California unions endorse a plan for Green Recovery and fossil fuel phase-out

A Program for Economic Recovery and Clean Energy Transition in California, released in June, is the ninth in a series of reports titled Green Economy Transition Programs for U.S. States, published by the Political Economy Research Institute (PERI), and written by researchers led by Robert Pollin. In this latest report, the authors address the challenge of economic recovery from the Covid-19 pandemic, and contend that it is possible to achieve California’s  official CO2 emissions reduction targets—a 50 percent emissions cut by 2030 and zero emissions by 2045— and at the same time create over 1 million jobs.  The investment programs they propose are based on the proposed national THRIVE Agenda, (introduced into the U.S. Congress in February 2021), and rely on private and public investment to energy efficiency, clean renewable energy, public infrastructure, land restoration and agriculture. The report discusses these sectors, as well as the manufacturing sector, and also includes a detailed just transition program for workers and communities in the fossil fuel industry.

In Chapter 6, “Contraction of California’s Fossil Fuel Industries and Just Transition for Fossil Fuel Workers”, the authors note that only 0.6% of California’s workforce was employed in fossil fuel-based industries in 2019 – approx.112,000 workers. They model two patterns for the industry contraction between 2021-2030:  steady contraction, in which employment losses proceed evenly, by about 5,800 jobs per year; and episodic contraction, in which 12,500 job losses occur in just three separate years, 2021, 2026, and 2030.  After developing transition programs for both scenarios, they estimate that the average annual costs of episodic contraction would be 80% higher ($830 million per year) than the costs of steady contraction  ($470 million per year). As with previous PERI reports, the authors emphasize the importance of the quality of jobs to which workers relocate:  “It is critical that all of these workers receive pension guarantees, health care coverage, re-employment guarantees along with wage subsidies to insure they will not experience income losses, along with retraining and relocation support, as needed. Enacting a generous just transition program for the displaced fossil fuel-based industry workers is especially important. At present, average compensation for these workers is around $130,000. This pay level is well above the roughly $85,000 received by workers in California’s current clean energy sectors.”  Relief Programs for Displaced Oil & Gas Workers Elements of an Equitable Transition for California’s Fossil Fuel Workers  is a 2-page Fact Sheet summarizing the chapter.

The report was commissioned by the American Federation of State, County and Municipal Employees Local 3299, the California Federation of Teachers, and the United Steelworkers Local 675, which represents workers in the oil and chemical industry.  The report has been endorsed by nineteen labour unions – not only those who commissioned it, but also the Alameda Labor Council, Communication Workers of America District 9 ;  International Federation of Professional and Technical Engineers Local 21 ; various locals of the  Service Employees International Union ; two locals of the  United Auto Workers; UNITE HERE Local 30 ; United Steelworkers Local 5 ; and the  University Professional and Technical Employees—Communications Workers of America 9119.  

Lead author Robert Pollin is interviewed about the report in two articles: “Labor Unions Rally Behind California’s Zero-Emissions Climate Plan“ (Truthout, June 10) and  “A Green Transition for California”  (American Prospect, June 11), which includes a video of the interview.

Decarbonization requires focus on sector-specific policies and investments: new report

Pathways to net zero: A decision support tool  was released on January 25, directed at policy makers and investors. The report provides a broad-stroke analysis of all sectors of the Canadian economy, summarized in Assessment Tables which identify processes within each sector, classified as “credible”  “capable” or  “compelling” as pathways to net-zero. Priority areas are identified and highlighted in the final recommendation that “Canada needs a paradigm shift from trying to do a little bit of everything to reduce emissions to accelerating real change by strategically focusing on building out key regional and sector-specific pathways to net zero. …This means prioritizing decarbonizing electricity, accelerating electric vehicle deployment and performing mass building retrofits, since these sectors are in the more mature ‘diffusion’ phase of their decarbonization transition.”  

The report also acknowledges the cross-cutting issues of carbon taxes, energy efficiency, and technologies such as carbon capture and storage. Future reports are promised to provide deeper assessments of the additional sectors of hydrogen and biofuel energy; plastics; iron and steel; aluminum; mass transit.  

Pathways to net zero: A decision support tool  is written by lead author Professor James Meadowcroft of Carleton University, and published by the Transition Accelerator in Calgary. The Transition Accelerator launched in summer of 2019 with Building Pathways to a Sustainable Future, a report which summarizes the organization’s goals and its “ transition approach”: partly defined as an examination of “opportunities to transform the large-scale societal systems or sectors which give rise to our emissions. This requires understanding how these systems operate, the stage of transition achieved in specific systems (‘emergence’, ‘diffusion’ or ‘system reconfiguration’), and the non-climate-related problems and disruptive currents influencing their evolution.”  

Other reports to date are compiled here and have focused largely on hydrogen energy and transportation issues.

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.

What if the financial sector moved away from fossil fuel investments?

