson describes – “spend money we don’t have on things we don’t need to create impressions that won’t last on people we don’t care about.” Unlike what most mainstream economists will tell you, that’s a recipe for disaster, not prosperity.

Take a moment to consider how the global economy is performing. Oil prices reached $113 a barrel earlier this year, contrasted with a low of $13 a barrel in 1999 (today they hover around $86). Stocks have seen unprecedented volatility; so too have the prices of grains and other essential foodstuffs. Major economies still haven’t fixed a broken financial system that inflates the prices of assets (such as mortgages) and permits a wasteful kind of “gambling” with legitimately earned money. If investment banking was working properly it would be facilitating much-needed investment in green infrastructure, not phony new financial products that consume rather than produce capital.

If this is what a “growing economy” looks like in the 21st century, we should clearly be aiming for something better! It’s time to start being rational rather than dogmatic about the word “growth.” We need to shake ourselves out of collective denial and engineer an economy that is more practical, meaningful and truly prosperous. Recent global protests such as Occupy Wall Street represent an awakening economic consciousness and a backlash against the status quo. They are revealing the cracks of a deeply broken system. But they’re not yet specific and productive.

I invite you to join me in applying specific solutions to these problems by engineering a new economy with a firm foundation. Fostering economic degrowth towards a steady-state doesn’t mean recession; it means fostering a balanced, manageable level of resource flows. It doesn’t mean going back to the dark ages; it means a life more happily and meaningfully lived.

Using the power of entrepreneurship and innovation, we need to find common purpose in the realignment of our overarching social and economic goals — not toward yesterday’s notions of solidarity or neoliberalism — but towards pragmatic and meaningful capital maintenance for prosperity without growth.

Join us on October 27th at 7pm at the Eastman Education Centre to learn more about how we can engineer prosperity without growth.

by James Johnston of the Centre for the Advancement of the Steady State Economy (CASSE)

Election Timidity

Surely, it is reasonable to ask why it is that those currently vying for political office in Manitoba are studiously avoiding the truly important issues we are facing. The important question any thinking person must be asking is: what leadership is our government giving with respect to our addiction to energy consumption and our oblivion to the pollution we are creating.

In 2008, amidst much fanfare, the then Doer government announced its “Climate Change and Emissions Reduction Act”. The government committed then to reduce greenhouse gas emissions to six percent below 1990 levels by 2012. Well we have not come even close to reaching that target. Doer suggested in 2008 that if we did not reach this target, this would be a good and adequate reason to defeat the NDP at the polls.

But dismally, the only opposition party that has shown any interest in this failure is the Green Party. The other two parties, it seems could not care less. One can only assume that if they form the government, they expect to do even less with respect to greenhouse gas emissions and the squandering of energy.

This is no trivial matter. In spite of windmills and ground source heat pumps, our dependence on fossil fuel in continuing to increase. We do not need statistics to know that. We build more efficient cars, but we drive more. Look at our highways. We have more efficient furnaces, but we build bigger houses. Our grocery shelves continue to burgeon with produce transported from all parts of the world. We mandate biofuels, but do nothing to decrease consumption. A holiday is not holiday if it is not fueled by energy.

Remember, we have already consumed the readily accessible oil. Were this not the case, we would not be extracting oil from the bitumen deposits in Alberta. The bitumen deposits may be vast, but not all the deposits are as easy to get at as the stuff we are extracting now. Inevitably, we will move from the more accessible bitumen to the less accessible stuff. Were the oil found below the shallow waters of the Gulf of Mexico not gone, we would not be drilling for oil deposited one mile below the surface of the ocean. The easy to get oil is gone. Puff! After we have extracted the oil deposited below a mile of ocean, we will drill for oil below two miles of ocean. And this trend will go on until the energy required to extract the oil is equal to the energy available from the oil.

To believe that we can have cheap energy forever is a fantasy. To believe that we are entitled to cheap energy is utterly and disgustingly self-serving.

There is only one policy that will break our addiction to energy, and that is a carbon tax. British Columbia has a carbon tax, although it is a very small tax at this time. BC has taken a small step in the right direction.

Oh, that Manitoba politicians had such courage and vision!

Eric Rempel

It Is Time to “Raid” Manitoba Hydro

Manitoba Hydro is important to Manitobans. It has allowed us to harness the vast energy potential of our rivers, so is a so it is not surprising that the routing of the BiPole III and talk of privatizing Hydro are already significant election issues. The PCs speak to inefficiencies at Manitoba Hydro. Jon Girrard blogs that Manitoba Hydro should not be treated as a “milk cow”.

Unfortunately, what is missing is any discussion as to what role energy, or more precisely cheap energy should have in the development of Manitoba. Because of its many rivers, and because of the infrastructure developed by Manitoba Hydro, Manitobans have access to an incredible amount of electric energy. The question is what how should that energy be used.

Unfortunately, we have all come to believe that we are entitled to cheap energy – yes, cheap gasoline, but also cheap electricity. Note the size of the homes and public edifices we are building, the exorbitant lighting we all take for granted, and our passion for perfect temperature control, both summer and winter. We have come to believe we are entitled to all of this, and that it will be there for us – always.

So we have a cheap energy policy. That is, because the production of hydro electricity is cheap in Manitoba, we believe we should also have low electricity rates. I believe this is unfortunate because it results in an unnecessary, potentially harmful dependency on cheap electricity. Cheap energy encourages the consumption of energy, and then, inadvertently, the wastage of energy.

Manitoba Hydro advocates for more efficient light bulbs, better insulation, and promotes energy efficient appliances, but the economic incentive to follow these recommendations is weak – because of our cheap energy policy.

If we believe that using more efficient light bulbs and more insulation is good, Manitoba needs to change its policy with respect to energy pricing.

Consider that most of us have become quite comfortable with a consumption tax on alcohol and tobacco. We have accepted that income taxes and property taxes are necessary. However, we resist a tax on energy. This makes no sense.

Consider a hypothetical firm paying $1,000 tax on profit and $1,000 for electricity. Now, because of a policy change, the tax on profits becomes $1,500 and the cost of electricity becomes $500. Such a policy change would create an incentive to do what? Hire another accountant to look for ways of reducing the tax. This is hardly desirable behaviour from a social point of view.

Now what if the policy change results in a tax on profits of $500 and the cost of electricity becoming $1,500. The incentive now is to reduce electric consumption. This is desirable behaviour.

Manitoba has an amazing resource in its hydroelectric potential. Manitobans are entitled to benefit from that resource, but that benefit should not be in the form of cheap energy. The benefit should be in the form of lower income and property taxes.

Eric Rempel