Budget 2019 provides modest funding for climate change improvements – Just Transition, electric vehicles, energy efficiency

budget2019No clean economy vision is evident in the  pre-election budget , Investing in the Middle Class, delivered by Canada’s Finance Minister on March 19.  The National Observer has a Special Report on Budget 2019 , composed of  twelve focused articles covering the range of notable provisions. Mitchell Beer provides a good summary of the Budget’s climate-related provisions, in “Morneau’s Pre-Election Budget Boosts ZEVs and Energy Retrofits, Extends New Fossil Subsidy”  in the Energy Mix (March 20).  Elizabeth May, leader of the Green Party is quoted in that article, and says that the climate provisions are “pathetic” – a similar reaction to that of Environmental Defence,which states more diplomatically that “funding for climate change in this budget does not match the scale of the challenge”. Similarly, the Canadian Centre for Policy Alternatives reaction judges the climate provisions as “modest efforts to move forward on greening the economy”, although calls the just transition plan “an important precedent.”  The Canadian Labour Congress reaction is a lengthly commentary on many worker-related initiatives  – including the issue of Just Transition.

On the issue of Just Transition:  The Budget plan text on Just Transition reiterates the previous Budget’s pledge of $35 million over five years for Just Transition of coal workers.  In its reaction, the Canadian Labour Congress  acknowledges the new pledge of  $150 million in infrastructure funding to directly assist resource-based municipalities, but quotes Hassan Yussuff, Co-Chair of Canada’s Task Force on Just Transition: “… Canada’s unions are looking forward to working with the Minister of Natural Resources as the newly named lead minister, but are disappointed to see that the government has not addressed key Task Force recommendations to support workers, in terms of income, training and reemployment needs. Without this, workers will be left behind.”

More details appear in  “Coal workers get cash in budget but lack of details risks ‘major blowback”  in the National Observer (March 19), including that the  $150 million infrastructure funding will not flow until the 2020-2021 fiscal year.  Funds  will be delivered by Western Economic Diversification Canada at a rate of $21 million a year over 4 years,  and the Atlantic Canada Opportunities Agency , at a rate of $9 million a year for 4 year.

Watch for a promised analysis by Hadrian Mertins-Kirkwood of the CCPA, whose March 12  blog assessing the Just Transition  Task Force Report  promised  to keep “a close eye” on Budget 2019 provisions.

On the issue of fossil fuel subsidies:  The government  reaffirmed its long-standing (and unfulfilled) commitments to phase out fossil fuel subsidies , and pledged to establish an expert committee to examine the issue. Here is the reaction from the Stop Funding Fossils Initiative: “This year marks the tenth anniversary of Canada’s G20 commitment to phase out fossil fuel subsidies. Yet, despite moderate progress in the 2017 budget, Canada remains the largest provider of fiscal support to oil and gas production in the G7 relative to the size of its economy…. the Government of Canada has doubled down on fossil fuels by introducing billions of dollars in new subsidies in the past year. Budget 2019 allocates a further $100 million over four years to the Strategic Innovation Fund, aiming to help the oil and gas industry reduce emissions. ”

(Coincidentally, the 2019 Annual Fossil Fuel Report Card  was released on March 20, revealing  that global banks have invested nearly US$2 trillion in fossil projects since the Paris Agreement was signed, and Canada’s Bank of Montreal, RBC, ScotiaBank and CIBC  are amongst the worst offenders. )

On the issue of electric vehicles: Budget 2019 included a number of policies  aimed at speeding  up EV adoption, including a  2040 deadline to phase out new internal combustion vehicle sales, and consumer rebates for purchases of electric and hybrid vehicles ($5000 for purchases under $45K).  Despite recent reports that EV supply is restricting purchases, the government did not institute a mandatory sales mandate for car manufacturers. Businesses will be allowed to deduct the full value of a new ZEVehicle  worth up to $55,000 in the year they purchase it.  The government also pledged $130 million over the next five years  to build electric vehicle charging stations – specifically including workplaces in the named locations.  The National Observer summarizes these proposals in “Canada proposes rebates for electric cars, voluntary sales mandate”. 

