So, today was supposed to be the big day. I’ve had it circled on my calendar for some time now, so imagine my surprise when it all turned into a non-event. Of course I’m talking about today being the day when the European Union was to decide on whether or not Canada’s tar sands oil should be listed as “dirty” under the EU’s “Fuel Quality Directive” and subject to a higher carbon offset charges at the time of importation. But instead of making a decision, it looks like EU decision makers deferred, and now an ultimate decision appears to be in the hands of some kind of committee, to be made at some point in the future, maybe.
Had a positive decision been made today, the EU’s “Fuel Quality Directive” would have listed bitumen-derived oil from Canada’s tar sands as a product requiring the payment of a higher carbon offset for importation than would oil derived from conventional sources, due to the amount of pollution created through processing. The government of Canada, of course, was hoping that a negative decision would have been made, and after intensive lobbying efforts by our government and its oil industry partners, directed at EU decision makers, the end result is….more waiting.
That the production of tar sands oil is, on the whole, dirtier than conventional oil, has long been an established fact. This week, a report published in Nature Climate Change, written by renowned Canadian climate scientist Andrew Weaver, assessed the relative levels of warming which the world can expect should all economically viable deposits of bitumen in the Alberta tar sands be developed for use. Weaver’s results have been interpreted by some national media sources as the green light for tar sands development, given that Weaver’s findings show that relative to some other fossil fuel energy sources, anticipated warming from the tar sands is less than what we would expect from other fossil fuel sources (specifically, coal and shale gas).
The Toronto Star, on Wednesday February 22nd, published a great article from Weaver himself about the study; if you’re interested in finding out more about the study in Weaver’s own words, read “The oilsands are a symptom of the bigger problem of our dependence on fossil fuels”.
However, Weaver’s findings do not dispute the central fact of the matter at hand, as least as far as the European Union is concerned: oil derived from the tar sands is typically dirtier than oil derived from other conventional sources. As a result, Europe continues to consider whether anybody importing tar sands oil into Europe will be required to pay a higher offset charge for the privilege of importing dirty oil.
What this means isn’t exactly clear, on the one hand, given that hardly anybody in Europe has been importing oil derived from Alberta bitumen. On the other hand, a European decision to essentially tax Canada’s dirty oil at a higher rate than conventional oil must be very troubling for Alberta oil producers and the Conservative government they’ve bought to act in their interests.
Canada, the EU and the World Trade Organization (WTO)
As a result, over the past year or so, the Conservative government of Canada has been engaged in an intensive lobbying effort in partnership with multi-national oil corporations in an attempt to influence today’s vote. Ultimately, the lobbying initiative appears to have reaped some level of payout, as a few nations which were intensively lobbied (the U.K. and France) decided to stay away from the vote (see today’s Globe & Mail, “EU blocks passage of Canada’s ‘tar sands’ ranking”, February 23/12). So while today’s decision wasn’t the outright victory sought by Canada’s Conservative government and its oil industry partners, the lobbying effort at least has stalled the process for the time being. Of course, Canada has also threatened the EU with a World Trade Organization challenge over unfair business practices if it doesn’t ultimately get its way.
Many believe that Canada has a strong case to make at the WTO, and that the European Union’s Fuel Quality Directive is, in fact, discriminatory, because it treats a single product, oil, differently depending on where it’s manufactured. Generally speaking, this is a big no-no in the realm of international trade, and I happen to agree with many of the experts who have been watching this issue play itself out: Canada will likely be successful at the WTO in arguing for its interests, if it comes to that. Based on current international trade rules, Europe’s Fuel Quality Directive does appear to be a discriminatory trade practice.
Lawrence Herman, an international trade consultant with a respected Canadian legal firm, shared his opinion on a WTO challenge in yesterday’s Globe & Mail (“The ground war with Europe over Alberta’s Oil”, Globe & Mail, February 22 2012). Herman refers to the FDQ as being a “border tax…to compensate for carbon emitted in…production”. Herman goes on to explain the concept of “differential measures” for “like” products which compete for the same market, and concludes that in those circumstances where two products which compete for the same market, such as bitumen-derived oil and conventional oil, are so similar, it would be discriminatory to punish one in preference to the other.
