Canada

Notes from north of 49ºN

Update 4 August:: Video on Jack Layton from MSNBC-below.

Jack Layton is the leader of the New Democratic Party of Canada whose riding is the next one over from me, Toronto-Danforth.  Over on the Huffington Post, Jack did a post on the realities of the Canadian health care system.

I have a lot of strong views on health care in the US based on my work in non-profit health and my research on the biotech industry.  It’s worth mentioning that today’s US health care system began as employer perquisites {benefits}, back when health care and pharmaceuticals were cheap.  The private insurance model starts to break down when costs escalate resulting in employers and employees getting squeezed and uninsured rates rising.  Some say a perfect storm of events {recession, rising costs, uninsured rate of 19%, and Obama} is leading to a tipping point in health care.  It should be noted that the US will not adopt a health care system like Canada’s, where the government {provinces} provide health care, but rather a system where the government finances health care delivered by private enterprise.

On the The Huffington Post, Jack makes some compelling points, whether you agree with his politics or not::

“Costs are under control in Canada. We spend similar amounts on public care – around 7% of GDP. For that price, Canada covers everyone, the U.S. just one third of the population. In case you’re worried Canada wastes money on bureaucracy, know that just 2.4% of our total costs go to administration compared to 7% of what your government spends. In end, Canadian care costs $2,500 less per capita – and covers everyone.”

He points out that the system isn’t perfect::

“Our system does have flaws. We need better prescription drug coverage, better remote access to care and better practices in hospitals and clinics. No honest advocate for our health care system would dismiss these things. But Canadian health care works — and works well.”

Does all this mean that the United States should adopt Canada’s health care system?…No. America can no more adopt our health care system than we can swap hockey for baseball as our national pastime. A good health care system reflects a country’s values, and each country’s values are different…But a system with 47 million uninsured, coverage denied due to pre-existing conditions and people thrown off plans when they become ill? That doesn’t reflect American values.”

Unfortunately, there are other competing values in play in the US, making healthcare a contentious issue.  It’s not a simple matter of costs and taxes, but one that also affects innovation and entrepreneurship.  Biotechnology is predicated upon using the human genome to better match diseases, patients, and therapies.  “Pre-existing conditions” and genetic skeletons in one’s closet can thwart innovation in biotech because it adds additional business risk.  If insurance refuses to pay, where are the revenues?

One question on my mind and one I pose to my students, is healthcare a public infrastructure or should it be treated strictly as a business?  The Canadian model is one where the state is the financier and provider, where the provinces oversee a large, integrated health infrastructure.  As stated above, a new US healthcare model is unlikely to be this comprehensive, instead focusing in financing.  The current US model uses market mechanisms heavily, where healthcare delivery, insurance, and pharmaceuticals all having a dog in the healthcare reform fight.  Altering the landscape through healthcare reform will alter business models and likely create windfall gains and losses.  On the other hand, we have that perfect storm of recession, rising costs, uninsured rate of 19%, and Obama.  Another implication of the current model, where healthcare is an employment benefit, is that it limits new business creation, i.e., creates “entrepreneurship lock.”  A recent working paper supports this reasoning::

“Overall we find some evidence that the U.S. emphasis on employer-provided health insurance may be limiting entrepreneurship.  The clearest evidence comes from the regression discontinuity results which create the most comparability in experimental and controls groups.  The finding of ‘entrepreneurship lock’ is important as it suggests that the bundling of health insurance and employment may create an inefficient allocation of which or when workers start businesses.”

