Monday, February 13, 2012

The Keystone Pipeline and the Futility of "Green" Boycotts

An interesting debate is playing out between the NY Times Joe Nocera and Joe Romm and friends.  You can read the details here.  I would like to add one simple point.  When has a boycott succeeded?   If Canada doesn't sell us their fossil fuel, will it really sit in the ground and not be consumed?   Global GHG emissions would be lower if such natural resources weren't tapped.  This is really an issue of transportation costs and economic incidence.  If the pipeline had been built connecting Alberta, Canada to U.S consumer destinations, what would have been the gains to trade?  In the absence of this pipeline, will this natural resource now be shipped to Asia?  At what transportation cost and what are the gains to trade?  So, does not building the pipeline have a causal effect on the dirty resource staying in the ground?  China smells an arbitrage opportunity here and is stepping in.  Have well meaning greens defended their "line in the sand" or have they merely diverted oil that will be consumed anyway?  World trade poses a challenge to the boycotters.    This is a classic example of leakage and represents a reason why I wrote my climate change adaptation book Climatopolis.  

As a fan of sharp GHG mitigation, and as a technological optimist, I believe that Dr. Romm and his friends should point their efforts to developing electric vehicles and the spread of cheaper renewable power generation.    Yelling and screaming at fossil fuel exporters to quit exporting isn't going to achieve much in a globalized world trade economy.

2 comments :

APB said...

Great questions you raise here.

I'm launching a new blog you may find interesting: http://energytransitions.wordpress.com/

Paul said...

Without a doubt this oil will be drilled. And there is also a good chance it won't leave the American continent. Mr. Obama and his green eco-friendly pre-election agenda may stopped or halted the construction of Keystone and now China wants to elbow the US out of the deal, but they are still forgetting one crucial fact - in order to get the oil to the East Coast the Northern Gateway pipeline needs to be constructed. And there is a pretty good chance that BC will not allow the construction. Then US will have even better arbitrage opportunity on Canada's vast energy resources and when the fuel price will be hitting $6/gallon mark there will be no opposition to Keystone. And our dependency on fossil fuels will again be only deepening...