1. People face tradeoffs.
2. The cost of something is what you give up to get it.
3. Rational people think at the margin.
4. People respond to incentives.
5. Trade can make everyone better off.
6. Markets are usually a good way to organize economic activity.
7. Governments can sometimes improve market outcomes.
8. A country’s standard of living depends on its ability to produce goods and services.
9. Prices rise when the government prints too much money.
10. Society faces a short-run tradeoff between inflation and unemployment.

Both as individuals and societies, there is some level of undeserved harm we need to accept if we are to live relatively free lives.

When it comes to pollution, it is also pragmatic to focus on the most egregious remaining externality. You will probably never get to the bottom of the heap (new technology and conditions create new problems), but you will maximize the utility payoff for your efforts, subject to the limitation of your own fallibility.

There may be some level of diffuse harm for which it isn’t worth anyone’s time to try and calculate restitution.

Imagine leaving the door of a big lecture hall open for a few seconds, cooling the air a small amount. Have you meaningfully harmed the people in the room? The same could be said about industry putting a few micrograms of sulfur dioxide into air thousands of kilometres away.

There is also the possibility of an error of false attribution: blaming a party for a harm that actually isn’t caused by them. The chances of that increase with the distance between supposed actor and supposed acted upon, as well as with the tenuousness of the causal connection.

“In practical terms, the only externalities that will ever be costed in through policy are those where the connection is relatively definite and proximate.”

unless you think this is something which is wrong, something which must change, then how are you not yourself tacitly asserting the right of industries to pollute in cases where the externality is not connected definitely and proximately to some party’s interest?

The report suggests that the best way for Ottawa to build a price for emissions into our economy is through a combination of a “carbon tax” on consumers and a “cap-and-trade” system that allows companies that produce less carbon than their caps permit to sell their unused quotas to companies that exceed their caps.

This is a sensible proposal because, while the purpose of a carbon tax would be to promote the use of carbon-free fuels and increased efficiency in the use of fossil fuels, it would also generate extra revenues that government doesn’t really need. Accordingly, the introduction of a carbon tax should be tied to an offsetting reduction in income taxes, so that Canadians who conserve energy find themselves no worse off than they would have been without a carbon tax.

GLEN MURRAY (NATIONAL ROUND TABLE ON THE ENVIRONMENT AND THE ECONOMY):
We think it’s helpful that someone comes out and takes this on and tries to shift the debate so that politicians have some more room to make better decisions for Canadians.

KEITH BOAG (CHIEF POLITICAL CORRESPONDENT):
The important part here is not just what’s said but who is saying it, and that’s why environmental activists are smitten.

STEPHEN HAZELL (THE SIERRA CLUB):
Let me tell you, the National Round Table, they’re not a bunch of raving environmentalists like me. These are mainly business people who have got some interest in the environment, so I think it’s a crew that the Government should pay close attention to.

1 day ago

OTTAWA – One way or another, Canadians must start paying for carbon dioxide emissions if the country is going to seriously reduce greenhouse-gas emissions, says a national advisory panel.

The National Round Table on the Environment and the Economy released a report Monday saying federal and provincial governments should immediately begin negotiating a national price on carbon.

While the influential panel stops just short of stating that a carbon tax must be imposed, it does suggest that’s the preferred option – in concert with an emissions trading system for industrial polluters.

The broader question of the net impact of industries and industry really cannot be answered on the basis of our speculation.