There’s a cost to economic development

Players in the “free” market do not in fact include in the price of their goods the true costs of its production.

By Andrew Williams

“A TREE has no value until it’s cut down,” a northern BC mayor once proclaimed. His statement brought to mind Oscar Wilde’s sardonic epigram: “A fool knows the price of everything, and the value of nothing,” for clearly what he really meant to say was that a tree has no price until it is cut down.

In doing so, he ignored the true value of a tree in producing oxygen, preventing erosion, providing shelter for wildlife, and, in its demise, creating soil.

Our local public figure can perhaps be forgiven for his statement because he was after all iterating one of the essential tenets of capitalism that everything from human labour to the water we drink has or should have a price.

There are many problems with this assumption, of course, but the most serious is ironically that players in the “free” market do not in fact include in the price of their goods the true costs of its production.

These costs are referred to as “externalities.” They are the benefits or harm resulting as an unintended byproduct of an economic activity that accrue to someone other than the parties involved in the activity or economic transaction.

They include effects such as pollution, diseases, destruction of wildlife, loss of habitat and so on – sort of like the “collateral damage” of warfare, the deaths of innocent civilians.

What the exclusive preoccupation with price, and therefore profit, in our business decisions produces is a short-term view of what is truly valuable. The result is generally private profit and socialized cost.

For example, when successive provincial governments saw stumpage fees as a cash cow and built their annual budgets on projected revenues from logging, the forestry industry was encouraged to clear cut valleys wholesale, with entirely predictable results to the rivers and fish.

The building of the Kitimat hatchery is an attempt to mitigate the impact of this activity on the salmon and the people who fished for them is an example of a socialized cost, since the taxpayer paid for the corporations’ short-term profit-taking.

Now we have a Prime Minister – an ex-Imperial Oil corporate man – telling us that an oil pipeline through the mountains and across the rivers of British Columbia, with accompanying oil tanker traffic along Canada’s west coast is essential to the economic well-being of this country because it will allow us to export Alberta’s oil to other markets than the United States. After all, oil has no value unless it’s sold I can almost hear him say.

All across this province the vast majority of local residents are saying, Hold on just a minute. Your planned pipeline would put at considerable risk the things I value in this province: the pure waters of rivers, the salmon that need them, and the coastal waters that feed us.

As a local eco-tourism operator asked the Sustainable Aquaculture Committee hearings about the potential damage of fish farms, “Who will compensate me when the bears my clients pay to see cannot survive because wild salmon have been wiped out by the fish farms?”

Likewise, would Enbridge really cough up the $110 million annually that wild salmon contribute to our local economy should an oil spill ruin our rivers? Would they ensure that the bears, eagles and forests that are nourished by these salmon would continue to be so in perpetuity? Would they compensate sports anglers for their lost recreation? Of course not.

Canada has become an environmental pariah because of our rejection of the Kyoto Accord we signed – instead of reducing our carbon dioxide emissions 5%, we increased them 18%, thanks to the ongoing development of the Alberta tar sands – or oils sands as Albertans insist on calling them.

So again, the question is will the oil industry include in the cost of their production the impact of their emissions on global climate change and the less developed countries most impacted by it? Of course not.

I learned when I was 14 and my friend Alfie in Montreal almost died from typhoid in Canada’s second largest city, which had no adequate sewage treatment, that there is no “out there.”

What we do to the air, water and soil of this planet we ultimately do to ourselves. The oil industry, like all capitalist enterprises, should be obliged to factor into their business decisions and their corporate bottom line, the true cost of their impact on this planet and on the lives, both human and non-human, that depend on a healthy environment.

A Terrace resident, Andrew Williams is a part time teacher, a fishing guide, a contributor to angling publications and a director of the Steelhead Society of BC’s northern branch.