A study of Canadian manufacturing plants demonstrates the economic damage of extreme hot or cold weather

Researchers at the Sustainable Prosperity Institute at the University of Ottawa released a Working Paper on November 24,  forecasting how manufacturing productivity will be affected by weather extremes. Based on longitudinal data from 53,000 manufacturing plants across Canada, the authors find that the productivity of the plants is reduced in extreme weather – both hot or cold. They highlight the importance of labour input as a main contributor to the productivity loss.

The authors’ summary appears in a blog, Estimating the impact of climate change on the Canadian economy,  which explains that the typical manufacturing plant in Canada currently experiences 4 extreme cold days and 14 extreme hot days per year, but under a scenario of high GHG emissions by the end of the century, that typical plant would experience one extreme cold day, but over 80 extreme hot days each year. They state: “Using medium and high greenhouse gas scenarios for 2050s and 2080s, we find that the annual losses of manufacturing output due to extreme temperature would go from 2.2% today to 2.8-3.5% in mid-century and to 3.5-7.2% in end of century.”  The authors claim to be the first to estimate the effect of extreme temperatures on establishment performance in Canada, and the first to estimate the potential economic impact of climate change in a cold environment. The full results and discussion appear in a 50-page Working Paper, “Manufacturing Output and Extreme Temperature: Evidence from Canada” by economists  Philippe Kabore and Nicholas Rivers.

Ørsted and U.S. Building Trades reach a national agreement for workforce planning in Offshore Wind

A November 18  press release from the North America Building Trades Unions (NABTU) and Ørsted Offshore North America  announces a “Landmark MOU for U.S. Offshore Wind Workforce Transition” , which “represents a transformative moment for organized labor and the clean energy industry. This framework sets a model for labor-management cooperation and workforce development in the budding offshore wind industry.”

According to the NABTU  press release, “The partnership will create a national agreement designed to transition U.S. union construction workers into the offshore wind industry in collaboration with the leadership of the 14 U.S. NABTU affiliates and the AFL-CIO.”    The newly-announced MOU is based on the model of an agreement developed by the Rhode Island Building Trades for the Block Island Wind Farm project – the first offshore wind installation in the U.S. which came online in December 2016, and is now operated by Ørsted .

No text of the new agreement is available yet, but the press release specifies:

“As part of this national framework, Ørsted, along with their partners, will work together with the building trades’ unions to identify the skills necessary to accelerate an offshore wind construction workforce. The groups will match those needs against the available workforce, timelines, scopes of work, and certification requirements to fulfill Ørsted’s pipeline of projects down the East Coast, creating expansive job opportunities in a brand-new American industry for years to come and raising economics for a just transition in the renewable sector…..Ørsted and NABTU, along with their affiliates and state and local councils, have agreed to work together on long-term strategic plans for the balanced and sustainable development of Ørsted’s offshore wind projects.”

North America’s Building Trades Unions is an alliance of 14 national and international unions in the building and construction industry that collectively represent over 3 million skilled craft professionals in the United States and Canada.  Previous NABTU model national agreements are available here .  Labour-affiliated BlueGreen Alliance issued a press release immediately, “lauding” the agreement between NABTU and Ørsted .  BlueGreen is also a partner in  New England for Offshore Wind , a civil society coalition which advocates for regional collaboration in New England, and urges state Governors to make commitments to power one-third of New England with offshore wind by 2022.

The Block Island Wind Farm has been described as “a case study in high-quality job creation” by the Center for American Progress in Offshore Wind Means Blue-Collar Jobs for Coastal States  (April 2018). Massachusetts Offshore Wind Workforce Assessment,(2018) is a detailed  study by the Massachusetts Clean Energy Centre, focusing on job-related issues, and highlighting the experience of Block Island.

Ambitious focus on electric vehicles in Quebec’s 2030 Plan for a Green Economy

On November 16, the government of Quebec released its 2030 Plan for a Green Economy (in French), with an official English-language Summary.   The plan is costed at $6.7 billion over the next five years, with targets to reduce GHG emissions by 37.5% below 1990 levels by 2030, and to achieve  carbon neutrality by 2050.  The bulk of funding and attention focuses on electrification of transportation. Already a leader in electric vehicle incentives, Quebec will have the most ambitious goal for electric vehicles in Canada  –  by 2030, 1.5 million electric vehicles on the road, along with 55% of city buses and 65% of school buses, 100% of governmental cars, SUVs, vans and minivans,  and 25% of pickup trucks. Sales of new gasoline-powered vehicles will not be permitted as of 2035.

Although emissions from transportation account for 40% of the province’s total emissions, two articles posted by CBC note that the measures announced will be insufficient to meet the GHG emissions reduction targets:  “Quebec’s push to go electric won’t get province to emission reduction targets, experts say”, and “How Quebec’s climate change plan protects suburbanites from tough choices” .

The new 2030 Plan for a Green Economy is part of a suite of complementary policy statements, including  Joining Forces for a Sustainable Energy Future: 2018 – 2023 energy transition, innovation and efficiency master plan  ; Strategy for developing the Battery Sector  (French only);  and Development of critical and strategic minerals in Quebec. The complete 2030 Plan for a Green Economy is available in French only .

