Environmental Economics: Water Management (Part 3)

Years ago when I was a kid I always wanted a pool. I loved swimming, and figured my life would be brilliant if I could simply step outside and jump into some water. What little Alex forgot was pool maintenance. From ensuring no algae growth to the chlorination of the water causing little Alex to feel tired upon exiting of the pool, little Alex had his eyes set on the benefits without weighing the consequences of acquiring a pool.  Little Alex also had a secret fantasy of throwing his dog into the pool and watch him swim – but that’s another story.

 However, little Alex was a highly intelligent individual who decided a little research might help. So he wrote in stone that he would write an article on Water Management one day.

That anecdote has nothing to do with this topic except it includes water. Water Management is increasingly becoming more of a concern internationally as the concept of Water Wars becomes more and more of a possibility. Of the water resources on Earth, 3% is not salty. Of that 3%, 66% is locked up in glaciers and ice caps. So 1% of the world’s water is left for human use. However, 20% of this water is remote and inaccessible – so 0.8% of the world’s total water is used for human activities. 

Agriculture uses 70% of the world’s usable water, while approximately 2.8 billion people live in areas where there either is not physically enough water to meet demand or areas where there is lack of human investment or capacity to meet water demand.  Problematically, 50% of the world’s population now are urbanized which has led to traditional water resources being polluted with urban waste water. As a result, farmers who sell their crops to cities often use polluted water. Heavy metals, antibiotics, oestrogens and other elements may be present in the water which in turn affects the food consumed by urban dwellers. Sometimes, irrigation of crops are contaminated with bacteria or viruses which can lead to diarrhoea or cholera outbreaks.

Usually, pollution of water resources occurs near cities or areas where urban sprawl is present. Noted is the fact that other areas such as karstic aquifers located in the mountains of Europe have a high level of clean water, not affected by industrialization of the modern age.

Specific examples of water management can be located anywhere in the world. In Canada, the participants in the oil industry have a heavy hand in water management. It can take between 1.4 – 4 litres of water to extra a litre of synthetic crude while 4 million litres to bring a gas well into production. Additionally, fracking uses a large amount of water as the head of Shell stated that shale gas development could use twice as much water, as traditional production of gas.  Interestingly, the Canada West foundation released a report showing water issues are becoming an issue in the West, as droughts are appearing to be “more severe and more frequent”.

In the United States, a report was released comparing water rates. Interestingly, the cities in rain scarce areas have lower residential water rates, but a higher level of use.  Per capita water use is declining in most of the cities surveyed in the Circle of Blue report. Additionally, it is estimated by the EPA that $335 billion will be needed to repair America’s water infrastructure to ensure adequate supply.  It is hypothesized that since the demand for water has fallen, price will rise (as it already has) as revenue is based on per use.

With a large population, India is no stranger to water management problems.  There have been reports of wells drying out and states fighting with each other over supply. Rajendra K. Pachauri is the Director of the Energy and Resources Institute of India had an interesting comment regarding water privatization. He believes that water efficiency will only increase once the private sector becomes far more involved.  Simply put, politicians “need to change people’s mindsets. Everyone in this country [India] thinks access to water is a God-given right. It’s a scarce resource which has to be treated as such and, like everything else, come with a price attached”.  However a UN report from 2006 on Human Development states that privatization of water resources leads to reduced access for the poor around the world as prices rise.  For example, New Yorkers pay around 65 cents a cubic meter for water while Colombians pay around $5.50.  Londoners will pay around $1.50. However, this may also have to do with stronger infrastructure in the Western areas just listed.

The UN Report report highlighted several facts. First, 12% of the world’s population uses 85% of the water. Corporations around the world that own or operation water systems serve only 7% of the world’s population while over 400 million children have no access to safe water and 1.4 million children die each year from lack of access to safe water. 

With the world’s population increasing, more efficient means of water distribution will need to be found.  Ideas such as monitoring irrigation performance and improving models, developing water reuse systems and better information management systems/technologies for sewage and water networks are all solutions that companies such as CSIRO in Australia advocates for. 

  

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Environmental Economics: Energy Production (Part 2)

Flip on a light, turn on your computer, and google ‘alexonomics’ while turning on your electric massage chair. What do all these activities require? Energy.

