Covid recovery clouds World Energy Outlook, but IEA calls for unprecedented changes to avoid lock-in to 1.65 degree temperatures

The IEA World Energy Outlook 2020 , the flagship publication of the International Energy Agency, was released on October 12, stating, “The Covid-19 pandemic has caused more disruption to the energy sector than any other event in recent history, leaving impacts that will be felt for years to come.” The report is a comprehensive discussion and  analysis of those impacts, and attempts to model the crucial next  10 years of recovery. Modelling is provided for all energy sources – fossil fuels, renewables, nuclear –  under four different scenarios, including a longer-than-expected Covid recovery and a Sustainable Development Scenario. Key highlights:

Solar is “king”: In 2020,  global energy demand is forecast to fall by 5% overall:  8% in oil, 7% in coal and 3% in natural gas demand. Under the heading “Solar becomes the new King of electricity” , the report states: “Renewables grow rapidly in all our scenarios, with solar at the centre of this new constellation of electricity generation technologies. Supportive policies and maturing technologies are enabling very cheap access to capital in leading markets. With sharp cost reductions over the past decade, solar PV is consistently cheaper than new coal- or gasfired power plants in most countries, and solar projects now offer some of the lowest cost electricity ever seen.”  

Questionable future for new Liquified Natural Gas projects: For natural gas, “different policy contexts produce strong variations”. For the first time, the business as usual scenario for advanced economies shows a slight decline in gas demand by 2040. And “An uncertain economic recovery also raises questions about the future prospects of the record amount of new liquefied natural gas export facilities approved in 2019.”  In certain scenarios, “the challenge for the gas industry is to retool itself for a different energy future. This can come via demonstrable progress with methane abatement, via alternative gases such as biomethane and low-carbon hydrogen, and technologies like carbon capture, utilisation and storage (CCUS).”

Peak oil within sight despite growing importance of plastics manufacturing: The era of growth in global oil demand comes to an end within ten years, but the shape of the economic recovery is a key uncertainty. The report notes “The longer the  (Covid) disruption, the more some changes that eat into oil consumption become engrained, such as working from home or avoiding air travel. However, not all the shifts in consumer behaviour disadvantage oil. It benefits from a near-term aversion to public transport, the continued popularity of SUVs and the delayed replacement of older, inefficient vehicles.”  The analysis also considers the impact of plastics manufacturing on oil demand.

Inequities will persist or be made worse.  “Reversing several years of progress, our analysis shows that the number of people without access to electricity in sub-Saharan Africa is set to rise in 2020. Around 580 million people in sub-Saharan Africa lacked access to electricity in 2019….and in addition, “a rise in poverty levels worldwide in 2020 may have made basic electricity services unaffordable for more than 100 million people who already had electricity connections”.

Structural change, not Covid, will bring lasting CO2 emissions decline: The economic downturn related to Covid has brought a temporary decline of 2.4 gigatonnes in annual CO2 emissions, although an accompanying decline in methane emissions is not clear.  And emissions are expected to rebound. “The pandemic and its aftermath can suppress emissions, but low economic growth is not a low-emissions strategy. Only an acceleration in structural changes to the way the world produces and consumes energy can break the emissions trend for good.”….  “ if today’s energy infrastructure continues to operate as it has in the past, it would lock in by itself a temperature rise of 1.65 °C.”

Finally, the report concludes by advocating a future path built on its Sustainable Development Scenario  , calling for “unprecedented” actions, not just from government and business, but from individuals.

“Reaching net zero globally by 2050…. would demand a set of dramatic additional actions over the next ten years. Bringing about a 40% reduction in emissions by 2030 requires, for example, that low-emissions sources provide nearly 75% of global electricity generation in 2030 (up from less than 40% in 2019), and that more than 50% of passenger cars sold worldwide in 2030 are electric (from 2.5% in 2019). Electrification, massive efficiency gains and behavioural changes all play roles, as does accelerated innovation across a wide range of technologies from hydrogen electrolysers to small modular nuclear reactors. No part of the energy economy can lag behind, as it is unlikely that any other part would be able to move at an even faster rate to make up the difference.

