The proposed Keystone XL pipeline is currently the single most important bilateral issue between the US and Canada. There are both supporters and opponents of the project on either side of the border. After speaking with many of them over the past year, it seems to me that the key difference between the two camps is their respective views of how to bring about major social change. With respect to Keystone XL, the fundamental social change at hand is how to address climate change.
Supporters of Keystone argue that even if you acknowledge that climate change is occurring and even if you are committed to addressing it, the Keystone XL pipeline should still go ahead. As a former policy economist myself, I think this argument has a lot of merit. Firstly, denying Keystone XL as a standalone project ignores the fact that there are many other pipelines already in service that transport oil from Canada to the US. In fact, some of these existing pipelines are well past their design lives and are more susceptible to oil spills than Keystone XL would be.
Then there is the issue of what the alternative scenario would be if Keystone XL is not built? It is likely that Canadian oil would find it other markets such as Asia. Also, the US would keep buying heavy oil from Venezuela; oil that is just as environmentally harmful as Canadian oil. Therefore, stopping Keystone XL will neither limit the growth of the oil sands or increase the "cleanliness" of oil imported into the US.
Those who take this line of reasoning argue that the way to address climate change is not by stopping individual projects through a piecemeal approach. Rather, the most fair and efficient policy would be to use some sort of market mechanism, (e.g. a carbon tax or cap & trade) spread equally across all polluters and enforced through an internationally binding treaty.
On the other side of the argument are those against Keystone XL. They point out that major social change is rarely brought about by well thought out, theoretically sound policies. Instead, society usually reaches some small but significant tipping point that ushers in a new era. For example, the civil rights movement in the US was instigated by one brave woman refusing to give up her seat on a bus. And the Berlin Wall fell, not because of some formal treaty to end the Cold War, but because a border guard misunderstood his orders and irrevocably opened the gates to West Berlin effectively ending the Cold War. The most ardent opponents to Keystone XL view climate change as the major social issue of our time and stopping Keystone XL is their tipping point.
I believe these are the two alternative perspectives on Keystone XL that President is Obama is grappling with as he considers the fate of the project. There is no easy way to satisfy both camps. However, in next week's column I propose an innovative compromise that both sides just might be able to live with.
