…environmental economics and the implications of environmental policy

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Every Molecule Matters…but does it?

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BC’s speech from the throne had some interesting words on climate policy (see here), but the line that got me chuckling was this one,

“Every molecule of carbon dioxide released into our atmosphere by human activities matters”

While this is a great line to counter the argument that Canada’s share of global emissions are only 2% and therefore inconsequential, more fun perhaps is that it echoes a great Monte Python Sketch (see YouTube here).

And indeed there are already signs of farce. A Globe Article today (here) has this to say about the BC Liberal Party’s internal maturations,

A number of Liberal MLAs have tried to bring the business community’s concerns forward as well. They echoed concerns that the government has created uncertainty by announcing carbon-cutting targets before the planning has taken place.
“I ask what the cost of this is going to be,” said Ralph Sultan, MLA for West Vancouver-Capilano. “I’m waiting [for an answer].”…there has been “lively discussion” within the Liberal government caucus on the climate-change agenda, and he noted that uncertainty around the government’s plans is hurting business….The environmental community is clamouring for a carbon tax, I don’t hear anyone else clamouring for one,”

Pressure here comes in part from the downturn in the provincial economy, which is linked strongly to the US and international markets like China,

Recently, representatives of industries have pointed out to Mr. Campbell that the economy is not as strong now as when he announced his plan a year ago.

But never mind that on the same day there is an article on BC’s booming economy (here)

Even so, the concern over afforabiltiy and uncertainty are linked. If the climate policy is designed to float with economic circumstances there is an erosion of expectations. Simply, folks will not know where they are going and perhaps more importantly will avoid taking action if they know a downturn provides an escape clause. The result of this gaming would be higher costs and fewer reductions. Better to provide flexibility to allow for unanticipated outcomes like recessions. And better perhaps to ramp up the policy so that incremental costs are smooth and not lumpy.

And from next door in Alberta there was another take on affordability from the leader of the Liberal party who is posturing for an upcoming election. He had this to say on mitigation (see here),

And if it costs a billion, so be it. This fabulously rich province has a gross domestic product of $242-billion, he says, and “we’re willing to bet Albertans will be willing to have one dollar out of 242 invested in addressing climate change.”

Kind of puts it all into perspective. But still, the affordability card in the climate game is a trump card and the ongoing challenge for climate policy is that the deck is stacked full of them.

Written by Dave Sawyer

February 13th, 2008 at 3:11 pm