New liability limits for nuclear power and oil: Better, but not good enough

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In June, Natural Resources Minister Joe Oliver announced that the federal government will increase the liability limits for the operators of nuclear power plants and for oil companies drilling in Atlantic and Arctic waters. The minister explained that the changes are consistent with the polluter pays principle. But a government that is truly committed to the polluter pays principle would not simply raise caps on liability – it would remove them entirely. Continue reading

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Environment Commissioner targets environmental liability limits

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Canada’s outgoing Commissioner of the Environment and Sustainable Development has used his final report to Parliament to call attention to policies that limit the financial exposure of potential polluters. His recommendations to update liability limits don’t go far enough. Continue reading

Liability limits: lessons from the BP oil spill

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One year ago, the BP Deepwater Horizon drilling rig exploded, killing 11 crew members and sending more than four million barrels of oil into the Gulf of Mexico. Although drilling in the Gulf’s deep waters is resuming, the law limiting oil companies’ liability for the damage they cause has yet to be changed. Until lawmakers eliminate the liability cap, oil companies will lack full incentives to prevent future disasters, and will be ill-equipped to deal with them should they occur. Continue reading

Encouraging Pollution: The Perils of Liability Limits

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The authors of this research paper examine the rationales for and the effects of laws that cap liability for environmental disasters, such as oil spills and nuclear accidents. Such laws, they conclude, subsidize environmentally harmful activities and encourage risky behaviour. Continue reading