Thursday, December 31, 2009

Prorogation of Parliament: Further Proof that Canada is the Fossil of the Year

During the Copenhagen Summit, Canada had the dubious distinction of being selected as the fossil of the year for its failure to respect its obligations under the Kyoto Accord and its underwhelming targets for further Green House Gas reductions. Locked in our colonial past, we have difficulty letting go of concepts and practices that are more appropriate to 17th and 18th centuries and embracing a mindset suited to the context of the 21st century.

For instance, look at the manner that Parliament was suspended yesterday. The Prime Minister of a minority government, which has the support of less than one-quarter of the electorate, telephoned the representative of a foreign monarch to request that Parliament be prorogued, and the request was granted thereby suspending the work our Parliamentarians should be carrying out on behalf of the people.

In short, we are locked into a constitutional arrangement that bypasses any notion of a modern democracy in which the majority of the population exercises its democratic will. Instead, we are ruled by the regime of the strongest man who plays by the political rules set out in Britain during the Middle Ages.

In this arrangement, the strongest man is the one who actually controls and dominates the most territory, and it is he who in principle exercises the power of the crown that has dominion over the entire territory. Over time, military campaigns were replaced by electoral campaigns in order to determine to whom the subjects within a demarcated territory owed their fealty.

Transposed into the 21st century, here in Canada we are still looking to find the man who can control the majority of the parcelled territories as determined by the results of the electoral wars. The Prime Minister of the day has control of the greatest number of parcelled territories, also know as electoral districts, but doesn’t control an absolute majority of the districts. As a result, he can be deposed by the leader or group of leaders from opposing political clans, with the caveat that another political battle must take place, otherwise known as a general election, to see which of the aspirants to the crown controls the greatest number of districts. To the winner go the spoils of victory, sovereign control of the entire territory, until the next electoral battle is called, usually at the whim of the strongest man, or sooner if a pretender to the crown dares to topple a strong man who controls less than an absolute majority of the territories.

With regard to controlling a parcelled territory, fealty is an all or nothing proposition for the subjects within the district. It goes to the winner of the electoral battle determined by the aspirant who garners the most votes. No majority is required, and the winner will in turn pledge his fealty to the leader of the political clan to whom he owes his victory.

These are the basic rules which govern Canada. They are archaic at best.

So, the question arises, how is Canada to take its place amongst other modern democracies of the world? The correct response it that it cannot take its place amongst modern nations until it replaces its crown-in-parliament governance. To do this, Canada must move beyond its simple winner-take-all electoral campaigns that allow a minority of like-minded individuals to usurp political control from the majority.

If we continue to live under the regime of the strongest man, we will be perpetually focused on the contest to seize the crown, leaving us unable to participate meaningfully in negotiations that require a perspective that transcends notions of territorial sovereignty.

Saturday, December 19, 2009

Copenhagen: the Economy Über Alles or How Føcked Are We?

For the first time in history, all major economies have come together to accept their responsibility to take action to confront the threat of climate change.

The quotation above from Barak Obama pretty well sums up the Copenhagen summit for me. The Copenhagen Accord advances the desires of the world’s leading economies and not the people who actually live on the planet. It’s a huge step backwards from Kyoto.

In the Kyoto Accord, the vast majority of the world’s nations ratified a legally binding treaty the spelled out the amount of GHGs to be reduced by each signatory and set out a time table for the reductions to take place. Certainly, not having the two biggest emitters, the US and China, included in the agreement reduced its value as an effective means of addressing the problem of climate change. Yet, the document spells out what are the expected results.

The Copenhagen Accord, however, is a fill in the blank document, where states fill in their names and the reductions they are willing to commit to. Moreover, the agreement is not legally binding, so any nation can pick whatever target figure it pleases, knowing full well that there are no penalties for failing to meet the target. Essentially, Canada’s environmental policy has now been ratified by the world’s leading economies.

It should be obvious that economies are not legal entities that have any responsibilities whatsoever. Failure to increase a nation’s GDP is not an indictable offence. As a result, the so-called deal that emerged was by and large an agreement between the stewards of the largest economies not to allow a legally binding agreement between nation states arise that would place unwanted constraints on future economic growth.

