The tar sands. Photo (cc) Dru Oja Jay, The Dominion.
The Canadian government is all-in on the tar sands, the nation’s reputation be damned. The Keystone XL pipeline has been a central focus of opponents of unlimited tar sand development, but it has been selected for challenge in part because the pipeline decision does not rest with a government that is willing to sacrifice everything on an altar of tar.
Perhaps the biggest cost in our unbounded quest for wealth through tar is a seeming willingness to abandon Canada’s long-standing reputation and place in the world. We were widely known as the world’s premier peacekeepers and consistent advocates of international law and multilateralism. No more, no way.
We are now the world’s climate dinosaurs, the only nation not only to fail to meet its climate treaty obligations, but to walk away from the global effort after having signed and approved the Kyoto Protocol. On top of that, we are now the one and only country to withdraw from the UN Convention to Combat Desertification. There are not many things that 193 nations support and one nation opposes.
Our reputation is tarred, but this is not Canada’s only loss. To appreciate the full price of setting no limits on tar sands extraction we need a national debate of all of the costs and benefits of present policies – including the constraints and costs placed on our economic future by the absence of limits.
A good place to start thinking about these concerns would be with an analysis from the Canadian Centre for Policy Alternatives (CCPA) entitled The Bitumen Cliff. The CCPA report is bang-on regarding the economic risks a tar-bound Canada faces. The greatest risks are not the problems historically typical of overdependence on staples exports, such as declining resource supplies, or collapse or volatility in commodity prices. The greatest risk is that much of the rest of the world will choose to deal effectively with climate change and we will be left holding a high-priced barrel of tar and not much else.
An over-priced Canadian dollar limits the diversity of our exports and accelerates the disappearance of manufacturing jobs. The CCPA report pins down the degree to which our dollar is overvalued and the number of resulting manufacturing job losses. At par with the U.S. dollar, which was the recent norm until a couple of weeks ago, our dollar was 25% over ‘fair value’ as determined by purchasing power comparison (The Bitumen Cliff, p. 7). The nominal value of our dollar has been driven higher by high oil prices and the ever-rising proportion of our exports that are from the oil sands. The oil patch has created 16,500 high-paying direct jobs recently, but our manufacturing sector, hurt by a high dollar, has shed 500,000 jobs at the same time (p. 8-9).
Some of those manufacturing jobs might have been lost anyway. Such jobs are also being shed in the United States and Europe. However, some high-paying jobs are being recovered in public transportation improvements and in the rapid expansion of renewable energy production and installation. Ottawa has cut programmes that support these sectors. That is what being all-in on one sector does to priorities.
I was in Denmark last week and their public transit improvements and wind energy initiatives are visible everywhere. Germany now leads the world in solar energy and Los Angeles, California has just adopted a municipal feed-in-tariff (FIT). Many large corporations including Starbucks, Unilever, Levi Strauss and Intel are also committed to large investments in renewable energy. IKEA intends to be a net energy producer by 2020. All of this suggests to me that basing Canada’s national economy on one of the most carbon-intensive energy options is, to say the least, imprudent.
Canada is also wrong-headed in what we are not doing. I chatted with a bright young American engineer in Copenhagen who had recently moved to Denmark to design wind turbine props for Siemens. Denmark’s early wind energy initiatives are now paying dividends in high paying jobs. Canada has begun to move in this direction, especially in Ontario, but we have not shifted as far or as fast as we might. We are missing opportunities that our massive and diverse landscape provides us because both government attention and private investment is flowing into the tar sands disproportionately.
On top of all of this, there are significant environmental costs associated with the tar sands beyond greenhouse gas emissions. Massive swaths of boreal forest are being removed in Alberta, reducing habitat and removing the carbon sink that the forest would provide. The water pollution associated with tar sands processing is considerable, and the water used in tar sands processes cannot be used elsewhere in Alberta for other purposes, including agriculture. In a world where climate is changing rapidly, prudent nations do not squander water resources heedlessly.
How much should Canada’s economic and environmental future depend on tar sands development? Should a geographically and socially complex and diverse nation not have a complex and diverse energy and economic future? It is past time for a public debate on these questions.
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