On the issue of infrastructure and the built environment:  The text of the government’s announcement relating to energy efficiency is here , and a Backgrounder: Strong Communities, Affordable Electricity and a Clean Economy  is also relevant.     Initiatives include $1.01 billion in funding, immediately, to increase energy efficiency in residential, commercial and multi-unit buildings – in the form of financing and grants to retrofit community buildings, financing for municipal initiatives to support home retrofits, and financing to improve energy efficiency and support on-site energy generation in affordable housing developments .  Funds will be administered through the Green Municipal Fund of  the Federation of Canadian Municipalities.   Macleans magazine summarizes this, as well as infrastructure funding, in “Cities are billion-dollar winners in Budget 2019”   which states that “the biggest single new spending item in the budget is a $2.2 billion “one-time transfer” through the federal Gas Tax Fund. That money doubles the usual federal-municipal transfer through that mechanism. The windfall is intended to address “serious infrastructure deficits” in municipalities and First Nations communities.”

 

Canada at COP24: Summary and reaction

COP24-table of delegatesIn the wee hours of Saturday December 16, after a dramatic extension of negotiations, the Katowice Climate Change Conference of the Parties (COP24) concluded with the adoption of  the Katowice Climate Package.   The meetings had brought together over 22,000 participants, including nearly 14,000 government officials, over 7,000 representatives from UN bodies and agencies, intergovernmental organizations, and civil society organizations, and 1,500 members of the media.  What was accomplished?    IISD Reporting Services provides an overview summary of accomplishments,  and a 34-page compilation of official decisions . For a more readable general overview, the UNFCC summarizes and links to the highlights in a release on December 14 , including reports and developments of civil society participants. Next steps for the international negotiators: Another round at  COP 25 in Chile in November 2019.  In preparation, UN Secretary-General Antonio Guterres will convene a Climate Summit in New York City in September 2019 .

Canadian reaction to COP24:  As characterized by Elizabeth May, leader of Canada’s Green Party – there was a dual agenda at the COP24  meetings: first,  to agree on  the “Paris Rule Book”,  which will govern a shared approach to calculating and reporting on the specific items required under the  Paris Agreement, and secondly, to respond to the urgency and dire warnings of the October IPCC report to hold global warming to 1.5 degrees C.  Recognizing the difficulty of achieving any level of agreement in the politically fraught atmosphere of 2018, reaction in Canada and internationally was generally positive and aimed to put the best light possible on the failure to resolve other points, such as more ambitious GHG reduction targets.

From Canadian sources:COP24 delivers progress, but nations fail to heed warnings of scientists”  (Dec. 15) from the Climate Action Network Canada; “The Hard Work Starts Now as COP Delivers Incomplete Rule Book, Low Ambition”   from the Energy Mix (Dec. 18); “Environmental activists frustrated COP24 deal not strong enough” at CBC ; and from Greenpeace Canada  “COP24 ends without firm promises to raise climate action and ambition.”   More critical comments come in “Trudeau government fails to take bold action at COP24 to avoid climate breakdown” (Dec. 16)  and  “McKenna’s global carbon market plan more charade than genuine climate action”   both  by Brent Patterson in Rabble.ca.  On December 14, CBC broadcast an interview with Elizabeth May , where she asks  “Do we want to survive or not?” , criticizing the focus on bureaucratic process which interfered with addressing the fundamental question of how to reduce emissions.

What did Canada achieve at COP24?:  Canada’s  Minister of Environment and Climate Change pledged to improve Canada’s emission reduction targets on December 5 before she travelled to Katowice, and once there, signed on to the statement of the “High Ambition Coalition” , (along with    the Marshall Islands, Fiji, Ethiopia, EU, Norway, U.K., Germany,  New Zealand and Mexico), pledging to enhance their Nationally Determined Contributions under the Paris Agreement by 2020.

Regarding coal phase-out, the government’s official  statement  was issued on December 13,  highlighting  Canada’s continuing leadership role in the Powering Past Coal Alliance, which was co-founded by Canada and the U.K. in 2017.   On  December 12, Canada made good on its 2016 pledge to phase out traditional coal-fired electricity by 2030 by publishing the final regulations for that effort in the Canada Gazette .

