The new British Columbia government tackles climate change policy and controversies: Site C, Kinder Morgan, and Carbon Tax neutrality

As the smoke from over 100  forest fires enveloped British Columbia during the summer of 2017, a new brand of climate change and environmental policy emerged after June 29, when the New Democratic Party (NDP) government assumed power , thanks to a Confidence and Supply Agreement with the Green Party Caucus.  Premier John Horgan appointed Vancouver-area MLA George Heyman, a former executive director of Sierra Club B.C. and president of the B.C. Government Employees and Service Employees’ Union, as Minister of Environment and Climate Change Strategy, with a mandate letter which directed Heyman to, among other priorities, re-establish a Climate Leadership team,  set a new 2030 GHG reduction target, expand and increase the existing carbon tax, and “employ every tool available to defend B.C.’s interests in the face of the expansion of the Kinder Morgan pipeline.”  A separate mandate letter to the Ministry of Energy, Mines and Petroleum Resources, directed the Minister to create a roadmap for the province’s energy future, to consider all Liquified Natural Gas proposals in light of the impact on climate change goals, to freeze hydro rates and to  “immediately refer the Site C dam construction project to the B.C. Utilities Commission on the question of economic viability and consequences to British Columbians in the context of the current supply and demand conditions prevailing in the B.C. market.” In addition, the government “will be fully adopting and implementing the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP), and the Calls to Action of the Truth and Reconciliation Commission.”

Some notes on each of these priorities:

Re the B.C. Climate Leadership Plan The recommendations of the B.C. Climate Leadership Team were ignored by the Liberal government when delivered in 2016.  In mid-September 2017, the reasons for that became clear, as reported by the National Observer , DeSmog Canada, Rabble.ca and Energy Mix . According to the National Observer,  “provincial officials travelled to Calgary to hold five rounds of secret meetings over three months in the boardroom of the Canadian Association of Petroleum Producers (CAPP). Representatives from Alberta-based oil giants Encana and Canadian Natural Resources Ltd (CNRL) are shown on the list of participants meeting with B.C.’s ministry of natural gas development.”  In the article for DeSmog Canada, Shannon Daub and Zoe Yunker state that the Climate Leadership process was a stunning example of institutional corruption: “what can only now be characterized as a pretend consultation process was acted out publicly….  The whole charade also represents an abuse of the climate leadership team’s time and a mockery of B.C.’s claims to leadership during the Paris climate talks, not to mention a tremendous waste of public resources.”  The documents underlying the revelations were obtained under Freedom of Information requests by Corporate Mapping Project  of the Canadian Centre for Policy Alternatives, of which Shannon Daub is Associate Director.

Re the  Carbon Tax:  The Budget Update released on September 11 states: “The Province will act to reduce carbon emissions by increasing the carbon tax rate on April 1, 2018 by $5 per tonne of CO2 equivalent emissions, while increasing the climate action tax credit to support low and middle income families. The requirement for the carbon tax to be revenue-neutral is eliminated so carbon tax revenues can support families and fund green initiatives that help us address our climate action commitments.” For context, see “B.C. overturns carbon tax revenue-neutrality”  (Sept. 22) by the Pacific Institute for Climate Solutions;  for reaction, see the Canadian Centre for Policy Alternatives-B.C. or the Pembina Institute .

Re the Kinder Morgan Trans Mountain Pipeline:  On October 2, 2017, the Federal Court of Appeal  is scheduled to start the longest hearing in its history, for the consolidated challenges to the National Energy Board and Federal Cabinet approval of Kinder Morgan’s Trans Mountain Project.  The government has applied for intervenor status, and in August  hired environmental lawyer and former B.C. Supreme Court Justice  Thomas Berger as an external legal advisor on the matter.  West Coast Environmental Law blogged, “See you in court, Kinder Morgan” , which provides a thorough summary of the 17 cases against the TransMountain expansion; WCEL has also published a Legal Toolbox to Defend BC from Kinder Morgan, which goes into the legal arguments in more detail.  The NEB website provides all official regulatory documents. Ecojustice is also involved in the complex court challenge.

Re the Site C Dam:  In early August, the B.C. government announced a review of the Site C project by the B.C. Utilities Commission.  The Preliminary Inquiry Report was released on September 20,  calling for more information before passing judgement on whether BC Hydro should complete the project. The Inquiry Panel also finds “a reasonable estimate of the cost to terminate the project and remediate the site” would be $1.1 billion, based on the figures provided by BC Hydro and Deloitte consultants. The Inquiry report is  summarized by  CBC . Next steps:  a series of round-the-province hearings and final recommendations to government to be released in a final report on November 1.

