Pricing carbon: views from Marc Jaccard and Unifor

Energy economist Marc Jaccard has written previously on the need for political reality in the discussion of carbon taxes.  In September, he and colleagues at Simon Fraser University released a new paper  Is Win-Win Possible? Can Canada’s Government Achieve Its Paris Commitment. . . and Get Re-Elected?. As described at his own blog , the report uses a national energy-economy model to simulate climate policy scenarios that explore the effect of current Canadian policies, and contrast the current policies with 1. “must-price-emissions” policies  and 2. Flexible regulations, such as those in California.  The  alternative policy approach in Is Win-Win possible assumes that the federal government would apply flexible regulations in key sectors – transportation, electricity generation, industry, etc. – in conjunction with a modest emissions price, reaching $40 by 2030.

Another carbon market piece, released in iPolitics at the end of August summarizes Unifor’s position on Ontario’s cap and trade regulations.“Could Ontario’s climate strategy trigger an industrial exodus? Not if the province acts now to blunt the effects” by Jordan Brennan  identifies industrial leakage as “an obvious threat” to the  cap-and-trade program underway in Ontario.  Stating that firms operating in emissions-intensive trade-exposed (EITE) industries …(like auto manufacturing for instance …)  might relocate to jurisdictions that do not price carbon,  Brennan summarizes recommendations that his union,  Unifor,  has made : “ First, ‘transition credits’ should be allocated to industries that bear an extraordinary burden of change. Second, the cap-and-trade program should include a ‘carbon price border adjustment’ to ensure that commodities entering Ontario from jurisdictions without a carbon price (or with a lower price) do not gain an unfair cost advantage over Ontario producers. Third, the carbon revenue system should not be revenue-neutral. The Green Fund should be used for ‘just transition’ as well as mitigate the impact on low-income people and to foster the development of low-carbon technologies such as energy efficiency, retrofits and renewable energy.” Unifor’s public reaction to Ontario’s Climate Action Plan in June 2016 is here. 

Alberta keeps its options open with renewable energy targets and preliminary approvals for 3 oil sands projects

In addition to a commitment to phase out coal-fired power by 2030, on September 14,  the Government of Alberta announced a firm target to generate 30 per cent of its electricity from renewable sources such as wind, hydro and solar by 2030. The government press release  associates this target with a projection that “at least $10.5 billion in new investment will flow into the provincial economy by 2030. This will mean at least 7,200 new jobs for Albertans as projects are built.” The health benefits of shutting down coal plants are highlighted in Breathing in the benefits: How an accelerated coal phase-out can reduce health impacts and costs for Albertans, a joint report from the Pembina Institute, the Canadian Association of Physicians for the Environment, the Lung Association of Alberta and NWT, and the Asthma Society of Canada, released on September 14.

On September 19,  the government appointed a Task Force, to be chaired by Gordon Lambert,  to make recommendations on targeting investments in climate technology to help transition to a lower-carbon economy. Submissions are invited; a report will be submitted by the end of November, summarizing the findings of the engagement and providing recommendations for a provincial Climate Change Innovation and Technology Framework.  Also underway: an Energy Efficiency Advisory Panel   which was launched in June 2016 (see the Discussion Document here )  and an Oil Sands Advisory Group  .     But not all is renewable in Alberta:  on September 15, the government announced  early stage approval of 3 new oil sands projects, representing “ about $4 billion of potential investment into Alberta’s economy and about 95,000 barrels per day of production”.  The proposed developments will still undergo further environmental reviews and will fall under the oil sands 100 megatonne greenhouse gas emissions limit, announced with Alberta’s Climate Leadership Plan.

International Criminal Court expands its priorities to include cases of environmental destruction

The International Criminal Court in The Hague, normally associated with war crimes of violence, on September 15  issued a new Policy Paper  which expands the terms of its case selection and prioritization  to include cases relating to “the destruction of the environment and the illegal exploitation of natural resources or the illegal dispossession of land.”  The Guardian summarized developments on September 15:  “ ICC widens remit to include environmental destruction cases” in The Guardian (Sept. 15) , and Global Witness issued a press release: “Company executives could now be tried for land grabs and environmental destruction”. The policy change comes as the  Prosecutor of the ICC considers whether to investigate a 2014 case filing that catalogues mass human rights abuses linked to systematic land seizures in Cambodia.  Global Witness, an advocacy group, published On Dangerous Ground in  June 2016,  documenting the extent of the problem:   “More than three people were killed a week in 2015 defending their land, forests and rivers against destructive industries. … we documented 185 killings across 16 countries – by far the highest annual death toll on record and more than double the number of journalists killed in the same period.”

berta-caceres-770x4702015 was also the year of the murder of Berta Cáceres,  the 2015 Goldman Environmental Prize-winner for her decade-long opposition to the Agua Zarca hydroelectric dam on her community’s land in Honduras.

