Global Commission proposals for clean growth forecasts 65 million new low-carbon jobs in 2030

The Global Commission on the Economy and Climate released its 2018 flagship report at the G20 meetings in Argentina  on September 5 . Under the title, Unlocking the Inclusive Growth Story of the 21st Century: Accelerating Climate Action in Urgent Times , the report acknowledges that all models are imperfect, but its extensive research and modelling predicts that its “bold climate action” prescription could deliver at least US$26 trillion in economic benefits through to 2030, and over 65 million new low-carbon jobs in 2030, as well as avoid over 700,000 premature deaths from air pollution.  As the final point in its action road map, it calls for Just Transition measures and a role for civil society and trade unions in their creation.

The report is structured around a sectoral approach, focused on energy, cities, food and land use, water, and industry. Across those economic sectors, every chapter hammers the theme of urgency, calling this the world’s “use it or lose it moment”. “The decisions we take over the next 2-3 years are crucial because of the urgency of a changing climate and the unique window of unprecedented structural changes already underway. The world is expected to invest about US$90 trillion on infrastructure in the period up to 2030, more than the entire current stock today. …. Investing it wisely will help drive innovation, deliver public health benefits, create a host of new jobs and go a long way to tackling the risks of runaway climate change. Getting it wrong, on the other hand, will lock us into a high-polluting, low productivity, and deeply unequal future. “

Unlocking the Inclusive Growth Story of the 21st Century  calls for the following urgent actions:

  1. “governments should put a price on carbon and move toward mandatory climate risk disclosure for major investors and companies.”  (Specifically, the carbon price for the G20 economies should be at least US$40-80 by 2020, with a predictable pricing pathway to around US$50-100 by 2030, accompanied by a phase-out of fossil fuel subsidies and harmful agricultural subsidies and tax-breaks by 2025);
  2. all economies should place much greater emphasis on investing in sustainable infrastructure as a central driver of the new growth approach;
  3. “ the full power of the private sector and innovation needs to be harnessed.” (Specifically, “ By 2020, all Fortune 500 companies should have science-based targets that align with the Paris Agreement.”  Governments need to change regulations, incentives and tax mechanisms that are a major barrier to implementing a low-carbon and more circular economy, and public-private partnerships should be encouraged.
  4. “a people-centred approach is needed to ensure lasting, equitable growth and a just transition. It is good economics and good politics.”….“All governments should establish clear Energy Transition Plans to reach net-zero energy systems, and work with energy companies, trade unions, and civil society to ensure a just transition for workers and communities. Successfully diversifying local economies as we shift away from coal and eventually other fossil fuels will require multi-stakeholder dialogue, strategic assistance, re-training, and targeted social protection.”

The Global Commission  is comprised of government leaders, academics, and business leaders, including Sharan Burrow of the ITUC, and Lord Nicholas Stern. Established in 2013, the Commission published its first, landmark report in the New Climate Economy initiative in 2014:  Better Growth, Better Climate , which established its position that there is no trade-off between growth and strong climate action. In addition to the annual policy document, international climate issues are published  in a Working Paper series, available here .

 

Against the evidence for its efficiency, Ontario’s Cap and Trade program axed

Doug Ford clappingIn Ontario, newly-elected Premier Doug Ford quickly fulfilled a central campaign promise, as the Province revoked the cap-and-trade  regulations and prohibited all trading of emission allowances, officially announced on July 3, 2018.   A further July 25  press release  announced the introduction of Bill 4, The Cap and Trade Cancellation Act, 2018  and claimed that “The average Ontario family will receive $260 in annual savings thanks to the elimination of the cap-and-trade carbon tax.”  All programs currently funded through the cap-and-trade revenues have been cancelled, including the immediate wind-down of the Green Ontario Fund, which funded many energy efficiency incentive programs.  The Cap and Trade Cancellation Act repeals the Climate Change Mitigation and Low-carbon Economy Act, 2016  of the previous Wynne government “and provides for various matters related to the wind down of the Cap and Trade Program.”

