INFO-Tain-ment

Thursday, April 26, 2007

The answer may surprise you - What a bright idea!

How many Tory Cabinet Ministers does it take to change a light bulb?

1) One- but it can't be NRCan Minister Gary Lunn because he is barely three apples high.

2) None- it can only be done from the PMO.

3) Two - Baird to complain that it took thirteen years to do something about it, and Fortier to hire a Montreal consulting firm to do the work.

I will not be the person to criticize the government's latest foray into the slow abatement of anthropogenic gases - there are enough of those already, and I am saving myself for today's idiocy when it is announced at 4 PM. I love the fact that the Environment Minister has to fly to TO to announce Tory climate change plan 2.0. Yes, 2.0. This is the second time they are making this announcement and all they are doing is proving that the Liberals were right - they don't need to change the Act to regulate LFEs. Didn't they get the memo?

I will say, however, that of all the policies they have introduced thus far, this is one that CAN have the largest impact. The billions of bulbs that already exist, if changed, will assuredly reduce the amount of electricity that Canadians use - with a bottom line impact as well. Cash savings for a limited investment will recover the value of the extra expenditure fifteen times (or greater) over the lifetime of the bulb. And that is not including the GHG implications of manufacturing less bulbs or the overall energy savings.

And, in keeping with a theme, the Government ripped the idea off from the Liberals in Ontario. Bravo.

The problem with this policy isn't what it accomplishes - rather, it is what it does by accident. It will ostensibly provide a bazillion dollar subsidy to one single company - Phillips. This is not the first time in as many months that a half-baked government idea was rolled out without an understanding of the economic implications. Last night as I drove by a Toyota dealership, they were unloading Yaris after Yaris. The 90 million dollar subsidy to Toyota is nothing compared to what Phillips is going to rake in.

I am not comfortable with the idea of a company receiving a windfall as a result of government policy. Sure, they should be rewarded for corporate social responsibility - but ultimately, the government shouldn't pick "winners and losers" in the corporate world by rewarding corporate investiture with an additional forced market benefit. By way of example, the entire sub-contact market in Canada has changed in less than three weeks as a result of the budget. Domestic manufacturers who didn't receive a windfall in the fee-bate are already shifting production mandates because they can't compete with an even more affordable Yaris. That will have a downstream affect on jobs in Canada. Oh, what a feeling!

It isn't only government policy though. Do we really need to give Tim Horton's a monopoly on the distribution of fancy collector quarters? Or Shoppers' Drug Mart? Or the Royal Bank? Puh-lease- it is CURRENCY for Christ's sake. Providing a corporate advantage for the change that companies provide in exchange for advertising is offensive to a lot of my sensibilities. Yes, that is a pet peeve more than anything else. Seriously, the main issue is that governments are massive consumers and their purchasing decisions will also have a disruptive affect on the open market. We get that. But it should lead by example and ensure that their decisions are not too beneficial to one company over another.

Rather than having a technical specification for purchasing, the policy should be results based - so that any different form of technology that achieves the suitable range of policy outcomes can be considered. As the purchasing requirements become more technical in nature, they start to mimic patents.

Of course, that may also be the solution - in the case of the light bulb policy, ensure that Phillips gets paid for its R&D, and then suspend their patent so that other manufacturers can reap the rewards of the policy, and aren't forced out of the market by monopolistic dominance. For obvious reasons, this is less attractive option, but as a voluntary program, it may help achieve the most important aspect of the goal - widely available and affordable environmental technology.

In the status quo, Phillips is going to have to increase its domestic production markedly in the next five years to fill the need: and they might not be able to do it.

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