The same people that bitch and moan every time the price of fuel goes up continue to purchase gas-guzzling vehicles every time the price of gasoline goes down. Society has a short-term memory problem. For some people, we can pin it on marijuana. For everyone else, I believe their short-term memory is being clouded by their desire to find short-term solutions to their problems, like flogging investments and the fact that they are poorer than they were a year earlier.
When gas was $1.50 per liter, customers were lined up to purchase hybrid cars because they were a viable alternative to regular gas automobiles. Chevrolet poured money and intellectual talent into bringing its Volt, the first mainstream, all-electric car, to market. People began to take transit and ride bikes because they could no longer afford to drive their gas-guzzling vehicle.
Fast-forward to a year later. Gas drops to under $1/liter and everyone forgets about car-pooling and the Toyota Prius. It’s frustrating to me as an environmentalist, but it’s a bigger pain in the ass for people like Shai Agassi, who is trying to bring the Better Place electric vehicle system to market.
Launching a project as ambitious as a nation-wide grid to service and charge electric cars requires capital that is only available in the stock market. Unfortunately, most people that invest in the stock market only buy shares in companies that are going to be profitable this quarter. If they want a warm, fuzzy feeling, they’ll adopt a stray dog or donate to a (tax deductable) charity. Fickle shareholders who are only interested in immediate profit will not hold stock in a company like Better Place, because there’s always going to be better companies for them to own in the short-term.
When oil prices rise, shareholders flock to companies that are based on low-carbon alternatives to burning fossil fuels. These companies continue to be attractive to investors, until energy prices become so high people stop buying cars and going on vacations. The economy slows, oil prices go down and investors return to high-energy sectors, such as aluminum and hop back in their SUV’s.
The cyclical nature of energy prices cripples innovation and is delaying the world’s switch to renewable energy sources. This innovation-stifling cycle will leave the middle class stuck at home living a lower quality of life than they had in the past, staring at a driveway that is home to a car that they can only sometimes afford to drive.
A nation-wide carbon tax, implemented by government, would raise oil prices to a level that low-carbon, renewable energy technology would become a no-brainer for society to adopt. This tax would give the price of oil a solid threshold that it would not fall below and give companies that develop green-technology a solid platform and plentiful capital to perform research and development. A carbon tax would dictate to the stock market that renewable energy is the smart, profitable choice.
If the government implemented a carbon tax equivalent to 20 cents a liter, pump prices would jump to $1.20 and very likely not drop below $1 anytime soon. This would cause a surge in demand for hybrid and electric cars, encouraging carmakers to churn out electric and hybrid vehicles by the hundreds of thousands. The per-kilometer cost of driving an electric car would become lower than driving your emission-belching Honda Civic.
Critics argue that a country like Canada can’t afford a carbon tax because it would cripple the oil and gas industry. These critics are short-sighted and do not see the long term gains society will reap. The reality of the world’s oil reserve situation is that there is no easy oil left. Anyone that cares to argue with me on this point should head up to Fort McMurray and try to extract oil from the tar sands in -40 C.
A carbon tax would help promote green energy and position Canada as a leader in green technology, which will be very beneficial when gas is $2 a liter and the Earth’s 7 billion inhabitants are looking for an alternative to oil.
We might lose some jobs in the tar sands in the short term, but we will gain high-paying, sustainable jobs in industries with infinite growth potential. Believe me, working in Fort McMurray is about as much fun as a migraine. What would you rather do? Live and work four hours north of Edmonton, freezing your ass off while sucking oil out of the Earth and permanently damaging the ecosystem? Or would you rather live in a environmentally friendly city with clean water and breathable air and work a well-paying job in a low-carbon, well-paying industry that provides goods and services that are demanded all over the globe?
The golf cart industry figured out many years ago how to make an electric vehicle that can run at a high speed through hilly terrain for an extended period of time. With some incentive, the market can clearly figure out how to make that golf-cart a little bigger, a touch faster and much safer.
Bring on the carbon tax.
Steve Langston is a freelance writer living in Winnipeg who has also lived and worked in Fort McMurray.