On September 17, Bill McKibben, a leader of the divestment movement, wrote Money is the oxygen on which the fire of global warming burns , published in The New Yorker. The essay traces the progress of the divestment movement and asks, What if the banking, asset-management, and insurance industries moved away from fossil fuels?. On the same day came the announcement that “ University of California drops fossil fuels from its $80 billion portfolio”.   An article in Rolling Stone  quotes the UC representatives, stating “it wasn’t moral or political pressures that convinced them to phase UC’s hundreds of millions of dollars in fossil-fuel investments. Instead, they say, it was the growing realization that fossil fuel investments no longer made financial sense and weren’t a worthwhile investment.”

Investment performance of Fossil fuel companies

In what has been seen as an historical turning point, ExxonMobil lost its spot on the S&P Index list of “Top Ten Companies” in August 2019 –  the first time it had not appeared since the Index launched in 1957.  In 1980,  the energy sector as a whole represented 28% of the S&P 500 Index; as of August 2019, it represents  4.4%.  According to a summary by the Institute for Energy Economics and Financial Analysis (IEEFA), the energy sector claimed last place in the S&P rankings of sector performance in August 2019, following similar results in 2018 and 2017.“This is not some temporary aberration. The oil and gas sector is in decline, profits are shrinking and investment options problematic …. This is true even for companies like ExxonMobil that historically have deep pockets.”

The full Briefing Note,  ExxonMobil’s Fall From the S&P 500 Top Ten: A Long Time Coming (August 2019) also includes discussion of the role Canada’s oil sands have played in the decline of the industry.  Carbon Tracker Initiative provides further information in Exxon’s New Clothes – the tale of why Exxon lost its prized position in the S&P 500 .

Are the banking, asset-management, and insurance industries moving  away from fossil fuels?  

New initiatives launched at U.N. Climate Summit in New York in September point in that direction:

  1. 130 banks from 49 countries signed on to the Principles for Responsible Banking (PRBs), committing to align their business operations with the Paris Climate Agreement and the Sustainable Development Goals. Despite the fact that the Bank of Canada issued a report flagging the investment risks of climate change in May, the only signatories from Canada were the National Bank of Canada and the Desjardins Group . Hardly surprising, given the April 2019 Fossil Fuel Report Card from Banktrack , which showed that Canada’s big banks rank 5th, 8th, 9th and 15th in the world for fossil fuel invesment since the Paris Agreement in 2015. In response to the PRI pledge, civil society groups issued a statement, “No More Greenwashing: Principles must have Consequences ”  which highlights the lack of concrete plans and the slow time frame: signatory banks are allowed up to four years to demonstrate their implementation of the principles.  A thorough discussion published by Open Democracy asks “The UN banking principles are welcome – but do they go far enough to stop climate destruction?
  2. A new Net Zero Asset Owner Alliance  was launched, convened by the U.N. Environmental Program’s  Finance Initiative and the Principles for Responsible Investment, and supported by WWF as part of its Mission 2020 campaign. The Net Zero Asset Owner Alliance signatories are insurance and pension fund management companies which hold approximately $2.3 U.S. Trillion. Their commitment document  pledges to re-balance those investment portfolios to make them carbon neutral by 2050, with intermediate targets set for 2025, 2030 and 2040. Founding members include   German insurer Allianz, the California Public Employees’ Retirement System (CalPERS), Swedish pension fund Alecta, PensionDanmark, Swedish pension manager AMF, Nordea Life & Pension, Norwegian insurer Storebrand, and Swiss RE.
  3. European investment bank-logo-enThe European Investment Bank strengthened its climate commitments at the U.N. Climate Summit  pledging to “ position the EIB as an incubator for climate finance and expertise to mobilise others, helping our societies and economies transform to a low carbon future.” Specifically, the bank pledged that 50% of new investments will be for climate action and environmental sustainability by 2025 (previously the target had been 30% by 2020). Also,  “we aim to align all our financing activities with the principles and goals of the Paris agreement by the end of 2020. As an important first step, we will phase out energy projects that depend solely on fossil fuels.”
  4. financing the low carbon futureThe Climate Finance Leadership Initiative (CFLI) , chaired by Michael Bloomberg, released  Financing the Low Carbon Future  , a thorough but readable analysis of how clean energy investment works globally, with practical recommendations . The CFLI is composed of  senior executives of seven major private-sector financial institutions– Allianz Global Investors, AXA, Enel, Goldman Sachs, HSBC, Japan’s Government Pension Investment Fund (GPIF) and Macquarie.
  5. Over 500 environmental and advocacy groups from 76 countires supported the Lofoten Declaration at the U.N. Climate Action Summit. The Lofoten Declaration , (named after the Lofoten Islands of Norway where it was first drafted in 2017) states in part: “It is the urgent responsibility and moral obligation of wealthy fossil fuel producers to lead in putting an end to fossil fuel development and to manage the decline of existing production.”  Canada is one of those countries, and Catherine Abreu of Climate Action Network Canada was one of the supporters, stating: “True leadership in response to the climate emergency means having the courage to commit to ending the expansion of oil and gas production and make a plan to transition communities and workers to better opportunities.”  A summary  appears in “If a House Is on Fire, You Don’t Add Fuel’: 530 Groups Back Call to Rapidly Phase Out Fossil Fuels Worldwide” in Common Dreams (Sept. 23); Background to the Lofoten Declaration here  .