Healthcare can also has an affect on the arts in the US in same fashion, necessitating that creatives take on dayjobs with health benefits.  One artist once told me that money {or lower costs} means the freedom to create.  The current system does precious little to create incentives for cash-strapped entrepreneurs and creatives to innovate and create.  Does this matter?  I think it does in terms of sustainable economic growth and treating healthcare as a publicly financed infrastructure, i.e., a social good, paid with {gasp} taxpayer dollars makes more sense than the current system, but the devil’s in the details and good implementation is critical in order for a new system to be successful.  That said, these challenges shouldn’t be reasons not to do it.
Video:: Jack Layton on MSNBC’s The Ed Show, NDP Blog via Twitter

Link

Twitterversion:: Jack Layton of #NDP clarifies healthcare in #Canada. Should healthcare be infrastructure? Implications for innovation & entrepreneurship. #ThickCulture @Prof_K

Song::  Planet Health – Chairlift {Brooklyn, NY of iPod Nano fame}

In California, identity politics is a way of life.  Ask Pete Wilson, ex-Governor of California on how Latino politics can derail a career, as detailed in a LA Times magazine article from 2004.  The same article highlights Republican concerns with shifting demographics::

“Many Republicans view the mushrooming Latino voter rolls in the same way a person looks at a growing mole: One hopes it’s benign but fears for the worst.”

Unlike in California where immigration is resulting in dramatic demographic shifts, here in Canada, a hot-button issue is Québec separatism that stems from centuries-old disputes.  The province of Québec has a distinct francophone culture when compared to the rest of predominantly anglophone Canada and this cultural divide naturally affects politics at both the provincial and federal levels.

Currently, at the federal level, Canada {with a variation of the Westminster parliamentary system} has a minority government {plurality of parliamentary seats} with Conservative Stephen Harper as Prime Minister.  Minority governments tend to be unstable.  Indicative of this, the Conservatives had a scare last December when Stephen Harper angered the other parties, bringing the country to the brink of Constitutional crisis.  Recent polls in Canada showed that about half of the voters wanted a more stable majority government, where one party has a majority of the seats.  Moreover, recent polls indicated that support for the Conservatives is dwindling, likely leading to a situation where the Conservatives and Liberals have close to the same number of seats, further deadlocking Parliament.  An article a week and a half ago by the Montréal Gazette brought up a controversial argument::

The 2008 federal results in Québec saw BQ making a strong showing with 49 ridings {seats} of 75 in Québec and 308 in Canada. The map below shows Bloc in light blue, Conservatives (PC) in dark blue, Liberals (LP) in Red, and New Democrats (NDP) in orange. The Bloc is strong throughout the province, while the Conservatives have support in a few rural areas, and the Liberals and NDP have appeal in or near the cities of Montréal and Ottawa.

“It’s the same good old Liberal Party of Canada that wants to put Québec in its place.”

–Pierre Paquette, Bloc MP Joliette

“It shows that he’s not only been out of Canada for 35 years, he’s never known anything about Québec except what he learned at Upper Canada College and, frankly, I’m not afraid of him a bit.”

–Thomas Mulcair, NDP MP Outremont

Song:: Tricot Machine -L’Ours {Montréal, QC}

Notes from North of 49ºN

I’ve been thinking more and more about the concept of nation, of late.  In summers past, the 4th. of July, Independence Day in the United States, meant being in northern California and perhaps heading to Point Reyes and seeing the tug-of-war between Bolinas and Stinson Beach.  The past three years, I have observed Canada Day, celebrating when Nova Scotia, New Brunswick, Québec, and Ontario became a federation, a dominion with ties to the UK.  Two adjacent countries, which appear to have similarities, but have key differences.  Population is one differentiator. At confederation in 1867, the US population was around over 10 times that of Canada, 38,558,371 to 3,625,000 {1870}.  The twentieth century would see the rise of American dominance, not only in terms of economics, but also in terms of media and culture.

American culture is readily evident in Canada.  On television and in major cities like Toronto, with the prevalence of brands like Starbuck’s, McDonald’s, and Subway.  A quick scan of the TV listings shows how popular US television content is in anglophone Canada.  Canada is aware of this and requires broadcasters to show Canadian content {Can con}.  The CBC, the Canadian national public broadcaster, is a flagship network of the nation, where, through its mandate, the network’s goal is to be a cultural touchstone for the nation.  I’ve blogged about the future of the CBC television on this post:: Will Globalization Kill or Make the CBC Relevant Again?, which touches on how the CBC is struggling to remain viable and relevant in the shadow of big media players in the United States and fending off challengers within Canada.  Unlike the BBC, Britain’s national broadcaster, which is funded through household television licences, the CBC gets funding from the government, but also is subject to market forces through selling ad time, both sources being historically uneven.

