An Eco­nomic Ap­proach to En­vi­ron­ment

Stanstead Journal - - FRONT PAGE - Vic­to­ria Vanier, Len­noxville

have to be liv­ing in a cave to not know that the 21st an­nual Con­fer­ence of Par­ties, bet­ter known as COP21, be­gan in Paris on Mon­day. The event has al­ready been in the news more than in any pre­vi­ous year, per­haps a re­flec­tion of the ur­gency

of the world’s coun­tries to sign an agree­ment that will truly help to slow down cli­mate change.

Dr. Terry Ey­land, an Eco­nomics pro­fes­sor at Bishop’s Univer­sity, has been re­search­ing a promis­ing so­lu­tion that would en­cour­age coun­tries to sign an in­ter­na­tional en­vi­ron­men­tal agree­ment: border tax ad­just­ments, or, car­bon tar­iffs.

In an in­ter­view with the Stanstead Jour­nal, Dr. Ey­land first spoke about why some of the more fa­mil­iar cli­mate change so­lu­tions that are be­ing con­sid­ered by some coun­tries and al­ready in use by oth­ers, such as a ‘car­bon tax’ or ‘cap and trade’ pro­grams, may not be low­er­ing over­all global green­house gas emis­sions, the main cause of cli­mate change.

“Poli­cies like the car­bon tax lead to costs to pro­duc­ers. Those com­pa­nies can lose their com­pet­i­tive edge to the same com­pa­nies in other coun­tries that don’t have en­vi­ron­men­tal poli­cies,” ex­plained the econ­o­mist. He also spoke about ‘car­bon leak­age’: the in­crease of car­bon diox­ide emis­sions in one coun­try as a re­sult of emis­sion re­duc­tions in an­other coun­try that has adopted an en­vi­ron­men­tal pol­icy. For ex­am­ple, a coun­try may stop pro­duc­ing cer­tain goods that pro­duce high lev­els of green­house gases in or­der to re­duce their emis­sions, then be­gin buy­ing the same prod­ucts from other coun­tries with less en­vi­ron­men­tal reg­u­la­tions.

“The green­house gas emis­sions are not be­ing re­duced glob­ally; they just get moved around from one coun­try to an­other.” Dr. Ey­land con­tin­ued: “So that’s the main stop­per for coun­tries to act alone to ad­dress cli­mate change: they fear a loss of jobs and they re­al­ize it won’t help the en­vi­ron­ment if the goods just get pro­duced else­where. Some­times it can even in­crease green­house gas emis­sions such as if pro­duc­tion of goods is moved to a coun­try that uses coal for en­ergy.” Coal is the ma­jor source of en­ergy in China and some sources have re­ported that China builds a new coal plant roughly ev­ery two weeks.

‘Car­bon tar­iffs’, the cli­mate change so­lu­tion that Dr. Ey­land has been re­search­ing, al­low coun­tries to tax car­bon­in­ten­sive im­ports at their bor­ders ac­cord­ing to how much green­house gas was cre­ated in their pro­duc­tion.

“Us­ing car­bon tar­iffs is a way for coun­tries to have an en­vi­ron­men­tal pol­icy with­out los­ing their com­pet­i­tive­ness. The goal is not to nec­es­sar­ily in­crease do­mes­tic pro­duc­tion of goods. What I find in­ter­est­ing is that if car­bon tar­iffs were adopted and ac­cepted, it would add in­cen­tives to all coun­tries to do some­thing en­vi­ron­men­tally.”

Asked whether Dr. Ey­land ex­pected the use of car­bon tar­iffs to be dis­cussed at COP21, he replied: “I’ve heard that it is on peo­ple’s minds; it has come up. I’m look­ing for­ward to see what hap­pens at the con­fer­ence.”

In Canada, where the ef­fects of cli­mate change have been less ob­vi­ous than in other coun­tries and where there are still pub­lic funds to deal with the dis­as­ters that have been oc­cur­ring, peo­ple are per­haps not as con­cerned as they should be about whether or not to, say, drive that snow­mo­bile all win­ter. “I be­lieve that about 99 % of peo­ple are un­aware of all the dan­gers in­volved with a warm­ing cli­mate,” said Dr. Ey­land.

Ad­mit­ting to be ini­tially sur­prised that I was in­ter­view­ing an econ­o­mist on an en­vi­ron­men­tal is­sue, I asked Dr. Ey­land about his field of in­ter­est. “Usu­ally when peo­ple think about eco­nomics they think about in­ter­est rates and un­em­ploy­ment, but there are so many sub­fields of eco­nomics. I’ve been do­ing this kind of re­search be­cause I love eco­nomics but I really love the en­vi­ron­ment,” said the pro­fes­sor who grew up in the beau­ti­ful, nat­u­ral en­vi­ron­ment of South Bolton. “I try to pro­mote the idea that we must keep the costs in mind, to understand where busi­nesses are com­ing from. We need to build bridges be­tween the en­vi­ron­ment and eco­nomics to pro­tect the en­vi­ron­ment.”

“I did snow­board train­ing for many years,” con­tin­ued the na­ture-lov­ing econ­o­mist in the phone in­ter­view. “I’ve seen the warm­ing trends. I’m in Trem­blant right now and there is only one run open; it’s one of the warm­est years here on record. It’s not look­ing good,” he con­cluded.

photo cour­tesy Bishop’s Univer­sity Eco­nomics pro­fes­sor Dr. Terry Ey­land has been re­search­ing the use of car­bon tar­iffs to en­cour­age coun­tries to sign an en­vi­ron­men­tal agree­ment.

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