Energy production is one of the largest issues facing government policy creators today. It is no secret that more energy is being used currently than ever before historically, and that trend is expected to continue unless something is done to curb the estimated 2.3% energy consumption growth per year.  Right now many countries are looking at greener sources of energy and funding development through subsidization and other incentives.  Although some of these programs have seen unfortunate outcomes (such as Solyndra in the USA), it is generally a good idea to invest in cleaner sources of energy.  

There are two types of energy sources, renewable and non-renewable. Renewable energy does not run out, while non-renewable has a lifespan.  Non-renewable energy includes fossil fuels and nuclear energy while renewable can include tidal, geothermal, biomass or traditional renewable resources such as wind, solar or hydro power. Renewable sources account for around 20% of global electricity, with around 75% of that number coming from hydroelectricity.

Nuclear energy has been derided around the globe as of late; the Japanse tsunami really gave the entire nuclear industry terrible publicity as I have discussed earlier. Currently, nuclear power occurs from the process of nuclear fission. Using uranium rods atoms are split releasing energy which generates steam and turns the turbines to generate electricity. This process generates spent fuel rods which are radioactive and stored in concrete casks. Cold fusion has been deemed to replace nuclear fission, a process that expels far less radioactive and uses deuterium as a fuel. Again, extended information can be found on my past post regarding nuclear activities.

Fossil fuels have long been the popular method of electricity generation. Coal, petroleum, natural gas, crude oil, shale and tar sands are all fossil fuels used to generate electricity. Currently, oil reserves are estimated to give the world around 40 years of production, while natural gas and coal are estimated to be around for another century (both numbers fluctuate depending on the source). Peak Oil theory relies on a model developed by M. King Hubbert whom accurately predicted American oil production would peak around 1965 – 1970. Peak oil optimists suggest the production decline will begin in 2020, while pessimists suggest the peak of oil production has already, or about to occur. The International Energy Agency states that conventional crude production already peaked in 2006.

Environmentalists are quite opposed to the energy that most likely powers their latte machines.  The main reason is the pollution fossil fuels are attributed with. Combustion of fossil fuels produces nitrogen oxides, sulfur oxide, volatile organic compounds and heavy metals while 90% of greenhouse gases apparently come from fossil fuel combustion.

Let me explain something for a second. The Greenhouse Effect is a scientific natural occurring event, and is often associated as an evil. There is a layer of greenhouse gases (H₂O, CO₂, CH₄, N₂O, and O₃) which absorb and emit electromagnetic radiation which mostly comes from the sun. Without this layer, the earth would be a whole lot colder. The reason this effect is mentioned is fossil fuels emit greenhouse gases, and as we used more fossil fuels, a thicker layer is formed in the atmosphere while causes the earth to become warmer than it should naturally be.

Back to why fossil fuels are evil. Environment Canada states that electricity generation contributes to smog, and acid rain. Radioactive material is also released into the atmosphere from fossil fuel burning. To quantify that statement, it is estimated that in 1982 American energy production released 155 times as much radioactivity into the atmosphere as the Three Mile incident.

However, lately coal has been on the rebound as it has increased 6% last year and now accounts for 30% of all energy consumption. Also, many of the coal electricity plants exceed EPA standards. As it is a cheap and plentiful fuel, the main challenge in burning coal is ensuring less of an environmental impact – which the industry has apparently been succeeding in doing.

Extraction of fossil fuels is probably the most newsworthy item in terms of environmental impact. From the BP oil spill (4.2 million barrels dumped into the Gulf of Mexico) to the large empty lakes in Alberta left over from the oil sands, these images can be quite disturbing. Fossil fuel incidents around the United States can be found here.

It is no secret that pumping oil from the ocean or open pit mining can be troublesome to the environment, but new methods such as oil (bituminous) sand extraction or fracking are raising concerns. Oil sands are defined as having a mixture of sand, clay, water and petroleum bundled together and is naturally occurring – to put it simplistically. To extract cold flow, cyclic steam stimulation, solvent extraction, THAI, CHOPS and other methods have been tried. To explain all these methods would take quite a while, so if interested please research. However, the environmental concerns boil down to destruction of land, air pollution, water management, marine life destruction, and public health problems. In August of 2011, the Albertan government initiated a study to link higher rates of cancer to the oil sands. In terms of animal life, moose have been found to have 17-33 times the acceptable level of arsenic in their system (2006) while Lake Athabasca has apparently seen a rise in deformities and tumours in fish. Water Management may be the largest concern, as (according to Greenpeace –so heavily biased) the oil sands use around 349 million cubic meters annually of water – and end up in tailings ponds.