The question I have is whether the role of a national broadcaster is even important.  I don’t see the United States as having the equivalent of the CBC, let alone the BBC.  PBS and NPR are, in my opinion, a loose confederation of programming, as opposed to a network with a strong identity, let alone an entity fostering a conceptualization of the United States as a culture or a nation.

The ideas of Arjun Appadurai and Benedict Anderson come to mind.  Appadurai speaks of globalization in terms of flows.  Flows of finance, ideologies, technologies, people and media, each with the suffix scapes.  Mediascapes have two components::

1. The flows of capacity to produce and disseminate electronic information
2. The images of the world created by these media

Benedict Anderson’s Imagined Communities discusses nation as an abstract entity, where meaning is shared within and the mass media address its citizens as a public.

Borders are often permeable under globalization and Canada has seen flows of media flood across its southern border, but what has this done to Canadians’ notion of nation?  Can Canadian content policy and the CBC help to reinforce the imagined community of Canada?  Does nation even matter?  Is Canada to Canadians “our home and disparate land,” as stated in today’s Vancouver Sun?  What about shared Canadian experiences such as Hinterland’s Who’s Who::

I think we need to remember that the context here is capitalism.  Media is flowing, media full of American meanings and ideals, as entertainment content to generate revenues.  In light of this onslaught, I think it is important for Canada to preserve its identity by creating content that increases Canadian cultural knowledge and awareness.  Why?  Without a national identity, i.e., an imagined community of Canada, meaning becomes increasingly derived from imagined communities of brands.  If our Diderot unities reduce to the constellation of brands we surround ourselves with, can we be citizens or are we just consumers?

I think nation does and should matter.  In Benedict Anderson’s words, nation::

“…is imagined as a community, because, regardless of the inequality of that may prevail in each, the nation is always conceived as a deep. horizontal kinship.”–p.7

Song:: Dreamer – Jenn Grant {Halifax, NS}

Video Extra:: jPod clips of “Cowboy” aired on CBC, Winter 2008.

Twitterversion:: #Canada, national identity, & #Media. Globalization blurs borders, but does #nation matter? #Appadurai #BenedictAnderson http://url.ie/1xu6 @Prof_K

Notes from North of 49ºN

It’s not often I agree with Tom Friedman, but last fall when I was preoccupied with the US general election, teaching, and associate directing a center, he was advocating not just a bailout, but a green buildup.  He quoted Van Jones, author of The Green Collar Economy::

“It’s time to stop borrowing and start building. America’s No. 1 resource is not oil or mortgages. Our No. 1 resource is our people. Let’s put people back to work — retrofitting and repowering America. … You can’t base a national economy on credit cards. But you can base it on solar panels, wind turbines, smart biofuels and a massive program to weatherize every building and home in America.”

Friedman was in favour of attaching green strings to bailouts, an idea I think warranted further study, at the very least.  Fast forward 9 months and focus on the province of Ontario, where at the federal level, the Conservatives {Stephen Harper}, and at the provincial level, the Liberals {Dalton McGuinty}, jumped on the US bailout bandwagon to a tune of $9.5B or $10.9B Canadian.  This is in addition to the Obama administration’s $49.8B.  The combined US and Canadian bailouts are worth 130 times the present value of GM.  Here’s what both Harper and McGuinty had to say about this::

“We had to save it all or have zero forever,”

–Stephen Harper, Prime Minister of Canada

“The alternative would have been a devastating blow to Ontario families and communities.”