Let me be clear about this: while I believe that a decision which rules discrimination will likely be the outcome at the WTO, I do not agree that it should be the outcome. Such an outcome would be, in my opinion, immoral, and an affront to the sovereignty of nations, and frankly to humanity. But sometimes, as they say, the law is an ass.
In Whose Interests?
Getting back to Herman’s opinion…think about this for a moment: If the production processes of one product leads to greater pollution outputs, it would be illegal in the opinion of the Government of Canada and in the opinion of many trade experts like Herman for that product to be penalized at the time of importation into another jurisdiction if the importation of a less-polluting product isn’t subject to the same penalty. If this is the case, what would be the incentive for polluting industries to clean up their processes? What does that say about proactive governments which are trying to encourage better business practices, and using the market as a tool for cleaner energy choices?
Clearly, what such a decision would be saying is that the environment doesn’t matter, as least as far as international trade goes, and that national states such as the European Union which want to use market forces as leverage for greener consumer choices are out of luck. And humanity is just going to have to put up with pollution generated by corporations in the pursuit of profits.
And that, to me, is absurd. And I know that I’m not the only one who views it this way. If a company is producing a product which entails the creation of more pollution, that product should be taxed at a higher rate than a similar product which doesn’t require the emission of as much pollution. That’s why Europe has been considering listing Canada’s bitumen-derived oil as “dirtier” than oil derived from conventional sources. Nations should have the ability to discriminate when its in the public’s interests to do so. And clearly, with regards to climate changing greenhouse gas emissions, the public has a considerable stake in the energy decisions made by their elected representatives.
Human vs. Corporate Rights
You can probably see where I’m going with this. Clearly, if our international trading structure doesn’t permit a nation to impose a tariff on a product whose production is more polluting than that of a similar product, what does that say about national sovereignty, or the importance of the health of people and the natural environment? We know that there’s a lot which is going wrong in this world already, but when a nation, or in this case the European Union, decides that it’s going to take a small step in an attempt to right a wrong, and finds that its ability to do so is thwarted by international trade rules which favour corporations over people, well, I ask you: is that right?
Last I looked, corporations weren’t impacted by pollution. Their children don’t suffer from respiratory diseases in the same way that human children do. Their livelihoods, for the most part, aren’t impacted by higher food prices resulting from shortages brought on by climate change. Yet we, you and I, through our elected governments, have decided to create international institutions like the World Trade Organization which will favour corporations over people and progressive national governments. That, to me, just illustrates that it’s time that we, meaning you and I, get our act together and begin to elect a government which is going to look out for our own interests.
Canada Chooses Corporate Interests Over People
In Canada’s case, it’s clear that the Conservative government has chosen to champion multinational corporations over people in its pursuit of thwarting the European Union’s imposition of the Fuel Quality Directive. We Canadians will have a chance in a few years to tell the Conservative Party what we think of their decisions to favour corporations over people. Let’s not forget the taxpayers dollars which were spent by Canada’s Conservative government in an effort to influence today’s vote, or how Canada’s Conservatives tried to hide their partnerships with Big Oil (see: “Feds hid names of big oil companies at lobbying retreat”, Mide De Souza, PostMedia News, February 13/12)
I hope that Canada doesn’t go through with its WTO challenge, but it probably will. I hope that, despite what experts like Lawrence Herman say, the WTO decides that it’s all right for a nation to impose a tariff on a product which requires more pollution than a similar product, but I don’t think it will. I do, however, know that it’s time we, the people, began reigning in corporate power, as we’ll be the ones to pass on this world to our – living and breathing – children. We are, you and I, ultimately responsible for the world which our children inherit. That the power structure that we and our parents created appears monolithic is no reason to throw our arms up into the air in frustration, claiming that we can’t do anything about it. People can, and do, affect change. We’ve seen it happen throughout the world in 2011, and it will continue to happen over the course of the global long emergency in which we are now in the midst of.
(opinions expressed in this blog are my own, and should not be interpreted as being consistent with the views of the Green Party of Canada)
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