“Business as usual” could lead to 13% loss in growth for the Canadian economy.

According to a study published in August by both the National Bureau of Economic Research and by  U.K.’s Cambridge University Institute for New Economic Thinking,      the overall the global economy could shrink by 7% unless the world’s nations meet the Paris Agreement targets for GHG emissions reductions. Long-Term Macroeconomic Effects of Climate Change: A Cross-Country Analysis” analyses data from 174 countries over the years 1960 to 2014 to model changes in output growth related to temperature and precipitation. The result: “Our counterfactual analysis suggests that a persistent increase in average global temperature by 0.04°C per year, in the absence of mitigation policies, reduces world real GDP per capita by 7.22 percent by 2100. On the other hand, abiding by the Paris Agreement, thereby limiting the temperature increase to 0.01°C per annum, reduces the loss substantially to 1.07 percent.”

The effects differ widely across countries. For Canada, the analysis finds that a “business as usual” scenario could result in a 13% loss in growth for the Canadian economy.     A summary for non-economists from the Climate News Network  quotes one of the authors of the study: “The idea that rich, temperate nations are economically immune to climate change, or could even double or triple their wealth as a result, just seems implausible.”

 

Job creation impacts of Energy Efficiency Programs: Best practices for measurement

A September 2015 report from the American Council for an Energy-Efficient Economy reviews the current methodologies used in studying the job creation impacts of energy efficiency programs, with a view to establishing best practice and a model framework for future analyses. Verifying Energy Efficiency Job Creation: Current Practices and Recommendations classifies, explains, and compares the methodologies currently in use in North America, as either top-down (modelling) or bottom-up (head-count). It then examines several exemplary studies, including two from Canada: the Ontario Power Authority (OPA) study of its Industrial Accelerator Program (IAP), a financial incentive and resource acquisition program started in 2010, and a study of Efficiency Nova Scotia, which measured the economic impact (in employment, payroll, and GDP) of organizations in the province’s energy efficiency sector. 

 

Canadian Cities Rank High in Climate Change Adaptation – and Some Examples

A newly released survey conducted by the researchers at the Massachusetts Institute of Technology investigates the progress in climate adaptation planning in 468 cities worldwide – 298 of which were in the U.S., 26 were in Canada. Results show that 92% of Canadian cities are pursuing adaptation planning, compared to 68% worldwide, and 59% in the U.S.. The top ranked impacts identified by cities that conducted assessments were: increased stormwater runoff (72%), changes in electricity demand (42%), loss of natural systems (39%), and coastal erosion (36%). Other important issues were loss of economic revenue, drought, and solid waste management. The report, Progress and Challenges in Urban Adaptation Planning: Results of a Global Survey is available at: http://www.icleiusa.org/action-center/learn-from-others/progress-and-challenges-in-urban-climate-adaptation-planning-results-of-a-global-survey, and summarized at: http://www.icleiusa.org/blog/survey_us_cities_report_increase_in_climate_impacts_lag_in_adaptation_planningworldwide-progress-on-urban-climate-adaptation-planning. For a policy perspective, read the David Suzuki blog “Canada’s Success depends on Municipal Infrastructure Investments” (March 13) at: http://www.davidsuzuki.org/blogs/science-matters/2014/03/canadas-success-depends-on-municipal-infrastructure-investments/. For a more anecdotal report which names and describes some innovative Canadian municipalities, see “Five Canadian Communities Fighting Climate Change That You’ve Probably Never Heard of Before” from the DeSmog Blog at: http://www.desmog.ca/2014/04/03/five-canadian-communities-fighting-climate-change-you-ve-probably-never-heard-of-before. It describes Dawson Creek, B.C.; Guelph, Ontario; Varennes, Quebec; T’Sou-ke First Nation, B.C.; and Bridgewater, Nova Scotia. An overview of the Upwind-Downwind Conference of municipalities in Hamilton in March, and a summary of Hamilton’s climate action initiatives, appears in “Ontario Municipalities take Action on Air Quality and Climate Change” at: http://www.alternativesjournal.ca/community/blogs/current-events/ontario-municipalities-take-action-air-quality-and-climate-change.

Industry Estimates of the Economic Impact of the Oil Sands

From the industry point of view, a study by consultants IHS CERA was published in January reporting focus group discussions by the oil sands multinationals in Calgary in summer 2013. The report projects that the oil sands’ contribution to Canadian GDP could reach $171 billion in 2025, with total contribution to employment in Canada reaching 753,000 jobs by 2025.

See Oil Sands Economic Benefits: Today and in the Future (Jan. 2014) at: http://www.ihs.com/pdfs/OSD-2013-Economic-Benefits-Jan-2-2014.pdf.

Disputing Oil and Gas Industry Claims for Job Creation in the U.S. and in California

The Center for American Progress has taken issue with the claims made by the American Petroleum Institute (API) in its 2013 testimony before the U.S. Senate Committee on Energy and Natural Resources. The API stated that the natural gas and oil industry supports 9.2 million U.S. jobs and accounts for 7.7 % of the U.S. economy, based on two studies which estimated direct, indirect, and induced job effects in the oil and gas industry. The studies were conducted by PricewaterhouseCoopers (PwC) and commissioned by API. The Center for American Progress disputes these claims, basing their own analysis on Bureau of Labor Statistics data for employment in upstream activities (oil and gas extraction, well drilling, and operation support), and downstream activities (petroleum refining, product sales through dealers and gas stations, and pipeline construction and transportation). CAP did not include indirect jobs. CAP estimates that there are less than 2 million direct jobs in the oil and gas industry, and nearly 50% of those jobs occur in gas stations. Their analysis also shows that BP, Chevron, ExxonMobil, and Shell have shed a net total of nearly 12,000 U.S. jobs since 2007.

Another U.S. research centre, NextGeneration, has waded into California’s political discussion about the Monterey Shale development by publishing a series of six articles. In one of these articles, Too Big to Believe, five prominent economists from California universities critique the methodology and results of an influential study published in March 2013, Powering California. Powering California, conducted at the University of Southern California and sponsored by Western States Petroleum Association (WSPA), included optimistic and widely publicized estimates of an increase of 512,000 net new jobs by 2015 and 2.8 million net new jobs by 2020. Yet Too Big to Believe states: “Each of the economists said the study’s findings were unreliable and inflated. They cast doubt on its methodology, which did not base its estimates on any projections for oil production or capital investment in California oil; instead, the study’s authors said they extrapolated from the effects of economic growth in North Dakota, South Dakota and Wyoming.”

In Keeping the Story Straight, the final article in the NextGeneration series, the results of Powering California are contrasted with two other economic impact studies done by industry-related organizations: one by IHS Consultants, and another commissioned by the Western States Petroleum Association and conducted by California State University at Fresno. In both cases, estimated job impacts were “negligible” or modest.

LINKS:

Big Oil, Small Jobs: A Look at the Oil Industry’s Dubious Job Claims is at the Center for American Progress at: http://www.americanprogress.org/issues/green/news/2014/01/22/82571/big-oil-small-jobs-a-look-at-the-oil-industrys-dubious-job-claims/
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Too Big to Believe: Top Economists Doubt California Oil Industry’s Jobs Figures at: http://thenextgeneration.org/blog/post/top-economists-doubt-california-oil-industrys-jobs-figures, and Keeping the Story Straight: Industry Reports at Odds in California Oil at: http://thenextgeneration.org/blog/post/industry-reports-at-odds-on-california-oil

Powering California: The Monterey Shale and California’s Economic Future is at: http://wms.communicationsinstitute.org/energy/powering-california-project/powering-california-the-monterey-shale-californias-economic-future/