The Economy IS Important, but it operates Within the Environment

Most economists will agree that most economic troubles are the cause of human action, but there are some that are not. The environment can cause economic disruption when natural disasters damage a country’s assets, and force savings to be spent on rectifying the problems caused.

Harper et. al. don’t seem to get this. They claim that the economy will suffer from too much environmental protectionism, but I would say that a far greater danger to the economy is environmental disaster.

Don’t get me wrong, sometimes I support the development of industry that may appear environmentally damaging on the surface, because I believe that what might seem damaging at first might actually be good overall, if it reduces the amount of supply coming from bigger polluters with little to no environmental protections in other parts of the world.

It is impossible to abruptly stop demand on some things in the absence of replacements. Too fast, radical change is likely not the best approach to the environment. We all need to be able to heat and power our homes, commute to work, etc. but we need to find the best way to expedite the development of efficient and affordable, green technologies. We should always be working toward better solutions for a greener Canada, not just when we believe we are nearing a crisis. I strongly believe that the best approach will be through government incentives for private sector development because we will have a bigger pool of ideas to draw from and we won’t be limited to the ideas of those who are on the government payroll.

The worst thing we can do, is absolutely nothing.

Developing Good Green Energy

It is part of our responsibility to protect the environment but there is a limit to what we can do in a country that is so cold in the winter, and as hot and humid in the Summer, as Canada. To make it easier on consumers, we need to develop green energy that is effective and cost efficient. The problem with solar and wind energy when everything is taken into account is that it costs so much to produce per kwh compared to nuclear. This raises costs for consumers. This is sometimes offset by the government, but we are still the taxpayers. Regardless, the end result is still the same… Higher energy prices. This hurts consumers, and discourages business.

One of the problems that I observe when government funds green energy, is that it gives incentives to continue production of current technologies, but gives little incentive to innovate and produce new and better technologies. If the government is willing to buy solar panels, then it’s a pretty safe bet that we will get more solar panels and not Easter eggs. A new, better, cost effective and efficient technology would be of the most benefit but this is unlikely to be developed if we keep buying things that already exist. If enough people were working on developing something better, I don’t think it would take long to achieve the goal if we didn’t unwittingly discourage it.

Should we be funding research and development then? The short answer is, no. This is because that through funding research, there is significant financial interest in researching and studying, but little in developing.  Through achievement, the researchers will expect funding to be cut, so they may delay development in an attempt to prolong funding.

So what is needed? I think that the best approach would be private sector involvement with limited government funding. Have a criteria set out for what is needed (Green Energy that is similar to solar and wind energy that costs $? per kwh to produce), then guarantee a market and purchaser for those that develop the new technology (. Think about it. All the risk will be on the private sector, and government will only pay for results. I think if the private sector could foresee a market, they would work to produce the technology, provided that they didn’t feel like they were in competition with publicly funded researchers.

The environment is a priority, and green energy is important, but our focus should be on developing the best  green  technology possible that can also be cost effective.