Much remains to be done:  Consider the September 2019 report by Carbon Tracker Initiative.  Breaking the HabitWhy none of the large oil companies are “Paris-aligned”, and what they need to do to get there. The report examines oil company investment activities , and concludes:

  • Last year, all of the major oil companies sanctioned projects that fall outside a “well below 2 degrees” budget on cost grounds. These will not deliver adequate returns in a low-carbon world. Examples include Shell’s $13bn LNG Canada project and BP, Total, ExxonMobil and Equinor’s Zinia 2 project in Angola.
  • No new oil sands projects fit within a Paris-compliant world. Despite this, ExxonMobil sanctioned the $2.6bn Aspen project last year – the first new oil sands project in 5 years.
  • The oil and gas in projects that have already been sanctioned will take the world past 1.5ºC, assuming carbon capture and storage remains sub-scale.

And Global Trends in Renewable Energy Investment 2019 , commissioned by the United Nations, was published in September, reporting the good news that  global investment in new renewable energy capacity, led by solar power, “ is set to have roughly quadrupled renewable energy capacity (excluding large hydro) in the decade ending in 2019. Renewables accounted for 12.9 percent of global electricity in 2018—and if hydropower is also included, the renewable’s share of global electricity production is  measured at 26.3%.  Cost-competitiveness of renewables has “risen spectacularly over the decade, as the levelised cost of electricity has been steadily decreasing, down 81 percent for solar photovoltaics and 46 per cent for onshore wind since 2009.”

Yet despite this good news, the report states: “Overall, we note that these figures represent a small share of the overall economic transition required to address climate change…. global power-sector emissions are likely to have risen by at least 10 percent between the end of 2009 and 2019.”

 

International clean energy experts discuss investment levels, zero emissions vehicles, building emissions, gender equality in Vancouver meetings

CEM10-MI4_LogoIn the week of May 27, representatives from global government, industry, and NGO’s met as Canada hosted the 10th Clean Energy Ministerial in Vancouver. Several announcements were made against that backdrop:

Investment support for clean energy: The federal government announced it will contribute up to $30 million to Breakthrough Energy Solutions Canada (BESC),  a public-private initiative to support “cutting-edge companies to deliver game-changing clean energy innovations to the market.” This Canadian program will be administered by Natural Resources Canada – in collaboration with Breakthrough Energy Ventures, a $1 billion investment fund launched in 2016 by billionaires such as Bill Gates and Michael Bloomberg.  The Canadian press release quotes Gates: “ We are hopeful that this Breakthrough Energy partnership with Canada will be a model for developing more collaborations…” A summary appears in “Canada launches homegrown version of Bill Gates-led clean energy fund”   in the National Observer (May 27).

The National Observer hosted a panel discussion on clean energy investment on May 28. The panel included the Vice-President of the European Investment Bank, the European Commissioner for Research, Science and Innovation, Canada’s Minister of Natural Resources, and Céline Bak, president of Analytica Advisors and author of the 2019 report,  Leveraging Sustainable Finance Leadership in CanadaA summary and video of the panel’s discussion is hereThe discussion revealed that, unbeknownst to Canada, the  European Commission and the European Investment Bank  have also reached agreement with Breakthrough Energy Ventures on a new €100 million fund to support clean energy investments – described in a May 29 press release.

Clean energy investment trends are worrying, as reported by the International Energy Agency in  World Energy Investment 2019 (May 14) : “Global energy investment stabilised in 2018, ending three consecutive years of decline, as capital spending on oil, gas and coal supply bounced back while investment stalled for energy efficiency and renewables.”  In May,  BankTrack and others published  Fool’s Gold – the Financial Institutions Bankrolling Europe’s Most Coal-dependent Utilities , naming the financial institutions behind almost €16 billion in support to the coal industry since the Paris Agreement was signed in December 2015.

electric truckZero emissions  vehicles: The International Energy Agency released the 2019 edition of one of their flagship publications, Global EV Outlook, which provides historical analysis, projections to 2030, and insights on electric vehicle and charging infrastructure deployment, ownership cost, energy use, carbon dioxide emissions and battery material demand. As part of the discussions on electrification of transportation at the CEM10, Canada became the first national government to endorse the Global Commercial Vehicle Drive to Zero (Drive to Zero) campaign, with British Columbia and the City of Vancouver also signing on . A press release explains “Drive to Zero is a strategic international initiative designed to catalyze the growth of the zero-emission (ZE) and near-zero-emission (NZ) medium- and heavy-duty vehicle sector (MHDV), which includes everything from transit buses to eighteen wheelers to box trucks to school buses. Pledge partners promise to collaboratively put in place supporting mechanisms to speed the early market for these vehicles and equipment.”  Drive to Zero is a program of CALSTART,  a nonprofit consortium with offices in New York, Michigan, Colorado and California, and international partners which include Clean Energy Canada.  As Canada’s Minister of Natural Resources stated in the press release, this is in line with Canadian priorities: the Final Report of the Advisory Council on Climate Action  ( May 28) recommends policies concerning zero-emissions vehicles, including “The Government of Canada, working with partners and stakeholders, should develop an integrated strategy to reduce emissions across modes of transportation, including actions to support modal shifts.”  Related: on May 2, the Pembina Institute published Fuel Savings and Emissions Reductions in Heavy-Duty Trucking : A blueprint for further action in Canada  . 

