Sloughing off the costs of environmental damage


Alberta Premier Rachel Notley on Parliament Hill, April 15, 2018. Photo by Alex Tétreault

In Alberta and other jurisdictions where fossil fuels are produced, there is a whole lot of externalizing going on.

Oil and gas companies really don’t want to take on the costs of climate change created by the people who buy their product. The externalizing of such costs is a longstanding, basic operating principle. But now governments are seriously starting to regulate carbon at the user level and other entities understand they are affected by climate change. There are lawsuits like one against Exxon Mobil for not disclosing the financial risk to shareholders of carbon taxes and other regulatory measures to fight climate change. U.S. fisherman are suing Encana for damage to their business from greenhouse gas emissions. Some of those externalized costs may be coming back to some corporations.

Environmental liabilities in the energy sector are so overwhelming that no government, regulator or politician can admit to them because it’s unacceptable to the public, writes @RossBelot #climate #energy #CanPoli #Alberta

Externalized costs also include emissions that are not measured because the regulator does not require a measurement. Oil and gas methane leaks are an example.

Recent studies in Alberta show this is a serious issue; leaks are much larger than reported. While there are commitments to reduce fugitive methane in Alberta, it is from the baseline of data that has been reported, not from the actual emission level, because no one is required to measure that. The scope of those unreported leaks is similar in the United States. For the corporations and governments involved, it is like those leaks never happened, externalized to the world at large and currently not included in greenhouse gas emissions reported to the United Nations. MORE

 

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