Sunday, March 23, 2014

Externalities

In a recent editorial in the Herald Magazine, published monthly by the Halifax Herald newspaper, the deputy publisher, Ian Thompson, wrote this:

"When the situation is urgent, we protect our interests, quickly. And when the need for urgency is not apparent, we fight over mink, seismic testing, wind turbines, quarries, highrises, fracking, workers from New Brunswick, farmed salmon and sometimes even cranberries. We simultaneously complain about high taxes and joblessness.

It’s curious that we don’t see the connection. Too many of us don’t see the connection between our desire, in a civilized country, for first-rate public services and the need to generate wealth — profitable companies and higher-income jobs — to pay for those services. We often frustrate investments that create the jobs that create the products that create our society’s wealth."

In most of the examples that he cites he has not addressed the issue that people are fighting over, and that is the externalities, which Wikipedia defines as the costs or benefits that affects a party who did not choose to incur those cost or benefits. We are fighting over the cost of these activities that is not borne by the businesses, but by the neighbours.

Have you ever lived next door to a pig farm? A rendering plant? A wind turbine?



I have lived in the Wentworth valley for 35 years and I have been threatened with the externalities of development many times. On our road geologists were drilling exploration wells for uranium in the 1980's, and every well became a channel for dissolved radon gas to rise up the well and into the water table. Without the wells the gas would be locked in the underlying rocks and would be harmless to people. The drillers created the wells and then went home, leaving us with their troubles.

The power company wanted to run their high voltage lines down through the Wentworth Valley because it would be convenient for them. We forced them to find another route, which was along the tops of the Cobequid Mountains. Do you want to live under a power line? (NSP appreciates that route now because those wires are close to the wind turbine farms.)

The TransCanada Highway was run through our valley in the 1950's and by the 1990's there were 6,000 cars and 1,000 trucks passing through our community every day. Children could not walk to school or ride bikes, and too many of our citizens were struck and killed by passing cars. When it came time to twin the highway the Transportation engineers wanted to run the new highway right down through our valley, splitting our community in half and expropriating houses and farms as they went. We beat them back and they found a new and shorter route through blueberry lands and only one house had to be moved.

The Maritimes and Northeast pipeline was run through our community, and at every river they cut a trench through the river bottom with explosives and let the river run right through the cut. The silt plume reached the Northumberland Strait and fouled commercial oyster beds and lobster habitat. Even the pipeline workers said that they would never have been able to do that back home in Alberta. Where's the gas, now that the wells are being shut in? Gone to New England, along with the profits, and we still have fouled rivers to this day.

In all of these cases, the businesses did not pay for all of the costs. We were being asked to pay the costs (radon in the water, power lines, damaged rivers, traffic noise) while others received the benefits.

How about those mink farms? They aren't any kind of farm that my grandfather would recognize. His farm was land based - most of what his animals ate was grown on his land, and their manure was spread back onto the land because it was too valuable to waste. Mink farms are feedlots, just like hog farms and most poultry and turkey farms. The principal use of the acreage surrounding these feedlots is to act as a dumping ground for the manure. Mink farms are very problematic because they produce both manure and carcasses, which must be properly disposed of without creating a health hazard or a source of pollution. And the mink farmers have not reliably done that, and I think that while the new farms must meet stringent codes many older farms have been grandfathered in. How is it right that a mink farmer may pollute streams and lakes without paying the costs to clean it up, or prevent it? How is it right that oil companies may contaminate the groundwater through fracking and we have to live with the contamination for generations? (Here's a thought experiment: suppose that the laws were changed and all of the officers and directors and employees of companies using fracking were personally liable for the remediation costs of any contamination that they caused, and like students loans in USA, those obligations were not extinguished through bankruptcy but followed the individuals through their lifetimes. How much fracking would we see in rural Nova Scotia when oil companies paid for their externalities?)

I know people whose lives are changed forever by a wind turbine 2 km from their house. Why should lobster fishermen have to worry about salmon waste and illegal salmon medicines destroying their lobster grounds while the aquaculture companies take home their profits and their government gifts? There are people who live near open pit mines who will never again be able to draw water from their well because the water table has been lowered out of reach. Blasting in quarries does the same thing, and also breaks basement walls. The companies do not pay for those external costs, but city folk want us to suck it up for the greater good of the province. No thanks.


We should celebrate mink farms that do indeed prevent pollution. We should find the turbines that don't bother anyone. We should visit the onshore salmon farm in Advocate that doesn't pollute the Bay of Fundy. And then we should talk to the people who live next door to the open pit coal mines. Better yet, we should take along someone from Springhill Junction who is soon going to have a Pioneer coal mine in their neighbourhood.

I don't have a lot of time for folks who don't want to look at a wind turbine farm in the distance, but I have all the time in the world for folks who have to move through their house to find a place to sleep where the turbine pulses won't get at them.

It's time we insisted that all development projects pay their full freight.

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