When Stephen Harper went all-in on his gamble that Canada could become a world-leading oil producer, he set the country up for international environmental pariah status. He also, argues Jeff Rubin, made a dramatic and potentially disastrous financial miscalculation. An economist and former bank executive, Rubin is certainly not an environmental activist or opponent of big business. Rather, he casts himself as a pragmatist laying out a simple analysis: the Alberta oil sands were a project premised on high oil prices backed by steady demand from the U.S. and China in a global political context that privileged growth over ecological concerns.
All three premises have proven to be dead wrong, and the carbon bubble is already bursting. Instead of raking in the promised billions, Canada is stuck with dirty oil, the extraction costs of which outweigh slumping global prices; a record of borderline criminal ecological negligence that has raised loud domestic and global criticism; and client states turning to alternative fuel sources like natural gas. The Harper government has ignored all warning signs, choosing instead to blindly push its oil agenda. This has led to a slew of side effects, including draconian, divisive policy and an overvalued dollar that has badly hurt Canada’s manufacturing industries, leaving in its wake a less diversified and under performing economy.
And then there’s the issue of global warming, which Rubin believes will force states and markets to actively seek alternatives to fossil fuels as its effects are increasingly felt. But it is also here that he sees a business opportunity for Canada, which he believes has all the geographical and climatic endowments to become a leading agricultural producer.
It is at this juncture that The Carbon Bubble turns a dangerous corner. For all his astute critique of big oil, Rubin does not demand a new politics, but simply urges that Canadians rush headlong to invest in and embrace big agriculture. This is jarring and reveals Rubin’s own hand: his primary concern is not environmental or even necessarily political, but rather economic. Readers would be wise to consider if investing in Monsanto rather than Exxon (Rubin’s literal suggestion) is really a solution to Canada’s mounting problems.