Financing the environment

There is a theory that the only way to save the environment is to assign a dollar value to it.

There is a theory that the only way to save the environment is to assign a dollar value to it.

This is quite popular in financial circles, and it is only fitting that it is the topic of today because it just so happens the federal finance minister and his provincial and territorial counterparts are all meeting in Whitehorse.

They are here to discuss pension reform, but let us provide another topic they should be looking at.

They should be discussing the value our society puts on the environment, or at the very least what we put into it.

A simple example is the Yukon’s deposit refund system on beverage containers.

People recycle cans and bottles because they get a financial refund for them if they recycle them

There is no money in throwing cans and bottles into the highway ditches or placing them in the landfill.

A value has indirectly been assigned to the land that does not get littered with cans and bottles.

The participation rate for items with a refund is, at least in the Yukon, more than 70 per cent.

Other items, such as baked bean tins and glass jam jars, have a very low recycling rate because the individual can or jar is worth nothing to the consumer once the contents have been eaten.

Recycling refunds are an example of a carrot approach, rewarding good actions to ensure appropriate environmental behaviour.

Individuals do what is generally considered the right environmental action because they get a financial reward.

Then there is the stick approach.

Since we live in part of the world where it is usually not considered appropriate to hit people with sticks to get them to do certain actions, fiscal means are used instead.

Note that in the unfortunately large areas of the planet where sticks are used, environmental issues are generally not high on the list of priorities as most people are desperately trying to stay alive and unharmed from authoritarian goon squads.

But in this allegedly tolerant part of the planet, people can get fined for doing something bad to the environment.

Fines can be levied for littering or illegally dumping hazardous waste.

There is no fiscal carrot or stick, yet, for when it comes to one really important and very current environmental issue.

There is no carrot or stick when it comes to greenhouse gases such as carbon dioxide, methane and nitrous oxide.

There is no financial incentive to capture and safely dispose of these emissions, often termed carbon sequestration and storage.

Nor is there any fiscal cost associated with pumping these gases into the atmosphere.

No permits are needed to do this, and there are no limits to the amount that can be disposed of.

A possible solution to this is called cap and trade.

There are many problems with cap and trade. These are most eloquently explained in cartoon format at www.storyofstuff.com/capandtrade/.

There is also the attempt to tax greenhouse gas emissions, such as through carbon taxes.

The provinces of British Columbia and Quebec have implemented different versions of this.

The solution to climate change will involve a lot more than carbon sequestration, carbon taxes and cap and trade.

But they all might be small parts of a much larger solution in reducing greenhouse gas emissions.

The point is that these financial mechanisms have yet to be implemented at the Canadian federal level and in most provinces and territories.

Guess who is to blame for this sorry state of affairs.

Right, it is those recent visitors to the Yukon’s fair capital city, the Canadian finance minister and his provincial and territorial counterparts.

Well, it is not entirely their fault.

All of us are producing way too much in the way of greenhouse gases.

There are many ways to reduce this, but it often requires a kick start from our political leaders.

In particular, it will require the finance ministers to provide some of the solutions to this problem.

It is not only an environmental issue.

It is such a massive problem it will require the powerful finance politicians.

In the political cabinet pecking order, environment ministers do not carry much capital.

The real power is where the money is, and that is the finance department.

It is telling that, in the Yukon, the premier is also the finance minister.

That concentration of political and fiscal clout in one individual is part of the reason he is perceived as being autocratic, domineering and extremely intimidating (at least to his cabinet colleagues).

This column is being written prior to the final communique from the Whitehorse finance ministers meeting.

However, let us go out on a limb and predict that the environment will not be mentioned.

This is a pity because the finance ministers do have the power to implement fiscal programs such as cap and trade, carbon sequestration and carbon taxes that could have positive environmental benefits.

It is not enough to just deal with recycling refunds on cans and bottles.

It is time to deal with the defining environmental issue of the age.

It is time to get fiscal with greenhouse gases.

Lewis Rifkind is a Whitehorse based part-time environmentalist.

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