Climate Week London: How oil sands companies benefit from carbon pricing

Watch today’s full Climate Week London live event on video from 11am-12pm on Monday 29 April.

“Oil prices are the largest producer of carbon in the world,” The Economist’s Environment Editor, Heidi Blakely. “Ten percent of global emissions derive from this fossil fuel industry.”

According to Bloomberg New Energy Finance (BNEF), the largest producer of CO2 emissions out of global fossil fuel supplies is the Canadian oil sands industry.

BNEF estimated that the emissions produced by the Canadian oil sands industry were 1.7 billion tonnes of CO2e (CO2e is a common measurement of greenhouse gas emissions). That figure was more than the annual CO2 emissions of all of the world’s fossil fuel use in 2018.

There is increasing concern that Canadian oil sands industry emissions are contributing to climate change and that the industry will be more difficult and more expensive to clean up.

So, how does the Canadian oil sands industry benefit from carbon pricing?

“Carbon pricing is supposed to shift money from polluters to people,” Blakely explained. “We generate value for the companies that burn the carbon, even if the carbon isn’t burned. So companies in this case benefit from the tax even if no-one burns any oil.”

“Taxes like this have often been used to foster industry in socially inefficient, environmentally damaging or energy intensive sectors in order to gain government handouts,” said Anna Hurst, Oil Sands and Climate Campaign Coordinator at Friends of the Earth.

“There are vast differences in the relative importance of the oil sands industry to global emissions, and that’s the kind of hypocrisy that needs to be rejected,” said Anna Hurst, Oil Sands and Climate Campaign Coordinator at Friends of the Earth.

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