Gender Equality in Clean Tech:  Over 100 organizations have now signed onto the Equal by 30 initiative, an international campaign begun in 2018. It “ encourages companies and government to adopt gender-equal principles, advance the participation of women in the clean energy transition and take concrete actions to support women in the sector.” A summary of the Gender Diversity participants and events is here . 

Hydrogen as a source of clean energy: A new “Hydrogen Initiative was announced  under the leadership of Canada, the United States, Japan, the Netherlands and the European Commission, with the International Energy Agency as co-ordinating body. The initiative is intended to drive international collaboration on policies, programs and projects to accelerate the commercial deployment of hydrogen and fuel cell technologies across all sectors of the economy, especially industrial and transportation applications.

Building efficiency: Heating and cooling strategies in the clean energy transition: Outlooks and lessons from Canada’s provinces and territories is a report released at the Clean Energy Ministerial meetings on May 27. It is the result of collaborative research between the International Energy Agency and the National Energy Board of Canada. Using Canadian provincial data, it examines energy demand patterns and energy policies regarding  heating and cooling services in buildings, urging policies to move from natural gas to existing, cleaner technologies.  The National Observer summarizes the report in “Cutting fossil fuels could save Canadians  $24 billion a year by 2050”  .

Clean energy investment declining in Canada; and a profile of Calgary’s clean energy economy

clean energy transition takes hold coverClean Energy Canada has released the 2017 edition in its Tracking the Energy Revolution series, on March 30.   The Transition Takes Hold  analyzes clean energy markets around the world, with an emphasis on investment trends.  The report states that global clean energy investment in 2016 totalled C$348 billion, with China, the U.S. and India collectively responsible for half of that amount.  This C$348 billion global clean energy investment represents a 26% decrease from 2015; in Canada, investment fell by 53%, from C$4 billion  to C$2 billion. The decrease, for the second year in a row, sees Canada fall from 9th to 11th place in the world for clean energy investment. To provide context, the report states that Canada already derives 80% of its power from emissions-free sources, and that fact, coupled with relatively stable demand for electricity, limits the need or opportunity for new investment. The opportunities for growth clearly lie in export markets.

The Transition takes Hold provides some estimates for employment in clean energy, based mostly on the 2016 Renewable Energy and Jobs publication by the  International Renewable Energy Agency (IRENA).  Since Canada is not an IRENA member, the report states only that in 2015, Canada was home to 10,500 jobs in wind and 8,100 in solar PV – but no source for that information is provided.  Based on figures from the U.S. Department of Energy, the report states that  the solar industry created one out of every 50 new jobs in the U.S. in 2016,  with wind turbine technician as the country’s  fastest-growing occupation.

At the local level, and  providing a window into the growing green culture of Alberta, is Calgary Region’s Green Energy Economy: Summary Report , published by the Calgary Economic Development department.   It states that the city’s green energy economy was responsible for generating $1.78 billion in gross domestic product, and employed approximately 15,470 jobs in 2015, equal to 1.8% of all workers in the Calgary Economic Region.  The report points out that “Calgary is a well-established ‘talent hub’ of high-value added, service-oriented workers that are experienced in the energy industry”, with the suggestion that the traditional energy sector provides a talent pool for the growing green sector. For this report, the green energy economy is categorized into four sub-sectors: renewable power supply and alternative energy; energy storage and grid infrastructure; green building and energy efficiency; and green transportation, and for each sub-sector, the report provides statistics as well as “on the ground” information about existing companies , supply chains, policies and programs . Green building and energy efficiency account for the largest GDP and number of jobs.   Interesting Appendices include a SWOT analysis, and a brief comparative look at policies of other cities around the  world.   Research and analysis was conducted by The Delphi Group.

Calgary_skyline _Kevin_Cappis

Calgary Skyline by Kevin Cappis.  Creative Commons 4.0 license.

Clean Energy is unstoppable – and China is in the lead

January 2017 began with an attention-getting report from Bloomberg New Energy Finance: “Solar Could Beat Coal to Become the Cheapest Power on Earth” .  Similarly, the Renewable Infrastructure Investment Handbook published  by the World Economic Forum states:   “ renewable energy technology, especially solar and wind, has made exponential gains in efficiency in recent years, enough to achieve economic competitiveness and, in an increasing number of cases, grid parity.”   A January 5 post by Clean Energy Canada,  “Clean Energy is too good a deal for Trump to Pass up ” , documents the economic and political  forces driving clean energy in the U.S., and offers this chart comparing the number of jobs in solar to the fossil fuel industries.

jobs-in-solar-vs-oil-and-gas-jan-2017

from Clean Energy blog post, “Clean Energy is too good a deal for Trump to pass up” (January 5, 2017)

And in an unprecedented move for a sitting President of the United States, Barack Obama has written “The Irreversible Momentum of Clean Energy”  in Science (Jan. 9), with an overview of his energy policy legacy, and making the case that market forces in the U.S. will carry it on.

