Government campaign claims Trans Mountain pipeline is a “bridge to a greener tomorrow” – economists and citizens disagree

keepcanada working

#keepcanaddaworking social media campaign

Now that the government of Canada has bought the Trans Mountain pipeline project from Texas-based Kinder Morgan,  the governments of Alberta and Canada have launched a public relations campaign to “sell” the deal to Canadians.  The  Keep Canada Working television and  social media campaign  promotes the familiar Liberal government message that  “Developing the economy and protecting the environment are two things that can happen side by side – without choosing one over the other”, and argues that “The Trans Mountain Pipeline expansion funds green investments, shifts the transportation of oil away from more carbon intensive methods like rail or truck, and provides a bridge to a greener tomorrow.”   The full “Climate Action” defense is here .

The “Jobs and the Economy” claims are here, including endorsements by politicians and includes a quote from Stephen Hunt, Director of the United Steelworkers District 3: “Members of the United Steelworkers are proud that the pipeline will be using Canadian-made USW-built pipe.”  The other positive job arguments are sourced from an April 2018 Globe and Mail article by the CEO of the Canadian Association of Petroleum Producers and the corporate website of  Trans Mountain, which are in turn based on an unnamed  Conference Board of Canada report .

What do other economists say about the benefits of the Trans Mountain pipeline?   In February 2018, the Parkland Institute summarized and critiqued the economic arguments in a still-useful  blog “Let’s share the actual facts about the Trans Mountain Pipeline” , and Canadian economist Robyn Allan has written numerous articles critical of the Trans Mountain project for the National Observer, most recently “Premier Notley’s claimed $15 billion annual benefit from Trans Mountain exposed as false by her own budget”  (June 7 2018). Other more detailed publications since the May 2018 purchase by the government:  “Canada’s Folly: Government Purchase of Trans Mountain Pipeline Risks an Increase in National Budget Deficit by 36%, Ensures a 637% Gain by Kinder Morgan”, published by the Institute for Energy Economics and Financial Analysis, describes the fiscal and financial risks and calls for more public disclosure of those details before the Purchase Agreement is finalized in August.  Similarly,  The view from Taxpayer Mountain  (June 2018) from the West Coast Environmental Law Association links to  the actual Purchase Agreement and reviews Canada’s obligations and risks.  On June 26, Greenpeace USA has published  Tar Sands Tanker Superhighway Threatens Pacific Coast Waters  highlighting the dangers of a potential oil spill on the environment,  and on coastal economies.  At risk: the $60 billion coastal economy of Washington, Oregon and California, which  currently supports over 150,000 jobs in commercial fishing and over 525,000 jobs in coastal tourism, and in the British Columbia Lower Mainland, Greenpeace estimates there are  320,000 workers in industries that rely on a clean coastline.

On the issue of climate change impacts, a widely-cited discussion paper, Confronting Carbon lock-in: Canada’s oil sands (June 2018) from the Stockholm Environment Institute,  concludes that  “The continued expansion of Canada’s oil sands is likely to contribute to carbon lock-in and a long-term oversupply of oil, slowing the world’s transition to a low-carbon future.”  And still valuable reading: David Hughes’ Can Canada Expand Oil and Gas Production, Build Pipelines and Keep Its Climate Change Commitments? (June 2016) from the Corporate Mapping Project  , and from Jeff Rubin,  Evaluating the Need for
Pipelines: A False Narrative for the Canadian Economy  (September 2017).

Tanker Bridge BlockadeDemonstrations continue:   Vancouver housing activist Jean Swanson’s  argues that the billions spent on Kinder Morgan would be better used for social housing, job creation, and renewable energy in  “Why I got arrested protesting the Kinder Morgan pipeline” in The Tyee, July 11.  Twelve Greenpeace activists mounted an “aerial blockade”  for Trans Mountain oil tankers by hanging from a bridge above the water on July 3 and 4.   And on July 11, CBC reported  “Secwepemc First Nation’s ‘Tiny House Warriors’ occupy provincial park in Trans Mountain protest” .  The Tiny House Warrior movement began in 2017, near Kamloops, to block the pipeline by  re-establishing village sites and asserting authority over Secwepemc First Nations unceded Territories.

