Canada could and should become a leader in energy efficiency
[April 2014 print edition]
I’m writing this column at the end of the coldest winter I can remember.
This resonates with me in a particular way. About seven years ago, in the wake of the release of the movie, An Inconvenient Truth, I was asked to be part of a panel discussion about the issue of global warming. Let me be very specific about the context: the theory espoused by former US vice-president Al Gore was that CO2 emissions, generated from fossil fuels, were responsible for a warming trend in global temperatures. The end result—according to Gore—was a kind of Apocalypse where we would see anything and everything from typhoons to hurricanes to famine to wide-spread flooding as the ice caps melted. It was the scientific version of the brimstone and fire preacher’s version of hell. This was what I had been called upon to discuss.
There were several members on the panel and I was the only one who expressed skepticism.
I am not a scientist. I can pretend to understand how CO2 uniquely captures heat from the sun’s rays, while it doesn’t simultaneously deflect those rays in the first place. Like I said, I’m not a scientist. But I did attend high school and I vividly recall Etobicoke Collegiate’s most respected physics teacher who argued (in the mid 1970s) that CO2 emissions were inevitably leading to a new Ice Age! At the time, I bought the story lock, stock and barrel. With age comes both wisdom and skepticism.
There’s a good reason why as a Canadian I’m particularly interested in theories concerning global warming. Compared to the other developed countries of the world, none other relies quite as much on the production of oil and gasoline products as we do. The Alberta oil sands are a resource that provides benefits for all citizens. Both Ontario and Quebec are have-not provinces and we don’t complain when the equalization payments flow our way. Yet at the same time, there are calls from many Central Canadians, particularly from members of the chattering classes, that the oil sands are almost uniquely bad and that production should at least be curtailed if not ended entirely.
Let me return to that panel discussion, held in the summer of 2006. There was a scientist—a PhD—who guaranteed that if CO2 emissions continued at current rates, that summers in Toronto would be unbearably hot within five years (that would mean 2011), causing widespread fatalities from heat stroke, and that we would never see snow again in this city.
As I write this, the date is March 23. The temperature is -8 Celsius and I see snowbanks everywhere and all I can think is: where’s global warming when we want it?
We’ve already seen implications of the global warming scare in this province. Perfectly functional coal-fired plants were shuttered early, which has at times required Ontarians to buy electricity off the North American grid. Currently, over two-thirds of the electricity generated in the US is from fossil fuels, with the majority being coal (so much for saving the planet). Because while many of us pay lip service to reducing CO2 emissions, when push comes to shove, there is a broad consensus that sacrifice is fine—as long as it’s not being asked of me!
However, there is a prudent approach that Canada could take to the issue of CO2 emissions. It makes sense to be cautious. If the Al Gore camp is indeed correct, then the consequences would be calamitous. Here’s how we might proceed… just in case.
First, continue extracting petroleum products from the oil sands. Yet at the same time, Canada could—and I would argue should—become a leader in energy efficiency. Who can argue with that as a principle? And the surest mechanism to accomplish that is tax policy to get us into smaller cars, to get us to insulate our homes, to get us to walk and bike as a means of getting to where we need to be.
Presently, taxes on gasoline average about 40 cents per litre across Canada. We use about 40 billion litres of gas every year, which means that about $16 billion in government revenue is raised by gasoline taxes. What if we started raising taxes, annually, by about 20 cents per litre? Then used that extra revenue to reduce income taxes, which are now the biggest source of revenue for the government? This would encourage people to legally avoid taxes by consuming less fossil fuel.
Because taxes would be lower on income, it would encourage more people to work longer and harder because taxes discourage wealth-generating activities. Environmentalists would be mollified; hard-core capitalists would celebrate the increased efficiencies in the system and these benefits would be permanent—whether or not Canadian winters remained cold, or became as balmy as those of Florida.
Toronto-based Michael Hlinka provides business commentary to CBC Radio One and a column syndicated across the CBC network.