CHAPTER 3 Media Article
Liberal leader wants penalties for companies that don't lower emissions,
News 1130, January 12, 2007

In this article, Stephane Dion, Leader of the Liberals, explains that there should be penalties and incentives to prompt oil patch companies to “lower their greenhouse gas emissions and water use. This change will encourage companies to improve their technologies and industrial processes, which will even benefit these companies in the long run. However, Pierre Alvarez, president of the Canadian Association of Petroleum Producers, thinks other sectors, “not only oil and gas” should be targeted also. Similarly, Prime Minister Stephen Harper isn’t very keen on this idea of “imposing drastic reductions” either. However, environmental groups criticize that the Conservatives’ approach to this situation is too long-term.


Connection to Chapter 3- excise tax, and negative third party effects

Setting penalties to lower greenhouse gas emissions and water use is an example of how the government can help lower negative third party effects. As discussed in chapter three, excise taxes may be government charges on a good to discourage consumption. Some of the penalties Stephane Dion is thinking about will probably take this form. Yet, in this way the consumer ultimately pays the tax since oil is inelastic, meaning the producer can increase the price and the consumers will only be a little discouraged to decrease consumption. As a result, these excise taxes will generate revenue for the government. Moreover, these penalties are still a possible solution to reduce the negative third party effects of the increasing pollution. Third party effects exist when a third party other than the buyer or seller is affected either positively or negatively. Here, the situation involves government action to decrease the negative third party effects caused by oil patch companies. The pollution created by these companies is harmful to both humans and the environment. Many, if not all, industries use inefficient technology simply because it is cheaper; but with government incentives and penalties companies will more readily change their habits. Less pollution creates a healthier and more productive society bringing about a better economy.

Personal Reflection

Pollution and greenhouse gases are becoming a bigger and bigger problem for our environment and, sequentially, for us too. Giving incentives and setting fines on big polluters are a good start to convince them to use less polluting methods and technologies. What’s more, according to this article, the former Liberal government has signed the Kyoto protocol yet “emissions actually increased 25 per cent” during their period in office. If we don’t start looking after the environment now, global warming is only going to get worse. The weird wind and snowstorm we experienced recently are likely an example of how global warming is changing the world. How much time do we really have until it’s too late? What will happen to us if we don’t change our habits? Will industries ever become bighearted enough to put the welfare of the Earth ahead of making profit? I think the government has to intervene before any industry or corporation will think more about the environment and the ultimate consequences of being a polluter.

http://www.news1130.com/news/business/article.jsp?content=b011297A