After years of protests about Site C, evidence against it seems to be piling up. A series of reports from the University of British Columbia Program on Water Governance, begun in 2016, have addressed the range of issues involved in the controversial project : First Nations issues; environmental impacts; regulatory process; greenhouse gas emissions; and economics.  In April, an overview summary of these reports appeared  in Policy Options as  “Site C: It’s not too late to hit Pause”,  stating that Site C is “neither the greenest nor the cheapest option, and makes a mockery of Indigenous Rights in the process.”   On the issue of Indigenous Rights, the UN Committee on the Elimination of Racial Discrimination called for a halt on construction in August, pending a full review of how Site C will affects Indigenous land.

If Site C is a good project, it’s time for Trudeau to trot out the evidence” in  iPolitics (Sept. 17), calls Site C “an acid test for Trudeau’s promise of evidence-based policy” and an environmental and economic disaster in the making.  The iPolitics article summarizes the findings of a submission to the BC Utilities Commission review by Robert McCullough, who concluded that BC Hydro electricity demand forecasts overestimate demand by 30%, that its cost overruns on the project will likely hit $1.7 to $4.3 billion, and that wind and geothermal are cleaner alternatives to the project. McCullough’s conclusions were partly based on his review of the technical report by Deloitte LLP, commissioned by the Inquiry.

 

Carbon Pricing now covering 13% of global GHG emissions; Canadian and U.S. developments

The World Bank released  the State and Trends of Carbon Pricing 2016 report on October 18,  which  measures the growing momentum of carbon markets: in 2016, 40 national jurisdictions and over 20 cities, states, and regions are putting a price on carbon, including seven out of 10 of the world’s largest economies.  About 13 percent of global GHG emissions are now covered by carbon pricing initiatives.  Drawing on new economic modelling, the report also predicts that this coverage could increase by the largest leap ever in 2017, to between 20 – 25 percent,  if the Chinese national Emissions Trading System (ETS) is implemented in 2017 as planned .

Carbon pricing in Canada continues to draw opinion and reaction, including  from Toby Sanger, a Senior Economist at CUPE and  a member of the Federal Sustainable Development Advisory Council, who reiterates a call for Just Transition and equity considerations in “How to offset the hardship of carbon pricing”  in the Ottawa Citizen (Oct. 6) . Andrew Gage at West Coast Environmental Law (Oct. 17) asks important questions about the price levels, scope, and timing of the national carbon price proposals currently under consideration  in “Will Canada’s national carbon price clean up our climate mess?” . His blog includes consideration of the impact  on B.C., and sends a message for  Saskatchewan: “So suck it up, Mr. Wall – it’s time to pay the carbon price and get on board with a national plan to deal with Canada’s climate mess”.   And a blog from Keith Brooks at Environmental Defence takes issue from an Ontario viewpoint with a recent Fraser Institute criticism of the Trudeau carbon pricing proposal in “Stupid or Just Lying? What’s up with the Fraser Institute?” (Oct. 13).

In the U.S., all eyes are on the State of Washington, where a ballot question in the November 8 election will decide whether Washington becomes the first state in the U.S. with a  carbon tax.   The Washington Carbon Emission Tax and Sales Tax Reduction question, known as Initiative 732 (I-732)  is modelled after B.C.’s carbon tax, but has divided traditional left and environmental allies, with the Alliance for Clean Jobs and Energy and the Washington District Labor Council opposed to the initiative, and the Sierra Club and others taking a “do not support” position.   For background, see the excellent overview (with links) at Ballotpedia, or “How a tax on carbon has divided Northwest climate activists” in the Los Angeles Times (Oct. 13) .

Proposals for carbon pricing designs:    A new policy brief released by the Centre for International Governance Innovation (CIGI)  in Waterloo, Ontario  proposes  a carbon-fee-and-dividend (CFD) program , which has been advocated by the Citizens’ Climate Lobby.  How the United States Can Do Much More on Climate and Jobs  envisions a federal program which would  collect a carbon fee from coal, oil and natural gas producers and importers, and distribute  all the revenue (after administrative costs) directly to American households in equal per capita monthly dividends.   To address fears of carbon leakage, the  program would include a border adjustment,  authorizing  a special duty on imports from countries lacking equivalent carbon pricing.   The paper concludes with arguments as to why this is the most likely- to- succeed political option.

Another U.S. discussion paper, from Resources for the Future,  Adding Quantity Certainty to a Carbon Tax, defines and discusses  the multitude of design elements for a Tax Adjustment Mechanism for Policy Pre-Commitment (TAMPP) –  which would adjust the tax rate of a carbon tax  at intermediate benchmark points if emissions reductions deviate sufficiently to threaten the long-term targets . The paper argues that the approach should be rule-based with a clear and transparent adjustment process to reduce unnecessary uncertainty for investment.

