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CEE Professor Matthias Ruth addresses Ecological Economics

October 11, 2012

CEE Professor Matthias Ruth, a leader in the field of Ecological Economics, recently testified before a Canadian panel to address the absence of environmental impact in the economic analysis of a 750-mile pipeline project taking tar sands oil to a terminal on the Pacific Ocean. Professor Ruth and his research associates argued that the Canadian pipeline company responsible for the project has not accounted sufficiently for the cost associated with disrupting the ecosystem. Ruth’s testimony is an example of how Ecological Economics, which addresses the natural and human interrelations within ecological, social, and economic systems, provides a new framework for informed discussions around national energy and infrastructure.


Source: News @ Northeastern

A 750-​​mile pipeline across Canada cuts through First Nation lands and pris­tine envi­ron­ments to bring oil-​​rich tar sands to a new ter­minal on the Pacific Ocean. The com­pany behind the project, the Cal­gary, Alberta-​​based Enbridge Inc., argues that the pipeline will create thou­sands of jobs and an influx of cash from the Asian com­pa­nies that will buy and process the tar sands.

But the eco­nomic analysis pre­sented to the Cana­dian gov­ern­ment does not account for the pipeline’s envi­ron­mental impact, including the poten­tial for a spill, said Matthias Ruth, a North­eastern pro­fessor with dual appoint­ments in the Col­lege of Engi­neering and the School of Public Policy and Urban Affairs.

Ruth is at the fore­front of the emerging field of envi­ron­mental eco­nomics, which focuses on devel­oping methods to account for unquan­tifi­able envi­ron­mental con­tri­bu­tions to the economy.

He and his doc­toral stu­dent, Rebecca Gasper, a researcher at World Resources Insti­tute, tes­ti­fied before the Joint Review Panel of Canada’s National Energy Board in Sep­tember. They argued against Enbridge’s eco­nomic analysis, explaining that the oil com­pany over­stated the eco­nomic impact of its project by as many 200 times.

There are a lot of things for which there is no market, like ecosystem goods and ser­vices — from water reten­tion and purifi­ca­tion to carbon uptake,” Ruth said. “There are a lot of costs that come from dis­turbing these envi­ron­ments that never made it into the eco­nomic analysis.”

Ruth noted that the amount of money First Nation tribes are being paid by pipeline devel­opers does not even begin to mea­sure the project’s impact on the land’s del­i­cate and long undis­turbed eco­log­ical balance.

We’re only now begin­ning to under­stand what projects like these can do to an envi­ron­ment and the costs that come with that,” Ruth said. “But now that we can mea­sure it, we can include it in eco­nomic analyses.”

The project is sim­ilar to the stalled Key­stone Pipeline, which would deliver crude oil from Canada to loca­tions in the United States for refine­ment and export. Ruth said a sim­ilar envi­ron­mental analysis could be applied to that project, to explore whether the envi­ron­mental dam­ages from a pipeline may out­weigh its eco­nomic ben­e­fits — even when applying top engi­neering standards.

Though Ruth’s tes­ti­mony may not sway the Cana­dian panel, it has already sparked a con­ver­sa­tion with the gen­eral public and in the media, which has started cov­ering the pipeline project from an envi­ron­mental angle.

It’s a total game-​​changer,” Ruth said. “It’s becoming clear that by pointing out these typ­i­cally non­market goals, they become part of the national energy dialogue.”