Earlier, on July 13, the province had announced  the cancellation of 758 renewable energy projects, calling them “unnecessary and wasteful” – one notable example, the almost-completed White Pines wind project in Prince Edward County.  And on August 2, in addition to the previously announced court challenge  to the federal government’s carbon pricing requirements under the Pan Canadian Framework,  Ontario’s  Attorney General announced a second court challenge  – this time in  the Ontario Court of Appeal.  “Doug Ford’s Ontario pursues ‘doomed’ plan to stop Trudeau government’s efforts to fight climate change”   in the National Observer (August 2) summarizes the development from a political viewpoint, and the Globe and Mail’s editorial is titled: “Caroline Mulroney’s carbon-tax court challenge is a partisan waste of money

Reactions :

Ford government Attempts to minimize Ontario taxpayer losses after abandoning carbon markets”   (July 25) in the National Observer;

“Ontario’s fiscal watchdog to probe cancellation of cap and trade,at Horwath’s request”   in the Globe and Mail (July 24);

From Professor Mark Winfield, York University:  “Doug Ford’s energy shake-up could cost Ontario”  in The Conversation (July 25)   ;

Clean power advocates disappointed but defiant in the face of Ford’s sweeping cuts” from the National Observer (July 17)

Solar companies may exit Ontario for Alberta after Doug Ford kills rebate program”  from CBC News (June 21) ;

Scrapping of cap and trade revenues a big loss for Ontario tenants badly in need of apartment retrofits”   from ACORN Canada;

  “From Cap-and-Trade to White Pines: What Lies Ahead In Ontario’s Energy Sector” from Toronto law firm Gowlings .

Before his election but based on the platform statements,  Unifor said in June  : “Workers in Ontario need forward-looking policies with the intention to build a green economy, but instead Ford announced his intention to cancel a successful program and pick an unnecessary fight with the federal government…. “Workers accept that climate change is real and need our government to lead with a real, predictable plan to reduce emissions and grow green jobs.”

Was there a problem with Ontario’s cap and trade system?  The April 2018 WCR article “New evidence supports benefits of cap and trade policies”  summarized several favourable studies, including  A Progress Report on Ontario’s Cap-and-Trade Program and Climate Change Action Plan: Year One ,  published by the Clean Economy Alliance –   which concluded that, in the first year of cap-and-trade employment had grown at the same time that Ontario economy grew to a 7-year high.  Environmental Defense published “Carbon pricing has no downside: why are we still arguing about it?” , which summarized the Clean Economy Alliance report, as well as No Bad Option: Comparing the Economic Impact of Ontario Carbon Pricing Scenarios  by Hadrian Mertins-Kirkwood, published in April 2018 by CCPA in partnership with the Clean Economy Alliance.

More recently, Dale Beugin, Don Drummond, Glen Hodgson and Mel Cappe asked “If not carbon pricing in Ontario – which works well – then what, Mr. Ford?”   in a blog published by the Ecofiscal Commission.   The purpose of the brief summary is to “correct the record on some of the myths and misunderstandings surrounding carbon pricing. The economic evidence clearly contradicts some of the recent rhetoric coming from Ontario.”  Earlier Ecofiscal opinion appeared in “Tread Carefully: Ontario’s cap-and-trade system meets a fork in the road” (June 8)  , and  “Can Ontario hits its targets without carbon pricing?”  .

In the U.S.,  economist Marc Hafstead  recently published “Carbon taxes and employment: Rhetoric vs research” in the Summer Issue of Resources, the online newsletter of Resources for the Future (RFF) , stating  “Opponents of policies to price carbon will likely continue with the “job-killing” rhetoric, but careful economic analysis suggests that these arguments are seriously exaggerated.”  (the brief article is based largely on his academic working paper Unemployment and Environmental Regulation in General Equilibrium: Considering a US Carbon Tax: Economic Analysis and Dialogue on Carbon Pricing Options  )  .

