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Turning green into gold

A few months ago, after commenting that B. C.'s carbon tax should serve as warning of further things to come - the recently announced Liberal plan for a national carbon tax is proof of that - I promis...

A few months ago, after commenting that B. C.’s carbon tax should serve as warning of further things to come – the recently announced Liberal plan for a national carbon tax is proof of that – I promised to look at how trucking can survive in a carbon-constrained future economy. The controversy over the speed limiter legislation in Ontario sidetracked my plans, but now that Ontario has its speed limiter legislation I would like to make good on that promise.

While it’s important to understand the risks behind the challenge of creating more environmentallyfriendly transportation systems, it’s just as important to consider the opportunities.

I believe properly structured cap-and-trade programs – where a provincial or federal body sets a cap for allowable pollution, and allows companies who have invested in equipment or facilities that exceed the government requirements to earn pollution credits and then sell those credits to companies that can’t meet the standards of the regulatory cap – provide not only a sensible market-driven approach to reducing emissions, but also a real opportunity for supply chain service providers.

Cap-and-trade programs worked quite well in the 90s in the US when they were used to limit sulfur dioxide emissions and tame acid rain.

Utilities and large manufacturers would likely be more than willing to purchase credits from carriers and warehouse operators. The cost of a fleet of low polluting trucks or a more efficient warehouse may seem an expensive investment to those in the industry but, compared to the costs utilities and large manufacturers would face in building a new plant, they’re a drop in the bucket. Supply chain service providers have a lot to gain by being a net seller of credits. And since such credits would be scarce, the utilities and power companies that need them would likely bid up the price.

But so far neither our federal government nor the transportation sector have aggressively pursued cap-and-trade programs.

Transportation providers have not only failed so far to state their support for cap-and-trade programs, past practice has shown they’ve generally missed the opportunity to participate in them.

For example, a few years ago the Port of Long Beach tried to establish an emissions-trading mecha-nism for transportation companies in its harbour area. Potential buyers of credits – power companies and utilities – rushed to join, for the reasons already cited above. But after a few years of failing to persuade terminal operators and transportation providers – the potential sellers of credits – to join, the Port gave up.

It’s hard to understand why transportation providers would pass up such a potentially lucrative opportunity, which also provides a market-driven approach to reducing emissions. Perhaps they’re too caught up in their day-to-day challenges to consider such a long-term issue. Perhaps they’re distrustful of government legislation.

Perhaps it’s also time they reconsidered their ambivalence and gave cap-and-trade programs the consideration they deserve.

– Lou Smyrlis can be reached by phone at (416) 510-6881 or by e-mail at

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