This is one of the winning entries in the New Diplomacy of Natural Resources program launched by the United Nations Association of Canada. The program brings university students together with representatives from industry, Aboriginal groups, government and environmental organizations to learn about, and recommend, new approaches to the development of natural resources. This is an edited version.
A resonating takeaway from the New Diplomacy of Natural Resources was that, in order to maximize co-operation and minimize strife, resource development must be sustainable, and open to broad, collaborative dialogue. The great shame of oil and gas extraction is that, by the nature of its carbon emissions, it fundamentally undermines both these qualifications.
Anthropogenic climate change will not only alter domestic landscapes and conditions, jeopardizing the goal of sustainability, but because the atmosphere does not respect political boundaries, resulting climate impacts are not limited to Canada. Disadvantaged and far removed populations share in the consequences of our actions, yet they have no stake in the consultations.
The nature of the Canadian economy, and the global energy mix, speaks to the importance of oil and gas resource development in coming decades. It is not, however, an invitation to manage the development of these resources in a haphazard manner. Sound legislation must be attached to resource development to ensure its social and environmental viability. As such, I would propose a national carbon tax as a method to both alleviate the aforementioned concerns, but also to act as a point of reconciliation among divided stakeholders
A carbon tax acts in the interests of international populations in consultation processes by seeking to limit the most transnational impact of oil and gas development. Likewise, by limiting carbon emissions, an honest effort is being made to develop the resources in a sustainable manner. More than that, a carbon tax can act as a bridge to facilitate dialogue between ideologically divided participants. Many industry experts, politicians, scientists and economists see carbon pricing as an eventual certainty; for the government to take a pro-active role in implementing a carbon tax would work wonders to ease concerns of environmental callousness among the climate-conscious populous. Seeing climate change being addressed in a serious manner could spur greater co-operation between environmental non-governmental organizations and government, as well as work as a point of mutual interest within consultations with First Nations communities.
There are those who claim that a carbon tax is job-killing legislation that would gut the resources sector in Canada. This is not supported in cases such as British Columbia or Sweden, whose economies are performing well with carbon taxes in place. Nor is a carbon tax being heralded as the harbinger of doom within the industry. Multinational corporations, such as ExxonMobil and Shell, are already factoring a carbon price of $40 (U.S.) to $60 a tonne into their long-term planning, likely a higher price than can be expected in the foreseeable future, and ExxonMobil has gone so far as to publicly support a carbon tax.
A carbon tax will undoubtedly render some deeper deposits of petroleum reserves currently recoverable as not economically viable. Well, why the rush in the first place? Alternatives for petroleum are a long way from competitiveness, meaning that sitting on reserves is not terribly different from leaving money in the bank. Economists agree that our current model of unfettered rapid development of Alberta's bituminous sands cannot continue indefinitely. The introduction of a carbon tax allows for a period of reflective thought and sustained planning; a period where an olive branch can be extended to the consultation participants who are currently seen as hurdles to get over rather than potential partners in development.
Lastly, a carbon tax would assuredly act as motivation for innovation. The process of horizontal fracking was developed to overcome technical and financial limits of previous technologies. By placing hard-to-reach reserves outside of current economic viability, industry is provided with a direct incentive to optimize their extraction process to minimize the resulting carbon emissions. Moreover, technological innovations may place the more pioneering corporations in a position of competitive advantage, and may allow for the exporting of not just natural resources, but also knowledge and technology.
Oil and gas negotiations in Canada are a particularly touchy topic, capable of raising fiery partisanship from any of the involved parties. By introducing a shock to the established order via a carbon tax, a new period of resource development could be one that fosters an environment of consolidation while addressing global impacts.
This article has been edited and condensed for publication.