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Tuesday, September 05, 2006

Avoiding the False Choice: Either Kyoto or not Kyoto

June 28, 2006

Preston Manning’s op-ed piece in the June 28th edition of the Globe and Mail entitled “Either Kyoto or not Kyoto”, once again demonstrated that you can take a man out of politics but you can’t take the politics out of the man. His comments confuse the issue with jibes at the previous government while ignoring the fundamental fact that Kyoto is not about what we can do for ourselves but what others can do for us.

I agree with Mr. Manning that “Kyoto or not Kyoto” is not the real issue. The real issue is the extent to which we and other members of the global community continue to dump greenhouse gases into the atmosphere. While there can be no doubt that better means may exist than those employed by the previous Liberal regime at reducing greenhouse gases, the planet’s atmosphere is a globally shared resource, one upon which the collective action of others have a much, much greater impact on us than anything we can do. In his current role as eminence grise for the Government, Mr. Manning should be aware that this situation is a classic case of a ‘tragedy of the commons’ where the externalized costs of burning fossil fuels can not be fully priced into the market for fuel and therefore those costs are off-loaded onto others.

The Canadian dilemma is quite simple. There are four scenarios. As individuals, organizations or as a nation we can choose to do little or nothing about greenhouse gases in the belief that we contribute so little to the problem (Canada as a whole contributes only about 2% to global emissions). We might expect that other countries who contribute more to the overall problem will reduce their greenhouse gas emissions as is ‘fair’. This scenario is clearly advantageous to us, because someone else is largely paying for fixing the problem. However, our non-action benefits no one. This can be referred to as a ‘free-rider’ scenario.

Being the international do-gooder we profess to be, we could also choose to lower our emissions while everyone else chooses not to. This may be altruistic but it is also referred to as the ‘sucker’ scenario because our actions benefit others while we derive no benefit from them. In the third scenario, we all work to fix the problem, sharing the costs and the benefits. We say “sharing the benefits” although this is not quite true. In the end the benefits we derive from the collective actions of others are much greater by far than the benefits we contribute. We can’t possibly reduce carbon emissions beyond 2%, whereas the rest of the world can reduce them by 98%. The fourth and final scenario is one where none of us work to reduce greenhouse gases and everyone ultimately suffers from catastrophic climate change.

From a collective and global welfare perspective, scenario three is obviously the best choice while scenario four is the most disastrous. However, the ‘best’ choice for any individual, organization or country is scenario number one because a benefit is obtained at the expense of others. Therefore individuals, organizations and countries will tend to choose this strategy over the others, especially since they will also be afraid of being caught as ‘suckers’. Unfortunately, if every individual and nation chooses scenario one (excepting those few altruists), we end up collectively choosing scenario four. We have a situation where a choice which is in our best interest individually ends up trapping us in the worst case scenario globally. Mr. Manning will no doubt recognize the form of these four choices as the classical ‘prisoners’ dilemma’ problem associated with collective action.

This brings me back to Kyoto. Canada’s participation in Kyoto is not about our internal policies related to our small possible contribution to reducing global greenhouse gases. Whatever we do or don’t do will have very limited impact on the global problem. However, Canada’s participation in the Kyoto Protocol, along with the other 145 countries who signed on to reduce greenhouse gases, is part of an attempt to reduce the ‘free-rider’ tendency that all nations have on this issue. If by treaty nations can be constrained from choosing the ‘free-rider’ option, then Canadians can capture the much more significant benefits from the collective efforts of other countries as they reduce their emissions. What we do in Canada is in effect the means by which we secure the cooperation of other nations by demonstrating to them that we are indeed choosing scenario three and not scenario one.

The real risk of walking away from Kyoto in favour of a ‘made in Canada solution’ is that Canada’s action would precipitate more ‘free-rider’-ism within the community of nations. Even in the most optimistic case of a ‘made in Canada solution’, Canada may reap the slim benefits of an effective national environmental solution at the cost of far greater benefits derivable from collective global action. This is very much the case of being “penny-wise but pound-foolish.” What is needed is to remain with Kyoto -- in fact Canada should continue to work to strengthen Kyoto – in order to reduce the potential for ‘free-rider’-ism.

That said, Canada’s national record at achieving its own Kyoto targets (for which the previous Liberal government must accept responsibility) is nothing less than deplorable. Within Canada, as Mr. Manning suggests, we can and must do better.

However, doing better will not occur by fiat from the PMO. As one Deputy Minister described to me once, on the issue of climate change “no one is in charge’. While the PM may determine a Canadian position regarding greenhouse gases, it is the responsibility of each federal ministry involved (Environment, Natural Resources, Industry, and Intergovernmental Affairs, not to mention TBS and PCO) to implement that decision. The problem is that these ministries do not themselves agree on what should be done. Therefore the commitment of the PMO or any single ministry will not necessarily be accompanied by the commitments of other departments. This more than anything else was the problem of the Chrétien government. Mr. Chrétien did make a commitment, but the multiple positions of his ministries made it impossible for his government as a whole to come up with any coherent position. The ministries were constantly fighting with one another, what to say of their relationships with the provinces? In such circumstances, who was any province supposed to be dealing on the subject of environment with when there was no single authoritative voice? And by the way, the provinces were no less incoherent than the federal government was for the same reasons.

Therefore, finding a solution to Canada’s greenhouse gas challenge can not simply involve “going back to the fork in the road” as Mr. Manning suggests and following a different path just because it is different. In reality the “fork in the road” is actually a nexus of many possible alternative solutions that can be applied with some degree of effectiveness or other. In fact there seems to be no lack of innovative ideas that may contribute to the lessening of green house gas emissions. The difficulty Canada has is in developing a coherent, comprehensive approach that can provide our international partners with evidence that we are not simply ‘shirking’ our global responsibilities. If we want to call that a ‘made in Canada solution’ then so be it. But this must not be done at the expense of our commitment to the Kyoto process which right now is the only viable vehicle we have to ensure that ‘free-rider’ trends do not take hold internationally. An ‘every nation for themselves’ solution is no solution at all. Only by encouraging as broad a base of international cooperation as possible can Canadians be assured that they will benefit from the work that must be done in other countries to target that other 98% of greenhouse gases that are emitted every year. Without trying to be too cute, to achieve this is more about governing than it is about politics.

Therefore as the Government moves forward on the Kyoto file they should consider embracing both options, Kyoto and a ‘made in Canada solution’, not as a matter of weakness or indecisiveness but as a reflection of the wisdom that has been repeatedly and successfully exhibited by Canadian governments of all stripes over time.