Some of us will remember the 1989 maritime oil spill in Alaska when the oil tanker Exxon Valdez ran aground and spilled about 250,000 barrels of crude oil into Prince William Sound.
Most of us will remember the 2010 British Petroleum oil leakage from off-shore drilling in the Gulf of Mexico. Part of those memories will include references to and images of the environmental devastation caused by those spills. Part of those memories will include some vague references to the huge costs of cleaning up those oil spills.
However, those memories will not likely include reference to the economic benefits derived from those oil spills. A little thought will set us right. The cost of cleaning up the mess is an economic benefit. In economic terms, the benefit derived from cleaning up the mess must be weighed against the cost of environmental degradation and devastation. Based upon this logic, analysts argue that the Exxon Valdez and BP oil spills have resulted in a net benefit to society.
This logic, although not with a promise of net economic benefits, offers a model that has found its way into the application to extend and expand the Trans Mountain Pipeline from Alberta to the southernmost coast of British Columbia.
It appears that we, as a society, have found a promising marriage of economic and environmental objectives. Extract our natural resources; shape and/or ship them via whatever means; burn, exhale, spray, deposit our toxins into our environment. Then, without so much as a "mea culpa," we marshal our resources to help the environment to recover. And if we do it right we derive a net economic benefit. A perpetual money making machine.
It’s too early to celebrate. The "marriage," so far, seems to be feasible for maritime oil spills, maybe, for wetland oil spills. Land oil spills, unfortunately, do not allow for the spill to expand and cover an extensive area. Which means the cost, that is, the economic benefit, of recovery is low. Unfortunately, we do not have the knowledge or capacity to have oil spills occur only in or near large bodies of water. Which means that society may have to rely on the large oil spills, in areas heavily inhabited by wildlife or humans, to have a net economic benefit sufficient to make up for the net economic losses on the smaller oil spills.
As well, the model rests on shaky foundations. It is somewhat of a reach, but it is possible to consider recovery costs as a benefit to society. After all, from the perspective of accounting, these costs add to our gross domestic product and the bigger our GDP the richer we are. And there are precedents in other substantive areas — criminal behaviour adds to our GDP through the activities of our justice system, not to mention the purchase of replacement goods, thereby, can be defined as an economically beneficial activity.
Of course, the loss of productive activity resulting from an environmental disaster must enter our equation to determine its net benefit. Some of these losses are easy to determine and understand by considering foregone productive activity in fisheries, aquaculture, agriculture, tourism, and are, therefore, easily entered into our balance sheet.
But how do we cost the damage to the environment? What time frame do we use to cost this damage — a year, five years, a century, a millennium? Is there a comprehensive understanding of our environment that gives us assurances that we know what the damage is in terms of its nature, its extent, its significance with respect to the "web of life," its effect on humans? And if we miscalculate these costs ... or do not enter them into our balance sheet ... ?
Does the environment lend itself to be measured simply in financial, monetary, micro-economic terms? It is, to be sure, the easiest way to give weight to environmental issues — and we do like "easy." But our environment is much more than this — our environment gives and nurtures our life. How do you measure that? What balance sheet is sophisticated enough to incorporate variables that are relevant to the environment?
Science fiction author Robert Heinlein wrote that "Man is not a rational animal, he is a rationalizing animal." We can behave in any manner we wish and we will find a rationale to support that behaviour regardless of its truth, relevance, integrity. Are we reaching the point where we create definitions and models to lull us into a false sense of well-being with respect to our environment and we can rationalize environmental disasters as being beneficial to us and our world?
We rationalize to ourselves that we are the masters of our universe. Unfortunately, the universe was not advised.
Chester and Rosemarie Letkeman are both retired from federal public service and are long-time Brandon residents. They are both interested in public policy, but have no political affiliation. Their column runs monthly.
Republished from the Brandon Sun print edition May 23, 2014