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Governance Through Social Learning

Gilles Paquet

B - National Perspectives

Chapter 6. The Environment–Energy Interface: Social Learning Versus the Invisible Foot1

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  • 1 This paper also appeared in J. Lemco (editor). The Canada–United States Relationship. Westport, CT (...)

1Despite all the pleasant rhetoric at the last Houston Summit and the formal negotiations between the United States and Canada regarding acid rain, neither government is resolved to taking a strong stand on the energy and environment issues they face. Both governments welcome additional studies, and negotiated agreements between the two countries are welcome as a progressive approach to the solution of current environmental problems — mainly in response to the intense public concern and media attention — but these issues are not very high on the political agenda of either government.

2The lack of congruence between rhetoric and action is attributable to the acute economic problems experienced by both countries and, in particular, to the shadow their huge budget deficits cast on any initiative likely to be costly in terms of public funds. In addition, there is still an immense amount of ignorance and uncertainty about both the real energy challenges facing North America and the real costs of “green-type” initiatives suggested by environmentalists. Not only is there no precise measure of the price Canadians and Americans are willing to pay to achieve energy sovereignty and to meet the environmental standards they purport to defend, but there has also been little evidence to indicate that they are willing to accept important sacrifices. Finally, much of the inertia on the policy front is also a result of the extraordinary tension between the natural myopia of politicians (whose time horizon rarely extends beyond four years) and corporate leaders (whose loyalty is to quarterly earnings and sound bottom lines) and the essentially long-term nature of energy and environment issues.

3The recent period of intense negotiations between Canada and the United States leading to the Free Trade Agreement has focused the attention of officials of both countries on the long term and on strategies for sharing their energy and environmental resources. This continental solidarity might be expected to increase concern over the prudent use of resources, but this has proved too optimistic a forecast. The only commitments emanating from the Free Trade Agreement discussions on the energy/environment front pertain to a continental sharing of energy in what is still regarded by both parties as the unlikely event of a crisis (risk-sharing amounting to little more than a minimal insurance policy) and to a continuing interest in educating their citizens about the realities and costs of environmental problems.

4While policy discussions flounder, political choices are still being made daily by governments, corporations, and citizens to effectively craft an overall policy stance. This de facto policy on both sides of the border puts priority on market mechanisms as the appropriate means for handling energy production and for ensuring viable environmental quality. Experts have argued repeatedly that national policies of a more ambitious sort are unwarranted and would be counterproductive for the problems are ill-structured, the policy goals are unclear, the technological future is less than transparent, and governments in both countries are still too ignorant about energy and environmental issues to experiment effectively with various policies. Only a substantial deterioration in environmental quality or an increase in energy prices appears likely to force both countries to question their total reliance on markets and lead them to craft the necessary international and intersectoral arrangements capable of reflecting critical trade-offs on the energy/environment front. In the meantime, there is a policy vacuum.


5Despite the lack of explicit environment/energy policies on both sides of the border, the casual reader of the popular press probably has the impression that the United States did not craft an energy policy in the 1980s while Canada did. This is a result of the attention that accompanied Canada’s National Energy Program (NEP) in 1980. In fact, after the world oil price shock of 1973–74, both the United States and Canada developed temporary policies to cushion their citizens from spiraling prices. Only in 1981 did the United States move away from such arrangements toward deregulation; Canada did not follow suit until 1985 when a change in government occurred (Watkins 1987). On the environmental policy front, the two countries have been somewhat out of sync, but they are drifting in the same general direction. In the United States, a concerted effort to promote environmental policy strategies was developed in the 1970s, but was relaxed in the 1980s. In Canada, the policy thrust was much weaker in the 1970s and today remains largely unfocused.

6There are many reasons for these choices and the same underlying forces are likely to continue to influence policies in the 1990s. Taking them into account is crucial if one is to attempt to gauge future policy trends.


7There are a number of reasons why the United States has no effective energy policy: the lack of a stable focus for energy concerns in the American legislative system; the sharp ideological infighting between advocates of public power and the free marketeers; the absence of a strong, coordinated leadership on the issues; and so on. But perhaps the most convincing explanation is that throughout the 1970s and 80s, there was a lack of consensus among the American population as to “what ought to be done on energy” (Uslaner 1987). In the absence of government intervention in the pursuit of explicit goals, officials have simply allowed the market to become the main referee. Thus, a de facto market-based energy policy evolved in the United States.

