Bang For The Buck

There have recently been a number of prominent journalists and politicians who have claimed that it is impossible for Canada to meet its Kyoto targets without triggering a deep recession or buying credits from countries like Russia whose decrease in emissions are due solely to economic downturn.

What they say is partly true. Canada’s national emissions have increased so dramatically over the last ten years that it would be impossible to get them down to six percent below 1990 levels by 2012 without hurting the country’s economy. This is simply unquestionable, and anybody who claims otherwise is either a fool or some kind of economics whiz who can create money by magic.

This being the case, there is still nothing preventing us from meeting our targets without giving away billions to Putin’s friends or killing our economy. All we need to do is to finally realise that this problem of Global Warming is indeed Global, and that it therefore makes no difference in what countries the reductions are made.

Our western capitalist mentality always makes you believe that everything is achievable with hard work, dedication and passion; if you want it, you can get it. And although some people’s long hours of work don’t materialise into anything substantial out of bad luck, this is still a good mindset have.

The trouble is that people too often assume that the work, dedication and passion must not only come from oneself but also directed towards oneself. In other words: you do the work for yourself to youself. This makes sense is cases where there is only one party involved such as personal studies, businesses or careers, etc. Take for example a university student studying in preparation for a final exam, he is studying for himself (he benefits from a good grade) and to himself (the studying is directed towards his brain, which is gaining more knowledge and capacity).

On the other hand, when more and more parties start coming in and when the both the work and payoff involve more than one party, that assumption can change.

Imagine a running team involving twelve extremely skilled athletes, whose overall score is determined by its members’ average time running the 100 meters. One afternoon, the coach comes into the dressing room and announces to his players that they are underperforming and that they must work harder to get their average times down, or face demotion to a lower tier. The team members are then faced with a number of choices: they can decide to spent more time and money training, even though only a few wealthy members will be able to afford that, or they can get the same result by simply getting those same wealthy members to buy decent pairs of running shoes for the two runners on the team who can’t afford them.

If those wealthy members were to follow the traditional mindset, they would each start spending resources on themselves. This is an understandable choice, as the wealthy members would feel that their money ought to be used for their own benefit. But because their score is shared with the whole team, and therefore reliant on the performance of the worse-off members, they would benefit just as much from buying those members new shoes as from buying more training hours. This is the mistake that Canada and other wealthy countries are making with regards to climate change.

Instead of buying poorer countries new pairs of shoes by cleaning up their mess, industrialised countries are following the old mindset and opting to spend their resources on additional training for themselves –cleaning up their own backyard. This is totally irrational, because while industrialised countries are by no means totally green, they are much more so than developing countries, and are therefore much more expensive to clean.

At the moment, our government is offering tax subsidies for home owners who retrofit their homes to make them more energy efficient. In other words, the government will forfeit a few thousand dollars to let home owners put up some solar panels and additional insulation which will take 10 to 20 tons of Co2 off the atmosphere every year. This obviously doesn’t harm the environment, but wouldn’t those few thousand dollars be better spend subsidising a group of Amazonian farmers so that they can buy fertiliser and stop releasing a few thousand tons of Co2 into the atmosphere every few years by burning forest to make farmland?

Both strategies work, but when resources are scarce, it’s wise to aim for the best possible bang for the buck.