 

 

G7 Summit makes some progress on Just Transition, plastics pollution – but not on fossil fuel subsidies

G7 leaders 2018With the chaos emanating from Donald Trump’s performance at the G7 Summit   hosted by Canada on June 8 and 9,  it would be easy to miss the news about one of the five Summit themes :  Working Together on Climate Change, Oceans, and Clean Energy  . But according to a brief statement by Canada’s Climate Action Network,  G7 Stands it Ground : “The G7 should be congratulated for publicly acknowledging for the first time the need for a just transition…..Canada showed leadership by stickhandling this climate outcome as the G7 host. ”

In contrast to the Final Communique of 2017, which contained only one paragraph on climate change,  the 2018 Official Communique   includes four lengthly paragraphs (#23 – 27,  including #26 which is the independent statement of the United States).   Included:  “Canada, France, Germany, Italy, Japan, the United Kingdom and the European Union reaffirm their strong commitment to implement the Paris Agreement, through ambitious climate action; in particular through reducing emissions while stimulating innovation, enhancing adaptive capacity, strengthening and financing resilience and reducing vulnerability; as well as ensuring a just transition, including increasing efforts to mobilize climate finance from a wide variety of sources. ….  Also, Recognizing that healthy oceans and seas directly support the livelihoods, food security and economic prosperity of billions of people, …. We endorse the Charlevoix Blueprint for Healthy Oceans, Seas and Resilient Coastal Communities, and will improve oceans knowledge, promote sustainable oceans and fisheries, support resilient coasts and coastal communities and address ocean plastic waste and marine litter. Recognizing that plastics play an important role in our economy and daily lives but that the current approach to producing, using, managing and disposing of plastics and poses a significant threat to the marine environment, to livelihoods and potentially to human health, we the Leaders of Canada, France, Germany, Italy, the United Kingdom and the European Union endorse the Ocean Plastics Charter.”

Background: As usual, several reports and position statements were released in advance of the international meetings.  The Climate and Energy Working Group of the G7 Global Task Force, (a broad coalition of over 40 civil society organisations) released  their  Recommendations  on a full range of climate change issues, and a separate Brief titled It’s Time for G7 countries to commit to Just Transition , which concluding with this: “Canada, as President of the G7, and building on the work of the Task Force on the Just Transition for Canadian Coal-Power Workers and Communities has the opportunity to elevate this discussion, and promote mainstreaming of just transition principles across all G7 priorities and discussions for the upcoming years.”

Other position statements:  The Global Investor statement to G7 leaders, signed by 319 investors representing more than USD $28 trillion in assets , and a Statement from the We Mean Business Coalition  .  Both business-oriented groups affirm their commitment to the Paris Agreement and made recommendations.

g7 fossil fuel scorecard infographics_canadaAlso, from the Overseas Development Institute (ODI), Oil Change International (OCI), Natural Resources Defense Council (NRDC) and Global Subsidies Initiative (GSI) : the G7 Fossil Fuel Subsidy Report Card , released on June 4 . It states that  G7 governments continue to provide at least $100 billion in subsidies to the production and use of coal, oil and gas, and ranks the G7 countries according to seven indicators: transparency; pledges and commitments; ending support for coal mining; ending support for exploration; ending support for oil and gas production; ending support for fossil fuel-based power; and ending support for fossil fuel use.  Using these categories,  Canada ranked 3rd out of the G7 countries overall, after France (1st) and Germany (2nd), followed by U.K., Italy, Japan, and the U.S. (7th).  This, against the backdrop of an Ekos Research  public opinion poll from March 2018 that shows Canadians want an end to fossil fuel subsidies in virtually every part of the country and across gender, age, region, education, and income. For a new discussion of the issue and the Scorecard report, see “Canada leads G7 in oil and gas subsidies” in The Narwhal.

The National Observer coverage of the entire G7 Summit is here, with a focus on the trade dispute, but including “G7 still negotiating as clock runs down on climate commitments and “McKenna praises IKEA move to ban single-use plastics by 2020” , which discusses the broader issue.

Reactions :  A compilation of reactions appears in “G7 Leaders isolate Trump on Climate” in The Energy Mix, and CAN-RAC  released a position paper in response  Shaping the Future: A new vision for civil society and the G7 .   Environmentalists, including Greenpeace,  called the Plastics Charter inadequate because it is voluntary,and focuses on recycling and repurposing, rather than reduction or an outright ban on single-use plastics.  The Chemistry Industry Association of Canada (CIAC) and the Canadian Plastics Industry Association (CPIA) released a statement of support of the Ocean Plastics Charter on June 10 , also stating that its members: ” had committed to goals of 100 per cent of plastics packaging being recyclable or recoverable by 2030 and 100 per cent of plastics packaging being reused, recycled, or recovered by 2040.”