International studies offer hope to reach Paris targets through Green Recovery plans

An October report, Assessment of Green Recovery Plans after Covid-19 , modelled Green Recovery plans globally and for the EU, Germany, Poland, Spain, the UK, USA, Japan and India. In all cases, the Green Recovery Plan produced the best results measured for GDP growth, employment impacts and emission reductions . The report assessed two paths to recovery, both of which have equal cost to government: 1. a ‘return to normal’ approach by reducing VAT rates and encouraging households to resume spending; and 2.  a ‘Green’ Recovery Plan that included a smaller reduction in VAT, but included public investment in energy efficiency and in upgrading electricity grids; subsidies for wind and solar power; a car scrappage program with subsidies for electric vehicles; and a tree planting program. The report was commissioned by the We Mean Business coalition and conducted by Cambridge Econometrics in the U.K.

Another report was announced in an October 28 press release:  Technical Report: The Case for a Green and Just Recovery, commissioned by the C40 Global Mayors COVID-19 Recovery Task Force.  This report (with details of methodology here), estimates that investing COVID stimulus funds in green solutions would create 50 million jobs, prevent 270,000 premature deaths, and deliver $280bn in economic benefits globally.   Expressing concern that, “to date, only 3 – 5% of an estimated US$12 – $15 trillion in international COVID stimulus funding is committed to green initiatives”, the C40 Task Force  issued a Call to Action  for national governments, international institutions, businesses and world leaders. Noting that timing is consequential, the Task Force calls for “decisive climate action before COP26” , to embrace the principles of the Global Green New Deal coalition – turning away from “business as usual”, ending all public investments in fossil fuels, and pledging to reach carbon neutrality by 2050.

The  C40 Mayors’ Agenda for a Green and Just Recovery  was launched in July, with support from civic society, labour unions and youth activists. A detailed  Implementation Guide was released in June with specific strategies.

An optimistic view: Green Stimulus Funds can take us to 1.5C

Finally, “How the coronavirus stimulus could put the Paris Agreement on track” appeared in Carbon Brief , summarizing “Covid-19 recovery funds dwarf clean energy investment needs” , an academic article published in the journal Science  – (restricted access). The authors of the article argue that if just a fraction of Covid-19 fiscal stimulus – around 10%  – was invested every year, it  would be sufficient to fund the clean energy transition.  “Together with the $300bn annual increase into low-carbon energy, investments into fossil fuels need to be reduced by $280bn per year for a Paris compliant pathway”.  The optimistic conclusion: “In very concrete terms, our analysis shows that the more ambitious goal under the Paris Agreement of limiting global warming to 1.5C is still within reach. Decisive leadership, swift action and sound use of scientific advice seems to be a good recipe for coping with both the Covid-19 crisis and our warming climate.”



Costs and job impacts of Green Recovery and Just Transition programs for Ohio, Pennsylvania

 Impacts of the Reimagine Appalachia & Clean Energy Transition Programs for Ohio:  Job Creation, Economic Recovery, and Long-Term Sustainability was published by the Political Economy Research Institute (PERI) in October, written by Robert Pollin and co-authors Jeannette Wicks-Lim, Shouvik Chakraborty, and Gregor Semieniuk. To achieve a 50 percent reduction relative to 2008 emissions by 2030, the authors propose public and private investment programs, and then estimate the job creation benefits to 2030. “Our annual average job estimates for 2021 – 2030 include: 165,000 jobs per year through $21 billion in spending on energy efficiency and clean renewable energy;  30,000 jobs per year through investing $3.5 billion in manufacturing and public infrastructure. 43,000 jobs per year through investing $3.5 billion in land restoration and agriculture.  The total employment creation through clean energy, manufacturing/infrastructure and land restoration/agriculture will total to about 235,000 jobs. “ 

There are almost 50,000 workers currently working in the Ohio fossil fuel and bioenergy industries, with an estimated 1,000 per year who will be displaced through declining fossil fuel demand.  As he has before, Pollin advocates for a Just Transition program which includes:  Pension guarantees; Retraining; Re-employment for displaced workers through an employment guarantee, with 100 percent wage insurance; Relocation support; and full just transition support for older workers who choose to work past age 65. The report estimates the average costs of supporting approximately 1,000 workers per year in such transition programs will amount to approximately $145 million per year (or $145,000 per worker).

Pennsylvania report

Using an identical structure, the same authors modelled a Green Recovery program for Pennsylvania, released as a preliminary document, Impacts of the Reimagine Appalachia & Clean Energy Transition Programs for Pennsylvania. They estimate that, “as an average over 2021 – 2030, a clean energy investment program scaled at about $26 billion per year will generate roughly 174,000 jobs per year in Pennsylvania.”

The authors estimate that oil and natural gas consumption in Pennsylvania will fall by 40 percent by 2030, and coal will fall by 70 percent, resulting in the loss of 2,870 fossil fuel-based jobs per year between 2021 – 2030. Given the demographic composition of the workforce, they estimate that 1,056 workers in the industry will voluntarily retire – leaving 1,814 workers per year who will experience displacement (0.03 percent of the total workforce). Just Transition measures similar to those called for in Ohio are presented, with the statement that “the overall costs of providing these displaced workers with generous just transition support will be trivial relative to the size of Pennsylvania’s economy. The just transition program should be financed jointly by federal and state government funding sources.” More detailed costing is promised when the final study for Pennsylvania is released.

The Political Economy Research Institute (PERI) at University of Massachusetts has published related studies in a “Green Growth” series, available from this link. States studied are Colorado (2019) , Maine (August 2020), New York (2017), and Washington State (Dec. 2017). In September 2020, PERI released Job Creation Estimates Through Proposed Economic Stimulus Measures, in which Robert Pollin and Shouvik Chakraborty modelled the impact of a $6 trillion, 10-year economic stimulus program for clean energy and infrastructure across the U.S.