So the solution to all these problems is renewable energy. Let’s break down each resource one by one.

First, wind power simply is hoisting a windmill, and allowing the wind to turn the turbines to charge a battery. Wind power is growing 21% annually, with the Walney Wind Farm in the Irish Sea being the largest wind farm in the world.  Turbines see operation and maintenance costs of 20-35% of total yearly costs. As I don’t want to get too much into it, a great reference is this source.  Concerns over wind power is the high cost of initial investment (which has fallen drastically due to new technologies), and noise/aesthetic complaints.

Photovoltaic (PV) cells are used to convert light energy supplied by the sun to electricity at the atomic level. Basically, the sunlight hits the solar cell (created from silicon) carrying energy which is converted into electrical current by the wires attached. A cell is divided into the glass, encapsulant, crystalline cells, encapsulant, back sheet, junction box, and the frame/rail holding it all together. The main issues with solar power is the cost, low level of efficiency and constant maintenance/replacement costs. However, solar farms have a higher level of efficiency as although as a single unit a cell is not very efficient, many more cells are.  Also, the chemicals used in the creation of solar panels are quite, well dirty. Arsenic, cadmium telluride, hexafluoroethane, and poluvinyl fluoride are used in the creation. According the 2009 report from the Silicon Valley Toxic’s Coaltion the harm from these chemicals are accrued at the alpha and omega of a cell’s life. The toxins that manufacturers expose their workers to are quite harmful and if solar panels are not disposed of properly, the environmental impact is quite lethal. For example the backsheet of a cell is made from polyvinyl fluoride which contains lead, chromium, cadmium, selenium, arsenic and antimony. However, companies such as BioSolar are attempting to alleviate the environmental impact by creating a backsheet that will degrade without causing contamination of the environment.  Financially, BioSolar has lost $2.6 million since 2006.

Companies are attempting to solve this issue with programs like First Solar’s recycling program. Researchers are working on developing organic cells made from nontoxic chemicals, however they are very inefficient.  

Hydroelectric power is damming rivers and using their energy to turn turbines, and thus create electricity. Quebec has quite the industry surrounding this resource. Interestingly, a study with a dam in the Amazon shows that the dam created a 3.6 times larger greenhouse effect per kWh than burning oil for energy production. This is caused by flooding river valleys, and the ensuing decaying organic material releasing large amounts of methane. Currently, underwater turbines are being researched for development.

Biomass and Geothermal production are two other energy sources that are not as talked about. Biomass production involves capturing the methane from decomposing methane and burned to produce electricity. Ethanol fuel is widely known, although the subsidization of the process used to create it has been blamed for rising food costs. Geothermal power is about harnessing the heat produced from the earth. One well is drilled into the ground to extract ground water and the other well injects that water into the ground. Hot rocks heated by the earth warm the water which causes steams, and turns the turbines to produce electricity. Natural geothermal energy from geysers, volcanoes, hot springs or steam vents also can occur. Iceland is a good example. Although a great example of a renewable resource, geothermal energy is quite expensive.

Again, I will tie this up in my fifth and final post of this series in terms of economics. Below is a chart showing the decommission, production and construction costs of electrical production per kilowatt-hour.  

Click here to view the website of the creators of this graph!

Energy production will continually be an ongoing debate as countries gravitate between cost, feasibility and of course the different lobbyist groups attempting to spin the government’s direction toward one source or another. A great example of this is ethanol, which is heavily subsidized due to the green lobby. However this has caused many farmers to cash in by growing corn for the sole purpose of creating ethanol, which some economists attribute to the growing cost of food. Additionally, it is arguable that these subsidies have little to no return environmentally as ethanol does very little to alleviate the environmental damage of fossil fuels – even in the present massive production. Brazil, currently, is another large producer of ethanol.

Most importantly, to make decisions regarding energy production an understanding is needed of the different options available – and how these options work. I encourage any policy maker to fully understand the non-renewable and renewable energy industries before drafting any energy policy.

