You hate your job and your boss but you've been at that same employer for 20 years and have a lot of great memories from the good old days.
You stay, even though there are no signs of those days ever coming back.
You fight with your spouse every day but you've been married for 25 years and have a lot of great memories from the good old days. You stay together, even though there are no signs of those days ever coming back.
Premier Christy Clark has spent
$2 billion on a $9 billion hydroelectric dam, but demand for electricity is flat, despite a growing economy, and there are other cheaper, faster ways to generate new power if needed. She's keeping the project going because building big hydroelectric dams is what her political idol did when he was premier.
Prince George city council has worked for months to line up government funding and the land to construct a $23 million transit maintenance facility at 18th Avenue and Foothills Boulevard. Public opposition is significant and there are likely other locations that would be better but the site has been surveyed and is ready to go.
These are all examples of the sunk-cost fallacy, a concept that has become a fixture in both economics and psychology.
The understanding of sunk costs and other concepts around how an item's true fiscal value is easily distorted by emotion and faulty logic won Daniel Kahneman the Nobel Prize in Economics in 2002. Despite the illusion that decisions about how we'll value items in the future (job, spouse, dam, transit facility) are being made rationally, the emotional investment in those items prevents giving up. We'd rather stick with a losing option than regret giving up just before things got better.
With the above four examples - the first two all too common but hypothetical, the last two unique but real - one has broken through the fallacy.
Kudos to Mayor Lyn Hall and the rest of Prince George city council for having the gumption to walk away from the proposed transit facility and order city staff to go find a better location. Although that decision won't be formally made until Monday night's meeting, city council is clearly ready to walk away from those sunk costs and start over.
They heard the public, some of whom should be ashamed of themselves for the online bullying and harassment of their elected officials. The folks who call the newspaper screaming insults and threatening to sue are ignored.
The people who call or write with concerns about coverage and want to talk about those concerns in a respectful manner always receive an audience.
Same goes for politicians.
Guaranteed that the people and arguments that made a difference in changing city council's mind on this project were the ones that were knowledgeable, articulate and considerate of the difficult choices politicians have to make.
Leadership, despite what Donald Trump thinks, is the ability to admit error and change course. Prince George city council has shown leadership with its decision regarding the bus maintenance facility.
As for Site C, the sunk-cost fallacy is on full display. Spending $2 billion is not a valid reason to keep going. Even if it would cost $2 billion more to return the site to its original state and another $1 billion to honour broken contracts with vendors, that's still $4 billion not spent on the dam that could go towards schools, highways and hospitals. Clark has simply badmouthed anyone who criticizes the necessity of Site C (emotional investment = her legacy project as premier), instead of making a case for it.
The reality is that Site C will lose money after it opens, based on B.C. Hydro's own electricity consumption forecasts for the first five years Site C is in operation, starting in 2024. After that, forecasts become pretty unreliable and the legitimacy of a project with a century-long lifespan needs to be judged on more factors than just return on investment over its first years of operation.
If Site C loses money for its first 25 years but reduces carbon emissions from B.C. and Canada by millions of tonnes, is that still worth it? And, as Bruce Strachan rightly pointed out in his letter this week, the transition to electric cars in B.C. will be smoother and faster having a ready source for that additional power.
Finally, Site C is worth it from an energy security standpoint because energy in modern society is like food. The problems from producing too much are far less than the problems from producing not enough.
Site C is nowhere near perfect but it is a project that will deliver dividends to British Columbians, even if it may bring some discomfort to B.C. Hydro ratepayers in the short term or longer. It is past the point of no return and it should be completed and put into operation.
Prince George city council's decision to relocate the bus maintenance facility will also pay community dividends, even if it may bring some discomfort to city planning staff in the short term. As mayor and council, their most valuable emotional investment is in serving city residents and making them happy and proud of their community. From that standpoint, backing off on the proposed location was an easy choice.
-- Managing editor Neil Godbout
