ECON371/UBCO2024WT1/NewsWiki/group1week5

Source:

https://www.cbc.ca/news/science/what-on-earth-fossil-ads-1.7347240

Problem:

The struggle to crack down on fossil fuel advertising-in an effort to diminish carbon emissions-as fossil fuel groups fight back against the motion.

Summary:

Montreal and Toronto have started restricting oil and gas companies' advertising on public transit systems, where many people who frequently use buses or trains see pro-fossil fuel ads. The Toronto City Council has taken another step by passing a motion to restrict fossil fuel advertising on all city property. Environmental groups, like the Canadian Association of Physicians for the Environment (CAPE), view this as a significant win, pushing for similar advertising restrictions as those imposed on the tobacco industry and other negatively impactful products. These measures are intended to stop the misinformation from greenwashing fossil fuel companies, such as those from the Pathways Alliance, a group of major oilsands producers. Environmental advocates see these restrictions as a needed step in fighting climate change, the fossil fuel industry argues that it limits important conversations on resource development.

Economic concepts:

1. Nonrenewable resources: A natural resource that we have a finite supply of. Once we use all of that resource, there's no way to acquire any more of that resource, or if there is a way it would take an extremely long time (multiple thousands of years or even millions) to produce more. Some examples of this would include coal and oil, which are common fossil fuels.
2. Public goods: A public good is a good that is both non-excludable and non-rivalrous. Use by one person neither prevents access by other people, nor does it reduce availability to others. Therefore, the good can be used simultaneously by more than one person.

Application of concepts:

1. This article revolves around the nonrenewable resources of fossil fuels. In addition to being nonrenewable, fossil fuels cause a significant amount of pollution in Earth's atmosphere. In the article, they are trying to reduce the use of fossil fuels by banning greenwashing ads that mislead consumers about the carbon footprint of the company, making them think it is lower than it actually is. The restriction on ads might reduce the amount of consumers that buy oil and gas, which in turn would help reduce pollution and encourage alternative sources of energy besides gas and oil.
2. Clean air and a stable, fresh climate are considered public goods by definition. It is extremely difficult for someone to be excluded from being able to use the air we breathe and there is not a way to rival it without some extreme situation. In the case of the article, we can assume that advertising fossil fuel and oil use in major industrial hubs such as Montreal and Toronto increases overall consumption of these goods/ services as well as negates the work being put toward green alternatives and green projects. By restricting fossil fuel advertisements, the use of the public good is being positively benefitted as this could reduce the amount of future consumption and positively increase the air quality. Moreover, goals set by policymakers have a higher chance of succeeding, such as a net-zero goal.

Conclusion:

The restrictions on fossil fuel adverts in Montreal and Toronto plan to reduce reliance on nonrenewable resources, especially those which cause harm to the environment. By banning misleading greenwashing ads, Montreal and Toronto are limiting the influence of fossil fuel companies. The use of public goods is being protected through this, since reduced fossil fuel consumption will help preserve air quality. While the fossil fuel industry argues that these restrictions are silencing important conversations, advertising sustainable alternatives prioritizes the long-term health of society by advertising shifts toward renewable energy. As a result, these efforts to stop misleading advertising would allow society to achieve healthier climate goals and support the transition to a more sustainable future.

Prof: An angle I see here that is a much larger theme in the article is the role of information in willingness to pay (WTP). We have talked about the importance of people having the information about the products they can spend money on in order to make their choices. This was one of the issues when we discussed contingent valuation. A good description of the choice and its impacts is important for ensuring that people are responding with a choice that reflects the value of the good to them. What greenwashing does is remove that information. People are confused and do not know if what they are spending their money on has the desired impacts on them, or on the larger environment that they may care about. Greenwashing hides the differences between products and makes it more difficult for people to express their preferences.