A general consensus is that the clean energy train  has left the station, and China is driving that train.  A January 2017  report from the Institute for Energy Economics and Financial Analysis (IEEFA) is the latest to document the growing dominance of China in the renewable energy industry in   China’s Global Renewable Energy Expansion: How the World’s Second-Biggest Economy Is Positioned to Lead the World in Clean-Power Investment.  The report  states:   “The change in leadership in the U.S. is likely to widen China’s global leadership in industries of the future, building China’s dominance in these sectors in terms of technology, investment, manufacturing and employment. ” According to the IEEFA,   Chinese global investment in clean energy exceeds $100 billion annually, (more than twice that of the U.S.), and is expanding beyond Asia to Africa, Europe, the Middle East, North America and South America. It cites the International Energy Agency’s World Energy Outlook 2016 report ( Nov. 2016) to state that China holds 3.5 million of the 8.1 million renewable energy jobs globally. Small wonder when five of the world’s six largest solar-module manufacturing firms, and five of the ten top wind-turbine manufacturing firms are owned by  Chinese companies.  Between 2015 – 2021,  “China will install 36% of all global hydro electricity generation capacity … 40% of all worldwide wind energy and 36% of all solar.”See a summary of the details of the IEEFA report in “China cementing Global Dominance of Renewable Energy and Technology”   in The Guardian ;  the Globe and Mail  summary   “U.S. and Canada falling behind China in race for renewable energy” (Jan. 6) rather badly understates the case .

The trend  seems set to continue.  On January 5, the Chinese National Energy Agency announced its plans for the next phase of energy investment: see “China Aims to Spend at Least $360 Billion on Renewable Energy by 2020 ” in the New York Times.

In Canada, the latest major report tracking clean energy investment was published by Clean Energy Canada in June 2016.   Tracking the Energy Revolution    reported reduced investment in 2015 (from $12 billion to  $10 billion), although renewable generation capacity grew by 4% in that time.  Even before the announcement of the Pan-Canadian Framework, Clean Energy Canada called this a “pivotal time” for renewables, and sets an optimistic tone.  That boosterism is also apparent in   “Challenge 2017: Rays of hope shine on solar industry despite ‘Trump digs coal’ mantra” in the Financial Post (Jan. 3) – a mostly anecdotal story of Canadian solar manufacturers, and  “Canada can cash in on a cleantech boom“, in the Toronto Star (Jan. 5). The Star article  applauds  a recent clean energy-focused trade mission to China by the Minister of Environment and Climate Change, the clean-tech incentives announced in the December 2016 Pan-Canadian Framework on  Clean Growth and Climate Change, and recent federal and provincial policies that set aggressive targets for renewable energy use in government buildings and operations.

U.S. Fossil fuel workers need early retirement, guaranteed pensions, and clean energy futures

A Just Transition program of income and pension-fund support for workers in fossil fuel–dependent communities could be provided for approximately $500 million per year, according to the Just Transition proposals by Robert Pollin and Brian Callaci. “A Just Transition for U.S. Fossil Fuel Industry Workers” was published in American Prospect in July and re-posted to Portside on July 11. It estimates the numbers of jobs at risk in the fossil fuel industry, contrasting coal and the oil and gas industry, and assumes  that displaced workers will be re-employed in a growing clean energy industry. The Just Transition proposals focus on: Retirements at age 64 with full compensation; Guaranteed fully-funded pensions; and Community transition.  For coal workers, pension funds are managed through the United Mine Workers of America Health and Retirement Funds, which is currently underfunded by $1.8 billion. The authors call for the federal government to  bridge that gap with funding from  companies and the government. In the oil industry, the authors call on the U.S.  Pension Benefit Guaranty Corporation to use its legislated  power to prohibit the oil companies from paying dividends or financing share buybacks until the pension funds are fully funded, and to place liens on company assets if pension funds are underfunded.  Acknowledging that the decline of the fossil fuel industry, already underway, will bring hardships to entire communities, they point to past experience: the Worker and Community Transition program operated by the Department of Energy from 1994 to 2004 to cushion the impact of nuclear decommissioning. Once example from that program:  a successful economic diversification program in Nevada, which repurposed a nuclear test site to what is now a solar proving ground.  Another previous community assistance program, the Defense Reinvestment and Conversion Initiative,  is deemed less successful.  The authors conclude that a Just Transition program is eminently affordable at approximately  1 percent of the $50 billion in overall public spending needed to build a U.S. clean energy economy. And they state,  “ It is also an imperative—both a moral and strategic imperative.”

