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Corporate Interest and its Host Country The interaction between business and government has always been an issue. Public sector institutions and policies have always the impact on business practices and making strategic decision and vise versa. Political, economic and legal decisions are closely connected with each other. During last years in Canada, more than ever, government and business coordinated their work focusing on many current discussions and analyses.
Nowadays Canada has the pluralist political model. According to this model a lot of interest groups were organized. Many people or groups of people found it more effective to organize and act collectively. They took part in different actions promoting their ideas. Interest groups become some kind of a bridge between citizens or businesses and policymakers.
For such groups political activity is one of the aspects of their work. Interest groups can act as professional lobbyists. It means they try to influence on government and make it to take decisions which would be suitable to them. In Canada there are hundreds of interest groups and associations that influence public policy. The role of them is sometimes diminished by critics.
It is a common point of view that lobbyists are large corporations (speaking about in-house lobbying) manipulating Canadian Parliament in their self interests. But speaking about the role of interest groups in the Canadian policy their aims should be pointed. They can be defined as ones of the special or public interests. It seems that these both notions interact. It is considered that public interest groups work in interest of whole population, but in fact all lobbyist movements act for narrow corporate interest. Having examined the events of the last years in Canada it is easy to come to conclusion that business interest groups have influenced positively on Canadian political decision making.
The Kyoto Accord became an issue between an interest group represented Canadian businessmen and government. In 1997 representatives of developing and developed countries met in Kyoto, Japan. The negotiators discussed the environmental problem: greenhouse effect. Burning fossil fuel was called as one of the reasons of it. It leads to the climate changes on the Earth. Though there were some different points of view.
Some scientists proved that emission of gas (carbon dioxide) entailed recent global warming. But others argued that it is a part of the Earth's periodic cycles of warming and cooling. The Accord provoked debates not only among scientists but among businessmen. It was pointed that the Kyoto Protocol would influence lifestyle, living standards and economic activity. For many countries it would effect on their ability to compete internationally.
In spite of all, the Kyoto Protocol was signed and 38 developed countries agreed to reduce their greenhouse gas emissions. Among them there was Canada. In 2002 Canada ratified the agreement though there were some interest groups that warned about negative after-effects for Canadian economy. They said that factually the Accord divided the country regionally, ideologically and into economic sectors.
There was a great opposition between big business and the greens. As it was said by the head of the Department of Foreign Affairs and International Trade, that there was a lot of activity going on discussing the economic value of emissions reduction. In September, 2002 Canadian small companies and big corporations formed a coalition. The main aim of it was to point after-effect of the treaty for economy and to appeal against the government's plan to ratify the Kyoto protocol. The coalition had a very serious doubt as to the fulfillment of the agreement. They said that Canada as a country would not be able to meet Kyoto targets without destroying the economy.
The costs would be high. The other aspect was pointed that not enough study had been done. Some items seemed to be confusing. An industry front group was created with the purpose to fight against Kyoto. It was called the Canadian Coalition for Responsible Environmental Solutions (CCRES). It was proclaimed that for Canada it was necessary to create its own plan.
It was said about "made in Canada solution." The phrase was used by the president of Imperial Oil in the fall of 2002 before the ratification of the Kyoto agreement. The Canadian Coalition for Responsible Environmental Solutions was a new lobby group. It insisted on a reward for businesses and consumers who would help to improve the atmosphere and make investments in cleaner technologies. The government should pay attention on business not only on greenhouse gas emissions.
CCRES worked much warning the government about the great economic losses. It was underlined that the country would have to purchase "emissions credits" from other countries that would lead to transference of money out of Canada. Instead of it the sum could be used for developing technologies. The other negative effect that impacts economy would be the rise of the price of energy and the price of manufactured goods. According to the treaty the country would have to conserve the usage of coal and oil and to develop and deploy new technologies and energy forms. But as it was pointed by Ron Brenneman, the Chief Executive Officer of Petro-Canada, that the business world of Canada is forced to say no to a great deal of innovative but unproven idea, because they cannot guarantee that innovations will help to reduce emissions by the time of the Kyoto deadline.
