Smart and Green

Prices, markets, incentives and fiscal responsibility from Canada's Greens? You better believe it.
Published on October 9, 2005

Once stereotyped as a fringe of Birkenstock-clad doom-and-gloomers ranting about ecological cataclysm and evil corporate polluters, the political face of the Green movement is maturing into a different force. Some of its leaders appreciate the important role wealth creation, markets and incentives play in securing a better environment. They are “smart” and “green” at the same time, and around the world that new sophistication is presenting a real challenge to traditional left-wing parties.

Across Europe the Green Party is an established political force. The German Green Party was the junior partner in the recently defeated coalition government there. On our side of the world, the party’s recently established presence has old-line parties brushing up their green credentials. Although vote-splitting in a system that favours large parties meant it gained no seats in the last election, the Green Party is a major force in British Columbia. It’s the same story at the federal level, where last year the Greens managed to field candidates in all 308 ridings.

To the many jaded observers of Canadian politics who see little difference between the Liberals, Conservatives and the NDP, the Green Party has the potential to shake up the torpor and narrowness in Canada’s political dialogue. In a recent Winnipeg speech, its relatively new national leader, Jim Harris, wowed a policy-savvy crowd with an articulate critique of Manitoba’s naïve policy of underpricing electricity. Invoking markets and prices, Harris described how the old socialist philosophy of subsidizing power was creating environmental havoc by encouraging overconsumption, discouraging intelligent conservation and retarding the development of renewable energy sources like wind and solar.

Harris went on to map out how market prices would stimulate a green energy infrastructure, while allowing room for substantial tax reductions or spending increases. He showed how luxurious and over–the-top federal subsidies like equalization were allowing Manitoba to get away with environmental malfeasance. His analysis struck at the very root of Manitoba’s stale socialist paradigm.

“The NDP has had this historical policy here in this province,” Harris said. “They’ve had lots of opportunity to change it, but have not chosen to do so. It’s been a very conscientious decision to avoid a billion dollars of revenue and remain a ‘have not’ province, to encourage energy inefficiency, to remain the most energy inefficient economy in the world. Those are all conscious choices.”

Such statements should worry Manitoba’s NDP establishment because the party believes it strives hard to be seen carrying the flame of environmental virtue. But the game changes completely for them if this sophisticated critique can successfully link environmental stupidity to a fossilized equalization system that supports Manitoba’s overgrown public sector, the party’s base of support. Especially so since the Greens are perceived to operate in traditional NDP territory, on the left.

Asked to describe what separates his party from the NDP, Harris returned to electricity: “There are a number of differences. First, the Green Party is not afraid of using market mechanisms. I don’t think you’d see many NDPers proposing their use. Typically, they’d say the only solution to any problem like electricity pricing is government intervention or subsidies or so on.… Their blind faith in government intervention would lead them to subsidize people to change or morally exhort them to do something.”

“Look, the strongest policy tool in this particular instance,” he went on, “is having market rates of electricity. That will automatically create demand reduction and then we can use the incremental revenue to create an energy-efficient economy.” Another surprise, which should concern the Liberals and Conservatives, was Harris’s statement that the Greens were fiscal conservatives. They believe in the sanctity of balanced budgets and would lower income taxes and shift other taxes so that activities that harm the environment would pay more. With this, Harris is positioning the Greens to appeal to the Canadian mainstream.

The Manitoba Green Party is still relatively new, with the usual growing pains. But its political visibility can only go up if it combines a small-government, decentralized, grassroots perspective with a sophisticated understanding of market pricing, fiscal responsibility, and the role of wealth creation and technology in improving environmental quality. More difficult, for them, and their provincial and national counterparts, will be the need to downplay its historic environmental alarmism in the face of many improving ecological indicators.

As described in a new Frontier Centre paper, Smart and Green: An Environmental Policy for the 21st Century, quality green policy is about incentives, property rights and eliminating the conflicts of interest that occur when governments wear two hats by trying to regulate themselves as owners of organizations that impact the environment. It is much more likely, for example, that a regulator would have come down faster and harder on Winnipeg’s 2002 sewage-plant spill had the facility been operated by a private company.

The paper discusses the bedrock principles that can bring environmentalism into the political mainstream. They include a healthy respect for markets, prices, incentives and the process of wealth creation. That forward-looking discussion, already somewhat embraced by Canada’s national Green Party, is only beginning. Old-line parties, especially the NDP, should modernize their policy arsenals to make them both smart and green.

Featured News


The Smallwood Solution

The Smallwood Solution

$875,000 for every indigenous man, woman and child living in a rural First Nations community. That is approximately what Canadian taxpayers will have to pay if a report commissioned by the Assembly of First Nations (AFN) is accepted. According to the report 349...

Building a 21st Century Transit System for Calgary

Building a 21st Century Transit System for Calgary

Calgary Transit is mired in the past, building an obsolete transit system designed for an archaic view of a city. Before the pandemic, transit carried 45 percent of downtown Calgary employees to work, but less than 10 percent of workers in the rest of the Calgary...