–Dalton McGuinty, Ontario Premiere

The troubles in the industry are not new news and CBC has a chronology of layoffs.  I’ve alluded to this bailout before and the scant jobs it will save, but here are the specifics in terms of the Canadian GM assembly line::

“At present GM Canada has 12,000 hourly and salaried employees, but that number is expected to shrink to about 5,500 over the next couple of years. About 1,100 of the new total is expected to be salaried jobs, which are unrelated to assembly operations. That means Ottawa and the Ontario government are together spending an unprecedented $2.1 million for each assembly job at GM Canada they hope to save.”–Time, 1 June 2009

It’s likely that GM suppliers will also be affected, a $7.2B industry employing 45,000 workers, but it is unlikely that all these jobs are at risk.  While Canada accounts for about 19.4% of North American production, Canadian cost advantages have been eroded by a stronger Canadian dollar, a weakened US union in the UAW, and strong and strategic bargaining by the Canadian Auto Workers union.

While the situation looks gloomy for manufacturing in Ontario, quite a few are banking on green jobs.  So much so that St. Clair College has a 2-year green jobs programme and the province has a commitment to clean energy.  Currently, the province gets 25% of its electricity from coal, but wants to shut down all of its coal plants by 2014.  The province is hoping to convert some of the plants to carbon-neutral biomass, although the yields will be lower.  The slack will need to be picked up by alternatives, with greener options being wind and solar.  Ontario’s Climate Change Action Plan calls for greenhouse gas emission reduction to 6% under 1990 levels and the new Green Energy Act is meant to protect the environment, regulate, and spur investment in green technologies.

Policy & Innovation:: The California Example

The PPIC has a report on the effects of California’s Zero-Emissions Vehicle {ZEV} mandate, particularly in the 1990s and early 2000s.  During this time, the California government, through the Air Resources Board {CARB} initially set in 1990 requirements that by 1998 that 2% and by 2003 that 10% vehicles sold in California would be ZEV.  Suffice it to say, concessions were made over time, but the original mandate set the wheels in motion for innovation.  The effects of the program were::

• The policy spurred patents in near-term technologies
• CARB arguably responded to technological changes when revising the program
• Technological spillovers resulted in a greater number of indirect  innovations
• Increased market development for emerging technologies
• Broadened design parameters
• Lower emissions in California

The program, albeit complex and not without politics and controversy, shows how policy can help to shape market-based activity in ways that would not occur otherwise.

Ontario:: Good Money After Bad

While not surprising, Canada and Ontario should have considered asserting themselves more, rather than caving to bailout pressure.  Why not move forward to develop policies that help transition away from declining industries and in-line with over provincial objectives?, e.g., environmental and energy.  How I see it is that the US and Canada are bailing out a company the capital markets have little faith in and now face the daunting task of rebuilding with a new CEO, “Big Ed,” who has a reputation for being an empire-builder.  I question having an empire-builder in charge of a company needing to be leaner, a company needing to reinvent itself overnight.  Let’s hope he indeed  “learns something about cars,” and doesn’t make mistakes like this one, the old CEO Rick Wagoner copped to:: “axing the EV1 electric-car program and not putting the right resources into hybrids. It didn’t affect profitability, but it did affect image.”

While there have been debates on whether or not the US needs an auto industry {NY Times} and criticisms abound, such as this one on how GM betrayed our trust, Canada is nevertheless a 12% equity shareholder.  This creation of a capitalist-state joint venture opens up a huge can of worms, as which interests will prevail and how to balance autonomous management and control versus paternalism?  I think the answers are in economic sociology, a topic for a future post.

Song:: “Canada” – Low

Video::

Twitterversion:: #Canada #bailout of #GMfail =more #fail ? Can #Ontario still dvel #greeneconomy & innov.w/enviro&energy policy objctves? http://url.ie/1wdt  @Prof_K

Crossposting:: An abridged, less sociology-heavy version is here.

Notes from north of 49ºN.