Global energy statistics can be found here (yes it’s BP so biased).

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Environmental Economics: Genetic Engineering (Part 1)

It is now June 2012, marking the one year anniversary of my blog. First, thank you to all my readers and commenter’s – and also the good folks who link me from different sites.

To mark this anniversary, I’m going to attempt to give a thorough view on how environmental and economical policies are conflicting, and how new policies should be created for the most productive result. This will be long, but I believe it should provide a solid insight into what most people believe are completely different issues, are actually very much intertwined. As a result of the length of this topic, I am breaking it into 5 different posts. This will be the first. The sixth and final post will tie all the policies together and attempt to explain their economic impact.

It’s actually amazing how many environmental issues are real problems on the planet, yet their severity and significance is misrepresented through popular media mediums. Obviously everyone has heard of climate change and nuclear issues, or even animal extinction. Yet, there are far more intense problems that the world will have to solve that will heavily affect economic activity around the world. Genetic Engineering, Energy Production, Water Management, Conservation, Land Degradation, and just simple waste will all be issues with a growing population. This first post will deal exclusively with genetic engineering.

The reasoning behind genetic engineering is pretty simple. Due to an increase in the world’s population, an increase of the world’s food supply will have to occur. To obtain this, plants and animals are genetically changed to maximize production. The Green Revolution is the prime example of this.  Currently, GE products can be found everywhere. GE plants and animals have the ability to produce different elements needed for drugs far cheaper than organic production. For example, antithrombin is produced in genetically engineered goats (called pharming) while bacteria specifically made to create insulin has been around since 1982. Yes, this comes straight from Wikipedia, yet I wanted to give some context. The process is rather simple. Identify the gene you wish to add to a host, isolate the gene, construct a new gene (add any elements to make the gene stronger, work properly), and target the selected part of the host you wish to change. Then watch the transformation of the host, and confirm regeneration with selectable markers within the transformed cells. As I am not a scientist, this process could probably be explained better – so any corrections are welcome.

The main selling point for genetically produced materials is cost, as it seems to be cheaper to create substances that are more likely to accomplish one’s goal. However, a large amount of risks seem to have been forgotten. For example, Dr. Pusztai’s research reports that GE potatoes are poisonous to mammals. Basically, DNA found in the snowdrop plant and the Cauliflower Mosaic Virus (CaMv) are used in GE potatoes and when tested against organic (regular) potatoes, rats fed the GE potatoes had a severe viral infection caused by the CaMv. The same CaMv gene is spliced into almost all GE foods and crops.

This is not the only example of problems. Monsanto is probably the largest GE producer on the planet, and one of their products is rBGH which was approved by the FDA in 1994. This product forces cows to improve milk production by using 400-500% higher levels of Insulin-Like Growth Factor (IGF-1) in cows. It was warned by the US Congressional Watchdog agency, the GAO to not approve IGF-1 as it could cause a public health problem (specifically breast, prostate and colon cancer). The EU and Canada both banned rBGH, but continues to be injected into 10% of all US Dairy Cows.

These are both specific problems, but GE products have macro problems as well. Genetic Pollution is when GE plants and animals interact with their environment and spread the genes. Think of it like this, when an insect pollinates a genetically altered plant, and then pollinates an organic plant – they pollute the organic plant with GE material. The EU doesn’t believe that genetic pollution can be controlled and are currently looking into the issue. In agreement with evolutionary theories, once released from the lab GE products can reproduce, migrate and mutate and the outcome is unpredictable.

Besides this, other macro problems are the potential creation of superweeds and superpests, or pests and weeds that are resistant to herbicides and pesticides. This means stronger pesticides will be used to control which most likely will be more toxic, and these toxic chemicals will find their way into the human food supply. One GE soil microorganism entitled Klebsiella planticola destroys key soil nutrients needed for proper growth of food, while lab tests has suggests that the common boll worm will evolve into a super pest immune to Bt sprays and other environmentally friendly biopesticides.

