Economic Incentives for Land Reclamation: Evidence from the Oilsands Industry in Alberta

• Author / Creator

  Zhang, Zhanji

• This thesis explores the impact of a tax-refund scheme on early reclamation and improved boreal caribou habitat outcomes. The research examines the extent to which a tax-refund scheme addresses the externality arising from energy extraction and generates desirable social outcomes in the context of the oilsands industry in Alberta.
  The data used in the study are based on in-situ oilsands projects (Hauer et al., 2018) and bitumen prices (Energy Information Administration, 2019). In addition, simulated data on output and cost are generated based on information from the Canadian Association of Petroleum Producers (2018) and energy project reports (Alberta Energy Regulator, 2018). A simulation model is constructed to assess firms’ reclamation decisions, impacts on caribou populations, and economic welfare outcomes under three different cases: the base (no-tax) case, the damaged land tax case, and the tax-refund scheme. Because tax levels can result in some firms exiting the oilsands industry, several iterations are required for the simulation model to reach an equilibrium state.
  We find that under a tax-refund scheme, oilsands projects would implement early reclamation of linear features in their licence area at certain tax levels, and this could generate a social outcome that is close to the socially optimal outcome associated with a damaged land tax. The tax-refund scheme also has other desirable properties such as improved political feasibility. In addition, this study’s findings will also be of use for caribou recovery efforts and policy implementation.

• Subjects / Keywords

  • Tax-refund scheme
  • Stock externality
  • Oilsands industry

• Graduation date

  Fall 2019

• Type of Item

  Thesis

• Degree

  Master of Science

• DOI

  https://doi.org/10.7939/r3-1z50-5j58

• License

  Permission is hereby granted to the University of Alberta Libraries to reproduce single copies of this thesis and to lend or sell such copies for private, scholarly or scientific research purposes only. Where the thesis is converted to, or otherwise made available in digital form, the University of Alberta will advise potential users of the thesis of these terms. The author reserves all other publication and other rights in association with the copyright in the thesis and, except as herein before provided, neither the thesis nor any substantial portion thereof may be printed or otherwise reproduced in any material form whatsoever without the author's prior written permission.