Wendy Palen and colleagues propose a moratorium on new oil-sands projects until regulations are in place to ensure compliance with carbon-emissions commitments (Nature 510, 465–467; 2014). We question whether such a ban is justified on the basis of the criteria they propose.
Emissions from oil-sands production are generally less than 0.1 tonne of carbon dioxide equivalent per barrel, so production costs would increase by at most US$6.50 per barrel if social costs were accounted for as the authors suggest. The social cost of carbon is estimated at about $65 per tonne of CO2 equivalent over the lifespan of an oil-sands project (see go.nature.com/9ztmyu).
However, many projects would remain viable despite this production-cost increase, in part because it would be offset for developers by tax and royalty deductions. The energy company Suncor, for example, estimates that a similar carbon policy would decrease its return on investment on a new mine by just 0.4%.
A moratorium is neither sufficient nor necessary for Canada to meet its greenhouse-gas commitments, or to achieve global carbon stabilization at 450 parts per million (see also N. C. Swart and A. J. Weaver Nature Clim. Change 2, 134–136; 2012).
To meet its target, Canada would probably need to set a carbon price that exceeds the social cost of carbon estimates — say, more than $100 per tonne (see go.nature.com/dswyma) — and apply it nationally to all sources of emissions. Even then, oil-sands production could continue to grow.
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