The only way is be to buy emissions credits on the international market though it is not beneficial variant for Canada, as it was said. By the way, about 200, 000 jobs would be lost. The Canadian Coalition for Responsible Environmental Solutions pointed on the other aspects. It should be mentioned that Canada is a large and cold country, thats why it needs more energy for heating, electricity and transportation. But according to the Protocol it should reduce energy and alter their transportation use. Canada and Russia seem to be at a distinct disadvantage compared to their partners such as Japan or China, for example.
It is clear that classifying as developing nations many countries have no stated emissions targets, according to the Kyoto Accord, though they have well-developed infrastructure and produce a lot of goods for export. These countries would be in an obvious advantage, ratifying the Accord. For Canada the results of economic and trade disadvantage would cause relocation of corporate operations to other parts of the world. Among those parts would be countries with lower environmental standards.
The problems, concerning Canadian ratification of the treaty, can be regarded as global and local ones. A global problem is greenhouse gases and a local one is the losses of the economy. Which one is of top priority? As it was pointed by CCERS, that ratifying the Kyoto Protocol Canada would achieve very little results at a very high cost. The risk was very high, taking into account the fact, that the USA, Canadian main partner and investor, did not ratify the Kyoto agreement. US specialists considered that the treaty would impact Canadian economy negatively and warned that the USA would have to re-evaluate its investments.
Since 1997 till nowadays economic and professional associations groups have been acting as "interest" or "pressure groups" (the biggest one was CCERS). Those groups tried to influence the government. Business or professional community promoted their common interest but there economic benefits would influence the whole country. One of the scientists, Jonathan Rauch, noted that interest groups act as a "parasite economy." He thought that they immobilize the work of the government. In his turn Professor William Stanbury regarded all interest groups as self-interest ones.
He said that interests groups operate only in their own interests though some causes may appear noble. He added that interest groups in Canada influence greatly public policy outcomes. Stanbury pointed that Canadian democracy gives an opportunity for different interests groups to show their points of view, concerning the problems which are in the interests of all Canadians. Sean Moore considered interests groups the largest and fastest growing element in the process of influencing the government.
Moore said that almost all interest groups are assigned to government relations. For some reasons interest groups that try to lobby the government decisions are considered to act in their selfish interests. But Moore argues and writes that advancing interests of some groups are not always taken into account by public. He proved that though lobbying acts in interest of special groups and for their benefits, lobbyists often make a government to act in the public interest. Nowadays public interest and special interest interact though sometimes "special interests" mask under the term "public interest." As it was said in 2002, in Canada business groups, non-governmental climate scientists and energy concerns formed a coalition that became an opposition to ratification of the Kyoto Accord by Canadian government. Though the treaty was ratified but the results of CCERS policy were taken into account.
It was proclaimed by a majority government that they would abandon the CO 2 emission limits of Kyoto. It was good news for businessmen and the fossil-fuel industry. New Prime Minister, Stephen Harper, said about the necessity to develop "made in Canada solution" that was proposed in 2002 (though there are much doubt about the solution. It is called made-in-the-U. S. one. ) In 2005 Joint Implementation mechanism was launched.
It allows developed countries to make investment in other developed countries and earn carbon allowances which can be used for their emission reduction commitments. In Canada a special program called the Prototype Carbon Fund was worked out for high emitters looking for credits. The project gives credits to investors investing in emission reduction projects. But with the purpose to reach benefits to the host country it is necessary to coordinate the work for improving energy efficiency, improving air quality and accessing to climate-friendly technologies. The Conference in Montreal, 2005, was the main step to bring together experts from governments and business environmental organizations. It is always useful to share experience and solutions related to climate change action.
Bibliography: March, Steve. Why the Kyoto accord is doomed to fail and what we can do about it: Three smarter ways to save the world (part I). Mac Leans, Dec. 06, 2005. W. T. Stanbury A Skeptics Guide to the Claims of So-called Public Interest Groups.
Canadian Public Administration, 36, issue 4, 1993. Canadian business bashes Kyoto as destructive. CBC news, Sep. 26, 2002. Canadians Split over Cost of Kyoto Accord: Historical Foundation of Canada. The Canadian Encyclopedia, 2006. web web
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Research essay sample on Corporate Interest And Its Host Country