Canadian Climate Change Policy: The Vancouver Declaration and Subsequent Federal budget

The First Ministers meeting in Vancouver raised enormous expectations, culminating on March 3 with the release of  an 8-page  Vancouver Declaration on Clean Growth and Climate Change  ,  (in French here ). The Declaration pledged immediate federal investment in green infrastructure, public transit infrastructure and energy efficient social infrastructure; investing in clean energy and clean tech R & D, as well as electric vehicles and clean electricity. It creates working groups to report by October 2016, in four areas: Clean Technology, Innovation and Jobs; Carbon Pricing Mechanisms; Specific Mitigation Opportunities; and Adaptation and Climate Resilience.  Acknowledging that ANY federal-provincial discussion represents progress from the Harper years,  reaction to the meetings was generally optimistic – for example, Four Reasons the First Ministers Meeting on Climate Matters  from Clean Energy Canada, and Vancouver Declaration Moves Canada Closer To A National Climate Plan  from DeSmog Blog.   The Council of Canadians disappointment is explained in “Council of Canadians protest as first ministers fail to take needed action on climate change”  , and the outrage of some Indigenous leaders marred the meetings, see “Indigenous leaders shocked at exclusion from climate change meeting”  in The National Observer  . For a simple, balanced overview, read “From Paris to Vancouver: What happened at the First Ministers meeting on climate” by Marc Lee at Canadian Centre for Policy Alternatives  , who rightly points out that achieving a clean economy is a  political problem, not a technical problem, and who advises us to “watch the budget”.

Action on climate change is listed as one of the top 10 things Canadian unions want to see in the federal budget, according to the Canadian Labour Congress.  And the Canadian Centre for Policy Alternatives included a call for a national carbon price of  $30 per tonne  in their Alternative Budget  .  When the actual federal Budget  was delivered on March 22 by  Finance Minister Morneau, he characterized the new government as a “champion of clean growth and a speedy transition to a low-carbon economy.”   Spending allocations include: $2.5-billion for public transit; $1.8-billion on green infrastructure; $574-million for energy and water efficiency upgrades in social housing;  $401-million for a variety of clean-tech development efforts;  $1.7-billion for climate and environmental protection, and an additional $1-billion in  each of 2018 and 2019 to establish a low-carbon economy fund for provinces and territories that sign on to a national climate agreement.   The Budget did NOT eliminate  fossil fuel subsidies, and DID include a provision to allow LNG producers to write off their capital investments at an accelerated pace for the next 10 years.  For an overview, see “Liberals unveil spending as ‘Champion of Clean Growth”  in the Globe and Mail (March 22).  Read CUPE’s response here .

Canada’s investment in Clean Energy decreased in 2015

Clean Energy Canada released the 2016 edition of its Tracking the Energy Revolution: Global Survey  on February 29, subtitled: A Year for the Record Books because 2015 was the first year in which more money was invested in clean energy in developing countries than in developed ones.  Further, investment in renewable power totalled a record US$367 billion, a 7%  increase over 2014.  More than half of that amount was invested in China, the United States and Japan.  For specific examples of U.S. progress, read  the White House briefing, America is Building a Clean-Energy Economy with Unprecedented Momentum  , which summarizes the accomplishments of the U.S.  Department of Energy’s Advanced Research Projects Agency-Energy (ARPA-E)  in promoting clean energy investment and research.

At a total investment of $4 billion, Canada ranked 8th globally in the Clean Energy survey – and investment decreased by 46%.  Yet  consider the projections of the Solutions Project , led by Marc Jacobsen at Stanford University, which has developed plans for 100 percent renewable energy for 139 countries around the world, including all U.S. states and Canada .

Also of interest, the International Energy Agency released its review of Canada’s energy policies , on March 3 – the first update since 2009. It states that Canada was the fifth-largest crude oil and fourth-largest natural gas producer in the world in 2014; in 2014, the energy sector contributed 10 per cent of gross domestic product, employed about 280,000 people and accounted for about 30 per cent of Canada’s exports.

Australia announces Clean Energy Investment Fund

A March 22 announcement establishes a A$1 billion clean-energy innovation fund to  invest in clean-energy technologies and businesses in Australia; the Australian Renewable Energy Agency  will also be retained.  Yet a controversy continues over the Australian government’s cut-backs on climate change science – see “Grim prospects: the shake-up of Australia’s climate science”  from the Sydney Morning Herald (March 11).  Another current controversy is highlighted in The Guardian: “Australia’s emissions rising and vastly underestimated, says report”  (March 18).

CANADIAN CLEAN TECH INDUSTRY – CONTINUED EMPLOYMENT NEEDS INVESTMENT

Ottawa-based research and consulting firm Analytica Advisors released the 2015 edition of its annual Canadian Clean Technology Industry Report    at the Canadian Energy Summit in Toronto at the end of May. The report notes that more than 800 clean tech firms in Canada directly employed almost 50,000 people in 2013 – a growth rate of almost 21% since 2012, making the industry a bigger employer than the aerospace manufacturing sector, logging or pharmaceuticals and medical devices. 20% of workers in the industry are 30 years old or under. While current employment growth is encouraging, continued growth of the sector may not be assured, as the report documents a troubling loss of export markets. U.B.C.’s Sauder School of Business in “ The Ups and downs of Cleantech Venture Capital in B.C.” also casts doubt on the future of clean tech by contrasting the risk-averse culture of Canadian capital markets to that of the U.S. The interview concludes that “Without strategic changes brought on by the private sector and government, business will continue as usual.” – i.e. companies will continue to favour the U.S. over Canada as a place to invest.   Case in point:   the Obama administration announced “More than $4 Billion in Private Sector Commitments and Executive Actions to Scale up Investment in Clean Energy Innovation ” on June 16. Note also the analysis of the U.S. funding by The Guardian which states “.. arguably more important than the $4bn raised was the fine print: a new federal information source and new financing options for would-be investors.”

