We oppose the socialization of private costs and risks through government subsidies and indemnities. For example, while we approve of private insurance as a way to internalize risks and costs, we oppose government indemnities to resource or financial sectors, particularly if those indemnities protect risk takers and polluters from the risks and costs of their activities.
The Principle in Practice:
- Because the risks of a nuclear accident were too high for insurance companies to insure, and because the companies in the nuclear industry refused to put their companies at risk of bankruptcy by self-insuring, governments stepped in to relieve the nuclear industry of liability. Energy Probe opposes exemptions from liability; in the case of Canada’s Nuclear Liability Act, we fought, and ultimately lost, a decade long battle in the courts to declare the Act unconstitutional.
- Canada’s export credit agency, Export Development Canada, uses subsidized Crown financing to extend loans and to insure Canadian companies who are building uneconomic dams (Guavio dam in Colombia) and operating environmentally risky mines (Omai in Guyana) in countries with dysfunctional legal and governance institutions. In so doing, EDC interrupts important market feedback that would otherwise protect environments and economies. Through newspaper articles and before Parliamentary committees, Probe International tracks EDC’s operations and exposes its harmful foreign operations made possible only by its access to the Queen’s credit card.