Seth Klein: Now is exactly the right time to regulate oil and gas
Earlier this week, Prime Minister Stephen Harper declared that, given oil prices plummeting to $60-$70 a barrel, now would be a “crazy” time to introduce regulations on the oil and gas sector.
This comes after promising nine years ago that the federal government would bring in new GHG regulations on the oil and gas sector (but failing to do so), and after committing at the Copenhagen climate talks in 2009 that Canada would reduce its GHG emissions by 17 percent by 2020, a target that Environment Canada now says the government has no plan to meet.
In fact, with the price of oil so low, now would be a terrific time to introduce new carbon-reduction measures.
For example, it’s an ideal time to introduce a federal carbon tax. When B.C. introduced its carbon tax, oil was at $150 (ouch!). But with oil at $65, consumers are well placed to handle the introduction of a carbon tax (provided, of course, that we also introduce an offsetting carbon tax credit for low- and modest-income households, as modelled in this CCPA report by Marc Lee).
Indeed, from a climate perspective, the downside of low oil prices is that consumers may be less inclined to change their behaviours and burn less gas, and a carbon tax, provided it was high enough, could mitigate that.
The timing would also be ideal for governments panicked about what the drop in oil prices means for reduced public revenues (as oil royalties are linked to price, and a reduction in production activity reduces other tax revenues as well). Because a carbon tax is linked to the consumption of oil, which is unlikely to slow given the low price, a carbon tax could help buttress government revenues.
Most importantly though, the drop is oil prices represents a welcome moment to rethink the path we are on. It’s a reminder that linking our economic fate to volatile commodity prices is always a roller-coaster. (Didn’t Albertans learn that lesson decades ago?) Sound economic management ought to be about moving us away from such dependence, and certainly isn’t about panicking and rolling over on climate commitments when the oil bubble starts to burst. We’ve been given a chance—a pause in the gold rush—to move away from mindless fossil-fuel expansion. That’s not crazy—that’s good sense.
Now is precisely when we should be capturing what income we can from this sector (via a carbon tax and/or other taxes and royalties), and using those revenues to expedite the transition toward a new low-carbon economy, using those revenues to fund green jobs and green infrastructure. And those taxation options should be complemented by other regulatory measures to cap carbon emissions within a defined carbon budget, to further accelerate the transition.
Comments
5 Comments
hmmm
Dec 11, 2014 at 3:14pm
Thank you, Seth, for your well-reasoned common-sense piece!
Hear, hear!
Dec 11, 2014 at 5:16pm
Excellent points.
Crazy Climate Change Denying Neo Cons
Dec 11, 2014 at 6:17pm
yup and while at it tell Albertans and Canadians to look at the Norway model of keeping 80% of Revenues from Oil and Gas or even that of NewFoundLand!
Not the CRAZY Canadian / Alberta model of giving 95+% + Subsidies to mostly Foreign Oil companies and Communist China state owned Oil companies.
Or the CRAZY Neo Con Conservative China Trade Deal giving Communist China NAFTA on Steroids like powers over Canadian Resources + fines via secret offshore Tribunals!
Just like "Cash Envelope" lying Brian and NAFTA.
NAFTA = Canada being the most SUED Country in the OECD.
Yup you and me paying $5 Billion +++ in NAFTA Fines to rich Foreign Corporations yeah that's CRAZY!
Signing the China Trade Deal in Valdivostok Russia yeah that's just CRAZY!
Being a Climate Change Denier like most Neo Cons Conservatives are that's CRAZY!
The Neo Cons Conservatives, their supporters and their rigid ideaology that's CRAZY!
Dr. Jack
Dec 11, 2014 at 8:28pm
Another communist proposal!!
What is next?
Take 99% of the income of the rich and give it to the drug addicts??
Ummmmm...
Dec 13, 2014 at 5:46pm
… that's assuming that the carbon tax would be borne by consumers and not the energy companies themselves. Just what Canadians need… more tax. Not to mention that adding a carbon tax that impacts energy companies in any way, right as they are getting punched in the gut by a free-falling oil price, would be akin to seeing someone take a 50% pay cut and then asking them to also cough up some more money to pay for daycare. Don't agree with that? The world needs oil and gas… why should the energy companies be penalized for selling exactly what drives our society? There are plenty of green incentives out there… wind and solar are heavily subsidized and EV car credits are standard. Let the markets drive investment, not the governments… half of the taxes collected would probably just be lost in government administration.
People tend to miss the point when it comes to the whole global warming "movement". The important point is not that we've so smart that we should believe that we can predict the future of a system as inherently chaotic and complex as the Earth… it's that the global population has finally started to grasp the concept of the tragedy of the commons, and carbon is just the tip of the iceberg. Even the green technologies have major environmental impacts. A significant amount of toxic waste is produced during the manufacture of solar panels; mines needed for all of the exotic elements in magnets and electronics create radioactive byproducts/tailings and heavy metal contamination; and a significant amount of mercury enters the biosphere any time a new hydroelectric damn floods a valley.
Pick your poison, just don't pick on carbon because it's easy. The last thing I want is another tax.