“What does this mean? Isn’t it just rhetoric?”

So started one of the more interesting conversations in my (brief) political career. I would later find out that the gentleman asking me the question was the Arif Jinha, the NDP candidate for Lanark, Frontenac, Lennox and Addington. He, and his Green-leaning wife had stopped by the Green Party table at the Ottawa Folk Fest a few weeks ago. I had the pleasure of tabling, and discussing what is probably the greatest difference between the Green Party and the NDP.

Mr. Jinha was referring to a flyer we were handing out about the tax shifting. The idea behind the tax shift is simple: shift taxes away from activities our society wants to encourage (investment in local business, sustainable job creation, innovation) and onto activities we want to discourage (excessive consumption, pollution, unhealthy lifestyles). The standard example is lowering income tax, but introducing a carbon tax in its place.

The exact phrase that he was pointing to was “the free-market economy, rather than government handouts, will encourage sustainability.” That phrase may be one of the core differences between the NDP and the Green Party. Since this is a Green Party blog, I’ll stick to explaining my take on the Green Party perspective.

Capitalism and free-market economies have done a really good job what they are designed to do: create profit for investors and (incidentally) distribute goods throughout society. The system has existed for a number of centuries without suffering major changes, suggesting that it’s fairly self-sustaining. What’s more, people seem to buy into the whole “work hard, and you’ll gain power and status” ethos.

There are dangers to capitalism and free-market economies. Corporations are designed to generate profit for their investors, regardless of the cost to workers, consumers, society, or the environment. In our economic system, there is a constant tension between those who want to make money, and those who want the best for society. Do things have to be this way? Do we have to choose between money and quality of life?

The answer the Green Party offers is: “no.” I’ve been referring to capitalism and free-market economies as if they are ideals. They aren’t. They’re human-made things, just like the computer you’re using to read this. As a society, we can sculpt them in any way that we see fit. We can use them to accomplish a goal that everyone, regardless of political stripe, can likely agree on: every person deserves to live a meaningful, enjoyable life free of suffering.

With a few subtle adjustments our existing economic system could begin to encourage lifestyles and businesses that are healthy, humane, and sustainable. The “free market” isn’t a goal, it’s a means to an end. It’s a tool in creating a society that is essentially just, which offers equal opportunities to all, and cares for the disadvantaged. We want to make societally damaging behaviour expensive, and socially beneficial behaviour profitable. In that economy, companies will opt to “do the right thing” in order to improve their bottom line.

One might wonder why we should use such a roundabout mechanism. If we want to encourage a certain behaviour, why don’t we just fund it directly?

Let’s use the example of reducing greenhouse-causing carbon emissions. To lessen carbon emissions, the Green Party could promise to “build 10,000 wind turbines after we get elected.” That would directly fund something we believe is good: it would support an industry that is relatively sustainable, it would make environmentally sustainable electricity cheaper, and it would create jobs. But it doesn’t solve the problem.

Why? Remember that our initial goal was to lessen greenhouse emissions. Building thousands of wind turbines doesn’t tackle the root problem. It creates a bunch of infrastructure that may or may not reduce carbon emissions. At the same time, it puts the government into a position where it must select a location for the turbines, and then select a company to build, install, and maintain the turbines. It assumes that the best way of reducing carbon emissions is through wind power. In the worst case scenario, it opens the government to allegations of corruption as it selects the location for the wind farms and the company to build them.

Instead of providing a direct sale to industry, the Green Party would rather tackle the problem head on. If we assume that most carbon emissions are due to the burning of fossil fuels, then the most direct route is to add a carbon tax to the sale of fossil fuels. That cost would discourage consumers from buying fossil fuels, and would encourage industry to explore alternative fuel sources. Each consequence has beneficial ramifications: consumers can now reduce their tax burden by reducing the amount of carbon they emit; while businesses have a sudden impetus to try technologies that were previously too expensive – not all of those technologies will be successful, but chances are that some of them will be.

Of course, being the Green Party, we would have to take into account the social and environmental costs of these approaches. This is termed triple bottom line accounting.

Socially, we have to worry about the burden of the carbon tax: can everyone afford to pay it? We have to ensure that people at the lower end of the income scale will not suffer due to the tax, either by reducing their existing taxes, or directly subsidizing their energy needs. If businesses close due to the tax, then there will also be a social cost. To lessen the risk of business failures, the Green Party would institute such a carbon tax slowly over a pre-planned time period (say a 2% increase every year for ten years). Such gradual changes allow businesses to adapt, replacing existing equipment over time.

Environmentally, we’re in an interesting situation. Carbon emissions have suddenly become expensive, meaning that they should fall. The government hasn’t endorsed any particular scheme for producing energy, so people are free to try any scheme they want from wind, to biodiesel, to the most effective, overall reduction.

Notice that the government has sidestepped all of the risks associated with infrastructure construction: it doesn’t have to worry about maintenance of the turbines, it doesn’t have to select contractors or locations, it doesn’t have to worry about sudden changes in the cost of electricity. Most importantly, the government and the electorate know that the goal will be achieved: carbon emissions will fall.

This example is intended as a thought experiment that demonstrates why the Green Party says that “the free-market economy, rather than government handouts, will encourage sustainability.”

The free-market is a tool. It is a device that can be used to encourages technical innovation, and provides a mechanism for distributing stuff throughout society. Corporations and businesses are sometimes attacked for behaving in a way that hurts society. By shifting taxes onto damaging behaviours, we can use the free-market’s capacity for innovation and distribution to improve society.

I’m not sure if I’ve properly addressed the risks associated with handouts. If readers feel that I haven’t, I’ll see about reworking this piece.