To fight climate change, we are told that we must change our behavior by reducing our consumption of fossil fuels. This is fine, but the most intense efforts of governments, investment funds and environmental activists tend to focus more on the production and export of these energies than on their consumption. Thus, we must stop investing immediately in new production projects, but we are much less categorical on the consumption side; we are ready to make efforts on condition that they are gradual and that they do not cost too much. In other words, to reduce GHG emissions, we prefer to act on supply than on demand. There are three important problems with this strategy: it stems from poor economic analysis, it is morally questionable, and it is ineffective.
To reduce GHG emissions, we can decide to produce less oil and gas, that is, turn off the taps, choke the market until there is no more fossil fuels. But in doing so, consumers will find themselves facing empty tanks or sky-high prices. This is not what we want. On the contrary, people immediately complain that the price of gasoline increases and they do not want to see queues in front of gas stations. Acting mainly on the offer does not bring the result that we want. Basic economic analysis tells us that if we reduce production, there will be a shortage and prices will rise.
And this is where the actions we are proposing are morally questionable. All the production that we are trying to block is applied to export projects intended to supply other countries and not to what we ourselves consume.
In other words, our main contribution to reducing GHG emissions consists of initiatives that aim to prevent others from consuming fossil fuels, but not us. It is not very glorious. All the more so since there are a lot of inequalities in energy consumption across the world and we are the richest. On a per capita basis, Canadians’ energy use is at least ten times that of the poorest countries. And we want to further reduce the consumption of these countries by refusing to send them gas and oil. For example, two main pipelines transport oil from the tar sands: that of Trans Mountain to Asia and that of Enbridge to Quebec and Ontario. All environmental activists are opposed to the first pipeline, but we have not seen anyone in Quebec take to the streets to demand the closure of the second, that is to say the one that brings oil into our cars. Isn’t there a certain hypocrisy in this behavior?
Finally, this opposition to export projects risks being ineffective with regard to the objective of reducing GHG emissions. It is because Canada is only one player among many on the international market. If we don’t sell oil to foreigners, the Russians, Arabs, or Iranians will and we won’t be further ahead. This is what will probably happen following the abandonment of the LNG project. And if we ever closed the Enbridge pipeline, we too could buy oil from those countries. For supply-side actions to have an impact, all countries would have to reduce production simultaneously. But at that point, we should be willing to live with shortages and high prices.
This insistence on export projects helps us take our responsibility away as consumers and put the blame on producers who are easy targets. Ultimately, only demand reduction projects all over the world will have an effect on the target, but they are much more demanding in terms of behavior change.