Lifting the ban on offshore oil drilling in the US: another reason why the high price of oil isn't a great way to reduce greenhouse gas emissions

In the news today is a report that George Bush, supported by Republican presidential candidate John McCain, is urging the US congress to the repeal the ban on new off-shore drilling for oil. John McCain previously opposed offshore drilling, but now he and others have been changing their minds and supporting some off-shore drilling.

I'm not going to debate the merits of off-shore drilling here, but it's fair to say that the ban was in place to curtail an environmentally risky way to search for oil.

What I will say is that this is a further illustration of why a high price of oil is no substitute for a carbon tax. High prices for oil mean more money paid to suppliers of oil, and more incentive to produce oil in environmentally or socially risky ways. In the US that means more incentives to drill in the environmentally sensitive Arctic National Wildlife Refuge, or off-shore. Here in Canada we are well aware of the environmental and social stresses caused by the boom in the oil-sands industry.

A carbon tax is different from a high oil price because with a tax, although the buyer pays more money, the seller receives less money. A tax would not increase the incentive to produce more and more oil and to thereby take more social and environmental risks.

Finally, a carbon tax produces revenues for our government, and not for unfriendly foreign governments. None of that tax money would go to the Taliban or to Al-Qaeda. I can't say the same for all the money that North Americans spend on crude oil.