From the Fraser Institute

By Kenneth P. Green

A new federal law—Bill C-59, which received royal assent last month—has Canada’s oil and gas industry and the premiers of oil and gas provinces up in arms.

Specifically, in legalese, it allows government or outside litigants to review a “representation to the public in the form of a statement, warranty or guarantee of a product’s benefits for protecting the environment or mitigating the environmental and ecological effects of climate change that is not based on an adequate and proper test, the proof of which lies on the person making the representation.”

These “reviews” would be conducted by government courts where claimants would have to prove the truthfulness of what they were saying.

Opponents of the law argue that it constitutes a gag order on Canada’s oil and gas sector, to prevent them from marketing their products, services and technologies in a positive way. And indeed, the legislation would gag a lot oil and gas sector talk, because all claims about climate change are highly uncertain. The law would impose severe penalties on those who can’t prove themselves innocent of misrepresentation, including fines up to $15,000,000.

Industry and political objections aside, however, a good argument can be made that government does have a legitimate interest in deterring businesses from engaging in fraudulent practices or false advertising.

For example, while warming is certainly real (1.1 degrees Celsius since 1850), the human contribution to this warming is unclear. Potentially harmful changes to the climate radiating from that increased warming are highly unclear, and the ultimate impacts on human health stemming from climate change are almost completely unknown and unknowable, depending, as they would, on unpredictable economic, technologic and social factors.

Thus, any claims about a technology such as “carbon capture and storage” reducing the risks of climate change almost certainly can’t be proven truthful in a rigorous cause-and-effect way before a courtroom standard of truth in advertising.

Similarly, technologies and practices that reduce the carbon intensity of oil and gas production, often portrayed as mitigating climate risk, cannot be shown to do so in a direct provable cause-and-effect way, because climate risks themselves are multi-factorial and still speculative, and the impacts of relatively small emission reductions remain unquantifiable.

With this new federal law, the Trudeau government seemingly wants to prevent the oil and gas sector from defending its products, operations, technologies and services on the grounds that some of their actions have already, and will in future, mitigate climate risk. The oil and gas industry and its supporters say this will render the industry unable to defend itself from onerous regulations and government actions meant to drive them out of business.

Of course, a fair argument can be made that businesses in the oil and gas sector should not make claims about climate change mitigation that they can’t back up in court, and that they should be subject to the same scrutiny as any other business. And due to this new law, they will likely appear in court someday to defend themselves against the government’s long-stated belief that the industry should be shut down.

However, to the extent the new law is limited to particularly unprovable claims regarding certain technologies, this may not be an entirely bad thing. It may actually force Canada’s climate policy discussions to be grounded more in fact than fancy.