The Marketplace Is The Answer For A Green Planet...And Tech

Greg Galitzine : Green Blog
Greg Galitzine
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The Marketplace Is The Answer For A Green Planet...And Tech

Forget save-the-planet sentiments and actions like last Saturday's Earth Hour,  and laws, and regulations.

The only way people and organizations will truly go green, and saving the earth and in turn boosting the market for green products and practices is by making them i.e. us pay the full costs i.e. environmental and related healthcare and other expenses for the damage we incur both directly and indirectly and add that to the prices of what we buy. 

And then let the marketplace works its magic to efficiently allocate resources... 

In other words if you want to telecommute from an insulated-up-the tailfeathers townhouse that relies on solar energy for cooling and heating, supplemented by fans and hot-water bottles respectively...and if you want to drive a tank to your office park from a mansion whose A/C is at 60 and the heat at 75...both of which is your right...then you pay accordingly for the Earth you use. What can be fairer, and more effective?

In a letter I recently wrote to a top Metro Vancouver, B.C.  planning official I explored 'full cost analysis' (FCA) to enable such a pricing system for transportation, land use and municipal services. I cited evidence such as:

(a) The Canadian Medical Association report, No Breathing Room: National Illness Costs of Air Pollution which reports that the economic costs of air pollution in 2008 will top $8 billion. By 2031, they will have accumulated to over $250 billion. Vehicle emissions account for 1/3 that

(b)  A Smartrisk report that says almost 3,000 people die and another 200,000 are injured every year in road crashes in Canada. Transportation injuries (chiefly motor vehicle accidents) cost $3.7 billion directly and indirectly in 2004

(c)  The David Suzuki Foundation estimates that the impacts in erosion, loss of wildlife habitat, and degraded water quality when such land is paved over range per hectare/year from $12,000 for farmland to $30,000 for wetland

(d) The C.D. Howe Institute calculation that development costs over the next 25 years in the Greater Toronto Area (road, sewer, water networks) under sprawl would reach $55 billion, plus $14 billion in operating expenditures whereas with compact development the same pricetag is: $42.8 billion (or 22 percent less)

(e)  Fiscal Cost of Sprawl: How Sprawl Contributes to Local Governments' Budget Woes, by Environment Colorado Research and Policy Center, research by Colorado State University, published 2003 calculated that for $1 in revenues from sprawl, $1.65 is spent in service expenditures 

These costs are not assigned, I said, which distorts commercial and residential real estate markets and municipal finances. If they were, builders and buyers would develop and locate smarter and municipalities would not have to 'outsprawl' each other in trying to attract commercial development especially.

I suggested that Metro Vancouver undertake a study into applying FCA. Here are some suggestions that I had presented:

(a)  Employer and college/post-secondary institution user-taxes based on the size of footprint i.e. land and transportation mode choice of employees and students, with allowance for brownfield i.e. existing serviced excluding just-built [past 15 years, to reflect commercial payback periods] /build-to-suit properties on formerly open space. 

In this transportation mode costs would be assigned on the basis of the average capital, upkeep and impact cost of each mode used by employees/students either actual (X per km [miles] multiplied by number of kms [miles] commuted) or the average distance commuted by each mode in the municipalities the businesses or schools located in.

In exchange for this shift to a user-pay system commercial taxes would be reduced. Employers and schools would be incentivized to locate on high-transit-frequency routes, employ telework, densify and stay in and make better use of present buildings. The dividend is cleaner air, less traffic, fewer accidents, more open space and lower total costs to businesses and schools, enabling them to be more competitive and to offer more.

(b) 'Service fees' imposed on new build/just-built commercial and residential property based on their initial and ongoing direct and indirect environmental and services costs and gradually extended to existing properties. In other words treat land user like other service: sewer/water and garbage. Garbage fees should rise to reflect the total environmental (including transportation and their related costs) of handling it. 

In exchange residential property taxes would be lowered and business taxes cut. The net effect would be increased densification and brownfield redevelopment. More retail businesses would be attracted to downtowns and town centres while existing retail space and industrial lands would be redeveloped. There would be a shift to apartments and townhouses both owner-and tenant-occupied. Going to a user-pay system will result in keeping more money in the pockets of owners.

Yes, businesses, and influential groups and citizens will squawk with a marketplace-based full cost approach, citing all matter of damage to their livelihoods. Tough. Why should the rest of us subsidize your enterprise and your practices and your lifestyle on our dime? If you can't afford to do it, change, live without or go kaput. No one forced you to go into business or use those methods or select the housing, appliances and transportation methods that you've used. 

Yet the absence of the full-cost approach has forced others to follow suit, such as by making publicly-subsidized sprawl and car use the dominant housing and mobility means, and landfilling and dumping rather than recycling the chief means of handling waste.

It will take courage to go full-cost. Yet in view of increasing environmental costs, healthcare expenses and climate change we don't have an alternative if we are to survive as a species.

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