New evidence about cap and trade policies – an important issue for Ontario voters

With a June 2018 election approaching in Ontario,  climate change policies and the cap and trade program are already emerging as  key issues.  Several relevant reports have been published since the Environmental Commissioner of Ontario addressed these issues in her audit report,  Ontario’s Climate Act: From Plan to Progress  in January 2018.

The government’s own progress report on the 5-year Climate Change Action Plan was released on March 14  , and includes an evaluation of the policies and projects funded through Ontario’s cap and trade program. One such program is the “Low Carbon Building Skills” initiative announced in August 2017 under the Ministry of Advanced Education and Skills Development, which  aims to improve training for low carbon building projects –  including retrofits, green construction and building operations.  Other highlighted initiatives relate to hospital energy efficiency; building and school retrofits; social housing; research into climate change impacts on  building codes.

clean economy alliance progress report ontario year 1A more independent view comes in   A Progress Report on Ontario’s Cap-and-Trade Program and Climate Change Action Plan: Year One ,  published by the Clean Economy Alliance – an alliance of Ontario’s  businesses, clean technology firms, industry associations, labour unions, farmers, health advocates and environmental organizations.   In answering its key question, “Is there any evidence that cap-and-trade has hurt Ontario’s economy or cost jobs?” the report concludes that “Rather than shedding jobs, Ontario added 155,000 jobs between January 2017 and December 2017 – the first year of cap-and-trade. Gains were driven by employment growth in wholesale and retail trade, professional services and manufacturing. Cap-and-trade doesn’t appear to have hurt economic growth either. 2017 marked a 7-year high in Ontario’s GDP growth. Forecasters including RBC, TD Bank and the Conference Board of Canada agree that in 2018, economic growth will slow slightly, but will remain strong.” The report card evaluates impact on emissions reduction, as well as implementation rates by policy area (transportation, buildings and homes, land use planning, and “others”) . It concludes with a brief case study of the incentives for electric vehicles – noting that 2017 was the first year that  more electric vehicles (EVs) were sold in Ontario than in any other province.

On  April 10, the Environmental Commissioner of Ontario released another relevant report: the 2018 Energy Conservation Progress report, Making Connections: Straight Talk about Electricity in Ontario.  In this statistically-dense report, she acknowledges that the province’s electricity  system was 96 per cent emission-free in 2017, but warns that the province will fall short of its 2030 carbon reduction target unless consumer behaviour changes:  “Looking ahead, much more conservation and low-carbon electricity will be needed to displace fossil fuels as the climate crisis continues to worsen. Ontario is not yet preparing seriously for this future.”

With the explicit purpose of informing the policy discussion before and after the Ontario election in June 2018, Ontario 360  has been established at the University of Toronto’s School of Public Policy and Governance, as an “ independent, non-partisan, and fact-based” resource.  On April 18, their first briefing on Climate Policy was published, written by Trevor Tombe, associate professor of economics at the University of Calgary. The briefing reviews the cap-and-trade system and the various initiatives which have been funded by its proceeds, and provides a top-level explanation of the merits of carbon pricing in general, with a comparison of cap and trade and carbon taxes. His conclusion: “while the evidence finds that pricing should be the backbone of any credible climate policy in Ontario, it is not a magic wand. There are areas where it may not be administratively feasible, and therefore narrow complementary policies should also be on the table. And even where pricing is appropriate, reasonable people will disagree over the appropriate price level and coverage. But whatever path forward future governments choose, they should strive for transparency in costs and benefits, clarity in the goals a policy is trying to achieve, and flexibility as new evidence emerges.”

