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The Toronto Star
Apr. 25, 2004 |
A suppressed report by the federal
government evaluating the effectiveness of spending $500 million since
the year 2000 to reduce emissions of greenhouse gases has shown -
surprise! - that the spending was largely wasted, producing neither a
reduction in gas emissions, nor the development of new "cleaner"
technologies.
An anonymous source that participated in the mid-term review is quoted
in the Star, saying, "We seriously underestimated the difficulty of
getting reductions and overestimated the payoff from new technologies."
How did the government manage to blow $500 million of taxpayer money?
It put it into "Action Plan 2000," which committed $210 million to
promote technologies that reduced greenhouse gas emissions in industry
and transportation; it gave $125 million to cities to encourage them
to use the non-existent new technologies.
And another $100 million was spent on promoting foreign demand for the
non-existent new technologies.
The lack of value Canadians received for their half-a-billion dollars
should come as a surprise to ... well, nobody.
Governments are notoriously bad at "inspiring" development of new
technologies and encouraging their adoption.
The idea that government can inspire the development of new,
beneficial technologies is an example of "industrial policy," a type
of governmental steering of industrial development thoroughly
discredited outside the halls of Ottawa.
Industrial policy relies on what the Nobel Prize-winning economist
Frederick Hayek called "the fatal conceit," that somehow, government
planners have special knowledge that markets, investors, and industry
lack.
One of our better Canadian examples of the fatal conceit comes from
British Columbia, with a price tag very similar to Action Plan 2000.
In a fit of industrial policy, the B.C. government decided that it had
to shorten the crossing time between Vancouver Island and the mainland,
by building three new, high-tech ferries.
After years of cost overruns, the ferries were a dismal failure, and
B.C. taxpayers wound up soaked for $450 million.
Examples from abroad are even more spectacular.
For decades, the Japanese Ministry of International Trade and Industry
(MITI) was responsible for industrial policy in Japan's high-tech
sector.
Analyses of MITI's performance showed a dismal failure to usher in new
technologies or to create new industrial sectors in electronics,
aircraft, aerospace, and biotechnology.
Worse yet, MITI was shown to have slowed the free-market development
of these sectors when their activities were found to be at odds with
planners' desires.
In 1953, for instance, MITI tried to block Sony from getting into the
transistor business. Fortunately, for those of us who watch television,
Sony managed to get MITI to back off.
A third example of the fatal conceit comes from California, a state
with environmental policies that many Canadian activists want to
emulate.
In 1991, the California Air Resources Board passed a "zero-emission
vehicle" mandate calling for 10 per cent of vehicle sales to be "zero-emission"
(battery electric) by 2003.
At the time, agency planners assured everyone that their initiative
would "force" the creation of new technologies, and millions of
dollars poured into battery research and subsidies for the few people
willing to buy overpriced and underperforming battery-electric cars.
Carmakers, forced to plow more than $1 billion into attempts to please
the planners, failed to develop a market-ready battery electric car.
As money flows into Kyoto-implementation programs, auditors are
finally getting the information they need to show its futility. And
it's not just in Canada.
European Union members are having trouble coming up with emission
reduction plans in the face of escalating cost estimates, and EU
Energy and Transport Commissioner Loyola de Palacio has implied that
the EU may have to reconsider its implementation of the protocol
altogether.
Meanwhile, countries around the world are pointing out that Kyoto
emission targets are simply unattainable.
Norway's greenhouse gas emissions are far above their targets. Spain
and Germany have expressed reservations about being able to meet their
Kyoto targets without economic dislocation.
And despite numerous attempts to bribe Russia into signing the Kyoto
Protocol, Russia has called both the science and economics of Kyoto
into question.
The $500 million that the government has already wasted is only a
taste of things to come unless Prime Minister Paul Martin walks away
from Kyoto.
Canada has already spent or allocated $3.7 billion on climate change
boondoggles of various sorts, and is planning to throw another $1
billion from the sale of Petrocan into the same pit of bad policy.
This is an industrial policy that Canada can do without.
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Dr. Kenneth Green directs the Centre for Studies in Risk, Regulation,
and Environment at the Fraser Institute. He is the author of Global
Warming: Understanding The Debate, a high school textbook recommended
by the U.S. National Science Teachers Association.
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Dr. Kenneth Green
Director, Centre for Studies in Risk, Regulation, and Environment
The Fraser Institute (www.fraserinstitute.ca) - 604-688-0221 | keng@fraserinstitute.ca |
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