Social capital is nothing new to ThickCulture, with quite a few posts on the topic, including this one by José, Trust is for Suckers.  When I teach sociology, I draw heavily on Pierre Bourdieu and have the class get a sense of how different forms of capital interact.  Cultural capital has always interested me {here’s a great overview of it by Weininger & Lareau}, despite going crazy trying to explain graphs like these::

I’ve used this very graph, but I’ve always wanted a way to engage students in a discussion of cultural capital that they could relate to.  So, I was catching up on Macleans reading and found articles on Canada’s smartest cities. It brings up an interesting question of how learning capacity affects the local economic development. The Composite Learning Index, using ideas developed by UNESCO, gauges a city’s ability to foster lifelong learning::

Twitterversion:: #newblogpost Hey Canada…How smart is your town? @macleansmag article on Composite Learning Index popularizing sociology? http://url.ie/1qkn  @Prof_K

Song:: Town Called Malice – The Jam

Video::

Notes from north of 49ºN.

I now live in a relatively small country, ranked 36th. in population, at 33.7M {versus 306.7M in the US}, but in the top 10 in terms of economies with a GDP of $1.3T {#9 ranking}, versus 13.8T for the US {#1 ranking}.  I mention this, as I wonder about scale and innovation, i.e., can smaller countries effectively compete in technology in a global environment?  One of my interests in innovation is biotechnology, a “new economy” area focusing on better outcomes for “health, the environment, and for industrial, agricultural and energy production.”  Advances in genetics are creating a race for companies and countries, with the idea of dominating the biotech field in order to enjoying profits and prosperity.

Last summer, I saw on a Canadian network a segment on how Canadian government investments in biotech were getting bought up by US firms, implying that the relatively small Canadian government was, in part, subsidizing innovations flowing south of the border.  The Matthew effect kicks in, as rich get richer and the poor get poorer, given that Canadian firms were being snapped up by US firms with deep pockets, transferring value southward.  According to a Globe & Mail article {click on license option}, another issue is that Canadian venture capital is lacking, so Canadian biotech firms often are capitalized by US venture capital firms that like to keep close tabs on operations and encourage offices/operations in the US.

Well, is Canada even a player in this biotech area?

According to 2006 OECD data, Canada is a player in terms of the number of firms {532}, the number of patents {ranked #6 in 2004}, and revenues {$83M}, along with an 11% compound annual growth rate {CAGR} of revenues from 1999-2005.

Given how collaboration and capital are now global, does it even matter where innovations are incubated?  A study by Bagchi-Sen & Scully {2004} is illuminating.  They divide biotech forms into two categories:: high R&D intensity and low R&D intensity.  Each has a different take with respect to strategies within the context of globalization::

• High R&D Intensity:: Ties to local universities/Canadian researchers & collaboration with pharmaceutical companies, but desire global capital inflows.  Prototypical firm is in health theraputics.
• Low R&D Intensity:: Emphasis on local production and development of Canadian market.  Focus on strategic alliances with foreign firms.  Prototypical firm is in diagnostics or agricultural biotech.

In terms of innovation policy, this brings up interesting food for thought for Canadian politicians in light of this recession.  Thanks to Barack Obama, Canada’s large neighbour to the south is pumping $21.5B of stimulus towards science and technology, which begs the question, how will this affect Canada?

It makes sense that Canadian policy would encourage the projects of low-intensity R&D firms with ties to the US, as these firms:: may be able to capitalize on relationships with stimulus-receiving firms, will develop innovations for the Canadian market, and will be focused on local Canadian production and manufacturing.  The high-intensity R&D firms could use funding {hint:: even more than $1B+CAN stimulus} that focuses on spurring innovations and the building of a sustainable base of Canadian talent and resources.  Dalton McGuinty’s {Liberal Premiere} efforts in Ontario might be a step in the right direction, but I’m not seeing clearly how this all fits together with an economic recovery plan.  Biotech. is not without risks, particularly with respect to agricultural biotech, which consumers are uncertain of.  Activists have alerted consumers with terms like “Frankenfood” for genetically-modified organisms {GMOs} and Monsanto’s lawsuits against journalists and farmers don’t help the cause.  So, maybe ag. biotech is a lose, but developing Canadian competitive advantage in innovations, in terms of other forms of biotech, nanotechnologies, clean energy, and green collar jobs, may provide fertile terrain for politicians and policymakers.