Growth of Canada’s Clean Energy, Wind Energy, and more on Grid Parity

Tracking the Energy Revolution – Canada, is the first annual status report by Clean Energy Canada, released in early December 2014. The report states that  $25 billion has been invested in clean energy, resulting in a 37 percent employment increase in the sector in the past five years, so that  by 2013 the clean energy sector (manufacturing, power production, energy efficiency, and biofuels) accounted for more direct Canadian jobs than the oil sands. To back up their job creation claim, Clean Energy published an explanation of the calculations. Full of infographics and tables, the report goes beyond statistics to highlight the leading provinces, companies, projects, and investor groups. It also makes recommendations for the federal and provincial levels and aims to spur laggard jurisdictions to more action.

 

More good news comes in a new report by the Canadian Wind Energy Association: 2014 was a record-breaking year for wind in Canada, with 37 new wind energy projects representing over $3.5 billion in investment. Fifteen of the projects involved municipalities, First Nations, and local farmers; activity was strongest in Ontario, Quebec and Alberta. The Grand Renewable Energy project in Ontario can be considered a poster child for the industry, with over 98% of the workforce on the project from Ontario – from turbine manufacture to construction, installation, and operation. Samsung and Pattern Energy are equity partners with the Six Nations of the Grand River, which owns 10% of the project; Samsung and Pattern Energy provided a $400,000 donation to the Grand River Post-Secondary Education Office, to help Six Nations students. In B.C., the government has provided more than $5.8 million since 2011 to support the participation of over 90 Aboriginal communities in the clean energy sector, including wind energy, biomass and run-of-river hydroelectric power. See “First Nations Clean Energy Funding tops $5.8 million” in the Vancouver Observer (Jan. 6, 2015). And also of interest, a report in January 2015 by Oceana conservation group concludes that offshore wind has the potential to generate more jobs (91,000 more over 20 years) produce more power, and lead to a higher degree of energy independence than offshore drilling for oil and gas, while posing fewer environmental threats. Read Offshore Energy by the Numbers: An Economic Analysis of Offshore Drilling and Wind Energy in the Atlantic
All this, despite the assertion in a December report  that the $548 billion that is paid annually in fossil fuel subsidies around the world have impeded the growth of the renewable energy industry by making fossil fuel power generation appear cheaper than it really is. The Impact of Fossil-Fuel Subsidies on Renewable Electricity Generation was published by the International Institute for Sustainable Development (IISD). Yet even so, Renewable Power Generation Costs in 2014, a landmark report from the International Renewable Energy Agency (IRENA), states that “biomass, hydropower, geothermal and onshore wind are all competitive with or cheaper than coal, oil and gas-fired power stations, even without financial support and despite falling oil prices. Solar photovoltaic (PV) is leading the cost decline, with solar PV module costs falling 75 per cent since the end of 2009 and the cost of electricity from utility-scale solar PV falling 50 per cent since 2010.”

New York Climate Summit: Labour Marches and Business Makes Pledges

The New York Times Editorial Board pronounced its verdict on the U.N. Climate Summit – focussing on the People’s March rather than the official meetings, and noting “a palpable conviction that tackling climate change could be an opportunity, and not a burden”.

The article notes that cooperation between the U.S. and China could create the conditions for a breakthrough agreement in 2015, “But what might really do the trick – if Climate Week is any guide – is the emergence of a growing bottom-up movement for change”. In an article in Truthout, Abby Scher summarizes the support for the People’s March by national unions in the U.S., including Service Employees (SEIU) and Communication Workers of America, as well as the New York state and city unions and the community-labour alliances which have taken root in New York since Hurricane Sandy.

The business community made headlines with its reports and announcements over the Climate Summit week: a Global Investor Statement by nearly 350 global institutional investors representing over $24 trillion in assets, calling for stable, reliable and economically meaningful carbon pricing and a phase-out of fossil fuels; the Carbon Tracker Initiative published a report for investors to measure their risk exposure and start directing capital away from high cost, high carbon projects; the new We Mean Business coalition released The Climate has Changed report; and iconic companies like Kellogg’s, Nestle, Apple, and IKEA and others released their own statements supporting climate change action.

CalPERS, the largest public pension fund in the U.S., pledged to measure and publicly disclose the carbon footprint of its $300 billion investment portfolio, and the California State Teachers Retirement System announced that it will increase its clean energy and technology investments from $1.4 billion to $3.7 billion over the next five years. And according to a New York Times summary of business initiatives: “The major Indonesian palm oil processors, including Cargill, issued a separate declaration on Tuesday pledging a crackdown on deforestation, and asking the Indonesian government to adopt stronger laws. Forest Heroes, an environmental group, called the declaration “a watershed moment in the history of both Indonesia and global agriculture. We should not underestimate the significance of what is happening”.