Regarding Just Transition:  Previous WCR posts (Dec. 6  and Dec. 11  ) summarized the many Just Transition publications and events at COP24.  Canada, along with 40 other jurisdictions, was a signatory to the  Solidarity and Just Transition  Silesia Declaration  put forth by host country Poland.  In the Climate Action Network Canada  press release at the conclusion of COP24, Donald Lafleur, Executive Vice-President, Canadian Labour Congress is quoted by Climate Action Network as saying:   “Canada’s trade unions applaud Canada and other parties for signing on to the Solidarity and Just Transition Silesia Declaration. We hope to see a commitment to a just transition that is tied to human rights and helps drive a more ambitious climate action plan designed to keep global warming below 1.5 degrees.”  The Environment and Climate Change Minister joined the Canadian Labour Congress and the Just Transition Centre at the side event,  Unions in Action on Just Transition,  on December 10, yet she did not release the recommendations of the federal Task Force on Just Transition for Canadian Coal Power Workers and Communities .  Personal testimony of Just Transition came  from Roy Milne, a coal miner and the president of United Steelworkers Local 1595 in Wabamun, Alberta, who calls himself part of the first group at the first coal mine to be  phased out in Canada. “Some jobs in new energy industries come with a pay cut of $50K: coal miner” is an interview with Mr. Milne, was broadcast on CBC’s The Current on Dec. 13, in which he states that currently, “a basic operator earns $80,000-$100,000 per year, with additional benefits and a defined pension scheme. An electrician retraining as a renewable energy technician would go from that salary to $45,000-$50,000 per year.”

Other issues: The Minister’s  own Statement at the conclusion of COP24 says that “Canada also played a leading role in laying the groundwork for a global carbon market, to help mobilize the billions of dollars of investments needed to tackle climate change” and “ Canada took part in the Carbon Pricing Leadership Coalition, encouraging all countries around the world to use the most cost-effective tool to reduce emissions.”  The details of that global carbon market remain unspecified.  In another press release,  the government announced that it will support increased participation by Indigenous people in international climate talks, by  providing  $800,000 over four years to to enable the creation of the Indigenous Peoples Focal Point at the United Nations Framework Convention on Climate Change. “The Focal Point will coordinate and lead work on issues related to Indigenous Peoples and climate change, promote awareness of Indigenous perspectives on climate change, and serve as a technical expert and advisor.”

And yet, with all the pledges and announcements, it must be noted that right after COP24, on December 18, the government of Canada announced    a $1.6 billion aid package for Alberta’s oil companies.  The National Observer article summarizes this in “Sohi announces $1.6 billion to help Alberta oil patch”  and quotes Minister Sohi: “ These are commercial loans, made available on commercial terms. We have committed to phasing out inefficient fossil fuel subsidies by 2025, and we stand by that commitment.” However, as stated in a press release from Environmental Defence    “At COP24 in Katowice, Minister of Environment and Climate Change Catherine McKenna announced that Canada would increase the ambition of its targets to cut carbon pollution. Less than two weeks later, her Cabinet colleagues, Minister of Natural Resources Amarjeet Sohi and Minister of International Trade Diversification Jim Carr, are using public money to make Canada’s already-weak targets even harder to achieve.”

 

 

 

COP24 Updates and Week 2: Voices of unions, business, the U.S., and youth

COP24-table of delegatesThe official meetings of the Conference of the Parties (COP 24) in Katowice began optimistically, with  over 40  countries, including Canada,  adopting the host country’s Solidarity and Just Transition  Silesia Declaration . On the same day, December 3,   IndustriALL Global Union and IndustriAll European Trade Union issued a joint declaration demanding a Just Transition for workers  .  The week ended with a diplomatic stand-off on whether delegates would “welcome” or “recognize” the landmark IPCC Scientific report – with four obdurate fossil fuel countries – U.S., Russia,  Saudi Arabia, and Kuwait –refusing  to use the word  “welcome”;  The Energy Mix summarizes those weekend negotiations and why the outcome is important – the Union of Concerned Scientists issued a statement that they are “deeply alarmed” by the U.S. position.    DeSmog UK sums up some of the concerns from Week 1 in  ‘We Cannot Accept an Unjust Energy Transition’: Future of Coal Communities Becomes Crucial Issue at Climate Talks”  .   The good news, according to an ITUC policy officer quoted in the article, is that “never, ever, before had climate negotiators debated so much about the impacts of the energy transition on workers and their communities”.