To reach net-zero emissions, governments, energy companies, investors and citizens all need to be on board – and will all have unprecedented contributions to make. The changes that deliver the emissions reduction in the SDS are far greater than many realise and need to happen at a time when the world is trying to recover from Covid-19.”

The full World Energy Outlook 2020 is only available for purchase. An overview, FAQ’s, and related reports including modelling details and a methane tracker are all available here .

“Historic” investments in electric vehicles for Canada: Unifor and Ford, Fiat Chrysler agreements (updated)

In a September 28 press release, the Canadian union for auto workers, Unifor, reports that members at the Ford Motor Company voted 81% overall in favour of new three year collective agreements “that include $1.95 billion in investments to bring battery electric vehicle (BEV) production to Oakville and a new engine derivative to Windsor, along with other significant gains…. ….. This agreement is perfect timing and positions our members at the forefront of the electric vehicle transformation, as the Oakville plant will be a key BEV supplier to the North American and European Union markets”. Under the heading, “Making History in Challenging Times”, the Ford Bargaining Report Summary  reports that the retooling is scheduled to begin in 2024, with the first BEV vehicles forecasted to roll off the assembly line in 2026, “and hopefully sooner.” Also, “Through this conversion, Oakville will become the first mass production BEV plant in Canada – and one of only a few currently in North America. Ford’s investment is also the biggest single facility investment in the auto sector since 2015 in Canada.”

The Bargaining Summary highlights changes in wages, pensions, and all topics, including that the company and union agreed on the advantages of having a union Workplace Environmental Representative, and that additional training will be offered to the workplace environmental representatives “related to Global Plant Action”. Unifor and Ford also agreed to develop an Anti-Racism Action Plan, and to establish a new Racial Justice Advocate position which will offer support to those who face anti-Black and anti-Indigenous discrimination.  

Media coverage of the agreement appeared in the Toronto Star on September 20, pointing out that the federal and provincial governments will also contribute to the re-tooling of the Oakville plant.  On September 22, the Star also published “Justin Trudeau’s Liberals are betting that electric vehicles can recharge the economy. But a vision is not a plan” , summarizing some of the policy context of the decisions. And beyond the benefit to the auto manufacturing sector, on September 17,  Canada’s Minister of Natural Resources was making the case that “Mining gives Canada a competitive advantage in electric vehicle market” arguing that “we are the only nation in the western hemisphere with an abundance of cobalt, graphite, lithium and nickel, the minerals needed to make next-generation electric batteries.”

$1.5 billion investment for EV production in Fiat Chrysler agreement

Following the agreement with Ford Canada, Unifor announced the ratification of 3-year contract with Fiat Chrysler (October 19 press release), including a $1.5 billion commitment to electric vehicle production at the Windsor Ontario plant. Jerry Dias states: “This year’s Auto Talks will go down in history as a transformational moment for the Canadian auto sector. Years of government neglect, job loss and worker despair is quickly turning to optimism, hope and a very bright future.” He repeated this message in an October 20 OpEd in the Toronto StarA new green auto strategy for Canada

The Unifor summary document includes all the agreement provisions, and includes the full text of the Product and Investment Commitment Letter, describing the plans for Windsor:

“In addition to the continued production of the current Pacifica and Voyager/Grand Caravan products, including the PHEV, AWD and ICE models, FCA confirms the intention to install a new multi-energy vehicle architecture (including Plug-In Hybrid Electric (PHEV) and/or Battery Electric (BEV) capability) and at least one new model on that architecture, contingent on the necessary agreements in partnership with the Company, the Union, and both Federal and Provincial governments which includes the implementation of this collective agreement and government financial support for the associated investments. With that joint commitment, the Company’s intention is to add the necessary assembly tooling and equipment to manufacture electrified vehicles for future models, currently planned from the 2025 model year. The total impact of this investment and product plan is estimated at 5,700 secured or new jobs by 2024 returning to a 3 shift operation. Potential workforce increase of 2,000 employees over today’s active on-roll employment. Investment related to Windsor Assembly: CDN $1.35B to $1.50B.”