And for an interesting, more neutral point of view: consider the special report Climate Protection as a World Citizen Movement, presented to the German Federal Government on the occasion of the UN Climate Summit in New York. The German Advisory Council on Global Change (WBGU) recommends a dual strategy for international climate policy: governments should negotiate the global phasing-out of fossil CO2 emissions at the Paris meetings in 2015, while civil society initiatives, including those of trade unions and religious organizations, should be supported and encouraged.

LINKS:

“A Group Shout on Climate Change” Editorial in the New York Times (September 27) is at: http://www.nytimes.com/2014/09/28/opinion/sunday/a-group-shout-on-climate-change.html?emc=edit_th_20140928&nl=todaysheadlines&nlid=67440933&_r=0. In contrast, see also “Moving Forward after the People’s Climate March” in Canadian Dimension at: https://canadiandimension.com/articles/view/moving-forward-after-the-peoples-climate-march

“At Least Some Unions Step Up for Big Climate March!” by Abby Scher in Truthout at: http://www.truth-out.org/news/item/26137-at-least-some-unions-step-up-for-big-climate-march, with a list of the unions who officially endorsed the People March at: http://peoplesclimate.org/organizedlabor/. See also the BlueGreen Alliance statement at: http://www.bluegreenalliance.org/news/latest/members-of-labor-environmental-partnership-front-and-center-in-peoples-climate-march

For Business documents, see Global Investor Statement is at: http://investorsonclimatechange.org/; Carbon Supply Cost Curves: Evaluating Financial Risk to Oil Capital Expenditures is at the Carbon Tracker Initiative at: http://www.carbontracker.org/report/carbon-supply-cost-curves-evaluating-financial-risk-to-oil-capital-expenditures/; We Mean Business website is at: http://www.wemeanbusinesscoalition.org/, with The Climate has Changed at: http://www.wemeanbusinesscoalition.org/stories. CalPERS statement is at: http://www.calpers.ca.gov/index.jsp?bc=/about/newsroom/news/montreal-carbon-pledge.xml; California Teachers Retirement System press release is at: http://www.calstrs.com/news-release/calstrs-commits-increase-clean-energy-and-technology-investments; “Companies take the Baton in Climate Change Efforts” in the New York Times at: http://mobile.nytimes.com/2014/09/24/business/energy-environment/passing-the-baton-in-climate-change-efforts.html?_r=3

Climate Protection as a World Citizen Movement by the German Advisory Council on Global Change is at: http://www.wbgu.de/fileadmin/templates/dateien/veroeffentlichungen/sondergutachten/sn2014/wbgu_sg2014_en.pdf

Investment in Canadian Clean Energy Mirrors Global Trend to Solar Pre-Eminence

Two new reports on investment in clean energy were released in March/April, both showing a global decline in investment levels, and that investment in solar now exceeds wind investment. A report by the United Nations Environment Programme (UNEP) shows a 14% decrease in global investment in renewables in 2013, but even so, renewables attracted $192 billion for new capacity and comprised 43.6% of newly installed generation capacity in 2013. The U.S. continues to rank first among developed economies for investment in renewable energy with $33.9 billion in 2013 – although this represents a 10% decrease, largely attributable to the uncertainty over the continuation of the Wind Tax Credit. Japan, Canada and the United Kingdom were the only G-20 countries in which investment increased. Canada ranked 6th amongst the G-20 countries with $6.4 billion investment, largely in wind energy ($3.6 billion) and solar energy ($2.5 billion) in 2013. See “Six Canadian companies shaping the future of clean energy” (March 27) in Globe and Mail Report on Business Magazine at: http://www.theglobeandmail.com/report-on-business/rob-magazine/six-canadian-clean-energy-companies/article17685931/?page=4. To read the Global survey, see Global Trends in Renewable Energy Investment 2014, produced jointly by the Frankfurt School-UNEP Collaborating Centre, the United Nations Environment Programme (UNEP) and Bloomberg New Energy Finance (BNEF) at: http://www.unep.org/newscentre/Default.aspx?DocumentID=2787&ArticleID=10824&l=en.

A related report was issued by the Pew Charitable Trusts, also utilizing Bloomberg data. Who’s Winning the Clean Energy Race? 2013 Edition contrasts a 16% decline in renewables investment in developed markets of G-20 countries (led by the U.S. and EU) with a growth of 15% in non G-20 countries, led by such countries as Chile and Uruguay. Pew ranks China as the top destination for investors; solar capacity in China increased fourfold in 2013. See Who’s Winning the Clean Energy Race? At: http://www.pewenvironment.org/news-room/press-releases/pew-report-finds-that-global-clean-energy-investment-declined-in-2013-85899543052. See also the U.S. Energy Information Administration’s April 2014 Electricity Monthly Update which shows that U.S. solar capactiy also increased by 418% between 2010 and 2014, as described at: http://cleantechnica.com/2014/04/24/us-solar-energy-capacity-grew-an-astounding-418-from-2010-2014/.