8In Canada, the NEP was crafted in 1980 following decades of explicit government intervention on the energy front (Doern and Phidd 1983). Energy had become a vital issue to government officials during the 1980 election, and, from that campaign, one could infer the existence of a clear “national division” on this issue. The newly elected Trudeau government, which received almost all of its support from the eastern and central provinces, imposed a number of important constraints on energy producers in the western provinces (Doern and Toner 1985). This policy was not the result of a national consensus, but rather of a coup de force by one of the two national coalitions of interests. However, when Jean Chrétien replaced Marc Lalonde as minister of energy in 1983, the policy climate had shifted as a result of the disastrous consequences of the NEP on investment in the energy sector. A greater willingness to consult and bargain with western energy interests evolved. By the time the Mulroney government ended its first term of office in 1988, any lingering effect of the NEP had evaporated.

9In fact, by 1988, government officials in both Canada and the United States had built up a rationale for nonintervention in the energy field. In the spring of 1987, Canada’s federal minister of energy, mines, and resources, Marcel Masse, all but admitted that there was a policy void when he charged a special committee with responsibility for consulting the Canadian population to determine appropriate directions for Canadian energy policy. This task force, under the stewardship of Thomas Kierans, submitted its report in 1988 (Kierans et al. 1988; Paquet, this volume, Chapter 5). The report urged, in a general way, the adoption of a market approach and the continuation of a policy of nonintervention. There was understandably no follow-up to the Kierans report, for it called for no real public action. “No explicit policy” had become the policy on the energy front in both Canada and the United States.

10It would be hard, therefore, to predict what strategies Canada or the United States would adopt in the event of a new energy crunch, especially given the fact that their recent Free Trade Agreement has further reduced the real possibility and, therefore, the likelihood of unilateral efforts to promote a national energy policy on either side of the border.


11Officials in Canada and the United States, as in many other countries, have been conscious of environmental issues for quite a long time. Between 1968 and 1978, some 150 governments created departments of the environment or their equivalent (Roots 1988). Canada and the United States were leaders in this pack: the United States created the Environmental Protection Agency (EPA) in 1970 and Canada created its Department of Environment (DOE) the following year.

12This early interest did not fare well through the second oil price shock and the recession of the early 1980s which influenced a systematic decrease in spending on environmental protection (Regens and Rycroft 1989). However, environmental issues have become prominent again since 1987, due mainly to increased awareness generated by the report of the World Commission on Environment and Development (the Brundtland Commission), which out-lined the necessary steps to environmentally sustainable economic development for the planet by the year 2000 and beyond (Brundtland 1987). However, this awareness has not yet been translated into meaningful policy proposals.

13The reasons for such inertia are simple: there is a substantial amount of soft grassroots support for environmental policies, but the political costs of action in the face of much ignorance and great uncertainty appear to be much higher than the economic costs of inaction. Political decision-making is concerned with short-term cost–benefit analysis, and, in the short term, tough environmental regulation is bound to hurt many polluting industries and, therefore, to affect the employment and income of voters. Yet in the longer haul, the losses attributable to environment degradation affecting crops, soils, aquatic ecosystems, forests, and human and animal life are seemingly catastrophic. At this point, the short-term time horizon of politicians has stacked the deck against longer-term environmental policies.

14In Canada, the creation of a department of environment could be regarded as a package of “positional policies” to “signal to affected groups and the attentive public that emerging problems have been recognized and are being dealt with” (Adie and Thomas 1982). But during the subsequent periods of economic difficulties, environmental concerns were displaced by priorities such as budget deficit cutting and international competitiveness imperatives. Although the DOE retains its symbolic value, there is little room for substantial and meaningful action in the current system despite the strong statements of Lucien Bouchard, who was minister of the environment until his resignation in 1990.

15Indeed, the fact that the environment portfolio has been handed, albeit temporarily, to the minister responsible for the Treasury Board, Robert de Cotret, appears to confirm that it no longer represents an autonomous generative policy locus. A “framework for discussion on the environment” has been issued — the so-called Green Plan (Bouchard 1990) — and a truncated and unsatisfactory national consultation has been hurried through the government. Yet the political and economic resources allocated to environmental protection continue to diminish, and whatever momentum might have been injected into the policymaking process by the former minister has all but evaporated with his departure.