So, in response to the question, how føcked are we, I would say that we the people got pretty well føcked over. Let me explain.

With regard to climate change, the nightmare scenario that is emerging is that as we run out of conventional oil to motor our economies, states will turn to other fossil fuels, namely coal and tar sands oil, to keep their economies running. Renewable energy sources as a replacement for conventional oil cannot fuel economic growth. Therefore, faced with the prospect of either a steady state, low-carbon economy or one that maintains present rates of growth but at the cost of increased GHGs due to the utilization of dirtier forms of fossil fuels, the Copenhagen Accord paves the way for the latter.

There is no way of getting around it. The choice is between a liveable planet over the long-term or unsustainable economic growth over the short-term. Left to the stewards of the economy, scorched-earth policies will be put into place. Left to the stewards of the planet, a low carbon economy will emerge.

Unfortunately, watching the Copenhagen summit unfold was like watching a disaster movie in slow motion.

Saturday, December 12, 2009

Fight Climate Change with Tax on Financial Transactions

This week French President Nicolas Sarkozy and British Prime Minister Gordon Brown with support from German Chancellor Angela Merkel announced they were in favour of the implementation of a Tobin tax on all global financial transactions.

It is refreshing to see an idea that has been around since the 1970s make its way back into the public discourse. After all, we have just recently invested untold trillions of dollars of public money to save the global financial system from collapse. It’s time for those who draw revenue from this sector to pay up. Indeed, those who toil in the real economy and pay tax on goods and services should not be left with the responsibility of bailing out the speculators. There are vast sums that can be gathered and utilized to finance the emergence of a low carbon economy.

Moreover, a financial transaction tax can be implemented in such a way as to also create significant disincentives for speculative financial transactions that suck capital out of the real economy. Tax rates should reflect the period of time that a security is held: the longer the time period, the lower the tax rate. That way, return on investment reflects the creation of real added value and not the speculative decision of the direction in which the value of an asset will move.

Objections that such a tax would limit economic growth are merely the shrieks of zombie economists who steadfastly believe that the volume of transactions in the monetized portion of the economy is the only indicator of the well-being of the population.

Monday, December 7, 2009

Canada Needs an Environmental Protection Agency with Bite

For those of us who take climate change seriously and are exasperated with Canada’s pathetic track record on environmental issues, the question arises do our democratic institutions have the capacity of bringing about the scale of change necessary to address the problem.

Looking at what’s happening in the United States, it may be a case of collective wishful thinking to believe that the Senate or the Canadian Parliament will adopt a climate bill that will deliver the goods with regard to significant Green House Gas (GHG) reductions. Yet, significant action may come about through regulation rather than legislation.

Today, the US Environmental Protection Agency (EPA), in a follow-up to a 2007 Supreme Court decision that placed GHGs under the purview of the Clean Air Act, declared that GHGs threaten the public health and welfare of the American people. As a result, the EPA is now in position to implement stringent emission standards for transportation as well as for any large emitters. Of course, the regulations will be challenged in the courts, which will delay their implementation, but slowly the regulatory framework will emerge and it will be independent of the partisan politics (e.g. the US Senate) that prevent significant change from coming about.

To learn more, visit the EPA website at

Given how our parliamentary system is profoundly undemocratic, presently we have a minority government with the support of only 23% of the electorate that dictates the terms of our climate change policy, we should follow the Americans' lead and create an independent agency that decides the regulatory framework for the reduction of GHGs. It would require an act of Parliament, but once in place it would escape the domination of electoral politics. In other words, the consequences of climate change are far too important to leave it to our politicians to come up with effective legislation.

Sunday, December 6, 2009

Public Health Trumps Economic Growth: Doctors Force Quebec Government to Back Off

Chalk one up for Quality of Life advocates. On Friday a group of 20 doctors working in the regional hospital in Sept Iles, Quebec, resigned on mass to protest the Quebec government’s complicity in going ahead to develop a uranium mine in close proximity to the town’s source of water. If the government doesn’t step down and the doctors go ahead with their plans, the region’s only hospital will be forced to close.

