Okay.
Thank you for having me. As mentioned, my name is Pierre Desrochers.
I'm here to present remarks that reflect only my opinion and those of my co-author Joanna Szurmak, who is also from U of T.
I usually don't begin my talks like this, but I would like to point out that I was contacted last Thursday morning and that Joanna and I spent a few sleepless nights producing a 20-page document that we obviously didn't have time to translate. You have the executive summary of what we wrote—it has been translated—but I would be grateful if the material that we produced could be included in the documentation of this committee.
The mandate you gave us was fairly broad. I figured that as an academic the best thing I could contribute would be a few conceptual thoughts. I would like to go over my main points using the images that were sent to you. You should all have a copy.
To be honest, the paper that I've sent to you and my remarks are somewhat of a fundamental challenge to the Natural Resources Canada paper that we were sent. What I want to argue in my presentation is that a lot of the concepts that were put forward in that document can be challenged on a number of counts. Basically, what I want to argue is that they ignore the historical reality of spontaneous cleaner technology development in the market, and that much historical evidence suggests that getting the government involved in trying to promote cleaner practices among businesses is likely to backfire.
The first image that you have is of one of the first computers, the ENIAC, the Electronic Numerical Integrator and Computer. As you can see, it filled a room about the size of this one. It weighed over 30 tons and consumed a lot of electricity and had something like 18,000 vacuum tubes. All you could do with it was long division.
Needless to say, I chose that example because it's the most obvious one that shows how, in competitive markets, people produce ever more useful output using ever fewer inputs. The laptop I have next to me, which weighs almost nothing, is in computing capacity far beyond what the people who developed the ENIAC could have thought of.
The point I want to make here is that this is not something that is limited to the computing sector. Thus, the third image that you have illustrates how people in the agricultural sector, and thus natural resources, produce ever more output using ever less input over time. The image on top of the chart has some corn on it, and to the left, the tiny little thing is the original ancestor of corn, teosinte. The numbers below indicate how much more corn we produce on a piece of land today than 100 years ago. In a part of Canada such as southern Ontario, we produce something like seven times more corn and seven times more useful animal and human feed on the same piece of land than was the case a century ago. We feed many more people using much less resources.
The chart that follows indicates that this has been true throughout the agricultural sector. This shows data from the Food and Agricultural Organization of the United Nations. Today we produce roughly three times more chicken meat using the same amount of animal feed as a few decades ago and roughly three times more dairy products than was the case using the same amount of input a number of decades ago. Competitive pressure, technological change, better feed, and better animal care spontaneously results in firms becoming more eco-efficient over time.
Obviously, this occurred in a context that was strictly economic. People did not improve their environmental performance because of environmental concerns but because it made good business sense to do so. This is referred to as the materialization of our economies: doing more with less by creating a lot more value using a lot less input.
Another academic concept, at the top of the page following, is best illustrated by a smartphone. I'm glad to see a lot of grey hair today—no offence—because you need grey hair to understand how much value is created by a smartphone today and recall all the technology, all the steel, the pulp and paper, plastic, metals, and other material that would have been required a number of decades ago.
Again, spontaneously, just because it made good economic sense, we developed over time increasingly greener practices in order to save money.
Another example of business being spontaneously green without any government prodding is shown by the development of kerosene. It's a nice Canadian story that is not known by enough people. As you may know, in the 19th century people used to go to the Canadian Arctic and to the Antarctic and other places to hunt whales. That's because especially sperm whale oil was the best illuminant available at the time. It gave you a brighter light with less smoke and no smell, which were all problems you would get if you tried to burn pork fat or various types of vegetable oil.
Obviously, though, it's not because whales were renewable that their management was sustainable, and so over time, as the whale population decreased, the price of whale oil went up, because it was, again, the best illuminant at the time.
Then a Canadian stepped in. I don't know how many of you are familiar with Abraham Gesner. He's buried in Halifax. He was the real pioneer in the development of kerosene out of petroleum, which proved to be a valuable substitute for whale oil, and so he should be given more credit for saving the whales than Greenpeace.