 

 

 

Canadian government spends $4.5 billion taxpayers’ dollars to buy Trans Mountain pipeline project and push expansion ahead

justin-trudeauDespite strenuous and prolonged opposition from environmental and Indigenous activists in Canada and internationally, and two days before a deadline imposed by Texas corporation Kinder Morgan, Canada’s Liberal government announced on May 29  that it will  spend $4.5 billion to buy the existing Trans Mountain pipeline and its associated infrastructure, so that a pipeline expansion can proceed under the ownership of a Crown corporation.  The press release is here  ; details of the transaction are here in a Backgrounder  ;  the text of the speech by Finance Minister Bill Morneau is here . Repeating the mantra of the Trudeau government, Morneau claims that the project is in the national interest, will preserve jobs,  will reassure investors and improve the price for Canadian oil by expanding its market  beyond the U.S.  Morneau says the federal government does not plan to be a long-term owner and is in negotiations with interested investors, including Indigenous communities, pension funds (notably the Canada Pension Plan Investment Board)  and the Alberta government.

trans-mountain-pipelineIn fact, the expansion pipeline, if built, would almost triple the amount of dilbit transported from Alberta to the British Columbia coast, from 300,000 to 890,000 barrels a day, and increase tanker traffic off B.C.’s coast from approximately five to 34 tankers a month.  As recently as May 24, an Open Letter coordinated by Oil Change International  and signed by over 200 groups  summed up the situation, stating there is a “….  clear contradiction between Prime Minister Trudeau’s unchecked support for the Kinder Morgan pipeline project and his commitments to Indigenous reconciliation through the United Nations Declaration of the Rights of Indigenous Peoples (UNDRIP) and his obligation to address climate change through the Paris Agreement.”  The letter notes that currently planned Canadian oil production would use up 16% of the world’s carbon budget to keep temperatures below 1.5 degrees, or 7% of the budget for 2 degrees.  Canada has less than 0.5% of the world’s population.

Today’s initial reaction to the government’s decision  has called it “astounding”, “shameful”, and an “historic  blunder”.  From the CBC: “Liberals to buy Trans Mountain pipeline for $4.5B to ensure expansion is built”   and “ Bill Morneau’s Kinder Morgan surprise comes with huge price tag, lots of political risk: Chris Hall”.  From  The National Observer   “Trudeau government to buy troubled Trans Mountain pipeline for $4.5 billion”   ; “BC Will Continue Legal Strategy to Oppose Pipeline After Federal Purchase, Premier Says”  in The Tyee  .  Toronto’s Globe and Mail posted at least 6 items on the decision , including  an Explainer , and Jeff Rubin’s Opinion: “Morneau had better options for Canada’s Energy sector” .

From  Greenpeace Canada: “Federal government volunteers to “captain the Titanic of tar sands oil pipelines” and risks $4.5B of Canadians’ money in the process” ; and  West Coast Environmental Law reaction points out that “There are currently 14 legal challenges before the Federal Court of Appeal, alleging that the government failed in its constitutional duty to consult First Nations about the Trans Mountain project, and that the federal review had other regulatory flaws. Success in just one of those challenges could derail the underlying federal approvals.”

In the Victoria Times Colonist, “Green Party Leader May calls pipeline decision ‘historic blunder’” ; John Horgan, Premier of British Columbia, released an official statement  , and a jubilant Alberta Premier Rachel Notley is profiled in the CBC story, ” ‘Pick up those tools, folks, we have a pipeline to build,’ Alberta premier says  “.  Reaction from B.C. First Nations leaders is compiled in this CBC story.

Social media reaction, as compiled by CBC , is here  .  The Dogwood Initiative has mounted a  “Time for Bill Morneau to go” online petition here ; SumofUs has an online petition  here,  to urge the Canada Pension Plan Investment Board not to invest in Kinder Morgan.   Direct emails can be sent to Prime Minister Justin Trudeau at justin.trudeau@parl.gc.ca .   Opposition continues and the story is not over.

