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Blocking pipelines in context: Extraordinary cost for little change in emissions

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The recent approval of new pipeline infrastructure projects across Canada has met with opposition. What are the economic costs of this opposition?

In this edition of Graphic Intelligence, we compare the estimated cost of blocking new pipelines to reduce GHG emissions to other government measures, including the current carbon price in Alberta and the estimated national carbon price required by 2030 to meet Canada’s target (both in blue). 

The figure above shows that, at $1,750 per tonne of GHG emission reduced, blocking new pipelines is one of the most expensive policy measures Canada could undertake. At the other end of the spectrum, the estimated cost of regulating oil and gas methane emissions is $13 a tonne. And blocking new pipelines is at least 10 times more costly than a carbon price that could bring Canada to its target by 2030.

As evident in the figure below, the real workhorse for meeting our 2030 emission target are current policy measures planned by Canadian governments. Blocking new pipelines would achieve little in comparison. 

Source: Author’s calculation, National Energy Board (2016), Environment and Climate Change Canada (2017), Tombe (2017) and Canada’s Ecofiscal Commission (2017)

Note: The “Alberta Climate Leadership Plan” and “Blocking Pipeline” cost estimates are from Tombe (2017). The remaining estimates are from Canada’s Ecofiscal Commission (2017).  

Vincent Thivierge is a Researcher at the C.D. Howe Institute. 

 

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© 2014 C.D. Howe Institute. All Rights Reserved.