Finally, a related report from the United States was released on April 17, evaluating the economic and environmental impacts of the cap and trade markets of the Regional Greenhouse Gas Initiative ( RGGI) in the U.S. from 2015-2017 .  The Economic Impacts of the Regional Greenhouse Gas Initiative on Nine Northeast and Mid-Atlantic States   found that the nine states which form the network  gained $1.4 billion in economic benefits over the past three years because of the way they invested proceeds, with the biggest payoffs (including in new jobs) coming from investments in energy efficiency programs.  In the same period, there has been no damage to the reliability of the electricity grid, nor a net increase in electricity bills.    The Economic Impacts of the Regional Greenhouse Gas Initiative on Nine Northeast and Mid-Atlantic States  was produced by The Analysis Group , who also were responsible for two previous evaluations since the RGGI launched in 2009, available here .

First Nations communities trading dirty diesel for renewable energy

First Nations’ commitment to renewable energy is described in Growing Indigenous Power: A Review of Indigenous Involvement and Resources to further Renewable Energy Development across Canada  released in February 2018 by  TREC Renewable Energy Co-operative. The report highlights examples of renewable energy projects, describes the potential benefits for  communities,  and outlines supportive policies and programs in each province. In the section on workforce issues, the report states:  “Whether a community is partnering with a developer and/or hiring a construction firm for their own project, it is important to insist, in writing, on a certain number of employment positions. After working with a developer on a wind project, Millbrook and Eskasoni First Nations (Nova Scotia) developed a database of skilled community members and had them join the union, to address employment issues.” The report contains a unique bibliography of articles and reports from lesser-known Indigenous and local sources.

The National Observer publishes frequent updates on the issue of First Nations and renewable energy  in British Columbia, which they have compiled into a Special Report titled First Nations Forward. Highlights from the series include “First Nations powering up B.C.” (Dec. 2017), and most recently,  “In brighter news, a clean energy success story:   Skidegate on the way to becoming a “city of the future”   (April 9). Also in British Columbia, the Upper Nicola Band  in the southern Interior will vote in April on a proposal to build a solar farm project  which, if approved, will be 15 times larger than the current largest solar farm in British Columbia ( a converted mine site at Kimberley ) .  CBC profiled the proposed new project in March. DeSmog Canada also profiled the Upper Nicola Project, and in November 2017 published “This B.C. First Nation is harnessing small-scale hydro to get off diesel.”

How green energy is changing one Alberta First Nation”  in the Toronto Star (April 10)  profiles a solar project at Louis Bull First Nation, south of Edmonton. It  was initiated under the  Alberta Indigenous Solar Program , one of several provincial grant programs to encourage renewable energy and energy efficiency amongst First Nations.  On  April 5, Alberta’s Renewable Electricity Program was announced – a  3-phase program which the government claims will attract approximately $10 billion in new private investment.  By 2030, it is also expected to create about 7,000 jobs in a wide range of fields, including construction, electrical and mechanical engineering, project management, as well as jobs for IT specialists, field technicians, electricians and mechanics. Phase 2 will include a competition for renewable energy projects  which are at least 25% owned by First Nations.

On March 22, the Ontario government announced :  “The federal and Ontario governments are partnering with 22 First Nations to provide funding for Wataynikaneyap Power to connect 16 remote First Nations communities in Northern Ontario to the provincial power grid…..When complete in 2023, the Wataynikaneyap Power Grid Connection Project will be the largest Indigenous-led and Indigenous-owned infrastructure project in Ontario history. It will mean thousands of people will no longer have to rely on dirty diesel fuel to meet their energy needs.”  The Wataynikaneyap Power website offers a series of press releases that chronicle the years-long development of this initiative, in partnership with FortisOntario . The most recent press release on March 22 states that the goal is to establish “a viable transmission business to be eventually owned and operated 100% by First Nations. In addition to the significant savings associated with the avoided cost of diesel generation, the Project is estimated to create 769 jobs during construction and nearly $900 million in socio-economic value.  These include lower greenhouse gas emissions (more than 6.6 million tonnes of CO2 equivalent GHG emissions are estimated to be avoided), as well as improved health of community members, and ongoing benefits from increased economic growth.”  Also of interest, a 2017 press release from FortisOntario : “Over $2 Million Announced For Wataynikaneyap Transmission Project First Nations Training Program .”

