Creating the frame for making choices
Tim O’Reilly observes that Pascal’s wager is a significant expression of decision theory when faced with a choice of what to believe when reason or science fails to provide a definitive answer. It is a simple and effective way to reason about contemporary problems like climate change.
We don’t need to be 100 per cent sure that the worst fears of climate scientists are correct in order to act. All we need to think about are the consequences of being wrong.
Let’s assume for a moment that there is no human-caused climate change, or that the consequences are not dire, and we’ve made big investments to divert it. What’s the worst that happens? In order to deal with climate change:
1. We’ve made major investments in renewable energy. This is an urgent issue even in the absence of global warming, as the International Energy Agency has now revised the date of “peak oil” to 2020, only eight years from now.
2. We’ve invested in a potent new source of jobs.
3. We’ve improved our national security by reducing our dependence on oil from hostile or unstable regions.
4. We’ve mitigated the enormous off-the-books economic losses from pollution. China recently estimated these losses at 10 per cent of GDP. We currently subsidize fossil fuels in dozens of ways, by allowing power companies, auto companies, and others to keep environmental costs off the books, by funding the infrastructure for autos at public expense while demanding the railroads build their own infrastructure, and so on.
5. We’ve renewed our industrial base, investing in new industries rather than propping up old ones. Climate skeptics like Bjorn Lomberg like to cite the cost of dealing with global warming. But these costs are similar to the “costs” by record companies in the switch to digital-music distribution, or the cost to newspapers implicit in the rise of the Web. That is they are costs to existing industries, but they ignore the opportunities for new industries that exploit the new technology. I have yet to see a convincing case made that the costs of dealing with climate change aren’t principally the costs of protecting old industries.
By contrast, let’s assume the climate skeptics are wrong. We face the displacement of millions of people, droughts, floods, and other extreme weather, species loss, and economic harm that make us long for the good old days of the current financial-industry meltdown.
Climate change is really a modern version of Pascal’s wager. On one side, the worst outcome is that we’ve built a more robust economy. On the other, the worst outcome really is Hell. In short, we do better if we believe in climate change and act on that belief even if we turn out to be wrong.
But I digress. The illustration has become the entire argument. Pascal’s wager is not just for mathematicians, nor the religiously inclined. It is a useful tool for any thinking person.
I think exploring the business case and doing the economic analysis is a sensible way of making decisions about our resources, how we use our resources, how we invest our resources, and how we create the resources we need for our future.
from My Point of View
Business cases to explore
Contribution and cost of resources
About the Alberta Oil Sands
Alberta sits over one of the largest recoverable oil patches in the world second only to Saudi Arabia covering 149,000 square kilometers, an area larger than England. It holds at least 175 billion barrels of crude bitumen found beneath boreal forest, muskeg and rivers.
To access the sandy tar like substance, the land referred to by the industry as overburden is removed and saved for future reclamation. Cranes and 400 ton trucks haul the bitumen off to extraction plants where in order to separate the sand from the bitumen it is mixed with large amounts of fresh water heated by natural gas. It is then spun with a chemical solvent to further remove clay and minerals leaving the remaining waste water to be dumped into enormous toxic railings ponds. The siphoned off bitumen is then sent into pipelines to be processed into crude oil throughout America
Has our need for oil become greater than our need for water? Fresh water has already become a scarce resource. We think of it as being infinite. But of the world’s total water supply only half of one percent is accessible fresh water. The oil sands mining operations use up to four barrels of fresh water to produce one barrel of oil. This water comes from the Athabasca river system which is fed from glaciers at the base of the Rocky Mountains. Not only does the industry suck up large quantities of fresh water but it will soon produce more carbon emissions than all of Canada’s passenger cars combined. The oil produced by industry contributes to a cycle of consumption that accelerates climate change further destroying the very glaciers that feed this delicate cycle.
About the North American Free Trade Agreement
Oil sands production is developing at breakneck speed. This pace is driven by corporate interests aimed at integrating North America’s economies and resources. The North American Free Trade Agreement proportionality clause ensures that an average percentage of energy resources continue to flow south. This guarantees an increasing export of a finite resource
The oil sands are quickly becoming the largest industrialized project in human history. With a proposed five fold increase in production, oil sands networks will soon span the continent.
A new agreement called the security prosperity partnership further expands NAFTA ensuring energy security for the United States but not for Canada. Canada remains one of the only industrialized nations that has not saved any energy for itself.
These resource agreements can also apply to water
Risk and return
If the Exxon Valdez accident occurred in British Columbia, it would cost taxpayers $21.4 billion to clean up. 4379 full-time jobs would be lost. Only 10 – 15% of an oil spill is ever recovered. 80% of British Columbians support a ban on oil tankers in B.C.’s coastal waters. Marine resources link us to our histories, our culture, and a sustainable economy. An oil spill would wipe them out forever.
Perspectives on the Alberta Tar Sands
Beneath the boreal forest of Northern Canada lies an abundance of plant life that has been compressing for some 200 million years. That ancient life is now the world’s 2nd largest oil reserve, known as the tar sands.
The tar sands are a mixture of sand and a heavy crude oil called bitumen. Bitumen can be mined in open pits or extracted from underground by injecting superheated water. Liquified bitumen is piped to upgraders for refining as far as 1600 miles away.
Peeling back the forest surface has already displaced more earth than the Great Wall of China, the Suez Canal, the Great Pyramid of Cheops and the ten largest dams of the world combined. The project could eventually industrialize an area the size of England
The Athabasca River is part of the third largest watershed in the world. Processing one barrel of bitumen requires approximately three barrels of water. The toxic water is then pumped into giant tailings ponds alongside the shore.
Enough natural gas is burned to heat 4 million homes daily, while local upgraders emit 300 tonnes of sulphur. Per day, tar sands operations release as much carbon dioxide as all the cars in Canada.
No comprehensive assessment of the megaproject’s environmental, economic, or social impact has been done.
Observations from our community
When it comes to common resources, a failure to cooperate is a failure to control consumption. In Garrett Hardin’s classic tragedy, everyone overconsumes and equally contributes to the detriment of the commons. But a relative few can also ruin a resource for the rest of us.
from Keystone Consumers
Canada has the third largest oil reserves in the world. But for several reasons, it may never be extracted.
Canada’s Oil Sands Explained
CBC Television’s The National – Film
I don’t tell people what to think. I am only saying what I think. I would like people to make up their own minds.
Make up your own mind – Film
Everybody is entitled to their opinion. It’s equally true, however, that everyone is not entitled to their own facts.
President, Canadian Association of Petroleum Producers
More oil sands facts, less rock star rhetoric
Restoring Our Atmosphere
Restoring Our Oceans
Restoring Our Environment
Creating Our Energy Systems
Creating Our Economic Systems