 

 

New B.C. Climate Leadership Plan leaves carbon tax untouched

Months later than scheduled, the Government of B.C. released its Climate Leadership Plan   on August 19, claiming that it will create 66,000 green jobs and decrease carbon emissions by 25 MT by 2050. See the news release and backgrounders here .  The Plan largely ignores the 2015 recommendations of the government’s own Climate Leadership Team (CLT) and does not increase the carbon tax, to allow other jurisdictions to “catch up”.    It organizes its  21 “action items” into 6 areas —natural gas, transport, forestry and agriculture, the built environment, industry and utilities, and the public sector, and focuses on  electric vehicles,  energy efficiency in buildings,  carbon sequestration in the forestry industry,  and promised emission reductions in natural gas production.   The Pacific Institute for Climate Solutions (PICS) reviews each of these areas in its Initial Assessment: Part 1 here     and Part 2 here .  In   “3 Big Questions about British Columbia’s Climate Plan”    , Clean Energy Canada states that carbon reduction measures “aren’t backed up by either the dollars or the regulations” – resulting in emissions reductions that are likely to be approximately 2 MT, rather than the 25 MT that the Leadership Plan promises.

The tone of reaction is summed up by Tzeporah Berman’s Facebook posting:  “pathetic and cowardly”.  For more detailed reactions, see   “5 Things you need to know about B.C.’s new climate plan” from the Pembina Institute;    “B.C.’s Climate Plan reaches Olympian heights of Political Cynicism” , an OpEd by Marc Jaccard in the Globe and Mail;  “B.C. hesitates when it should lead” by the David Suzuki Foundation;  “Christy Clark gives up the Climate Change Battle” in The Tyee ;  “B.C. Climate Plan leaves hard work for another day” by the Pembina Institute , and “B.C. Climate Plan full of holes”    in the National Observer.

Is British Columbia losing its leadership position on Climate Change?

On May 10, the Chair of Canada’s Ecofiscal Commission wrote in the Globe and Mail  , urging Premier Clark to increase B.C.’s carbon tax and emulate the revenue transfers in the Alberta carbon tax structure.   Some members of the government’s own Advisory panel on Climate Leadership sent an Open Letter to the Premier   on May 17  (one year after the panel had delivered its recommendations  ), urging action and questioning the delays on their recommended initiatives.  The Open Letter coincided with an Opinion piece  in the Victoria Times Colonist, and an article by Tzeporah Berman (one of the signatories) in the National Observer  . For the best summary of the current state of climate progress in B.C., see the Pembina Institute/Clean Energy Canada backgrounder: Evaluating Climate Leadership in British Columbia   .

Where do unions stand on Carbon Markets?

In a Working Paper titled Carbon Markets After Paris: Trading in Trouble , Sean Sweeney, Coordinator of Trade Unions for Energy Democracy (TUED),  argues that it is time for unions to reevaluate their stance on emissions trading. He asserts a “Paris Contradiction” –   that the INDC’s targets from COP21 in Paris in December 2015 are not sufficient to reduce GhG emissions, and  are part of a “neo liberal fantasy”.  Focusing on Europe and the problems of the European carbon market ( the EU ETS), Sweeney criticizes the  European Trade Union Confederation for its “defensive approach (prevention of carbon leakage and the protection of existing jobs)”, and its continued participation in the Social Partnership framework. In his accompanying blog , he states:  “ Facing up to the the failure of carbon markets will allow unions and their allies to better concentrate on developing and organizing around the kind of programmatic commitments that can seriously tackle climate change and the systemic roots of the crisis…. by extending social ownership of key sectors like energy, a genuine ‘just transition’ is possible and that unions can play an important role in making it happen.”    Even outside the neo-liberal fold, Sweeney’s call to reject carbon markets is controversial.  The European Trade Union Confederation, subject of Sweeney’s criticism, most recently issued its  “Position on the structural reform of the EU Emissions Trading System”  in December 2015, reflecting a concern for “carbon leakage” but demanding a Just Transition Fund to protect workers.  The ETUC claims to have consulted widely amongst European labour unions to reach its position.   The Canadian Labour Congress, in the lead-up to COP21 stated (Nov. 2015)  “The Canadian labour movement supports a national cap and trade carbon-pricing system”, and the Canadian Union of Public Employees, in its response to the 2016 Federal Budget  states, “CUPE supports putting a price on carbon, but it must be done in a progressive way that penalizes corporate polluters rather than low-income and working Canadians. Revenues raised from carbon pricing should be used to invest in complementary green investments, job retraining, create green jobs, and to mitigate negative impacts of climate change and carbon pricing measures on vulnerable Canadians.”  See also  Marc Lee, “Don’t believe the Hype on B.C.’s Carbon Tax” (March 4), and in the U.S.,   the Center for American Progress called for an integrated North American carbon market on March 17.