Away from the official agenda, in all-important side meetings:  on December 6, the Polish trade union Solidarność signed a joint declaration  with the U.S. Heartland Institute, aligning itself with the climate denying group and rejecting climate science.  A series of meetings were co-organized by Trade Unions for Energy Democracy (TUED)  ,  Trade Union Confederation of the Americas (TUCA)Rosa Luxemburg Stiftung-New York Office, the UK’s Public and Commercial Services UnionFriends of the Earth Europetransform! europe. The Agenda of the meetings is here ; discussion focused on the TUED discussion paper  written by  Sean Sweeney and John Treat,   When “Green” Doesn’t “Grow”: Facing Up to the Failures of Profit-Driven Climate Policy,  which is described as  “a discussion paper highlighting the failures of profit-driven climate policy and making the case for an alternative approach that focuses on the public good and meeting basic human needs, and that embraces the struggle for public / social ownership and democratic control over energy resources and use.”   It concludes with the observation that at the moment, everyone is being left behind. “This is not a scenario that unions can accept. Only a coordinated, public-goods approach allows us to escape the contradictions of commodified energy systems that pit some workers against others.”

Week 2, which runs from December 10 to 17th, has seen the arrival of political leaders, including Canada’s Environment and Climate Change Minister Catherine McKenna.  An interview with McKenna on her first day in Katowice appears  in the National Observer,  “McKenna says climate targets could be law in future” .  One of the issues addressed in the interview: a new report from Stand.earth and Environmental Defence, Canada’s Oil and Gas Challenge: A Summary Analysis of Rising Oil and Gas Industry Emissions in Canada and Progress Towards Meeting Climate Targets ,  which  shows how oil and gas emissions in Canada are rising, and documents examples of how oil and gas companies have influenced  Canada’s climate policies. It calls for phasing out subsidies to the oil and gas sector on an accelerated timeline, and extending just transition policies , especially to oil and gas workers. McKenna did not commit to any such new policies.

In its only official event, the  U.S. Administration attempted to lead a session on December 10,  called “US innovative technologies spur economic dynamism”, which promotes “ clean coal”.  As reported by Common Dreams  and DeSmog UK , protesters – mostly young people – disrupted the meeting  with laughter and speeches before they walked out.  Think Progress summarizes the event and the U.S. presence at COP24 in “Anger, protests greet U.S. fossil fuels side event at U.N. climate talks”.  In contrast to the positions of the U.S. Administration, We are Still In  , the coalition of U.S. state and local governments and organizations, is presenting a full slate of presentations and panels supporting the Paris Agreement – their agenda is here .  Included under this umbrella are the positions of the U.S. business community, including the We Mean Business coalition .  Their  blog, “Why we need a Just Transition to a Low Carbon World” summarizes their report, released at COP24:  Climate and the Just Transition: The Business Case for Action   .

From an international business view,  Climate Change and the  Just Transition: An  Investor  Guide was released on December 10   by the Grantham Research Institute on Climate Change and the Environment at the London School of Economics, in partnership with the the Initiative for Responsible Investment at the Harvard Kennedy School.    The International Trade Union Confederation is also listed as a partner in this publication.  The Guide endorses the need for Just Transition and illustrates a review of academic research and reveals the viewpoints of the financial community on the value of Just Transition. The release of the report coincides with the release of a Global Investor Statement  by some of the world’s largest pension funds, asset managers and insurance companies, which calls for governments to phase out thermal coal power, put a meaningful price on carbon, and phase out fossil fuel subsidies. It’s significance is described  in The Guardian article, “Largest ever group of global investors call for more action to meet Paris targets”   .  The Investor Group Briefing Paper  includes an endorsement of the Powering past Coal Alliance, and states: “Investors encourage governments to transition to a low carbon economy in a sustainable and economically inclusive way. As stated in the Paris Agreement, this must include “the creation of decent work and quality jobs in accordance with nationally defined development priorities”, by providing appropriate support for workers and communities in industries undergoing transition . Additionally, governments should work with investors to ensure that the benefits and opportunities created by acting on climate change and the increased adoption of clean energy technologies are accessible to all”.

For COP24 News  from a trade union perspective , read a blog by Philip Pearson appear in “Breaking News” at the Greener Jobs Alliance website or the  COP24 Blog by IndustriALL  .

