Proposals for a green transition that is just and inclusive in Ontario

decent_work_in_the_green_economy-coverDecent Work in the Green Economy, released on October 11 , combines research on green transitions worldwide with the reality of  labour market trends in Ontario, and includes economic modelling of  Ontario’s cap and trade program, conducted by EnviroEconomics and Navius Research.  The resulting analysis identifies which sectors are expected to grow strongly under a green transition (e.g. utilities and waste management and remediation),  which will see lower growth (e.g. petroleum refining and petrochemical production), and which will see a transformation of skills requirements (e.g. mining, manufacturing, and  forestry). Section 3 of the report discusses the impacts on job quality (including wages, benefits, unionization, and job permanence), as well as skills requirements.  The general discussion in Section 3 is supplemented by two detailed Appendices about the employment impacts by economic sector,  and by disadvantaged and equity-seeking groups (which includes racialized workers, Indigenous people, workers with disabilities, newcomers, women, and rural Ontarians.) A final  Appendix describes the modelling behind the analysis, which projects employment impacts of low carbon technologies by 2030.

The paper calls for a comprehensive Just Transition Strategy for Ontario, and proposes  six core elements illustrated by case study “success stories”.   These case studies include the Solar City Program in Halifax, Nova Scotia, (which uses local supply chains and accounted for local employment impacts), and the UK Transport Infrastructure Skills Strategy (which incorporated diversity goals and explicit targets in workforce development and retraining initiatives).  An important element of the recommended Just Transition Strategy includes a dedicated Green Transitions Fund, to transfer funding for targeted programs to communities facing disproportionate job loss; to universities or colleges to provide specialized academic programs; to social enterprise or service providers to carry out re-training programs; to directly impacted companies to invest in their employees; and to individuals in transition (much like EI payments).

The authors also call for better data collection to measure and monitor the link between green economy policies and employment outcomes, and better mechanisms for regular, ongoing dialogue.  This call for ongoing dialogue seems intended to provide a role for workers (and unions, though they are less often mentioned). The authors state: “No effort to ensure decent work in the green economy will be successful without meaningfully engaging workers who are directly impacted by the transition, to understand where and how they might need support. Just as important will be the ongoing engagement with employers and industry to understand the changing employment landscape, and how workers can best prepare for it.” And, on page 39,  “Public policy will be a key driver in ensuring that this transition is just and equitable. …. Everyone has a role to play in this transition. Governments, employers, workers, unions and non-profit organizations alike must remember that if we fail to ensure that the green transition is just and inclusive, we will have missed a vital opportunity to address today’s most pressing challenges. But if we design policies and programs that facilitate this transition with decent work in mind, they have the potential to benefit all Ontarians.”

Decent Work in the Green Economy was published by the  Mowat Centre at the University of Toronto, in cooperation with the Smart Prosperity Institute at the University of Ottawa.  In addition to economic modelling, the analysis and policy discussion is based on an extensive literature review as well as expert interviews and input from government, industry, labour and social justice representatives. Part of the purpose of the report is to initiate discussion “between those actively supporting the transition to a green economy and those advocating for decent work” as defined by the ILO.  Further, the report states: “ Importantly, this conversation must address the need for equal opportunities among historically disadvantaged and equity-seeking groups who currently face barriers to accessing decent work.”

Nova Scotia introduces Cap-and-Trade legislation

A press release on September 29  announced that the Nova Scotia government has introduced amendments to the Environment Act, enabling regulations to set caps on GHG emissions, distribute and enable trading of emission allowances within the province, and set a province-wide greenhouse gas emission target for 2030.  The province will create a Green Fund to support climate change initiatives and innovations, and  money from emissions sales and fines will be deposited there.  Next steps include “developing greenhouse gas reporting regulations this fall and consulting with stakeholders on them”.

The amending legislation, Bill 15, received first Reading in the Legislature on September 29 as a means to satisfy the requirement of the Pan-Canadian Framework on Clean Growth and Climate Change.   However, reaction from the Ecology Action Centre in Halifax urges the federal government to reject the plan, stating that “A carbon pricing system that doesn’t actually put a price on carbon, support low-income people, or incentivize clean growth truly misses the point.” The EAC also warns of the risks of extreme volatility since the plan is structured to create a carbon market within Nova Scotia alone – covering a population of under a million people and about 20 businesses.   The Ecology Action website has compiled documents and submissions from the provincial consultations leading up to this announcement. The Canadian Centre for Policy Alternatives Nova Scotia Office published a Backgrounder in May 2017 which outlines its proposals for a  stronger cap-and-trade policy.