Don’t get me wrong, genetically engineering plants for greater chances of growth and stronger crops is a good idea. However, doing it ethically and with careful consideration is a must. If the genome is stable, genetic modification is not harmful. Additionally, genetic modification does not have to be about pesticide resistance. In many cases, large corporations such as Monsanto create the very pesticides they claim their plants are protected against.  Remember, Monsanto and other GE providers are corporations – pro profit. For example, Monsanto could lose billions of dollars from a court ruling in Brazil.  Basically a consortium of farmers argued the GM soya given to the farmers by Monsanto is “highly contaminating” (Batista da Silveira) in terms of attempting to differentiate between organic and GM soya. To explain the situation further, the reason for purchasing the Monsanto products is the farmers can spray roundup (herbicide glyphosate) for weed control without affecting their crop which are created by Monsanto to be roundup resistant. Monsanto collects royalties from the farmers for these seeds, and now may be forced to return these same royalties.

Relating this back to economics is simple; it’s our food supply. Prince Charles summed it up best when stating: “what we should be talking about is food security not food production”. He’s partly correct. Ensuring our food supply is not contaminated for generations due to corporations attempting to monopolize food production is a tough battle. However, maximizing food production efficiency will always be a topic of discussion. Maximizing efficiency is always on the mind of our capitalistic society. Sure, for the short term genetic engineered crops perform marvelously. However, when long term use of the product can cause different diseases and become the origin of more problems than society could ever anticipate, this is when GE production of food should be re-analyzed. The cost of health and environmental problems that GE products are linked to are too great to be ignored.

One of the best ideas I have read to solve the commercialization of DNA coding is creating an open source library for different plants. This would eliminate the monopoly that corporations have on GE production and allow far more minds to place their input into the creation of stronger more durable plants. Ideally, this is a great idea, practically it would almost never work due to the powerful GE lobbyist groups who would do anything to prevent this open source library from occurring. Patenting products is a key part of GE corporation's business model, and adding more freedom and transparency to their products would be very difficult to legislate into law. 

Regulation of GE products has been increased drastically over the last few years, which is good. The EU leads the way, while other countries are developing stronger policies. The age old saying of "we are what we eat" can be applied to this situation, and rightly so. GE production should not be abolished, yet the community should be far wearier of the potential outcome of their actions. 

*A good list of GE companies can be found here: http://www.biofortified.org/resources/genetic-engineering-companies/

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Analysis of Bill C-38: Centralization of Power

With the uproar that Canada’s Bill C-38 has caused, I decided to quickly post what was actually so worrisome about this bill. The uproar I am referencing is the 24 hours of consecutive voting on 800 amendments the opposition has proposed to Bill C-38. If you read the National Post, there really is no substance to the article just quotes from rambling politicians. However, it is worthwhile to take a second look at the Budget Bill as the bill did inspire 13 000 Canadian websites to black out as a form of protest.

When I attended the 2012 Budget in March, I walked away unimpressed. The only thing that stood out for me was the removal of the penny, and even that was quite insignificant in terms of cost savings. I did like the fact that the government was moving towards paperless offices, and enjoyed the irony that the budget was printed in an expensive book as pointed out by the opposition. However, as I continued to read, some items really stood out.

First, Division 23 of Part 4 repeals the Fair Wages and Hours of Labour Act. This act was designed to ensure that contractors bidding on government contractors would pay their employees fair wages and overtime. To be honest, although I don’t support repealing the act, I do see some sense in it. Private industry has to usually work longer hours without pay especially in the corporate world. Repealing this Act would simply make public and private contractors on equal grounds. At the same time, I do support paying overtime and fair wages to everyone – so I do not see why repealing this bill is necessary. It could cheapen bidding on government services and lower costs, at the expense of the Canadian worker. Either way, I’m lukewarm on this topic.

The environment is clearly being attacked by Bill C-38. The Kyoto Protocol Implementation Act is repealed, the Nation Energy Board is amended, the Fisheries Act is watered down, while the Canadian Environmental Assessment Act is being replaced with a new Act. Specifically, (if Bill C-38 was passed) the Fisheries Act would not apply to all fish, meaning all fish and waters where they live might not be protected. It can, and I strongly emphasize the word can, exclude many fish and their habitats. Also, the responsibility to protect the fish and their environment can be given to provinces or other entities. This is worrisome for the fact that other entities may not have the interest in preservation of environment.