Well, enough of this talk of the “new economy” of biotech and innovations, what about the old economy, still prevalent in many parts of Canada?  Globalization has drawn Stephen Harper’s {Prime Minister} Conservative government into bailout fever to the tune of $9.5B, in order to secure that 16% of GM’s production remains in Canada.  This includes $3.1B that the Province of Ontario ponied up by Dalton McGuinty’s government.  Unfortunately, this might only save 4,400 jobs, after projected layoffs, according to CBC::

Given how the Tories and the Grits have played their cards in this {along with playing a current game of Federal “chicken”}, I see an opportunity for the NDP to make inroads with their platform based on developing new technologies and saving jobs.  Alas, more on “GMfail” and job losses in Canada in a future post.

So, it looks like nation matters, but in a global milieu.  Nothing surprising.  If you were to advise Canadian politicians, should new technologies {e.g., biotech, green, energy} be developed more aggressively {or at least explored} and does it make sense to commit billions to save jobs with an untested GM restructuring?

Twitterversion:: #newblogpost How should Canada compete {bio}tech, given globalzatn, US domnce, & recession? #GMfail bailout, good idea? http://bit.ly/18bBq8 @Prof_K

Song:: Genetic Engineering – Orchestral Manoeuvres In The Dark

Video::

Notes from north of 49ºN

I remember how my parents said that RFK was accused of being a carpetbagger, coming to New York to become a US Senator in 1964.  Now that Stephen Harper, Prime Minister of Canada, finds his Conservative Party down in the polls by 5% {35-30%}, attack ads are being run tantamount to accusing the Liberal Party leader, Michael Ignatieff, of being a Canadian “outsider.”  The ads accuse Ignatieff of coming back to Canada after being gone for 34 years::

The Conservatives are really slipping in the polls in Québec, so you think they would come up with a more engaging attack ad than this one in French.

This one paints Ignatieff as a carpetbagging opportunist, living in the UK and referring to himself as American::

The Liberals may be further undermined by attacks from the Bloc Québécois in Québec, which has 24% of the population in Canada.  Support for the Bloc is upwards of 40% in Québec, while Liberal support in the province is around 35%.

I find the anglophone ads to be rather effective at conveying the frame of Ignatieff as a elitist outsider.  I agree with the pundits that Harper is fighting for his political life and managed to get into a feud with Brian Mulroney, a conservative blast from the past.  Conservatism seems to be lacking cohesiveness on both sides of 49ºN.

While another Federal election is unlikely in the near term, it’s likely to pressure uneasy alliances between the Conservatives, the Bloc, and even the left-leaning NDP {read:: concessions by Harper?}.

HatTip:: LinnyQat

Twitterversion:: Harper {Tories} attcks Ignatieff {Grits} on nationalism frame. H. fighting 4 political life, Grits gaining. Strange bedfellows in store?

Song:: Jay-Z “Takeover”

Takeover – Jay-Z

It was May Day here in Ontario.  I just Tweeted about a program I saw on TVO with socialism as a theme with Ontario NDP leader, Andrea Horwath, and political scientist at York University, Leo Panitch.

The discussions were interesting, but what really stuck with me was whether or not good politicians follow the votes or get the electorate to see things differently.  For example, given the anti-corporate climate, will politicians pander to where they think the electorate is or will they try to shape thinking about the economy?

Sell the sizzle, not the steak

In a shameless attempt to drive more pageviews, I included a pic. and cartoon of Ségolène Royal {Ségolène is a ThickCulture crowd-pleaser, according to our Google Analytics}, a French socialist {Parti Socialiste, PS} centre-left politician who ran for President in 2007 {losing to Sarkozy} and may run in 2012.    Say what you will about Ségolène, she manages to capture attention.  She has been known to have a quirky, evangelical style and has been accused by some as having a Joan of Arc complex.  Well, this sounds familiar (see Glenn Beck video from last fall).

