As this is my first
post in the new year, I take this opportunity to wish all readers a blessed
2017.
I was struck recently by a
short article in the National Post
entitled simply “Nota Bene.” When
I checked the online version at
I found it carried the title
of this post. The article--an excerpt from, “The World Needs More Energy”, by
Steven Lyazi from Uganda, raises major concerns about the consequence of
Climate Change policies and reminds us that economic policies have costs as
well as benefits.
Consequences for poor countries
Lyazi notes that for most of history, the only
energy available was “human or animal muscle, wood and animal dung, water
power, and plant or animal oil”. Then, almost suddenly, we began to use coal,
then oil, natural gas, hydro-electric and nuclear energy creating undreamed of
prosperity in many countries. However, many countries lagged far behind, and
many still do. These countries are “held back condemned to continued energy
poverty—and thus to real poverty and the diseases, malnutrition, and
desperation that go with the absence of modern energy.”
While Lyazi admits this is
partly due to corruption and incompetent leadership, it is, according to him,
also because
Callous,
imperialistic people in rich countries use exaggerated, imaginary or phony
environmental concerns and fake disasters to justify laws, regulations and
excuses not to let poor countries use fossil fuels or nuclear power of develop
their economies.
While most of the developed
world only uses a little renewable energy, “they” want the poor countries to
use only renewable. While he supports clean energy and a clean environment, he writes,
“But that does not mean we should accept more poverty. It does not mean these
rich, powerful people should be able to take away our right to live”.
The Paris Climate Change Agreement
Now Lyazi may be overstating
his case. The 2015 Paris Climate Change Agreement which recently received the
necessary ratification does make some provision for the poorer countries. It’s
preamble, for example, “Further requests the Green
Climate Fund to expedite support for the least developed countries and other
developing country Parties”[1]
Article 4 provides that “Parties aim to reach global peaking of greenhouse gas emissions as soon
as possible, recognizing that peaking
will take longer for developing country Parties[2]…and
“Developing country Parties should continue enhancing their mitigation
efforts, and are encouraged to move over time towards economy wide emission
reduction or limitation targets in the light of different national
circumstances”. And “Support shall be provided to developing country
Parties for the implementation of this Article. The
least developed countries and small island developing States may prepare and
communicate strategies, plans and actions for low greenhouse gas emissions
development reflecting their special circumstances” Moreover, Art. 9 provides
that “Developed country Parties shall provide financial resources to assist
developing country Parties with respect to both mitigation and adaptation in
continuation of their existing obligations under the Convention”.
Thus developing countries are allowed to implement
policies at their own speed and are to receive financial assistance. Canada, for example, has committed $2.65
billion to this purpose by 2020[3].
However, does anyone have any idea how much assistance will really be necessary
and how much of that has so far been promised? Do we really believe that most
developed countries will meet their own climate change targets as
well as assist developing countries to the extent necessary? In any
case, many developing countries have a very long way to go before they can
match the level of prosperity in developed countries. Can this development
really occur without further fossil fuels? Will renewable such as solar and
wind really become so inexpensive as to meet the increasing needs in poor
countries? Will electric cars become so
cheap that the average person in the third world can afford one? Even China is
still building numerous coal-fired electric generating plants and has agreed
only to stop increasing its emissions in 2030! What can we then expect from
smaller, poorer countries? Our climate change policies must, obviously,
continue to keep the consequences on poor countries in mind.
Progress through Industrialization
In fact, we must recognize that for these countries
the environmental impact will first become worse as pointed out by Dylan Pahman
in another article that caught my attention recently.[4]
In commenting on Pope Francis’ message on the World Day of Prayer for the Care of
Creation, Pahman argues
What
seems to be lost on these hierarchs[5] is
what to do about the problem. The pope praises the UN’s Sustainable Development
Goals and the Paris Agreement, but similar statements have not proven effective
in combating climate change. What has proven effective? Industrialization and
free markets. Really.
Although Pahman agrees that “Wastefully harming the environment is bad stewardship”,
he posits that we do not have to choose between the plight of the poor and the
plight of the planet.