Even before the Kinder Morgan fight, Canada is falling short on its climate goals

As we have noted in previous posts in the WCR  , many voices have warned that Canada’s progress in reducing greenhouse gas emissions is falling short of its commitments under the Paris Agreement.  Three recent reports provide more evidence.

On March 27,  Perspectives on Climate Change Action in Canada—A Collaborative Report from Auditors General—March 2018  was released by the federal Commissioner of the Environment and Sustainable Development and for the first time ever, compiles the findings of the federal and provincial Auditors –General, with the exception of Quebec, which did not participate.  The results are presented for each province, and summarized as: Seven out of 12 provincial and territorial governments did not have overall targets for reducing greenhouse gas emissions; governments have different targets from each other, and of those that have targets, only two (New Brunswick and Nova Scotia) are on track to meet their targets. Most governments had not fully assessed climate change risks, and their plans to reduce greenhouse gas emissions consist of high-level goals, with little guidance on how to implement actions.  At the federal level, the report states: “ even though Environment and Climate Change Canada was the federal lead on climate change, the Department did not provide the leadership, guidance, and tools to other departments and agencies to help them assess their risks and adapt to climate change. Moreover, only 5 federal departments and agencies of the 19 examined undertook comprehensive assessments of the climate change risks to their mandates.”  There was limited coordination of climate change action within most governments. Some governments were not reporting on progress in a regular and timely manner.

The second analysis is from the Pembina Institute, which partnered with the Energy Innovation of San Francisco to develop the Energy Policy Simulator (EPS), an economic modelling tool to evaluate the effectiveness and costs of  energy and climate policies for Canada. Enhancing Canada’s Climate Commitments: Building on the Pan-Canadian Framework applies the Energy Policy Simulator to three different policy scenarios, including the Pan-Canadian Framework for Clean Growth and Climate Change   , and concludes “ that even if the PCF is fully implemented, 2030 emissions will exceed Canada’s goal by 161 million metric tons (MMT), a gap 3.7 times larger than the 44 MMT shortfall predicted by Canada’s government. Extending and strengthening PCF policies would allow Canada to come much closer to its target, save money, and save human lives.”  The Energy Policy Simulator is offered here  as a free, open-source app available for other researchers to use.

Finally, the devil is in the details when author Barry Saxifrage of the National Observer took a close look at the federal government’s report to the UNFCC in December 2017, the 7th National Communications report. In “Canada’s climate gap twice as big as claimed – 59 million tonne carbon snafu” (March 27)  , the author contends that “The Trudeau government says its proposed climate policies will get Canada to within 66 million tonnes of our 2030 climate target. That’s already a big gap, but the federal accounting also assumes we can subtract a huge chunk of Canada’s emissions.”  That “huge chunk” refers to a further 59 MtCO2 of carbon emissions which the government omits to tally as part of our Canadian emissions, presuming that offsets will be purchased by Ontario and Quebec through their participation in the cap and trade market of the Western Climate Initiative with California. So far, the U.S. has not agreed to such an arrangement.

On a more optimistic note, a new report states:  “Canada can reach its 2030 target if the federal, provincial and territorial governments implement climate policies in a timely and rigorous way. The Pan-Canadian Framework has the policy tools needed to achieve the target but measures will have to be ratcheted up to fill the 66 million tonne gap.” In  Canada’s Climate Change Commitments: Deep Enough?  ,authors Dave Sawyer and Chris Bataille use economic modelling to show that Canada could honour its Paris GHG reduction commitment (30 per cent below 2005 levels by 2030) and still achieve GDP growth of at least 38 per cent. They compare this to a GDP growth of 39% if Canada took no action to reduce greenhouse gases.   The report calls for transformation changes, specifically: Building exclusively net-zero energy homes, i.e. buildings that generate as much energy as they consume. • The electrification of transportation, so that cars, trucks and trains can be powered by renewable energy rather than oil, which contributes to climate change. • Wholesale shifts away from fossil fuels and towards renewable energy. • Driving down energy needs by making industry, buildings and vehicles more energy efficient. • Embracing the full potential of energy storage to maximize the use of renewable electricity and building infrastructure to trade  that electricity between jurisdictions.

Canada’s Climate Change Commitments: Deep Enough?  was released on April 12 jointly by four environmental advocacy organizations: Environmental Defence, Climate Action Network, The Pembina Institute, and the Conservation Council Of New Brunswick.

 

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.