 

Gender equity practices needed in the Canada’s renewable energy sector

A new report argues that Canada’s renewable energy and aligned “climate prosperity” initiatives are perpetuating employment and income inequities for women in Canada, and calls for the renewable energy sector–a major area of action on climate change–to incorporate gender equity practices in workforce training, hiring, and management.  Women and Climate Change Impacts and Action in Canada: Feminist, Indigenous and Intersectional Perspectives  states that in countries such as Canada, United States, Spain, Germany, and Italy, women hold only 20-25% of jobs in the sector, and the vast majority of these jobs are lower paid, non-technical, administrative and public relations positions.   Further, while women  face social-economic barriers that leave them bearing the brunt of climate change impacts, they are  denied a role in developing policies and programs to mitigate climate change.  Women and Climate Change Impacts and Action in Canada makes a unique contribution in examining the roles and knowledge of  Indigenous women, and calls for solidarity across women’s groups to advance the paradigm shifts necessary to achieve gender mainstreaming and climate justice in Canada.   The report was produced in collaboration between the Canadian Research Institute for the Advancement of Women and the Alliance for Intergenerational Resilience, with financial support from Work in a Warming World (W3) Project, partnered with Adapting Canadian Work and Workplaces to Respond to Climate Change Project (ACW). A summary of the findings is at the ACW website; the full report is archived in the ACW Digital Library here.

More on this topic:  Creating and Optimizing Employment Opportunities for Women in the Clean Energy Sector in Canada  (2016) is an informal  working paper/knowledge synthesis by Bipasha Baruah, Canada Research Chair in Global Women’s Issues at Western University.  She states that “The conversation about gender equity or social justice (more broadly) in Canada’s green economy is at best incipient and tokenistic” , and calls for specific employment equity policies as well as a shift in societal attitudes. The article documents the same underrepresentation of women in the renewable energy industry, and argues that Canada lags other OECD countries in data collection and analysis, and policy initiatives.  “Renewable inequity? Women ’s employment in clean energy in industrialized, emerging and developing economies” is a more formal article by Baruah which appeared in Natural Resources Forum (2017).  The 2017 volume  Climate Change and Gender in Rich Countries: Work, Public Policy and Action, edited by Marjorie Griffin Cohen, offers a still broader look at the issue of gender and climate change.

L7 leaders alert to backsliding on Just Transition at the G7 meetings; Unionists share  Just Transition experiences in Vancouver

clc-logoIn Ottawa on April 4 and 5, the Canadian Labour Congress, along with the International Trade Union Confederation and the Trade Union Advisory Committee to the OECD (TUAC), hosted the L7 meetings of international labour leaders, as part of Canada’s presidency of the G7 this year.  According to the CLC press release, the L7 considered a full range of topics, including extension of bargaining rights, full employment, gender equity, and progressive trade – but also “ welcomed the creation of a new G7 Employment Task Force – a key outcome of the G7 Employment Ministers meeting in Montréal from March 26th to 28th.” The G7 Leaders’ official statement re Employment Outcomes and the Task force is here;  one of the “deliverables”  is to  “Share best practices and identify policy approaches to assist individuals in making the transition and adapting to changes in the labour market.”  In the L7 Evaluation of the Outcomes of the G7 Innovation and Employment Ministerial Meeting  released after the meetings, the unionists point out : “While discussing transitions, the text does not refer to “just transitions” in contrast to the outcomes of the Italian G7 presidency. The main proposals for transitions by the G7 focus on reviewing social protection and training systems. The support for “apprenticeship and training opportunities and adult upskilling programs” is welcome but is not enough and does not address financing and governance challenges.”  The CLC press release states:  “For trade unions, the Task Force should aim for “Just Transition” principles that ensure that workers are not paying the cost of the adjustment to decarbonisation, digitalisation and the shifts in production and services technologies.”

