Course:ECON371/UBCO2011WT1/GROUP8/Article 4: Alberta and Feds Unable to Explain
Alberta and Feds Unable to Explain Minister's Green Oilsands Claim During Europe Mission
Summary
This article talks about claims made by former provincial economic minister regarding the environment policies and measures to protect the environment from the oil sands development. The federal and the provincial government seem uninterested with such claims and are declining to explain them. The Alberta government has instructed the oil sands companies to recycle 100 percent of water they were using in the production process by 2016 but on the other hand the actual regulation introduced require a reduction in the waste and not a 100 percent recycle of water. The government considers the development of oil sands as a great resource which is booming economic activity for all Canadians. The government wants oil sands development to be ethical but they are still not responding to Renner claims. The government claims that many of the oil sands companies are already recycling up to 95 percent but they are not ready to exactly tell how many companies are recycling 95 percent of the water. The Pembina in situate research says that less than one percent of the land have been restored to its original state before the industrial development. Annual emissions have greatly increased and the emissions are greater than the pollution of all the cars on Canadian roads. The industry is now facing targets by the provincial government to reduce the emission and companies are claiming their support for a balanced climate plan.
Economic Analysis
Overstating a policy to protect the environment is a big issue when it comes to politicians in Canada, especially when regarding pollution in the Alberta Oilsands.
Rob Renner, former provincial environmental minister, introduced the idea of 100% water recycling by the industry by 2016. Do you think this is realistic – let alone efficient? No it certainly isn’t. The actually regulations that were set in Alberta to reduce the waste of water was set, but not at 100%. As we learned before, “efficiency is when the economy’s recourses are allocated to their best uses; an equilibrium is reached in which the marginal benefits of an activity equal the marginal costs” (Textbook Glossary). And a key aspect of efficiency is Pareto Optimality – which is when both of the firms MAC curves need to be the same in order for efficiency to be reachable.
Another account from an Environmental spokesperson, Jessica Potter, states that there has been tremendous amount of work regarding a plan to aggressively deal with tailing ponds. She also noted, “that companies have been pooling technology and research to reduce ponds for the collective good” or in other words being prompted to innovate and find was to reduce emission. It does not however, state what the incentive for this type of technological innovation is.
And finally Prime Minister Stephen Harper’s government is trying to put a cap on atmospheric heat that is trapped due to excess pollution. This can be done with a standard like Rob Renner has tried to introduce, however not as extreme.
In the textbook there is a graph showing that in order for the standard to be introduce, put into practice and effectively working, the companies involved need to be thoroughly researched so the marginal abatement costs of both can be analyzed before going any further. From there either a uniform standard or an individual standard can be implemented only if they are continuously regulated. But above all, the standard cannot be extreme, for instance capping all emission levels to 100%, as this is not reasonable to ask of the firms, nor is it efficient for the production of goods and services.
Prof's Comments
The article describes some seemingly misleading information being presented by past and present government representatives. In the context of what we have studied, you should be asking yourself how this can be explained. What is the impact of this misleading information. I see it as an attempt to shift the demand curve. This is a lot like the green goods that are discussed in the text. In this case, the government is trying to present Alberta oil as a green good, thereby increasing demand.
5/10