The problem with kerosene is that, if you know anything about the oil industry, kerosene is more or less in the middle of the barrel. There is lighter stuff on top, which was thrown out and burned; there's heavier stuff at the bottom, which was thrown in rivers or burned, and it was causing a lot of pollution. Over time, however, valuable uses were found for these polluting waste products. In the upper fraction there was something called gasoline, with which you might be familiar, which was a waste not too long ago. Then, of course, we managed to create value out of what was a polluting waste product.
The lower fraction had things such as asphalt. Remember that when Gesner was around, roads were not paved, so again a source of pollution was spontaneously turned into a valuable product. Wealth was increased and pollution was decreased. People became wealthier, while the environment became cleaner at the same time. This pattern of developing valuable outputs out of pollution can be observed in any industry.
What you see on the slide showing “Chicago Union Stockyards 1924” is all the uses that were developed for waste products out of livestock. At one time only the meat and the leather were valuable; everything else was thrown away. When people were throwing it into rivers, significant pollution problems resulted; people got sick because of it. With the rise of the railroads, however, and the concentration of production in places such as the Chicago stockyards, everything but the squeal became a valuable byproduct.
What you have on this slide is the list of all the things that were manufactured in the early 20th century out of animal waste, which was once a source of pollution. Of course, many of these were later replaced by plastic, but still nothing is wasted today in that field.
On the next slide, to stick to the natural resource theme, we see that much more value is created out of wood today than was the case a number of decades ago. One of my colleagues likes to joke that we now live in houses made out of glue rather than out of wood, but that's again because a lot of sawdust and other types of waste that were problematic at one time were turned into valuable byproducts, again strictly for economic reasons, not to save the environment, not because of government regulation, not because of government taxes.
On the next slide, you see one of the most tangible results of all of this spontaneous innovation. You have four maps of the United States. The darker parts are the U.S. forest cover.
What you have in 1620 is what we think the forest cover looked like at the time. In 1850, in the top righthand one, you can see that people are moving along waterways and are settling in the most suitable areas. Then by the 1920s, with the railroad going everywhere, the low point of the U.S. forest cover is reached. But the forest, as you can see on the bottom right side, has rebounded tremendously since then.
I would argue that this was not because of deliberate governmental policies but because business managed to create value out of waste, and increasingly, valuable things were created from resources that came from underground rather than from the surface. Again we have good, spontaneous green results without any government prodding.
That's the first set of ideas that I wanted to throw at you.
The next slide refers to the precautionary principle. This underlies much of the vision that was in the Natural Resources Canada document. The precautionary principle says that we should not go ahead without absolute certainty. What my co-author and I argue in the paper is that this is not a sustainable way to look at risk in the natural resource sector.
Basically, what we argue is that a better way to look at development should be the creation of lesser problems than those that existed before. This is how we should look at all technologies that are labelled as green today. Often they create, I would argue, more problems than those that existed before. It's not because they're based on renewable energy sources that they are necessarily more sustainable.
If you look at the document that you don't have, you will see that we spent a fair amount on the precautionary principle and on explaining why we believe it is not a good guide to policy. On slide 13, another way to look at this is shown. You see Newton about to be hit by the apple.
Again, there might be problems in developing new technologies, but we argue that the historical record shows that there have been more benefits than problems. You should keep in mind that refusing to try to improve technologies will leave significant problems as significant problems, whereas technological progress has a very good record of creating lesser problems than those that existed before.
Now, the document you sent me also wants the government to do a lot of things, but what I point out is that the government is already doing a lot that is highly questionable: promoting inefficient use of resources, spending money on things that individuals would not spend their own money on, such as ethanol. We could discuss wind and solar power if you want, which, I would argue, create more problems than they solve and only exist because of government subsidies. Perhaps doing less in that context would be actually the way to go, if you want business to spontaneously behave in a more sustainable fashion.
