Red, Green & Blue: Will Polar Oil Race Launch a New Cold War?
The Arctic is heating up in more than one way, as we saw last week when Russia planted its flag on the seafloor below in an apparent move to establish a claim to the ample oil and gas reserves buried beneath.
What’s disastrous for polar bears and Inuit subsistence hunters is emerging as a potentially huge — and destabilizing — fossil-fuel rush for the nations bordering the Arctic Ocean as the polar ice melts. How heated could disputes over the North’s buried oil and gas riches become? It’s still early, but I’ve already heard at least one theory that this could even spark conflict between the U.S. and, of all places, Canada. The ocean treaty regarding claims to seabed sovereignty might soon fall apart before the U.S. has even ratified it.
So how concerned should we be? What role should the Earth’s citizens play as the most fuel-hungry nations on the globe start a new race for buried energy? Is this the start of the next Cold War?
Image source: Wikimedia Commons
Tags: Canada, gas reserves, global warming, melting ice caps, North Pole, oil reserves, polar ice caps, Red, Green and Blue, Russia, U.S.
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August 15th, 2007 at 7:12 pm
Jimmy, "hysterical catastrophic concerns," as you put them, are often things genuinely to be concerned about. People were scared out of their wits during the Cuban missile crisis because they had good reason to be. People were scared out of their wits they might lose their jobs and homes during the Depression because they had good reason to be.
Yes, I’m a huge fan of FDR, and not only because of his stirring message at a time of legitimately great fear. He didn’t place his confidence in blind optimism, but in the power of motivated people to effect great, positive change, even in the face of near-overwhelming odds.
And that’s what I’m arguing here. I don’t advocate hand-wringing in the face of dwindling water supplies, shrinking oil reserves and looming financial crises: I’m in favor of meaningful, immediate action to turn those trends around. But while you seem to believe a free market and ever-improving technology will be our saviors, I support more pro-active measures: a shift to more environmentally friendly, sustainable agriculture; greater emphasis on resource conservation; and, yes, like you, an oil tax.
August 15th, 2007 at 7:39 pm
Just tweakin’ you there, Shirley
August 15th, 2007 at 8:50 pm
An extreme example proves the logic, Jason. Then it becomes an argument of degree. If I get paid $50 an hour to slave away and bust rocks for 20 hours a week with no taxes… then beginning on the 21st hour I’m assessed a 99.9% tax on what I earn then it’s unlikely the net income of 5 cents an hour will induce me into busting rocks after the first 20 hours. It makes much more sense at that point for me to focus my energies on conserving and managing the money I earned in the first 20 hours.
Given the logic of the example the question becomes, “where is the breaking point?”. Forgetting whether it is moral to maximize this value from a working democratic tax base; it is my opinion that we hit this point in 2000. Bracket creep put a substantial number of two earner working professional families in the punitive tax brackets making it as appealing to conserve as it was to work. My family experienced this directly when a bank my wife was working for merged with another bank allowing an absolutely painless period of unemployment for her because 1/2 her income was going to taxes (SSI, Federal, plus sales and other on the income spent) and the other 1/2 was going to excess that was easily replaced by limited conservation. The first earner’s income is not taxed nearly as heavily and has substantial standard and other deductions so most of my income was still intact.
The big loser wasn’t us it was the economy in general and the government. We trimmed our nights out to around once a week because she had the time and energy to cook more. We fired the housekeeper for the same reason; as we did the lawn care company and the car wash, etc. We did bargain and coupon shopping rather than impulse shopping. Interestingly given the tax code her MBA and CPA economically paid as well to iron shirts as it did to develop Data Warehousing solutions. She eventually did go back to work but as a matter of choice; but the point is that there is a tipping point… a threshold where it doesn’t matter whether the second earner works or not and the government has to be careful of that.
The surpluses of the 90’s caught everyone off guard especially the two income professional households upon whose backs these surpluses were built. And they were unsustainable because too much of the population was projected into the punitive tax brackets where it didn’t matter whether the second earner worked or not.
If people have to work then you can jack up the progressive rate to whatever you want and get the greatest gain. The problem today is that our government is largely funded by smart people who don’t have to work but who choose to work. The degree to which you can screw these people with tax code is limited.
August 15th, 2007 at 9:03 pm
Jimmy,
You still didn’t answer my question. I asked for figures. I’ll just ask one simple question, and you provide only an answer to it:
How many of these "second earners" quit their jobs due to high taxes?
I appreciate the personal example, but in order for me to believe that this is actually widespread enough that it would cause a weakening of the economy and require a lowering of taxes, I’ll need to see some real numbers.
August 15th, 2007 at 9:49 pm
I know, Jason… I’ve been looking for it but I’ve not found a study that I think would satisfy you.
I’ll dig around some more though and see what I can find.
August 15th, 2007 at 10:05 pm
Nasty.
: )
August 15th, 2007 at 10:08 pm
And just to throw more fuel on the fire (so to speak), here’s this:
"Scientists warn Arctic sea ice is melting at its fastest rate since records began"
August 16th, 2007 at 5:27 pm
OK… that was a pain.
It seems there are not too many people who go to the trouble of empirically defending common sense. Because of all of the environmental factors surrounding tax code it’s hard to isolate just the effect of a marginal change on the second earner’s decision to work; but after a bit of searching here you go. Dismiss it if you like.
Estimating the Labour Supply Responses of Married Women Using a Canadian Tax Reform [.pdf warning]
Fire me an email if you respond so I’ll know to check back [jimmy@rationalenvironmentalist.com].
Btw… with the exception of wasting hours wading through scholastic article abstracts looking for this needle in a haystack I have enjoyed the debate.
August 20th, 2007 at 5:08 pm
Jimmy, I’ve been very busy, so it’s been hard to find time to respond to much of anything.
It may be common sense to think that a married woman might be inclined to stay home instead of work if the tax rate on her working income increases, but it is definitely not common sense, at least not to me anyways, to think that such an occurrance was so widespread that it caused an economic slow-down. I would need to see empirical evidence to that effect.
The report you linked to is somewhat related, in that it shows how decreased taxes could send the wives of men who earn higher incomes back to work, but it doesn’t speak specifically to this situation. I guess I thought since you were speaking so confidently of that as being a cause, and therefore, pushing tax cuts as a solution, that you had seen some information that I hadn’t.
I understand how your theory would work. What I don’t know is how many people were pushed into a higher tax bracket. Then, out of those, how many actually quit working specifically because of it. With those numbers, and a few more stats, we could quickly calculate the losses due to this situation. I haven’t seen any of those numbers, though.
Another thing I haven’t seen you address is my argument on how I don’t think tax cuts increase tax revenues. It’s a very backwards idea to me. Refer to my post above on August 15, 2007 at 1:55pm.
October 22nd, 2007 at 12:02 pm
J.F.K. did it and was called a genius for it. G.W.B. did the EXACT same thing and was called an idiot for it. No, there is no partisan political semantics going on there…