The Social Costs of Technological Change

Here's a very brief addendum to the previous post:

The CCCE (Canadian Council of Chief Executives) released a report today calling for substantial absolute reductions in greenhouse gas emissions that must be borne by all sectors (of industry and society). Basically, they are proposing a domestic emissions trading scheme similar to Kyoto, or else a carbon tax, which should be offset by other tax reductions. Though they utilize the language of collective responsibility and of immense sacrifice, what they are really seeking to do is preserve their existing profitability and the system that they depend on, while shirking the real brunt of the changes off them as much as possible. A capped emissions trading scheme that would begin to decrease greenhouse gasses, if we are to believe the rhetoric of Canadian corporations thus far, is just not possible in the time frame that scientists deem we must act within - that is, not possible if corporations are to keep their profits and share values more or less consistent. A carbon tax would simply offer corporations the option to download the tax onto the consumer in the form of higher prices. When we couple the carbon tax with a reduction in other forms of taxation (a necessary condition for the carbon tax according to the CCCE), namely the corporate tax rate, corporations could stand to improve their profitability. The CCCE says they are not proposing a carbon tax however, since it is unlikely that A) they would actually see an equal or greater reduction in other tax forms when all is said and done, and related to this, B) The PR cost of downloading the tax onto the consumer would be immense, and some portion of it would be non-transferrable, that is, captured by the firms.

Corporations will, at their leisure, undoubtedly change their production methods and technologies to cleaner and more efficient alternatives. This is the Schumpeterian idea of 'creative destruction' that neoliberals have played up so much for the las 30+ years. The question is, and which has been the defining question of our times, is who will bear the brunt of the research costs? The CCCE makes it crystal clear that "investing in technological innovation is the best way to bring about the cleaner technologies that will reduce greenhouse gas emissions". And they point to the state-led federal and Alberta technology funds as the model for who should be doing the investing. Yet again, the distribution of the cost of progressive social change falls heavily on the individual taxpayer, while those who will gain the most from new technologies (in a financial sense) shirk almost all of the financial costs associated with it.

For the original policy report, see:
http://www.ceocouncil.ca/publications/pdf/test_14a7f87d43da18e574aa830d322a9cbe/Clean_Growth_ELI_Policy_Declaration_October_1_2007.pdf
For a CBC article summarizing the report, see:
http://www.cbc.ca/money/story/2007/10/01/climateceo.html?ref=rss