 

Federal budget gets high marks for conservation initiatives but disappoints on green economy spending

Budget 2018, Equality + Growth: A Strong Middle Class   was tabled by the federal government on February 27.  The Globe and Mail published a concise overview in  “Federal budget highlights: Twelve things you need to know” .  A compilation of reaction and analysis from the Canadian Centre for Policy Analysis is here , including statements from CCPA partner organizations such as the United Steelworkers   and the Canadian Labour Congress.

budget_analysis 2018The section of the Budget which relates most to a low carbon economy is in Chapter 4: Advancement .  The Budget commits an unprecedented $1.3 billion over 5 years for conservation partnerships and the protection of lands, waters, and species at risk – prompting the Pew Trust in the U.S. to call the biodiversity targets “an example to the world” in  “With earth in peril, Canada steps up” .  Responses from the 19 environmental advocacy members of the Green Budget Coalition are compiled here , applauding the  “historic” and “landmark” investments in the Budget.  DeSmog Canada summarizes the provisions, which aim to protect 17 per cent of land and 10 per cent of oceans by 2020 under the United Nations Convention on Biological Diversity, and commit to recognizing  Indigenous leadership.

But on the climate change front?

The National Observer writes: “Budget delivers new conservation fund but avoids climate commitments” (Feb. 27) , highlighting the Budget allocations announced for the  the  $2.6 Billion Low Carbon Economy Fund  (announced in 2016) : $420 million will go to Ontario, for retrofitting houses and reducing emissions from farms;  $260 million will go to  Quebec for farming and forestry best practices, as well as energy retrofitting, and incentives for industry;  $162 million will go to British Columbia, partly for reforestation of public forests; $150 million will go to Alberta for energy efficiency programs for farmers and ranchers, for  renewable energy in Indigenous communities, and for restoring forests after wildfires;  $51 million is going to New Brunswick and $56 million to Nova Scotia for energy retrofitting. Allocations for Manitoba will be announced later, and for Saskatchewan if it signs on to the Pan-Canadian Framework.

The Pembina Institute reaction is also fairly positive in  “Budget 2018 builds on last year’s commitment to climate change” . “We are pleased to see that Budget 2018 allocates $109 million over five years to develop, implement, administer, and enforce the federal carbon pollution pricing system. …Another $20 million over five years is allocated to fulfill the PCF’s (Pan-Canadian Framework on Clean Growth and Climate Change) commitment to assess the effectiveness of its measures and identify best practices. ”

Less positive reaction:  “Council of Canadians disappointed by Trudeau government’s budget 2018” (Feb.27), which  points out that the government has allocated $600 million to host the G7 summit in June 2018 in Quebec,  yet the Budget fails to phase out subsidies for the fossil fuel industry, as it committed to at the G20 meetings and in the October 2015 election.  Elizabeth May of the Green Party also “laments squandered opportunities” and points out that “Budget 2018 does not touch subsidies to fossil fuels in the oil patch and for fracked natural gas”.

In advance of Budget 2018, the Canadian Labour Congress published “What Canada’s unions would like to see in the federal budget” – a broad perspective which included a call for “a  bold green economic program of targeted investments over the next five years for renewable energy development and infrastructure” … and “ the establishment of Just Transition training and adjustment funds for workers affected by climate change and the transition to a low-carbon economy, automation, the digitisation of work, and job losses caused by trade agreements like CETA.” The CLC response  to the actual Budget emphasizes the positive  developments on issues like pharmacare and pay equity, but is silent on the green economy issues. Canadian Union of Public Employees’ reaction is similar.

 

Manitoba joins the Pan-Canadian Framework, leaving Saskatchewan the odd-man-out

Facing a deadline of February 28 to qualify for approximately $67 million in federal funding through the  Pan-Canadian Framework on Clean Growth and Climate Change, the province of Manitoba announced on February 23 that it will sign on to the Framework agreement.  However, the province will not compromise on its flat $25-a-tonne carbon price, as outlined in its Made-in-Manitoba climate policy document (October 2017).  Manitoba’s letter announcing its adoption of the Pan-Canadian Framework is here .  The federal government’s letter welcoming  Manitoba is here , stating that Manitoba will only be in compliance with the carbon pricing provisions until 2019. Ottawa has stated that it will review each province’s carbon price plan every year starting in 2019, thus postponing until then any further conflict over the federal standard of a $50 per tonne carbon price . Details of the $2Billion Low Carbon Economy Fund, for which Manitoba now qualifies,are here.