16In the United States, the terms of the environmental debate have been more explicit as the confrontation between ecologists and certain environmentally-unfriendly industries developed earlier. A measure of ethical environmentalism has even emerged (Schwartz 1989) as well as a widespread belief that citizen action should be the primary force in the protection of the environment. It has also become clear that it will not be acceptable to rely almost exclusively on bureaucratic efforts to solve environmental problems. This dual approach of public and private action has evolved slowly, but in the 1980s there was a shift toward a greater reliance on private protection of the environment as government-initiated environmental protection measures proved less effective than expected. Public sector policies were sharply criticized as being often motivated more by populist sentiment and pork-barrel politics than by actual environmental concern (Caldwell 1988; Fraas and Munley 1989; Stroup and Shaw 1989). As a result, “the new breeze blowing in Washington” has tended to promote a myriad of market-based mechanisms to supplement the existing policy framework (Stavins 1989).


17These energy and environment dossiers raise complex questions; uncertainty and potential surprises become possible. The issues are not dealt with adequately by economic theory, for they include the complexity of economy–society–environment interactions where resources are not divisible, property rights are nonexistent, market failures are prevalent, and other problems such as uncertainty, public goods, external effects, and irreversibility are omnipresent (Paquet 1990d).

18Charles Perrings (1987) has shown that because of the complexity of ill-understood direct and indirect interdependencies, external effects in the socioeconomy are neither anticipated nor taken into account by the price mechanism. This incompleteness of the price mechanism results in the market not being able to detect intertemporal environmental deterioration even though it is physically observable. A great potential for surprises ensues. Without a time perspective that perfectly discounts these surprises or a price mechanism that anticipates them perfectly, the efficiency of the market mechanism in solving environmental problems is suspect.

19Three issues are central to the current problems in effectively addressing environmental concerns: a lack of appreciation of the complexities underpinning the notion of sustainable development, a fundamental myopia about the politico-economic system in dealing with energy and environment issues, and the need for some innovative theory-building if appropriate institutions are to be established.

Sustainability as Resilience

20Sustainable development is a difficult concept for economists to deal with. It amounts to development with nondeclining natural wealth (Pearce et al. 1989). This concept is not a static notion: it is not only a process of natural capital conservation and of maintenance of productivity, but also a matter of maintaining the stability (a certain constancy) and the resilience (a capacity for the system to maintain its integrity) of the overall ecological system. Both energy and environment issues challenge the stability and the resilience of the system.

21Market-based strategies cannot deal effectively with certain irreversible problems. As a result, even though market-type approaches may serve to improve the incentive-reward system in some ways and, thereby, extend the time horizon of economic agents somewhat, it is unlikely that this will suffice to ensure resilience.

22Research by animal ecologists has shed some light on the strategies developed by animals for acquiring system resilience. Vertinsky (1987) has noted the uncanny parallel between the successful behaviour of animals in the face of uncertainty (the balance and capacity to switch during crisis between a competitive myopic individual search for efficiency and a collective search for resilience) and the behaviour of Japanese companies that are operating in an environment where the market prevails, but are capable of subjecting themselves to a cooperative framework (through radical state intervention) in a crisis “to secure the collective survival.” This duality of private competition in general, coupled with the possibility of switching to cooperation and guidance by collective norms during a crisis, ensures resilience.

23This model can also be applied on the environmental front. The source of system resilience may be manifold. A variety of sources may elicit cooperation in crisis — ethics, “deep ecology,” hierarchies of rights and obligations in the context of social norms, and conventions are all more or less effective ways to trigger a switch to different sets of rules during a crisis. But successful switches require a well-developed and operating sociocultural underground within which the market mechanism is nested. Some sort of “social capital” that supports individual actions at normal times but constrains them in critical circumstances is necessary (Coleman 1987). But one cannot expect such social capital to emerge organically, and resilience is unlikely to crystallize without the institutional prerequisites for a smooth co-evolution of the economic, social, and environmental systems being put into place (Norgaard and Dixon 1986).

