Dealing with Climate Change “Losers.”

The Windsor Star, July 15, 2014.

Full text:

How can politicians move climate policy forward?  “Dealing with losers” is a big part of the answer.

Last month, Stephen Harper joined the other G7 leaders in calling for “urgent and concrete action” to address climate change. We should expect our Prime Minister to take climate change seriously, because it’s probably the gravest long-term threat to Canada’s security and prosperity. Here in Windsor, heat waves and declining water levels are among the serious problems partially attributable to global warming.
President Barack Obama has mandated significant reductions from the leading sources of greenhouse gas emissions in his country. Will Prime Minister Harper be able to do likewise with Canada’s oil and gas sector, and with consumers’ transportation and home energy emissions?

A new book from Professor Michael Trebilcock, of the University of Toronto, can help our Prime Minister do so.  In Dealing with Losers: the Political Economy of Policy Transitions, Trebilcock shows that even the wisest policy changes create “losers.”  The key message of the book is that leaders must mitigate the opposition of those who stand to lose from policy change. Trebilcock proves this with examples from fields like public pension reform and agricultural supply management, in addition to carbon pollution control.

“Dealing with losers” is often the right thing to do, if for example they innocently made investments in reliance on the pre-reform status quo.  Dealing with losers is also politically essential in democracies, because these groups often have the power to derail progressive reform.
Next generation climate policy will create two kinds of “loser” in Canada.  First, significant costs will be faced by the oil and gas sector, which is responsible for 25 per cent of the country’s emissions.  Second, most Canadians use fossil fuels to travel and to heat and cool their homes. Carbon pollution control will make these fuels somewhat more expensive.

Trebilcock’s new book offers several ideas for Stephen Harper, or any other leader who wants to move climate policy forward without being kicked out of office by angry “losers.”
1. Phase in the change. 

Carbon pollution control measures can be introduced gradually, with a timetable which brings us to our target as soon as possible. Of course, we must get started as soon as possible if we are to phase in and still hit our targets in time.

2. Compensate the losers.

Auctions of emission permits or a carbon tax would create new government revenues. Funds could be transferred to the provinces in proportion to the economic impact of the measures. This might help bring the provincial governments on-side as supporters of carbon pollution control.

 Ottawa could also cut federal income taxes, compensating Canadians for higher fossil fuel expenses. B.C.’s Liberals took this approach with their 2008 carbon tax. They have since reduced greenhouse gas emissions by 17.4 per cent, while outperforming the national average for economic growth, and winning re-election twice.
3.  Show the losers that they are winners too.

Canadians have a great deal to gain from carbon pollution control.  There is still time to prevent many of the catastrophic storms, droughts, and heat waves which climate change threatens. There is still time to prevent the damage to our children’s prospects, and to the people of the global south who stand to lose the most from climate change.

Why don’t these opportunities create more public demand for carbon pollution control?  Most Canadians don’t yet see climate change as serious enough to merit pocketbook sacrifices.  People tend to underestimate phenomena which they can’t connect to personal experience.

Policy leaders need to show how climate change is already contributing to lethal, destructive weather events.  The next time Windsor or another Canadian community experiences catastrophic warming-related weather, the Prime Minister should use the opportunity to tell us how carbon pollution control offers a long-term win for all of us.

Michael Trebilcock’s Dealing with Losers is an important book for any policy leader who takes responsibility for administering tough medicine in a democracy.  We should all hope that, when it comes to climate change policy, Stephen Harper is this kind of leader.

Noel Semple is a member of the University of Windsor’s Faculty of Law