Just Transition Vancouver event 2018

Photo  by Tracy Sherlock, from the National Observer, April 6

On April 5 and 6th  in Vancouver,  labour leaders from around the world presented and discussed their experiences at the Metro Vancouver Just Transition Roundtable, hosted by the B.C. Federation of Labour,  the Canadian Labour Congress, Green Jobs B.C., the City of Vancouver, Vancouver and District Labour Council, and others.  Amongst the speakers:   B.C. Federation of Labour President Irene Lanzinger, who  argued that “the two defining problems of our time are climate change and inequality”, and they need to be addressed together, and urgently.  Samantha Smith, Director of the Just Transition Centre of the International Trade Union Confederation, provided European examples in her Keynote Address, and a spokesman from the United Federation of Danish Workers 3F, the largest trade union in Denmark, spoke of the clean economy investment of members’ pension funds.  Other union speakers were from New Zealand and Norway.   From Vancouver,  City Councillor Andrea Reimer discussed their Renewable City Strategy and the Greenest City Action Plan. The Councillor reported that  Vancouver has 25,000 green jobs (5% of all jobs), and that surprisingly, these are not  in the transportation and waste recovery sectors, but in local food production, clean buildings and local technology companies. For a summary of the event, read  “BC FED President Irene Lanzinger calls climate change and inequality ‘defining problems of our time’”  in the National Observer (April 6). 

Canada’s Clean Fuel Standard Framework released

On December 13, the Government of Canada released its  Clean Fuel Standard Regulatory Framework, the latest stage in the  development of regulations to complement the Pan-Canadian Framework on Clean Growth and Climate Change, by achieving  30 megatonnes of annual reductions in GHG emissions by 2030.  The standard will apply to all fuels – gasoline and diesel, but also aviation fuel, natural gas for heating, and metallurgical coal. It  will also apply to the full life cycle of fuels –  the first jurisdiction in the world to do so, according to the Pembina Institute .  The Clean Fuel Standard process began in November 2016, with consultations held throughout 2017,  largely focused on the government’s Discussion Paper (February 2017).   Comments received in that consultation were compiled  in a November report:  Clean fuel standard: Summary of stakeholder written comments on the Discussion Paper.   In response to the December Framework release, comments on the technical details will be accepted from  industry, provincial  governments, non-governmental organizations until January 19, 2018. Draft regulations are promised for  late 2018.

The Pembina Institute reaction  highlights three noteworthy aspects of the proposed Canadian Fuel Standard Framework:  1. Sustainability and indirect land-use change issues are sidelined –  which is “concerning and unacceptable” ;  2. Canada’s existing  federal Renewable Fuels Regulations will remain in place for a short-term transition period, and the new GHG-intensity-based clean fuel standard will eventually replace them – ( an approach  Pembina has previously recommended in its April 2017 submission to the government ); and  3.  Pembina urges  “the importance of timelines” – i.e. the longer it takes to implement these regulations, the more stringent they must be if Canada is to meet its emissions reduction target for 2030.

How important is the Clean Fuel Standard?  It has been called the single most important policy tool to achieve Canada’s emissions reductions target for 2030.  And in November 2017, Clean Energy Canada published “What a Clean Fuel Standard can do for Canada”  in which Navius Research used two in-house models to simulate the impact of different Clean Fuel Standard designs on Canada’s economy.  The report concluded, among other beneficial effects :  “The policy would increase economic activity in clean fuels in Canada by up to $5.6 billion a year in 2030. It would also create up to 31,000 jobs for the skilled workers needed to build, operate and supply new clean fuel facilities.”   A separate Technical Report  explains the modelling and provides much more detail about all projections, including employment projections.

Also of interest: From the EcoFiscal Commission,  A delicate (im)balance: policy interactions and the federal clean fuel standard  and an April 2017  Submission to the Clean Fuels Standard  consultations  from the Pembina Institute, Equiterre, Environmental Defence, and the Conservation Council of New Brunswick.