…environmental economics and the implications of environmental policy

Archive for the ‘pembina’ tag

Unlocking the cash cow contradictions

with 20 comments

Not sure how one squares this,

Killing Canada’s cash cow not the answer (here)

A report funded by TD Bank on the regional economic impact of climate change should be viewed with a jaundiced eye…it tells us that only by punishing Alberta with massive carbon taxes can the federal government meet its climate-change goal of reducing greenhouse-gas emissions by 20 per cent below 1990 levels by 2020….Shooting the cash cow is not the answer.

With this…

Oil sands billions expected to be unlocked (here)

Steadily rising oil prices will combine with lower costs to put some of the more than $100 billion in canceled oilsands projects back on the front burner, according to a new study.

It seems the golden goose can not be killed. And even if some oil sands projects become marginal with carbon pricing, as production costs fall, and oil prices rise due to scarcity, will not more wealth be left in the ground? But then again, we expect more income now and our kids can fend for themselves.

Written by Dave Sawyer

November 4th, 2009 at 2:39 pm

Posted in Emissions Pricing

Tagged with , ,

Dragging the misery out a few years longer

with 32 comments

Ross McKitrick has a good response to the Pembina/Suzuki paper here.

Ross is the type of guy to go after everything, and indeed that is what he does in this editorial – the government, the targets, the models, the ENGOS, and the science. Funny thing is, he is mostly right on all accounts. Indeed, his gives a great overview of why one should be sceptical in looking at all things climate policy.

But, does his argument mean everything is wrong? I think not. He makes an argument for precaution when thinking about climate policy and climate science, but when it comes to climate outcomes that could be really really bad, he prefers skepticism over precaution. Strange because he clearly believes risk and uncertainty dominate climate policy and science, but then implies that a little climate policy insurance is unwarranted.

This position then gives fodder to the Rhino Party Whips of the world, which perhaps says it all. (see comment 23, 8:37 pm). In the end, this all serves to drag the misery out a few years longer.

Written by Dave Sawyer

November 3rd, 2009 at 1:33 pm

Wal-Mart and Climate Change Expectations

with 24 comments

Ok, so I am back …. not sure why I left….

Below is a unedited version of a Letter to the Globe I submitted (see Here).

Standing in Wal-Mart, looking around at the Halloween mayhem, I realized just how bad it is. No, it is not consumer confidence, because the lineups were 15 deep, with all manner of folk clamoring to spend. And no it is not the brinks and mortar economy, because the shelves and isles were positively chocked full.

No, I realized that our expectations are all wrong. We expect mounds of cheap stuff to be available and ready to take home in a moments notice. And yes, we expect someone to cart it away once it crumbles shortly thereafter. And herein lies the real root problem with our Wal-Mart expectations — disposal.

All this junk has to be made, shipped, stored, bought, taken home and then dumped. All of it except for the soft bits that hit the sewage facility and then the river. And all of this activity emits carbon and other nastiness, loads of it. But no matter, the greatest trash heap of them all, our atmosphere, is handling that for free.

So, standing there in the Wal-Mart mayhem, it became clear to me that at the root of the Globe’s editorial response to the so-called “landmark climate change study” is Wal-Mart expectations. Labeling the report’s economic conclusions as “devastating” fits well with our collective expectation that we expect more for less. Or even better, we expect a free lunch.

But are we worse off with action to manage carbon and other environmental nastiness? Based on the report, I think not. Even with aggressive action on climate change as outlined in the report, and no linked permit trade with the United States to reduce our domestic costs, Canada’s economy will still be much larger than today. All economic sectors will increase in size and wealth, including that great Canadian cash cow, oil and gas. Under aggressive climate action, even Alberta’s economy is still a third larger than today.

In this “devastated” economic future, Canada will all be richer, Wal-Mart will be bigger and we can all buy more stuff.

So are we better off with action on climate change? Economically we may be marginally worse off, but our wellbeing is so much more than just economics. For starters, the growing trash heap in which we all live in may be a little smaller. And that, my friends, may just make us all better off.

Written by Dave Sawyer

November 2nd, 2009 at 2:32 pm