And for another view of the “unofficial” side of COP24, check Democracy Now, which is reporting from Katowice.   “Thousands Protest at U.N. Climate Summit in Coal-Heavy Poland, Facing Riot Police & Intimidation ”   was posted on December 10,  and Amy Goodman interviewed Swedish teenager and “climate hero” Greta Thunberg  on December 11.  December 8 was officially dedicated to Youth voices , with Greta being the most publicized, but certainly not alone.  Last words to Greta and the  young people she represents:   “… we have not come here to beg the world leaders to care for our future,” …. They have ignored us in the past and they will ignore us again. We have come here to let them know that change is coming whether they like it or not. The people will rise to the challenge.”  And from video of a speech posted by the UNFCC , she states: “The first thing I have learned is that you’re never too small to make a difference.”greta speech cop24

Fossil fuel subsidies, plastics pollution, circular economy are key topics at the G7 Energy and Environment meetings

Following the G7  meetings at Charlevoix Quebec in June 2018, further meetings in Halifax from September 19 to 21 brought together the G7 ministers with responsibilities for Environment, Oceans and Energy.  The International Institute (IISD) published a comprehensive summary of the meetings  on September 25, with links to the official Chair’s Summary statements.  The National Observer was one of only a handful of media outlets which reported on these meetings.  Their report of September 25,  “Unscrambling the language of Canada’s G7 Climate Diplomacy”   is a plain language overview of what happened.  Environment and Climate Change Canada, as host of the meetings, also published press releases highlighting Canada’s commitments:  the press release of  September 19, titled “G7 environment meetings in Halifax focus on climate action, and the $26 trillion opportunity of clean growth and tackling air pollution”  announced a Canadian pledge of  $2 million for the National Adaptation Plan Global Network, to further climate change adaptation in  developing countries and $2 million for a new initiative to empower women entrepreneurs working on climate solutions in the developing world.  More broadly, Environment ministers discussed the  implementation guidelines for the Paris Agreement on climate change – the Paris Rulebook –  in an attempt to move that forward before the scheduled deadline of the UNFCCC  Conference of the Parties (COP 24) in Katowice, Poland, in December 2018.

On September 20, the Canadian government’s press release states : the Government of Canada committed to diverting at least 75 per cent of the plastic waste from government operations by 2030. It will achieve this by eliminating the use of unnecessary single-use plastics, increasing recycling rates, and leveraging its purchasing decisions to focus on sustainable plastic products. The Government of Canada also announced a $65 million investment through the World Bank for an international fund to address plastic waste in developing countries. ”

A contentious issue was fossil fuel subsidies. An earlier report by the National Observer , “G7 promise to kill fossil fuel subsidies hangs over Halifax meetings” (September 20)  , highlights the topic, which has been a perennial but never-resolved issue since the G20 first agreed to phase them out in 2009.  In 2016, the G7 first set a deadline for ending fossil fuel subsidies by 2025  ; Energy ministers at the 2018 Halifax meetings reaffirmed that commitment.

public-cash-oil-gas-en-1Despite the G7 commitment, “Canada is still the largest provider of subsidies to oil and gas production in the G7 per unit of GDP”, according to the newest report by the International Institute for Sustainable Development (IISD), which has published extensively on the issue.   Fossil Fuel Subsidies in Canada: ‘Public Cash for Oil and Gas: Mapping federal fiscal support for fossil fuels , a September 2018  report was published by  the International Institute for Sustainable Development (IISD), in collaboration with Oil Change International, Equiterre, Environmental Defence, and the Climate Action Network.  It also states that overall fossil fuel subsidies declined in Canada in 2016-2018 over 2015, but it  attributes this to the impact of oil price fluctuations on the value of deductions, and how companies use tax deductions,  rather than any substantive policy reform.  In a concluding discussion , the report states that the oil and gas sector will inevitably follow the economic path of the coal industry, and thus, “it is imperative that those in these declining energy sectors are part of the planning” for a Just Transition. Removing subsidies for the sector,  could create enough “fiscal space” to fund a just transition for workers and communities.

Green Budget cover 2019The Green Budget Coalition also weighed in recently on fossil fuel subsidies in its  Recommendations for Budget 2019 ,  which includes a discussion of the history of fossil fuel subsidies in Canada, a rationale for their phase-out, and calls for the government:  to provide a transparent accounting of what subsidies are in place to the Parliamentary Budget Office; not to introduce new subsidies; and to legislate a timeline for the phase-out of remaining deductions for fossil fuel exploration and production, and for direct subsidies.

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 .