Discounting the Future

24The myopia of the price mechanism condemns all evaluations of energy and environment dimensions as somewhat truncated. Energy and environment issues raise questions of long-run collective needs, whereas the market mechanism effectively monitors only short-run individual preferences. Moreover, sustainable development, i.e., development with nondeclining natural wealth, raises questions about intergenerational comparisons: how should the fate of future generations be factored in when we make current decisions?

25Questions of intergenerational equity are bothersome for economists, for they expose incontrovertibly the fundamental incompatibility between intergenerational equality as an objective and any positive rate of discount that dramatically shrinks the present value of future flows of benefits and costs (Diamond 1965). As soon as the rate of discount is positive, this entails a certain myopia and a bias against the future state of the ecological system. This has led many to point to the social discount rate — the socially agreed on positive rate of discount — as the culprit, because it enforces a certain degree of myopia.

26A suggested solution has been to reduce the rate of discount and, thereby, increase the time horizon of decision-makers. This may not be the right approach. Artificially reducing the discount rate can only introduce yet more distortions as the new rate would ignore time preference and opportunity costs. It would most certainly extend the time horizon and force decision-makers to take into account more fully some long-run environmental costs, but it would also modify the rate of harvesting of renewable resources and of depletion of nonrenewable resources in ways that may turn out to be both surprising and deplorable.

27Tinkering with the discount rate is hardly sufficient. A lower discount rate would not only make long-run costs more relevant to current decisions, but it would also give more valence to future benefits in present decisions. Consequently, it is not clear in what way the energy/environment interface would be modified. A more reasonable way to respond to the concerns raised by high social discount rates is to work harder at identifying all the costs and benefits in matters dealing with energy and environmental resources (Pearce et al. 1989).

Institutional Carpentry

28In both the United States and Canada, the tools used to identify costs and benefits have mainly been of two sorts: impact analysis and market tests.

29Environmental impact analysis is now used worldwide. It requires agencies to take into account the effects of their policy decisions on the quality of the environment in the hope that assessing even nonqualified damage before the fact will lead to a change in values and generate more attention to environmental costs even though they may be external to the agency. The concept has now been accepted in more than 30 countries including Canada and the United States. These analyses have served as “an informing and testing of policy,” but it is fair to say that it has been much more effective and pervasive in the United States where it is more firmly, if imperfectly, embedded in the normal process of planning and decision-making (Caldwell 1988). However, recent judicial decisions in Canada (in the case of huge dams in Saskatchewan and Alberta) indicate that this is becoming a more potent tool in Canada.

30This being said, the main tendency in both Canada and the United States has been to rely more and more on market-based environmental policies, even if the pace at which both countries have proceeded is quite different. In the United States, the actions of citizen-enforcers have created enough pressure (even though they were not always productive in environmental terms) to allow questions to emerge concerning the best mix of permissible “bounty hunting” and tolerable bureaucratic foot dragging (Greve 1989). In Canada, the move toward market-based environmental policies was much slower: it has been defended on intellectual grounds since the 1960s (Dales 1968), but much of the Canadian economic decision-making structure maintains a preference for public enterprise in these matters (Hardin 1974), and the present government has had to proceed more carefully. But there has been a recent wave of publications in Canada emphasizing the importance of understanding the environment in the economy, i.e., the centrality of market-oriented approaches to environmental problems (Block 1990; Doern 1990). This would appear to indicate that Canada is now rapidly catching up with the United States on this front.

31Still the following cautious statement by the Canadian minister of the environment to a Standing Committee on Environment of the Canadian House of Commons (Bouchard 1989: 18–12) indicates that indecisiveness and prudence are still prevalent:

Energy is a big industry in Canada; energy is almost Canada. It is almost in terms of energy that this country has been built. The modern country of Canada is so blended with energy preoccupations that it is very difficult for us when the time comes to establish a plan for environment, because environment could be perceived as the enemy of energy programs. It is not, and the Minister of Environment is not the arch-enemy of the Minister of Energy. We are not, because we know now that energy consumption must be renewable, sustainable, and protect the atmosphere.