Ontario, Quebec and California sign formal agreement to link their carbon markets

On September 22, Premier Couillard of Quebec hosted Premier Wynne of Ontario and California Governor Jerry Brown in Québec City, where they signed an agreement which formally brings Ontario into the existing joint carbon market of the Western Climate Initiative (WCI).  This comes as no surprise: the government had announced its intention to join the WCR in April 2015 as part of its Climate Change Action Plan.  When Ontario joins up with Quebec and California, effective January 1, 2018,  the carbon market will cover a population of more than 60 million people and about C$4 trillion in GDP. The three governments will harmonize regulations and reporting, while also planning and holding joint auctions of GHG emission allowances.  Text of the Agreement on the Harmonization and Integration of Cap-and-Trade Programs for Reducing Greenhouse Gas Emissions is here.  Here is  an introduction to Ontario’s cap and trade program, which was announced as part of the  For an up-to-date description of the Western Climate Initiative and its importance as a model for sub-national, international co-operation, see   “Will Other States Join California’s International Climate Pact?”  in The Atlantic (August 10  2017).

The Western Climate Initiative Inc. is  based in Sacramento California, and  is now  “a non-profit corporation formed to provide administrative and technical services to support the implementation of state and provincial greenhouse gas emissions trading programs” .

Federal government about to release its proposals for promised national carbon pricing system as California debates radical changes to its cap-and-trade program

In advance of a consultation paper by the federal government, expected to be released in the week of May 15, the Pembina Institute released a Backgrounder report , Putting a price on carbon pollution across Canada . The Pembina report  outlines the current federal and provincial carbon pricing policies in Canada, and makes recommendations for the national benchmark plan promised by 2018. Recommendations  include that any benchmark should at least  provide guidance on treatment of Export Import Trade Exposed sectors and be designed to minimize carbon leakage and competitiveness impacts; and stipulate that cap-and-trade systems must have a cap decline rate in line with a 30% reduction below 2005 levels by 2030. Pembina places emphasis on the need for a 2020 carbon pricing review, as well as frequent carbon pricing and climate policy reviews to ensure that Canada meets its obligations under the Paris Agreement.

A briefer paper on carbon pricing, also released in May, also summarizes the existing provincial carbon pricing plans – but from a right-wing point of view. From the Fraser Institute:   Poor Implementation undermines Carbon Tax efficiency in Canada  .

Also on the topic of carbon pricing, Pembina posted a blog  on May 11 “Time for Premier Brad Wall to focus on carbon price implementation” , in which Nathalie Chalifour, a Professor of Law at University of Ottawa, explains her opinion that the federal government is within its constitutional authority to impose a carbon pricing mechanism on the provinces, despite Saskatchewan Premier Brad Wall`s recently stated opinion to the contrary.

Meanwhile, as reported in the National Observer (May 4) , “California tables new cap-and-trade plan that jumps ahead of Quebec and Ontario” . Quebec and California  have a linked carbon credit market that expires at the end of 2020, and Ontario`s cap and trade plan is schedule to link to the California−Quebec system in 2018.  Continued partnership with California  will demand that those provinces raise their minimum price per tonne of carbon and abolish offsets, among other changes outlined in the  bill currently before the California state Senate . For a full discussion of the proposed legislation, read “California is about to revolutionize climate policy … again” (May 3) in Vox.  Author David Roberts states: ” The changes that SB 775 proposes for the state’s carbon trading program are dramatic — and, to my eyes, amazingly thoughtful. I know some environmental groups have reservations (on which more later), but in my opinion, if it passes in anything close to its current form, it will represent the most important advance in carbon-pricing policy in the US in a decade. Maybe ever.”

Cap-and-Trade proposals for Nova Scotia – and beyond?

A discussion paper released in early March by the government of Nova Scotia proposes the structure of a cap-and-trade system for the province, as required by the Pan-Canadian Framework on Clean Growth and Climate Change .  Nova Scotia is a reluctant participant in the national carbon pricing regime of the Framework, having walked out of one of the federal-provincial meetings on the topic in October 2016.

The Discussion paper, Nova Scotia Cap and Trade Program Design Options , proposes a plan which covers only those sectors required by the Framework, and grants free allocations to them, including Nova Scotia Power and the suppliers of fossil fuel. Sectors not included represent about 10% of emissions, and would be allowed to sell offsets into the system.  Fugitive emissions will not be included.  As stated in the Discussion paper, the system will not align itself with any other provinces. Yet, days after the release, and in apparent contradiction to the Discussion paper, the CBC reported that the Premier is still in discussion with the provinces of New Brunswick and Prince Edward Island about a regional system : see “Welcome to join: Atlantic cap and trade system explored” .

An excellent summary of the features and failings of the plan appears in a post from the  Environmental Law blog from Dalhousie University.  It states that the proposed plan    seems designed to meet the minimum GHG emission reductions obligations under the Pan-Canadian Framework, while also minimizing any impact on Nova Scotia’s economy. “We are clearly far from getting our C&T system right. To do so, would take time, careful analysis and a public dialogue on priorities and values rather than starting assumptions that all we care about is trying to preserve the status quo for as long as we can.” Unfortunately, the deadline for public submissions was March 31, less than a month after the release.

Political Manipulation Could Derail Nova Scotia’s Cap and Trade System”  in the Halifax Examiner is also highly critical. Author Brendan Haley decries the lack of time and opportunity for public input, and states that political expediency seems to be motivating the design of the carbon pricing system .  The Ecology Action Centre also has concerns over the proposed system   – their position paper is here .