According to a CBC report (Feb. 26), Saskatchewan is now the only province not part of the Pan-Canadian Framework, and the federal government is “just waiting” and hoping that they will commit.  New Premier Scott Moe, so far, is holding to the policies outlined in Prairie Resilience: A Made-in-Saskatchewan Climate Change Strategy, released in December 2017 under previous Premier Brad Wall – a strong opponent of a carbon tax.

Federal government releases detailed proposals for Canada’s carbon pricing system, including output-based pricing for industrial emitters

On January 15, the Minister of Environment and Climate Change and the Minister of Finance issued a press release  announcing the full draft legislative proposals relating to the carbon pricing system. Public comment will be accepted until February 12, 2018.   The full text of  Legislative and Regulatory Proposals Relating to the Greenhouse Gas Pollution Pricing Act and Explanatory Notes are in English  and French versions . Comment on the legislative proposals will be accepted until April 9, 2018, with “structured engagement” and consultation with provinces and territories, Indigenous Peoples, environmental non-governmental organizations, industry, and business promised over the Winter/Spring of 2018.

Minister McKenna also released for comment the proposed regulatory framework for carbon pricing for large industrial facilities – an Output-based Pricing System (OBPS), with the aim “to minimize competitiveness risks for emissions-intensive, trade-exposed industrial facilities, while retaining the carbon price signal and incentive to reduce GHG emissions.   Emission sources covered by OBPS will include fuel combustion, industrial process, flaring, and some venting and fugitive sources – but notably, “Methane venting and methane fugitive emissions from oil and gas facilities will not be subject to pricing under the OBPS.”  The system will include emissions of all seven of the UNFCCC-designated greenhouse gases, “to the extent practicable” – carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride and nitrogen trifluoride. Details are  in Carbon pricing: regulatory framework for the output-based pricing system  (French version here) , and  build on the Technical Paper : Federal Carbon Pricing Backstop (French version here) , released in May 2017.

Leading up to the January release, the federal government had released clarification about the timing of  the planned backstop carbon pricing mechanism on December 20, 2017 – it  will come into effect by January 2019, bringing the carbon price to $20 per tonne in any jurisdiction that doesn’t meet the federal benchmark.  Full details are set out in:  Supplemental Benchmark GuidanceTimelines , and the Letter to Ministers . Generally positive reaction followed, from the Pembina Institute  and  Clean Energy Canada.

Initial reaction/summary of the proposed legislation released on January 15:  “Ottawa’s new carbon pricing plan will reward clean companies” from CBC,  and from the Globe and Mail, “Ottawa prepares to relax carbon-pricing measures to aid industry competitiveness” .  More substantive comment comes from the National Observer, in  “Trudeau government explains how it will make polluters pay” (Jan. 15).  Reaction from Environmental Defence came from Keith Brooks , who calls the proposed plan “an effective and fair pan-Canadian carbon pricing system.”  Reaction from  Clean Energy Canada is similar.

Meanwhile, in Alberta: Note also that the province of Alberta released their new Carbon Competitiveness Incentive Regulation (CCIR) for large industrial emitters in December 2017, also based on an output-based allocation system.  Carbon Competitiveness Incentive regulations replaced the current Specified Gas Emitters Regulation (SGER) on Jan 1, 2018, and will be phased in over 3 years.  It’s expected to cut emissions by 20 million tonnes by 2020, and 50 million tonnes by 2030.  Favourable testimonials from the oil and gas, wind energy, and cement industry are quoted in the government press release on December 6.

To explain output-based carbon pricing, the Ecofiscal Commission published Output-Based Pricing: Theory and Practice in the Canadian context , by Dave Sawyer and Seton Stiebert of EnviroEconomics in early December.  The highlights of the paper are summarized here, with a discussion of the pros and cons and challenges of implementation, with special attention to Alberta’s provisions.