32Despite much agitation at the task force and committee level, valse-hésitation is the style of the day in government and there remains a policy void in both countries. Not much work has been done on the construction of either an alternative paradigm to look at energy and environment or refurbished institutions and attitudinal changes that are likely to foster the needed adjustments to policymaking on these fronts (Daly and Cobb 1989).

33In the meantime, citizens in the United States and Canada, indecisive as they may be, have become restive. Although, in early 1988, only 4% of Canadians thought of environment as the country’s highest priority, by mid 1989, 94% placed the environment at or near the top of their list of concerns (Dyer 1990). The impatience of some Canadians was also evident in the emergence of Earth First members who were willing to use civil disobedience and even ecological terrorism in pursuit of their environmental goals. In the United States the same tendencies on the environmental front are present, but with a higher degree of impatience and radicalism emanating from deep-rooted environmental ethics. In Canada, frustration is still in the incubation phase, but growing quickly.


34Although Canadians and Americans may share a soft consensus in favour of effective environmental protection, there is no agreement on how to construct the appropriate private–public action mix to create the sort of resilient system that is desired. There is a great cacophony of voices of various groups and factions on both sides of the border. However, each of these coalitions is slowly being transformed into an action group expending much time and resources to ensure that its point of view is registered. On the energy front, one notes an even higher level of rent-seeking activity in Canada than in the United States. It is ascribable to the greater dependence on energy in Canada’s northern climate, but also to the relative importance of energy-related activities — both economic and symbolic — for regions of the country (Hydro Québec, for instance) (Paquet 1989e).

35On both the energy and environment fronts, the voices are as volatile as they are vehement. One is not sure that either government has fairly represented the points of view of its constituents. In many cases, governments have added to the already high degree of false consciousness and anomie. For instance, at the beginning of the 1980s, Canadians regarded energy as a very special commodity and supported a national policy for the sector. By the end of the decade, officials wanted to believe that such a policy was no longer necessary and that the market could be relied on to alleviate all problems on this front. This “new” Canadian view was promulgated in the final report of the Energy Options Process (Kierans et al. 1988) and embraced by the Mulroney government officials.

36But what was said to the Kierans task force by Canadians and what was finally reported was not the same thing. Much cognitive dissonance was injected in the task force process. Canadians still do not feel that energy is a commodity like others and the “new” Canadian view propounded by the Mulroney government — that there is no need for a national policy — is not widely shared by the citizenry. Polls indicate that Canadian citizens have a much greater concern for conservation and for environmental issues than does their government. They are not necessarily swayed by government officials in the energy field in Ottawa who repeat constantly that “hoarding is not good economics” or that conservation is not critical. For the Canadian public, “energy saved is energy found.” Consequently, there has been concern over the fact that government-initiated energy conservation projects have all but disappeared and it has become apparent that Canada’s energy policy is not to have a policy at all (see Chapter 5).

37Indeed, the same sort of concern about “officials” misreading the concerns of the population may be seen in the United States where, despite the fact that one high-efficiency light bulb over its lifetime eliminates the need for nearly one barrel of oil, energy efficiency and conservation programs continue to be canceled or downsized (Hirst 1990).

38Because of energy misinformation disseminated in Canada and the United States, there have been negative consequences of environmental action. A hands-off policy on energy limits the possibility of public involvement in environmental policies that might constrain the energy industry. Government policymaking on both sides of the border is fragmented. In the United States, cohesive pressure groups already best articulate what environmental policy should be. Yet such groups have not been powerful enough to reinvigorate the conservation movement that would lead North Americans to consume 30% less energy than they now do (Stobaugh and Yergin 1983). Nor have they been able to reverse the environmentally malignant energy strategy based on fossil fuels.

39However, the progress made on the acid rain front in 1990 suggests that one should not discount too readily the power of environmental groups in the United States: at times, the EPA has been the largest regulatory agency both in terms of budget and personnel (Rosenbaum 1985). After a period of softening environmental drive, Canada may also give encouraging signs of some strengthening of the tonus of environmental policy in spite of all the equivocation and federal–provincial squabbles.

40The popular attention focused on, and the extent of the litigation associated with, environmentalism does not provide the best conditions for energy competition and cooperation (Vertinsky 1987). There is much waste of resources in the energy and environment fields (Buchanan et al. 1980). The invisible foot marches in.