Continuing on, the bill repeals maximum time limits on permits that could affect different species at risk. To exemplify, if a mine is created near a species that is extinct, there is no legal obligation for the corporation to seek an environment assessment 3 years later to see how that species has been affected by the mining activity. Continuing on this theme, the National Energy Board does not have to consider how energy projects will affect species at risk when issuing permits. To provide an example, if an oil pipeline could disrupt a significant migration route for a species at risk, this will be immaterial to the board when considering the issuance of a permit. Adding to this, if the National Energy Board rejects an application for a permit – the Conservative Cabinet now has the power (through C-38) to overrule. This is comparable to the government having judiciary power, when it is clearly know that in a democracy legislative and judiciary power should remain completely separate to avoid corruption from too much power.

Adding to this is the fact that when the National Energy Board reviews a project, environmental considerations will not be represented by an Environmental Assessment Agency. Instead, the National Energy Board will now consider the environmental impacts. Again, centralization of power.

The scary part is the replacement of the Environmental Assessment Act. Right now, the Act replacing this Act is unknown. What is known is the assessments will be less rigorous and only occur on designated projects. Designated projects are not defined – therefore it is a possibility that very little projects will require an assessment by the government.  Minister Flaherty announced at the budget that this new Act will simply lower the amount of time an assessment will take, which sounds positive. Although true, this is accomplished by replacing the regular assessment process with a speedier and less conclusive assessment. The environmental effects are now defined to impacts to fish, migratory birds, and marine plants. According to the Conservatives, the environment consists only of fish, birds and marine wildlife. This is a head scratcher.

A misconception of the Bill is that it allows American law enforcement the same power on Canadian soil. This is untrue. It simply increases cooperation between American and Canadian law enforcement agencies, but American officials still are placed under Canadian scrutiny/supervision when on Canadian soil.

The main problem I find with the bill is the centralization of power to the Cabinet and ministers. The amount of power the Minister of the Environment Peter Kent receives if Bill C-38 is passed is ridiculous. Considering he is in the running for the worst Minister of the Environment in Canadian history, and  his qualifications for the position do not exist, this man should not have this much power in a field that he knows nothing about. Peter Kent is a journalist, and worked as an anchorman and foreign correspondent. 

Bill C-38 also removes civilian oversight of CSIS and removes many of the Auditor General’s powers. I have no problem with repealing Kyoto, the Protocol did nothing and Canada doesn’t follow it anyway. Adding to this, I believe in increasing the age of retirement and decreasing public servant and governmental costs through decreasing social programs. However, decreasing social programs should be done intelligently by basing it on thorough analysis – not a speedy vote. I have already blogged about social programs becoming a social problem.

Basically, this is a massive bill rewriting, repealing or replacing roughly 70 laws and Acts that is being rushed through Parliament. It involves heavy centralization of power to the federal government, specifically the Cabinet, and blatantly reduces environmental protection. This bill should not be passed based on those tenets alone. 

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The Gift of Honesty

As an accountant, I can see the act of gift giving through a raw technical point of view.  Credit cash, debit inventory as the gift giver engages in a physical transaction to acquire a new gift. Credit Inventory once the gift is given, but what account is debited to balance the transaction? The answer is relatively simple – happiness. Giving to someone and watching their face light up in surprise is an amazing sight to see. 

However, that is a typical and common point of view. Giving can also be done through other means, and may not be well received. The other means I am referencing is honesty. Our society has become complacent and passive; often one will choose the easier complimentary route of embracing one’s decisions and viewpoints with an agreeable answer while thinking the opposite.

Think of it like this. If a friend of yours decided to buy a car that they could not afford, but desperately wanted in order to attract a member of the opposite sex – what would your response be? Your friend obviously wants confirmation for this decision, and it is much easier to agree with their plan on payments for the car and maintenance. Or, you could choose another route, offering one line of disagreement that is quick and probably will simply turn your friend off from your opinion.

Or, the last option – giving a frank and honest answer on why your friend should not buy that car. Spending the time to explain thoughtfully your arguments and working through the issue. In terms of the example, discussing with your friend why using a material item to elevate status to attract based on false premise of wealth is simply not a strong way to attract a significant other. Not only that, the decision to buy an expensive car which your friend cannot afford will cause very real changes financially in their life.

Although this is the longer route, a real friend will give you honest well thought out advice when it’s needed. This is indeed a gift that is sorely missed in our society today, the ability to disagree with the direction of another person on reasonable grounds – and outwardly showing your legitimate concerns. The only reason a friend will outline their concerns is because they care. If your friend did not care about the outcome of your decisions, there would be no concern and hence a friend would simply agree with your decisions, regardless of the expected outcome.

