An Economic Approach to Environment
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.