Adam Smith’s invisible hand symbolizes the unseen benefits that economic competition confers on the coordination of economic activity. The ‘invisible foot’... symbolizes the unseen costs... the negative welfare effects of competition over distributive shares. [Magee et al. 1989]

41The important lobbying activities of sectors threatened by environmental policies have led to an increased politicization of the EPA context in the United States and of the DOE in Canada. This has had a great impact on the effectiveness of these agencies. Current efforts to neutralize the emergence of a strong environmental policy in Canada owe much to the lessons that energy producers have learned from the United States record over the last decade.

42Energy-related projects create jobs, regional development, and growth-producing megaprojects within relatively short periods. These features imply a focus on well-identified beneficiaries. On the other hand, environmental losses are diffuse and likely to hurt only in the long run. It is not difficult to see why the “invisible foot” may operate effectively: redistributing from environment to energy may not be right in terms of long-term societal opportunity cost, but it is quite attractive in the short run.

43In the United States, the energy and energy-related sectors took some time to realize the dangers presented by developing environmental concerns: the energy crisis blinded them in the 1970s. In Canada, the energy players are intent on ensuring that current environmental policymaking is not defined in threatening terms. The present reactive approach of the DOE — emphasizing the broad responsibility of all citizens for pollution control — is bound to generate more paralysis than progress in government policymaking in Canada. As Lucien Bouchard (1989: 18) insisted before the Standing Committee on Environment, environmental questions challenge “the current life style of our society.... We must tap the creativity of Canadians in designing acceptable solutions. Better informed and educated citizens will be better able to make intelligent decisions.”

44Such cautiousness does not reveal a weakness of will on the part of the Canadian government, but rather the depth of the issues raised by the energy/environment interface. The Canadian government does not feel either compelled or able to propose a proactive environmental policy that would amount to a modification of Canadian life style.

45The continental integration of economic forces in terms of energy-based resources leads one to believe that there will be coordinated efforts on both sides of the border to neutralize attempts to promote environmental policies likely to impose high costs on the energy and energy-related sectors. Consequently, one should not be too optimistic in examining the environmental agenda for the next decade. There have been many promises made by many countries. Scenarios call for 20% and 50% reductions in carbon dioxide emissions by 2005 and by 2025, respectively. But this will not be possible without massive progress in energy efficiency and, perhaps, without greater reliance on nuclear energy. Yet neither front is very promising at this time in view of the withdrawal of resources from both. Moreover, as energy prices will continue to rise and energy crunches will thus become more probable, energy lobbies will likely grow in both power and persuasiveness. When faced with a trade-off between energy and environmental concerns, the Canadian and American public and politicians will probably choose to support the energy sector.


46An alternative to the litigious chaos of the rent-seeking society is the design of a democratically rooted policy capable of effecting the necessary switch from competition to cooperation when necessary. This is possible only if governments become learning organizations and if policymaking is reframed in terms of social learning.

Governments as Learning Organizations

47Defining a policy requires establishing the basis for selecting certain procedures or adopting certain strategies in the face of different plausible sets of circumstances. This cannot be done by presuming that experts already have all the necessary information, and that it is only a matter of negotiating the technically adapted policy. The information is widely spread through the population and scattered among many expert subgroups. A reasonable policymaking process must be based on social learning — on mutual learning by experts and clients, on interaction likely to generate a more complete picture of what measures are feasible, acceptable, and implementable.

48Attempting to solve the energy/environment problems by using a research organization (Garratt 1987) might appear to be a roundabout and ineffective strategy, but this is not so. The development of a policy stance in the environment/energy field requires policymakers and policy analysts to recognize a central problem: the goals of the policy are either unknown or very ambiguous and the means–ends relationships are highly uncertain and poorly understood (Rittel and Webber 1973; Paquet, this volume, Chapter 5).

49As we saw in Chapter 5, a standard way of looking at policymaking à la Wilensky (1967) is based on four elements: goal setting, control, innovation, and intelligence. When the problem is well-structured, policymaking emphasizing the first two elements is quite adequate. But when dealing with ill-structured and elusive problems, one must use an alternative approach that focuses on innovation and intelligence.

