Daily Archives: July 24, 2007

Conservatism and environmentalism

This leafy wilderness is getting crowded. Andrew Sullivan’s fully in, it seems.

Of course, to some extent, the environment involves a public good that only the state can regulate… It’s foolish to deny this. What traditional conservatives can uniquely bring, however, is a way of improving environmental policy to embrace more market-friendly structures, and a better appreciation of how the private sector is most likely to come up with new energy sources. There’s a fruitful right-left synthesis here if we can all grow up and find it.

Sullivan’s inspired by this thoughtful essay by the arch-conservative Briton Roger Scruton in The American Conservative, warning about the dangers of leaving the whole field of environmental policy to the nannyish Left. Scruton:

A revival of trusteeship is the only hope for the future, and this attitude is natural to human beings. They enter the world through no choice of their own, to be greeted, as a rule, by the love of parents and the security of home. The trustee is the one who recognizes that his home, and all that it means, are inherited things, things to be safeguarded and passed on. This attitude exercises itself at the local level in the voluntary associations and small institutions of civil society.

This is a lovely passage and I admire and respect the sentiment, though I find it a little too mystical for my sensibility. Nor am I necessarily concerned about large-scale solutions, as long as they’re simple and rules-based. A carbon tax, whatever the implementation problems, is an example of a large-scale policy that requires the clout of a national government to implement properly.

Indeed, emphasizing local responses could be ineffective in dealing with a global problem. I see challenges like climate change as essentially economic, in that polluting the air, for instance, means taking something that doesn’t belong to you — somebody else’s clean air — and using it up.

When you’re making rules governing economic behaviour, the broader the application, the better. They should be few, but strong and applied equally to everybody. Free international trade, buttressed by firm and clear securities laws of wide application, are good examples of broad rules that lay the groundwork for individuals to pursue their own prosperity. If rules on emitting carbon need to be laid atop them, so be it.

In that sense, I do share Scruton’s sense of the central challenge:

The real cause of the environmental problems we face is not so much large private enterprises or the pursuit of profit or even capitalism as such. It is the habit we all have of externalizing our costs. Consider air travel. If somebody offers you cheap flights, you will take them rather than the more expensive flights offered by a company that puts some of its profits into rectifying the environmental damage caused by airplanes. This is human nature: we try to ignore the damage done by our unnecessary journeys by air if someone else bears the cost of them.

But after addressing that central challenge, rather than taking local authorities, and civic institutions and civil society groups to be the next-most important actors, I think it’s up to individuals to adjust. And once they do, however they do it, so be it.

Paying the real full cost for city water

waterfallThe Residential and Civil Construction Association of Ontario advocates spot-market pricing for water:

Harry Kitchen, economics professor at Trent University and author of the report on financing, noted that consumers pay far less for water than what it actually costs. “That’s because, historically, the municipalities have not included asset replacement costs in calculating their water rates. The impact has been an inability to maintain and upgrade these systems.”

Some of the key recommendations in the two reports are metering, full-cost pricing, and greater private-sector participation. With metering, consumers pay for the amount of water they use. This promotes conservation. As well, metering allows the application of variable rates in order to reflect the season of the year or time of day of water use.

Here’s a Toronto Star story on the idea, too.

They’re working from this study (PDF) by Professor Kitchen who’s one of a very few genuine academic experts on municipal finances and talks sense every time I hear him. At length and with due academic rigour, he makes the straightforward point that municipal infrastructure such as water pipes are falling apart because cities don’t charge what their services actually cost.

In Ontario, at least, they’re tantalizing close to doing so. They’re required to use what’s called “full-cost pricing,” but that just means cities have to figure out what their systems cost to run, and make sure those costs are reflected in the water and sewer rates. That sounds right, but in practice, they charge the exact same price 24/7/365, regardless of the capacity strain the system is under, and frequently leaving themselves nothing extra to repair or expand the water system with.

Furthermore, because there’s no discount for using water at off-peak times, people turn on the taps whenever they feel like it, meaning the demand spikes are atrocious. To accommodate them, the water system needs to be overbuilt.

Kitchen and the construction association call for close metering of water use, among other things, with rates that vary with demand and time of year. This is what Ontario’s electricity system is gradually being heaved toward, over quite a bit of opposition from people who don’t want to pay more for power. (They’re usually the ones who really should.)

Variably priced water would also make it a lot easier for municipalities to raise rates to reflect the damage that city water use does by draining local waterways.

Don’t expect anything to happen till it’s crisis time, though. That’s what it took with electricity.

Bloomberg’s congestion charges revived

Duly noted: NYC’s traffic plan first had to crack Albany’s gridlock.

As I read it, this is very, very, very far from a done deal, just a political compromise to meet a deadline to file some paperwork to get some federal funding for the idea, if it actually happens. A key deadlock was between New York Governor Eliot Spitzer, a Democrat, and State Senator Joseph Bruno, a Republican, who, according to the Associated Press, just despise each other:

Although Bruno and Spitzer supported the mayor’s “congestion pricing” concept, negotiations with the skeptical Assembly Democrats never started while Bruno was calling Spitzer a spoiled brat and Spitzer said Bruno chose summer vacation over doing the people’s business. Calls for investigations of each other’s use of state helicopters, Bruno’s claim that Spitzer used state police to spy on him, even Spitzer’s bouncing of a Bruno staffer from a news conference, were part of feuding that became so heated it raised eyebrows beyond New York.

“Now, now boys,” tsked the headline in The Economist of London. “Even by Albany’s standards, their recent feuding has caused new highs, or rather new lows, of dysfunction.”

The Bloomberg plan was just a casualty in the crossfire, before it was bandaged up, given some painkillers and sent back out there to fight another day.

So it’s good the New York City congestion charge hasn’t been killed because this politicking, which had nothing to do with the issue, might have made the city miss an arbitrary deadline set by another government, but again, it’s wrong that that might have happened at all.