The comparison isn’t accidental.  Obama with his power of persuasion, thus far, and the state of the economy may be providing a perfect storm for a change in the political zeitgeist. Will the Democrats see this as an opportunity to embrace that dreaded third-rail word, socialism, in terms of either rhetoric or implemented policy -or- would that just bring about a Gingrichian revolt akin to 1994?  Change?  What kind of change?  New Deal change?  New Frontier change?  Great Society change?  Is it a matter of the public looking for it -or- will savvy politicians frame a “new” economic order for them?  I think we’re in for seeing plenty of sizzle sold, but at some point, steak will have to be on the table, specifically, in terms of economic recovery.

The upcoming election in British Columbia is pitting the centre-left  (NDP) versus the centre-right (BC Liberal) {e.g., see blog on the BC Carbon Tax issue}, where the centre-left has a shot of controlling the provincial government.  Nationwide, the NDP support has risen 1 point since December to 13%, while the Liberals and Tories swapped positions and are polling 36 and 33%, respectively.  Perhaps regionally, there may a shift to the left {Canada has had NDP provincial governments in the past}, but I wonder as joblessness continues and bailouts persist, will national-scene politics in Canada and the US move towards a more socialist agenda?  While Barack is far from a socialist, he’s gaining comfort in his centre-left stance::

“The economic philosophy that Mr. Obama developed during the presidential campaign drew from across the ideological spectrum even as it remained rooted on the center-left. As that philosophy has been tested in practice through his early months in office, the president has if anything become more comfortable with an occasionally intrusive government as a counterweight to market forces that are now so powerful and fast-moving that they cannot be counted on to be self-correcting when things go wrong.”

–“Obamanomics: Redefining Capitalism After the Fall,” NYT, Richard W. Stevenson

So, are you ready for some socialism?  Will we see the selling of socialism?  Sounds like an oxymoron, but it may be a matter of time before we see something like this.  What’s Springsteen up to this summer?

I welcome any and all thoughts.

OK Ségo fans, while not entirely flattering, the following cartoon should help you with your fix. 

Twitterversion:: EpicFail for capitalism? Given current econ & political climate, is US/Canada ready for socialism? Will politicns pander or reshape thinkng?

Song::  

Notes from north of 49ºN

While the Vancouver Canucks advance in their bid for the Stanley Cup, the British Columbia provincial election is heating up, as the NDP has pulled within 2 points (39/41 +/- 3.4) of the not-so-liberal BC Liberal Party.  The Green Party is running a distant third at 13%.

One of the big election issues is the Carbon Tax, which is a tax on pollution.  It puts a price on the social costs of environmental degradation {negative externalities}.  The carbon tax was initiated last year in BC, which should give Obama insights into his plans to address carbon reduction.  {Obama’s already talking of a nationwide “cap and trade” policy.}

BC Carbon Tax & The Economic Sociology of the Environment

The BC carbon tax claims to be revenue neutral, meaning it returns the tax in the form of lower personal and corporate income tax.  The tax shuffles funds around in the following manner where one-third of the carbon tax revenues are paid by individuals and two-thirds by industry, while two-thirds of the tax reductions benefit individuals and one-third benefit business.  A fairness issue arises, as some businesses can pass the tax along to consumers, depending on the elasticity of demand.  The carbon tax is initially (effective 7/1/08) $10 per tonne of carbon dioxide equivalent (CO2e) emissions (2.41¢ per litre on gasoline), but will increase each year after until 2012 to a final price of $30 per tonne (7.2¢ per litre).  For US readers, this is currently 7.68¢ US per gallon of gasoline and will go up to 22.9¢ in 2012 (4/30/2009 exchange rate).

One of the issues brought up is that while the BC Liberal Party is imposing a tax on pollution, it’s allowing the export of carbon-producing fuels to leave the province untaxed.  In addition, the government is allowing offshore drilling for oil as part of their energy policy.  This is opening up the BC Liberals to charges of hypocrisy.