50Friedmann and Abonyi’s (1976) approach to such problems is again applicable in the energy/environment context (see Figure 5 and discussion in Chapter 2). Social values (block B) provide normative guidance in either the transformation of reality or the selection of strategies for action; they define what is acceptable. Theory of reality (block A) is a symbolic representation and explanation of the policy environment; it depicts what is feasible. Political strategy (block C) refers to the political action chosen; it identifies the stable and implementable options. Social action (block D) deals with the practical measures taken to ensure an effective policy outcome.

A Joint North American Task Force

51The long-term costs of the scenario of the invisible foot are very high, but there is no hope that social learning will proceed unless one can force the debate outside the present framework, which emphasizes short-run technical and economic efficiency while excluding other considerations. The time may be ripe for a first Joint North American Task Force on Environmental and Energy Resources to reffame the basic questions. If the Free Trade Agreement has made clear that the United States and Canada are now to share energy and environmental resources to a greater degree than in the past, a coordinated policy on such matters as environment and energy should be sought.

52This sort of new regional learning organization is akin to what was recommended by the Advisory Panel on Energy of the Brundtland Commission in 1986 (Iglesias 1987). Such agencies were meant to provide:

Needed capability to identify and seize opportunities for regional cooperation in financing, developing and exploiting new technologies for energy supply, energy saving, and environmental regeneration.

53Both Canada and the United States appear to be converging toward related environmental policies, yet in neither country is there a crisis of great immediacy. Therefore, current conditions provide an opportunity to create a North American forum to discuss issues that are continental in scope. Presumably, the presence of both Canadian and American environmentalists and energy industry representatives on this task force would ensure that the right questions would be asked and that various aspects of the issue would be explored. Moreover, one might count on such a first continental effort to ensure a degree of social learning for all interested parties and the public in general, and for the effort to have enough moral authority — as a result of the wide coverage of its surveying and the extensive amount of knowledge contributed by all the stakeholders to its ultimate recommendations — to be considered seriously by the governments on both sides of the border. Such an initiative would echo the separate initiatives of the Resources for the Future (United States) and Resources for Tomorrow (Canada) undertaken some 30 years ago as major efforts at stock-taking on the state of national resources and to develop natural resources policies.

54A Joint North American Task Force on Environmental and Energy Resources would provide the basis for some harmonization of policies at the continent level on issues that are already commanding some world-level attention. Such an initiative would not only foster a higher degree of North American awareness and due concern in the aftermath of the Brundtland report but might also enable much of the good work that has begun in Canada and in the United States to find an outlet likely to result in refurbished rules of the game on both sides of the border. For instance, much use might be made of the work done for the National Task Force on Environment and Economy (Canada) — made up of ministers from seven governments, federal and provincial, and the CEOs of seven of Canada’s top corporations — in adapting the Brundtland report to the Canadian arena. This has already generated a landmark report (National Task Force on Environment and Economy 1987).

55In the same spirit, United States senators John Heinz (Republican, Pennsylvania) and Timothy Wirth (Democrat, Colorado) initiated and sponsored Project 88, “a bipartisan effort to find innovative solutions to major environmental and natural resources problems.” Also in the United States, 50 people from industry, government, academia, and the environmental community worked on the final report Harnessing Market Fortes to Protect Our Environment — Initiatives for the New President produced in 1988 (Stavins 1989). Indeed, if a meeting of some 100 senior representatives of corporate and political strategists from both Canada and the United States in New York in December 1989 is a harbinger of things possible, battles of words may be soon replaced by calls to link arms at the North American level (Howard 1989).


56Social learning cannot occur ex nihilo. It must evolve from a set of basic principles and build on bets on certain promising directions. In the energy/environment world, certain key principles have been put forward as guidelines for any exercise in social architecture (Perrings 1987): the principle of intergenerational equity, the principle of collective property, and the principle of individual accountability. These may serve as prime movers in the learning process.

Three Principles

57The principle of intergenerational equity points to the contradiction between the criteria of intergenerational egalitarianism and a positive social rate of discount. It forces the debate onto a field where means have to be found to extend the time horizon of the present generation if the common inheritance is to be preserved.

58A small step in this general direction might be taken through the collective property of natural resources — energy and environment — and through the astute use of contracts governing such resources. This has been accomplished effectively in the world of mines and forestry. Such contracts could prohibit practices with proven deleterious effects and institute mechanisms resembling both royalties on depletable resources and taxes on polluters.

