(May 6, 2011) Fiscal prudence and smaller government could go hand in hand with environmentalism — really!
Stephen Harper, the environmentalists’ worst nightmare, remains Canada’s prime minister for four more years, and with the majority he needs to do as he pleases. Environmentalists fear a hard-hearted Harper will ignore their goals in a single-minded determination to eliminate the deficit and obtain smaller government. In fact, a hard-headed Harper could decide to meet many of the environmentalists’ demands to better realize his economic and small government goals.
Harper could start by fast-tracking efforts to privatize Atomic Energy of Canada Limited, a goal of Greenpeace as well as Energy Probe, my organization. AECL loses money year after year with no credible hope of ever delivering on the reactor export sales needed to turn this crown agency around. In a 2006 study, Energy Probe found that the federal government’s subsidies to AECL over the previous half century amounted to 12% of the entire federal debt.
By selling AECL to a company that could salvage some value from it, Harper would not only recoup some of the past losses, he’d also staunch the future flow of federal dollars to AECL, lower the federal government’s regulatory costs, and eliminate an entire agency that has mostly brought grief to Canada.
Another federal agency whose demise would be cheered by environmentalists is Export Development Canada. EDC has a history of making bad loans to Third World governments for environmentally risky projects. When the projects fail, often due to corruption, EDC writes off the loans at taxpayer expense. Shutting down EDC would also clean up our government – this is a patronage agency whose chief role is to dispense government largesse – and strengthen the private sector. Before EDC muscled Canadian banks and other private sector financiers out of the export business, the private sector properly took the risks, and reaped the rewards, of sound lending.
One of the biggest government boondoggles is ethanol, a fuel made from food crops. Once the darling of the environmental movement, ethanol is now recognized as disastrous by most in the environmental field, from the Sierra Club to the Earth Policy Institute to the Green Party. Studies show ethanol-related smog to increase deaths in various airsheds while costing energy (it takes more energy to create a litre of ethanol than the litre of ethanol contains), wasting water (up to 1700 litres per litre of ethanol) and increasing CO2 emissions. Should Harper eliminate taxpayer subsidies for ethanol production, benefits would extend beyond the environment to the poor – food prices have soared as a by-product of diverting corn and wheat to fuel production, leading to food riots in the Third World.
Harper should also take action in the climate change field by rejecting carbon capture and storage facilities, heavy recipients of government funding and a major future escalator of power prices. Greenpeace and Energy Probe both oppose these attempts to bury carbon dioxide because of the health and environmental risks they pose, as do the many NUMBY (Not Under My Back Yard) communities asked to host the facilities.
What could possibly go wrong with pumping billions of tons of carbon dioxide underground? If large quantities of carbon dioxide escape to the atmosphere on a windless night, the colourless, odourless, heavier-than-air gas would suffocate an entire low-lying community in its sleep. If the gas migrates underground, it would contaminate aquifers. And if nothing in the facility explodes and if the underground pipes don’t corrode and leak, seismologists predict that the vast store of CO2 injected underground under pressure could induce earthquakes, even in areas not known to be seismically active.
The most benign way to meet our energy needs, and the way most favoured by environmentalists, is through energy conservation – doing more with less by using energy more efficiently. Because artificially cheapening the cost of consuming fuels through government subsidies undermines the incentive of people and businesses to use energy wisely, Harper should eliminate all subsidies to all energy-producing industries. No freebies to exploration, or to gas and oil pipelines, or to transmission corridors, or to nuclear plants, or to wind farms. Many environmentalists will cheer most of these pro-conservation measures and some will cheer them all.
But Harper can go further still, by also eliminating subsidies to all the major energy-consuming industries. No freebies to the automobile industry, or to the mining industry, or to the pulp and paper industry. More cheers from environmentalists.
And more black ink on the government’s bottom line. All the measures that I’ve described here simultaneously save money, promote the public weal, and protect the environment. If Harper tips his hat to environmental groups by taking some of these on, he would not only have eased the job of trimming his budget and delivering smaller government, he could run for re-election in four year’s time on his environmental record.