The carrot and the stick

There’s a song with a line that goes: “Everybody want to go to heaven, but nobody wants to die.” You could add a verse that says: “Everybody wants to save the world, but nobody wants to pay for it.” Instead, I want to be paid. And so, I think, might you. So pay me already.

There’s a song with a line that goes: “Everybody want to go to heaven, but nobody wants to die.” You could add a verse that says: “Everybody wants to save the world, but nobody wants to pay for it.”

Instead, I want to be paid. And so, I think, might you.

So pay me already.

The Alberta government has announced it will double its levy on excess carbon emissions over the next two years. The Globe and Mail reported this is an attempt by the province to improve our credibility at the global conference in Paris in November pushing us all down the “decarbonization” path.

The environmentalist lobby took about 18 seconds to strip the credibility aspect off the announcement. Climate Action Network Canada said only a full stop of oilsands development will be acceptable. Greenpeace said the same, noting that you can’t gain credibility by taxing heavy emitters as a sort of licence to export more and more fossil fuels.

No doubt both will book tickets on the solar airplane to Paris to make that point.

That is more or less a micro picture of humanity’s effort to save us from runaway climate change. But as long as there’s a gazillion barrels of oil in the ground, someone will want to buy it and burn it.

So rather than look at the appearances of the provincial announcement, let’s look at its substance.

Already, Shell Canada and Capital Power are on side with the announcement. Oilsands giant Suncor is on record as supporting carbon pricing as a means to encourage reductions in carbon emissions.

That’s good, because whatever people say about regulating emissions, pricing carbon, cap and trade systems or light bulbs in our houses, only dollars count.

This is a tweak of the system put in place by Ralph Klein. Ours was the first government in North America to put a price on carbon emissions and to penalize heavy emitters financially.

The financial penalties were light enough to not inhibit energy development, and Alberta’s total emissions have continued to rise since. The law is due for an update this year, so here’s the update.

The Calgary Herald reports there are 103 facilities that emit more than 100,000 tonnes of CO2 a year. The old law said they must reduce that by 12 per cent or pay a levy. The new law says they must reduce emissions by 20 per cent by 2017 or pay a levy that’s twice as steep as it was before.

That’s the new law, in a nutshell.

The corporations spewing out all this CO2 have three options: reduce emissions by becoming more efficient; pay into a technology fund or buy offsets. Myself, I’m becoming partial to the third option.

Businesses will naturally strive toward efficiency; it reduces costs and boosts profits.

The technology fund option is fine as far as it goes. I like to remember how the Alberta levy on rubber tires eventually produced some pretty interesting new ways of keeping tonnes and tonnes of rubber tires out of landfills. I have no doubt that a technology fund for carbon will eventually produce something useful as well.

But if you want faster results, I would emphasize the offsets option. Why? Because it makes dollars change hands, which is the only stick that works on the donkey of commerce.

Pay me to produce the offsets. Make it easier for me to invest in solar and wind power. Draft laws to make it simple for me to put solar panels on my roof and see that I get paid for the power they would produce.

One article I found said industrial-scale energy storage will be widely available within five years, and cost-effective home off-grid storage sooner than that. Pricing carbon will help ensure that. In the meantime, heavy industry will need to buy some offsets, creating two markets for each new green power installation.

If it’s credibility we want, taking coal-fired plants offline as they age and replacing them with green power — financed by levies on the heaviest emitters (that includes our cars and trucks) — would be a good result of last week’s announcement.

The giant oil companies know this is going to cost them — and they’re still on board. The price of gasoline is going to rise because of carbon pricing. But we can smooth that with reductions in other taxes, as B.C. has done.

And we should also be able to make some of that money back by investing in wind and solar farms, storage banks, or just a few solar panels on our homes.

The carrots and sticks that move commerce are the only means proven to work to change human behaviour.

So kudos for the upgrade to Alberta’s Specified Gas Emitters Regulation. Next, please see that the money the levies raise are used by Albertans, in Alberta.

Neiman is a retired Advocate editor. Find his blog at readersadvocate.blogspot.ca or email greg.neiman.blog@gmail.com.

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