59To enforce such contracts, individual accountability would need to become an effective norm and mechanisms would need to be designed to ensure that those not meeting contractual obligations would be effectively charged for the damage they have caused. Given the possibility of escaping such charges through bankruptcy or the like, the idea of natural resources bonds — reimbursable deposits equal to the maximum possible damage in the event of violation of the rules of the contract — might be used (Solow 1971). The conjectured value of the bond could always be revised upward or downward as experience reveals that more or less destructive methods have been used.

New Norms

60These three principles may be put into effect in a variety of ways depending on basic current values. To the extent that intergenerational solidarity prevails, there may be little cause for the establishment of priorities within the present generation to emphasize the importance of longer-term objectives like the resilience of the system. Some (Daly and Cobb 1989) have chosen to bet on the construction of new solidarities. Others, who are either more cynical or averse to risks, would prefer the state to accept responsibility for sanctioning some priorities in the choices made by the present generation: the precedence of needs over preferences for instance (Frankfurt 1984a). Such norms or rules would direct traffic in the forum and ensure, like traffic lights in large cities, a way to orchestrate the actions of all agents. (Who would claim that the market would do this job better than coercive traffic lights?)

61Such norms or rules may vary with normal or abnormal times, very much as instinct guides animals to changes in the rules in critical times. Conventions may be changed according to certain meta-rules, and one of the central roles of the Joint North American Task Force would be to hammer out such meta-rules (Orgogozo and Sérieyx 1989; Paquet, this volume, Chapter 5).

62However, there is little hope that such developments will occur organically in Canada or the United States on the environment and energy fronts. A reframing of the issues is necessary. This, in turn, requires a revolution in the mind of the citizens of both countries. This new consciousness might begin in the year of the 200th anniversary of the death of Adam Smith with a recognition of a forgotten portion of his message: competition and markets cannot do everything, and governments should provide “certain public works and certain public institutions, which it can never be for the interest of any individual, or small number of individuals, to erect and maintain” (Smith 1776). The world of energy and environment calls for such public institutions, and until such a time as this is widely recognized, there is little hope that the requisite social architecture and carpentry will be allowed to proceed.


63Canada and the United States have been groping for market-oriented energy and environmental policies. Recent reports may serve as a basis for a promising process of social learning on this front (Stavins 1989). However, the market cannot be a panacea. To political and economic actors who focus on energy and environment policy, public goods loom large and, unfortunately, market-place decisions and calculations do not take into account public goods to an appropriate extent (Kash and Rycroft 1984). Social learning will have to lead both governments to return somewhat to some interventionist form of policy-making.

64Moreover, what is acceptable, what is feasible, what is stability-generating, and what is effectively implementable need not be the same all across North America. Much of the existing diversity may not be rooted so much in fundamental differences or in poor understanding of the issues as in historical circumstances and differing values. An occasion to take stock of the knowledge and values of the energy/environment players in Canada and the United States may be useful even if it does not lead to a unified policy, but only to critical appraisal of current policies and to the elaboration of different but coherent strategies. For example, there may be advantages for both Canada and the United States in developing joint policies on matters of binational concern such as acid rain, where the spillover effects from one country to the other are important, but this need not be the case across the board. It should become clearer to each nation (as social learning proceeds) why and to what extent values and priorities differ and why explicitly different policies may be desirable.

65Some may regard the social learning approach as futile or at least as likely to generate more heat than light. F. Scott Fitzgerald (1945) may have been right in saying that no grand idea was ever born in a conference, but “a lot of foolish ideas have died there” (Fitzgerald 1945). A Joint North American Task Force might be expected to slaughter foolish ideas in good currency. While the United States and Canada determine their own policy options, such a task force could effectively evaluate their potential for success. As Canadian humorist Stephen Leacock has reminded us, Canadians can only be passionate about moderation, one may reckon that any slaughter of foolish ideas and sacred cows at such a conference would likely be civil and humane.

Notes de fin

1 This paper also appeared in J. Lemco (editor). The Canada–United States Relationship. Westport, CT: Praeger, 1992, pp. 129–151.

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