Yes, sometimes you will encounter an adverse opinion to your decisions. Yet, hostility to another argument is no way to counter honest thoughtful statements that might be true. Instead, use the concerns to make a better decision.

Listening to a person and giving an honest opinion is a gift that is incredibly undervalued. In business these people are called consultants, and charge quite a bit for their services. In life, these are called best friends who charge nothing. The people in your life who give you the gift of honesty through sincere listening are the people who should be cherished and appreciated. 

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Quebec Protestors May Have a Point

I guess it’s been a while since I hit the keyboard. Not physically, that would be a terrible thing to do. I mean what did the keyboard do to deserve being hit? Actually my keyboard has been waiting for me to come back to type out my opinions, actually screaming; my keyboard is wondering what in the name of Zeus and the Olympian gods is going on in Quebec.

 There were actually confirmed protests in Paris, Taipei, London (UK), Berlin, Brussels and Copenhagen regarding the decision to increase tuition from the base amount of $2168 by $325 each year for 5 years.  The reason behind the international protest is Quebec attracts many international students, who are upset over the matter.  International students have actually become far more popular in Canadian Universities, as they charge them far higher tuition to attend.

The best part about this debate is the attack on the students.  Sun News posted a graphic of tuition rates across the country that was not only heavily biased and completely out of context, but it was heavily shared on social media to attack the protestors. Basically the graphic showed average tuition rates across the country, which Quebec obviously has the lowest. What they failed to show was everything else, or answer the question: Why does Quebec have the lowest tuition?

Quebec has a culture of social services which derives from a less capitalistic view of lifestyle. Citizens pay more taxes for (theoretically) better/more service.  Just compare Ontario tax rates to Quebec. The first bracket (39 020) pays 5.05% compared to 16% in Quebec,  the second bracket 9.15% compared to 20% in Quebec, and the last bracket 11.16% in Ontario compared to 24% in Quebec.  That’s quite a large difference. The extra money is supposed to go to social services such as education to make it more affordable for the general masses.  In terms of the students, tax rates should not have much of an effect, as tuition is 100% deductible. However, they will eventually pay for the tuition of the future – so they have a right to protest their future increased taxation which is supposed to limit their current tuition. Basically, improve a student’s cash flow now, in return for a higher payment in the future. Future value of money is always less then Present Value for the finance students.

Also, one should look at the fundamental reason for public education. The reason for subsidization, bursaries, and grants of the education system is to increase access, as education is primarily an investment in the future of our society. Limiting education limits the potential of society, creates a larger gap between the rich and poor, and polarizes difference sects of society.  This is the reason why Germany, after World War II, made post secondary education almost completely free – a revolutionary concept that arguably gave their society a vast advantage.

Now, we can afford to have the students keep paying these rates. What’s the reason for the increase? Unions.  Administration accounts for a majority portion of a Quebec University’s budget and as they have unionized and have the power to shut down entire schools, they have been granted their gross overpayments. Bureaucracy has taken over which means less efficiencies. Again, public unions and their powerful lawyers demand too much from taxpayers that simply cannot afford their ironclad pensions and payroll.

So what’s the conclusion? Support the increase of tuition. Why? That $325 per year really isn’t that much, and it supposedly isn’t going to the administration. More so to improve the quality of the Universities of Quebec, which are lagging far behind others internationally (besides McGill).  However, the reformation of education should be a fundamental debate in politician’s minds, yet it’s one often forgotten. We should look at the German model, and realize our flaws. Their dual educational system has a high focus on apprenticeships produces a more technically advanced society.  The humanity courses such as degrees in history, political science, recreational and leisure studies, film studies or a major in Italian Cultural studies should not be encouraged. Education for the sake of education is not a strong or good policy. Education for the sake of improving one’s skills, understanding and candidacy for a better job that can improve a society in a functional way is a far better basic view of why schools exist.

Again, I am not saying studying history or film is wrong; I am a bit of a history buff myself. However, we must differentiate between the abstract degrees, and the degrees that will support new business and economic development.

Support the increase in tuition as a temporary measure, but focus on the reformation of education from its core beliefs to its unionized restrictions.  

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