So, in the past 10 months, what has been the effect?  I think it’s impossible to gauge the results, given that gasoline prices have gone down and the BC economy is in a recession, although with lower unemployment than Washington, Oregon, and California.  I have to admit I am skeptical that the BC Liberal’s  carbon tax policy will actually reduce carbon emissions.  Why?  This Canadian Dimension editorial introduces a paradox::

“By way of comparison, the average retail price of gas in Canada, adjusted for inflation, has risen forty percent in the past five years. The increase is the equivalent of $120 per tonne of emissions — four times as much as the maximum tax proposed in B.C.

But consumption did not decline. In fact, during the same period both gasoline sales and greenhouse-gas emissions rose to record levels…

In short, the B.C. carbon tax is regressive, shifting ever more of the province’s tax burden onto working people, while reducing taxes on corporations. It will do nothing to cut emissions or slow global warming.”–“B.C.’s Carbon Tax: A Regressive Hoax” from Canadian Dimension (4/30/2008)

How can this be?  Are the economists that off-base?

As an economic sociologist, with a BA in the dismal science, I know at least some of the answers.  Increasing prices through a Pigouvian tax without consumption/production alternatives offers no incentives to alter behaviour away from carbon emitting activities.

A Northwestern sociologist, Monica Prasad, offered this interesting observation::

“The one country in which carbon taxes have led to a large decrease in emissions is Denmark, whose per capita carbon dioxide emissions were nearly 15 percent lower in 2005 than in 1990. And Denmark accomplished this while posting a remarkably strong economic record and without relying on nuclear power.”

—“On Carbon, Tax and Don’t Spend,” NYT (3/25/08)

How did Denmark do it?  According to Prasad, Danish policymakers subsidized environmental innovation by businesses and investing heavily in alternatives.  The idea here is to give incentives to move consumers and businesses away from carbon emission generating technologies towards renewable ones.  As a sociologist, I’m wary of talk of “pricing” carbon, as it attempts to reduce natural capital (i.e., the environment) with financial capital and the assignment of property rights, politicizing economic activity along the lines of power and wealth.  I’d much rather see policy aimed at moving towards a different technological curve, away from carbon, along with an increase in investments in public infrastructure (e.g., mass transit in cities/suburbs) that offers alternatives to carbon-heavy practices.

The Politics of Carbon: “Axe the Tax”

Carole James, leader of the NDP, has been advocating dumping the carbon tax in favour of a “cap and trade” approach, the direction Obama is leaning towards.  The NDP “axe the tax” stance was costing them politically, despite the tax being unpopular, as environmental groups criticized the move.  In this election, there are 85 seats up for grabs.  While the Green Party may siphon off votes from the NDP, it is very unlikely that a single seat will go to the Greens.  Given the overall BC Liberal Party stance on the environment, environmentalists may have a tough choice on May 12.  The carbon tax may fade away as a key issue, as the economy and issues of ethics and integrity might come front and center, but perhaps the economy and the environment will become an intertwined issue.

I’d like to see policies in BC and elsewhere move towards weaning citizens away from carbon.  A recent Wired Magazine article  goes over many of the issues involved in green technologies, including who will pay for the costs of innovation.  I think the BC Liberal carbon tax isn’t the best policy, as I don’t see it reducing carbon emissions and is mute on carbon-emitting fuels being exported and untaxed.  Whichever party wins, I see the BC government as playing a key role in spurring behavior changes through investments and incentives, but who will foot the bill, particularly given a tight budget?

• What are your thoughts on a carbon tax?  (In BC or even in the US)
• What are your thoughts on policies that create incentives for businesses & residences to adopt new greener technologies or retrofit carbon-based ones?
• Should policy focus on investing in new green technologies?  How much should government foot the bill? Should green be linked to economic recovery plans?
• What would the candidates & the “Fake Tweeple” candidates say?