Tools For Change - January 2008

INSTRUMENTS FOR CHANGE - AN INTERVIEW WITH DR. JOHN NYBOER OF SIMON FRASER UNIVERSITY

December 18, 2007

Dr. John Nyboer is a research associate and adjunct professor in the School of Resource and Environmental Management at Simon Fraser University (SFU).  He has 17 years of experience in energy modeling, policy and analysis and issues related to greenhouse gas emissions, and he's played an integral role in developing end-use models of energy demand in all sectors across Canada.  John has undergraduate degrees in biology from the University of Alberta and education from the University of Toronto and has Masters and PhD degrees in natural resource management from Simon Fraser University. 

Simon - John, what do we need to do in Canada to motivate large-scale societal change on the issue of climate change and greenhouse gas emissions?

John - I think primarily what one has to do is to associate some sort of a value to the carbon that we're emitting, and that value then gives it an impetus to do something.  By using the word value, I'm suggesting there be a price associated with the carbon emissions or at least greenhouse gas emissions.  So that would be the primary approach.  There are other approaches, but they tend to be less compulsory in their response from consumers.  And if you really believe that climate change is an issue that needs to be addressed, we can't just wait for the consumer to respond voluntarily.  We have to push them in a direction that would require a much stronger response.

Simon - Could you provide some examples of how you would put value to carbon?

John - The easiest way is to simply say there is going to be a charge for emitting into the atmosphere.  Currently, we see the atmosphere as a free waste receptacle for our carbon or GHG emissions.  There is no charge for emitting into the atmosphere, even though there is very likely a cost associated with it.  To have people actually represent that cost in their calculations of how they would use carbon fuels, for example, or use a process that emits other greenhouse gases (GHG), you would fix a price to it that would focus people on ways to not emit that GHG. 

Simon - What would these tools look like?

John - The simplest one, in terms of efficiency and effectiveness, would be to affix a price, or a tax, to carbon.  An alternative would be to set up a market that recognizes there's only so much carbon we're allowed to emit and then you have to buy the right to emit that amount of carbon.  That would be a cap-and-trade approach, where there would be a cap on the amount of carbon you could release and trading, at a cost, to release more than that amount.

Simon - Can you give some examples of where this has been successfully used in Canada or around the world?

John - There are a number of European countries like Norway, Sweden, Germany and Denmark where carbon taxes have been imposed, and there have been some positive impacts in terms of emissions levels.  Now, one cannot always associate a particular tax with how it affects the economics of a country, and the taxes tend to be relatively small.  In Germany, one gentleman suggested it was more like a wart on the butt of the economic system and so it may not have a huge impact.  But unless there is a price associated with carbon emissions, there could be no response to its reductions.  So in these countries, we actually do see significant reductions in carbon-based GHG emissions.

Simon - Would associating these costs with carbon be the same for individuals, companies and communities?

John - In different situations, you might find different tools working.  In building construction, for example, regulations - such as a requirement for zero-emission buildings - might be more effective than a price on carbon.  At the same time, the higher operating costs of an (energy-inefficient) building would be less attractive to buyers, and so the contractor would be very inspired to build emissions-free buildings in the first place.

Simon - If the government was unwilling to regulate, what other tools would be available to create change?

John - There are a number of tools one can use besides regulation, though some might consider the imposition of a carbon price to be regulation.  For example, you could say to the people of Alberta that if you don't reduce your emissions a year, or five years, from now, we're going to start charging you for it.  If you give them enough time to reduce their emissions, there could be little impact on their bottom line and still meet the criteria that by, say, 2050, we have to be down by 75 per cent of what we emit today.

Simon - What do you think is the relative importance of energy efficiency within carbon reduction efforts?

John - I'm a firm believer in there being a huge potential to reduce emissions because we become more efficient with our processes.  But it's always difficult to use a goal of energy efficiency to help solve a goal of reducing emissions.  While there is a strong relationship between energy consumption and CO₂ emissions, it is also quite possible to need more, rather than less, energy to reduce greenhouse emissions.  I'm thinking here of things like carbon sequestration.  So while energy efficiency plays a significant role, it is not going to be a sufficient role.

Simon - Could you expand on what you mean that energy efficiency is not sufficient to help meet emission-reduction goals?

John - We are consuming ever increasing amounts of energy for things like heating, lighting, cooking and refrigeration. That demand for energy is happening around the world because huge portions of the population do not yet have what we have.  So that, in spite of a significant increase in the efficiency of producing goods, overall energy demand will continue to increase.  Therefore, we have to find some alternatives that will help us reduce the amount of emissions generated from the production and consumption of that energy.  So, for example, we need a strong focus on renewable energy of all sorts that is not GHG intense - such as wind and wave power, biomass, geothermal and even nuclear, if you're inclined in that direction.  Another route would be to significantly change processes to those that are the least energy-intense methods of producing goods.  With most companies today, the focus is on the bottom line, even if it means consuming more energy to produce the good because they're saving more on labour or the cost of materials.

Simon - We've talked a lot about what we can do on a large scale, but what can the average Albertan do?

John - There are lots of opportunities for the average Albertan to reduce GHG emissions in his or her lifestyle - anything from better insulating their homes to buying smaller vehicles to traveling less.  The biggest issue for most people, I think is to realize these things do not come for free.  The motivation that has a person buy an efficient fridge may not be the same motivation that prevents him from using energy in other forms.  It's very difficult to reduce energy consumption on an item by item basis.  So perhaps the biggest thing average Albertans could do is to insist the government place a value on carbon emissions.  This way, they would be constantly reminded that they have to be carbon sensitive in their daily choices because they would have to pay every time they weren't.

Simon - What do you think about using incentives as opposed to imposing taxes or setting levies?

John - Incentives are hard to analyze, because it is very difficult to determine the degree to which the incentive actually bore fruit or not.  We've done reviews where incentives have been given for such things as (compact fluorescent) light bulbs.  We found that some people would purchase light bulbs once they were offered an incentive, but there were huge numbers that would have purchased these bulbs whether you provided an incentive or not.  We call these people free riders, because they in essence receive money for doing something they would have done without the incentive.  So in a sense, the incentive you give to these people is lost money and not effective in reducing emissions or improving energy efficiencies.  It's very difficult to ascertain how much that free ridership might be, but we tend to find those programs and policies poor in terms of their net gain in emissions reductions or efficiency improvements.

Simon - How big a role does educating the public, business leaders and communities play?

John - Education is important to the extent that people at least know what the issues are.  Their response to those issues, though, still often depends on how they act at the moment when they are making a decision to buy a new appliance, automobile or home.  For example, we all know that we should drive slowly in school zones.  If it was simply a matter of information, all we'd need to do is post a sign that you are approaching a school zone and you'd automatically slow down.  Yet we find that's inadequate, and we need to institute laws and fines and court appearances to enforce this thing, which we all should know because we're educated.  The same thing goes for cigarette smoking.  So, while education is important in informing people, unless it is supported by policies that invoke some sort of cost or value, they tend to wind up not being very effective.