The Bank of Canada would be wise to consider the future we're heading towards. For a petro-economy such as Canada's, where the energy industry and the country's economic well-being are closely linked, the financial risks associated with the pending battle against climate change are much greater than any cyclical downturn in oil prices.
Ditching the Keystone XL pipeline should be a no-brainer. The 1,179-mile pipeline extension would carry some of the world's dirtiest oil from Canada to Texas. It shouldn't be necessary to repeat this, but since we have a Congress controlled by a party that denies the reality of climate change, it is.
While Washington state lawmakers' bold pragmatism promises to help their environment and their economy, the new Congress in Washington, D.C., seems hell-bent on pushing legislation that will strip away our environmental protections, continue to ignore the threats of climate change and keep us addicted to dirty fossil fuels.
The plunge in oil prices may be good for consumers and the global economy, but it could also hurt efforts to make our planet's energy system more sustainable. Policy makers from around the world can prevent this by taking advantage of cheaper oil to make meaningful changes in the way we price energy.
Choosing that path would require countries shifting a good chunk of their tax base from personal and corporate income to carbon taxes collected from households and businesses. Of course, if our economies are to remain competitive while doing that it will also require the levying of carbon tariffs on goods from countries that don't tax emissions like we do.