To learn more, visit

This is a clear case where the quality of life of the town’s inhabitants must come before economic growth. This is not simply a question of jobs versus public health. It goes much further. This conflict underlies the tension between two different worldviews: one that asserts that the public good is advanced by continued economic growth and one that places the standard of material life along side many other health indicators and does not privilege material well-being over all other quality of life indicators.

Clearly, from the doctors’ perspective, the exploitation of a uranium mine is detrimental to the public health of the region. Moreover, they judged it to be against their professional code of ethics to remain silent and simply treat the inevitable increase in the number of sick and infirm as a result of mining uranium in the region.

For far too long the proponents of economic growth at any cost have had their way unchallenged. This gesture goes a long way to assert that the quality of life of the population comes before material well-being of an increasingly isolated elite.

In fact, the situation in Sept Iles demonstrates how useless the GDP metric is in determining a quality of life problem. Since the calculation of GDP doesn’t differentiate between what is good and bad for the public – it simply adds up the volume of all monetized transactions – the increase in health care expenditures expands the region’s GDP, which is to be interpreted as a good thing for the population at large. In other words, when wearing the GDP blinders, the question of whether or not to go ahead with the development of the uranium mine doesn’t even arise since the internal logic of the mindset has already determined what course of action should be undertaken.

If we consider that increased economic growth has led to ever increasing growth in the proportion that health care expenditures demand of provincial government budgets (soon to reach 50% in Quebec), the question should be raised, can we the public, in particular the middle-class, afford continued economic growth? Essentially, those who stand to gain the most financially from the development of the mine are the invesors who are more than willing to offload the externalities of its development to the public purse, and it’s the middle class who fills its coffers. Slowly but surely the members of the middle class are becoming wage slaves.

Thursday, December 3, 2009

Financial Crisis or Oil Shock

Financial Crisis or Oil Shock

Former CIBC chief economist for world market, Jeff Rubin, makes a strong case that the financial crisis is a symptom of a sudden doubling of the price of oil, which triggered a rise of interest rates that left sub-prime mortgages at an unprecedented level of risk to default. Rubin, in my opinion, is Canada’s leading economist who understands the link between energy resources, the economy, and financial markets.

You can read the entire article at

Risks, Consequences and Copenhagen


Martin Wolf’s most recent Financial Times column contains one of the best short arguments for a new climate policy that I’ve seen. He notes that climate skeptics — or sceptics, in the British spelling — argue that the science of climate change is uncertain and that putting a tax on carbon emissions is therefore a mistake. Mr. Wolf then writes:

Yet it is not enough to argue that the science is uncertain. Given the risks, we have to be quite sure the science is wrong before following the sceptics. By the time we know it is not, it is likely to be too late to act effectively. We cannot repeat experiments with just one planet.

When you’re thinking about taking some kind of corrective or preventive action, you want to keep in mind two factors: the risk of a bad event occurring and the potential consequences of that event. In the case of the climate, the science suggests that the risks of a much warmer planet are significant and the potential consequences severe. Can we be certain that such consequences will occur? Of course not. But it seems a bit reckless to assume — to hope, really — that they won’t.

That’s precisely the sort of thinking that caused economic policy makers, at the Federal Reserve and elsewhere, to ignore the signs of a dangerous bubble in real estate and on Wall Street.

Mr. Wolf’s column is worth reading in full. It also includes more detailed arguments about what should happen at the coming Copenhagen climate conference and beyond.

Wednesday, December 2, 2009

Canada's Reputation Lies in Tatters

George Monbiot writes a scathing criticism of Canada’s environmental record. It’s important to be aware of how members of the international community see us. We have as a tendency to be rather sanctimonious, not realizing that we are no longer seen as the kinder, gentler North Americans.

For the kinder, gentler version of his article, go the Globe and Mail at

Finally, Heather Mallick takes it all in and asserts that not only is it embarrassing to be a Canadian, but that the root of the problem is the democratic deficit in Canada.