In the short run, of course, industrialization
is the problem. A quick glance at a global
pollution map reveals that newly-industrialized China and India are some of
the worst offenders. However, so long as we truly care about the poor, we must
not overlook the fact that these countries are where the greatest progress in
overcoming poverty has happened since the 1970s. Hundreds of millions of people
have escaped crushing poverty through the industrialization and increased
liberalization of their economies.
Nevertheless,
As a recent study in
the journal Nature on environmental care from
1993-2009 notes, “while the human population has increased by 23% and the world
economy has grown 153%, the human footprint has increased by just 9%.” Economic
growth is compatible with care for
creation.
…….
“Encouragingly,
we discover decreases in environmental pressures in the wealthiest countries
and those with strong control of corruption.” In particular, “environmentally
improving countries are characterized by higher rates of urbanization, human
development (a composite measure of health and education) and control of
corruption.” To clarify, they also note, “Most encouragingly, these countries are
net exporters of agricultural and forestry products, and by this measure are
not simply exporting their demand for food and fibre (and the associated local
pressures) to other countries.”
Pahman recognizes that”
We will
need to accept the fact that in the short run things will need to get a little
worse for the environment, as they start to get better for the poor. Each
nation must climb an initial “hump” during which it makes more aggressive use
of resources, to attain a widespread level of general human well-being. Once
that’s attained, significant mass support for environmental protection has
emerged in every developed country.
Counting the Cost
How long it will take to get over this “hump” is
not clear. In any case, developed-world climate change policies must recognize
this trade-off between fighting poverty and fighting environmental degradation. This short-run trade-off is not limited to
developing countries. Also developed countries must be fully aware of the
consequences of their policies. In Ontario, we have seen major increases in the
price of electricity, at least in part, due to subsidies for solar and wind (“feed-in”
prices of three times market rates) and the forced closing of all coal
generating plants. Consumers are up in arms and some people are said to have to
choose between paying their electricity bills or putting food on the table. In
response, the Ontario government has now introduced subsidies for the poorest
electricity users[6]. However,
manufacturers are also complaining and threatening to move elsewhere—to locations
with lower power rates. Ontario companies are becoming uncompetitive
internationally.
Meanwhile, Alberta and B.C. have introduced carbon
taxes amidst a major down-turn in the price of oil causing many oil producers
to shut down with major employment effects. Quebec and Ontario are implementing
“Cap-and Trade” while the federal government has just set a minimum
national price for carbon of $10 a tonne to
be implemented in 2018, rising to $50 a tonne by 2022.
On the other hand, Canada’s largest trading partner
(and the world’s largest polluter, the U.S. has elected Donald Trump, a climate
change denier, as president and will be going full-steam ahead in developing
its oil and gas resources. While Canada’s LNG (liquid natural gas) projects are
bogged down in the regulatory process, the U.S. has its first such export
project up and running and others close to completion. U.S. shale oil
production is increasing again after cut-backs due to lower oil prices. In
fact, the U.S. is set to become a net exporter of oil and gas in 2017!
Meanwhile, Canada still lacks adequate pipelines to take advantage of these
export markets. At the same time, China, the world’s second largest polluter
can emit as much as it wants until 2030
Now our Prime Minister may argue that Canada needs
to be a leader in the climate change field and that leadership will put us in
the forefront of renewable fuel technology and create plenty of new jobs.
Personally, I have strong doubts that such will be the case. I also doubt
whether the price in jobs lost is worth paying. Canada’s total emissions are
only about 1 percent of the world’s total. Let’s slow this process down until the U.S.
decides to actually implement further climate change initiatives. The economic
consequences of further Canadian measures will most likely be too much to bear.
Let’s drop the planned increases in our carbon taxes for now.
[4]
“Calling climate change a sin
won't help the planet -- or the poor”,. Acton Commentary, http://www.acton.org/pub/commentary/2016/09/21/calling-climate-change-sin-wont-help-planet-or-poo
[6] By the way, subsidizing the purchases of the
poor of polluting products is also questionable policy. If an item really needs
to be taxed then the poor should also be forced to make the necessary
tradeoffs. They should be recompensed in ways which do not depend on the amount
of the polluting product they use. Increasing income tax credit for lower
income is a better way.