Canada falling behind in the Parade to Ratify the Paris Climate Agreement

cop21 logoAfter a special ceremony at the United Nations on September 21, 2016, with 31 nations participating, the U.N. announced  that 60 countries representing 48% of GHG emissions had formally joined the Paris Agreement. Brazil had already ratified on September 13,  and Theresa May, Britains’s new Prime Minister, had also pledged to ratify the agreement before the end of the year. Video messages from nations including Germany, France, the EU, Canada, Australia and South Korea all promised to ratify the Paris accord in the coming months.  Importantly, a Reuters report  on September 25 states that India, representing approximately 4% of global emissions, will ratify the agreement on October 2, the anniversary of Ghandi’s birthday. See also the Times of India report .    Watch the Paris Agreement Tracker  for the status of ratification as the world pushes to reach the trigger point of 55 nations which produce 55 percent of the global carbon dioxide pollution.

Where does Canada, responsible for  approximately 1.9% of emissions, stand? Text of Justin Trudeau’s speech at the United Nations on September 20  focused more on the needs of  Syrian refugees than on our climate commitments.  Official statements have not been forthcoming, but interviews indicate  “Canada to ratify Paris climate deal while still working on national plan” (CBC, Sept. 16). Federal Environment Minister Catherine McKenna is scheduled to meet her provincial and territorial counterparts on October 3 in Montreal to discuss the options put forward by the four working groups formed at the Vancouver meetings last April.   Their recommendations were due by the end of September. On September 18, the Globe and Mail reported  that the federal government may impose a national carbon price plan, and that the emissions reduction target will not exceed that of the previous Conservative government: 30 per cent below 2005 levels by 2030.  See also “Federal government sends mixed messages on how provinces can price carbon” from the National Observer (September 25) for an update.

Parliament has now returned from summer recess, but a meeting between the Prime Minister and the premiers is not expected before the COP22  UN climate conference in Marrakech,  Nov. 7-18.

Not only scientific urgency is pushing the recent global rush to ratify .  On September 20, 2016, 375 members of the National Academy of Sciences of the U.S., including 30 Nobel laureates, published an Open Letter  warning that the consequences of opting out of the Paris agreement would be severe and long-lasting for the planet’s climate and for the international credibility of the United States.   “The political system also has tipping points. Thus it is of great concern that the Republican nominee for President has advocated U.S. withdrawal from the Paris Accord. A “Parexit” would send a clear signal to the rest of the world: “The United States does not care about the global problem of human-caused climate change. You are on your own.” Such a decision would make it far more difficult to develop effective global strategies for mitigating and adapting to climate change. The consequences of opting out of the global community would be severe and long-lasting – for our planet’s climate and for the international credibility of the United States.”

Recommendations by House of Commons committee is at odds with GHG reduction

The House of Commons Standing Committee on Natural Resources  released its second report, The Future of Canada’s Oil and Gas Sector: Innovation, sustainable solutions and economic opportunities  on September 21. The report summarizes the comments from 33 witnesses who appeared before the committee in 7 meetings, and makes recommendations, including: “1. The Committee recommends that the Government of Canada continue to promote the benefits of investing in Canada’s Natural Resources sectors, including oil and gas, which shall include the continued encouragement of innovation, research and development.” And “2.The Committee recommends that the Government of Canada work in collaboration with industry and the indigenous, provincial, territorial, and municipal governments to develop the supporting infrastructure needed to create a favourable environment for natural resource development and transportation, and to deliver oil and gas products to strategic domestic and international markets.”    The Dissenting Report from the Conservative members goes even further to support the fossil fuel industry, making 5 recommendations which include:   “We strongly encourage the government not to impose any additional tax or regulation on the oil and gas sector or the Canadian consumer that our continental trading partners and competitors do not have. This includes measuring the upstream greenhouse gas emissions from pipelines…”  The Opinion statement by the New Democratic Party members of the Committee calls for speedy, permanent changes to the National Energy Board assessment process, and for the Government to honour its obligation for a Nation to Nation relationship with Indigenous peoples, including proper consultation and accommodation on all energy projects and the protection of Indigenous rights.   The NDP also states its support for the testimony of Gil McGowan, President of the Alberta Federation of Labour, calling for support for  value-added development of the oil and gas industry, “because these kinds of investments not only create jobs directly in upgrading, refining, and petrochemicals but also create other jobs”.

Contrast these recommendations with the message released on the next day, September 22,  by Oil Change International in its report,  The Sky’s Limit  .  The report states that developed reserves of oil and gas alone would take the world beyond 1.5°C, even if coal were phased out immediately, and lists examples of some of the biggest projects around the world that cannot go ahead – in the U.S., Canada, Australia, India, Russia, Qatar and Iran .   It concludes that “To stay within our carbon budgets, we must go further than stopping new construction: some fossil fuel extraction assets must be closed before they are exploited fully. These early shut-downs should occur predominantly in rich countries.”   (This urgency is in the spirit of a recent Dutch parliamentary vote in favour of closing down all remaining coal-generation power plants, even though 3 of them were just opened in 2015: see the article in The Guardian ).

The Sky’s the Limit states further, “extraction should not continue where it violates the rights of local people – including indigenous peoples – nor should it continue where resulting pollution would cause intolerable health impacts or seriously damage biodiversity.”  Finally, in a discussion of Just Transition, “ The most critical questions lie in how industry and policymakers will conduct an orderly and managed decline of fossil fuel extraction, with robust planning for economic and energy diversification.”