In addition to the headline-grabbing investment commitment for new Electric Vehicle production, the agreement also enhances training for Workplace Environmental Representatives, and increases the frequency of the existing union-management business review meetings. “The parties agree to review company product plans and business forecasts, including on electric, autonomous, connected vehicle and component parts development.”

Labour’s perspective on electric vehicles

Unifor’s Road Map for a Fair, Inclusive and Resilient Economic Recovery, published in   the summer, states: “The government must also take the lead in supporting zero-emission vehicle manufacturing and preparing the economy for electrified transportation through targeted subsidies and investment in battery technology innovation. A long-overdue National Auto Strategy, for instance, would help merge Canada’s innovation agenda, trade policy, skills training and infrastructure development to foster a modern supply chain for EV components and parts, leading to final assembly. This need not only apply to light duty, passenger vehicles but other modes of surface transportation, including mass transit, commercial trucking and logistics, student transportation, taxis and light rail. Once in place, such a strategy could serve as a rubric for all transportation sectors and industries.” 

These points are also made by Angelo DiCaro, Research Director for Unifor,  in an essay titled “Canada’s auto sector revival will take more than wishful thinking. We need a plan”, featured in the August/September issue of The Monitor, and at the Canadian Centre for Policy Alternatives website.  DiCaro reiterates the call for a national auto strategy, and sketches out key steps for a national Electric Vehicle strategy, starting with Step 1, a “comprehensive mapping of existing capacities and materials needed to forge a complete supply chain for EVs and component parts in Canada”, followed by setting domestic production targets for vehicle assembly and component manufacturing.

Union workers are strong allies for electric vehicles, as Canada’s Unifor demonstrates appeared in the industry newsletter Electrek in June 2020, quoting favourable statements re EV manufacturing from both Unifor and the United Auto Workers(UAW) in the U.S. The UAW published their report, Taking the High Road: Strategies for a fair EV Future in January, making specific policy recommendations, and stating: “The UAW rejects the idea promoted by climate change deniers that fuel efficiency and environmental regulations lead to closed plants and lost jobs. Fuel-efficient vehicles, clean energy, clean manufacturing, renewable energy and other advanced technologies are an opportunity to create new middle-class jobs with good pay, good benefits, and economic security.”

More recently,  the American Center for Progress released  “Electric Vehicles Should Be a Win for American Workers” on Sept. 23 . It concludes: “Federal funding to incentivize consumer demand, drive manufacturer investments, and build out electric vehicle infrastructure should be made contingent on key job quality and domestic content standards. In structuring funding, policymakers must be realistic about present EV capacity while also ensuring that taxpayer dollars do not subsidize low-road employers or erode job quality standards in the broader industry. By designing federal policies that encourage both rapid vehicle electrification and the creation of high-quality, good-paying domestic jobs throughout the EV ecosystem, policymakers can satisfy the priorities of climate and labor advocates and ensure economic prosperity for future generations. In a period of significant economic and environmental challenges, the transition to EVs presents a powerful and positive opportunity to improve conditions for both American workers and the climate.”

Electric vehicle policy in Canada

In response to the news of the Unifor/Ford agreement, Clean Energy Canada published a Media Brief: “What is a zero emission vehicle standard and why does Canada need one?” . It notes research from the International Council on Clean Transportation that found that Canada is the 12th largest vehicle producer in the world but  is responsible for only 0.4% of global EV production. Assessing that Canada has a EV supply problem,  Clean Energy Canada recommends a ZEV standard as the solution, rather than a voluntary standard or consumer incentives.  “A ZEV standard is a supply-focused policy that requires a gradually rising percentage of vehicles sold by auto manufacturers to be zero-emission (i.e. battery-electric, plug-in hybrid or hydrogen fuel cell vehicles). While purchase incentives help drive demand, ZEV standards secure supply.”  Currently, only British Columbia and Quebec have ZEV standards in place – with B.C. having passed the Zero Emissions Vehicle Act  in May 2019, requiring automakers to meet increasing annual levels of EV sales reaching 10% of new light-duty vehicle sales by 2025, 30% by 2030 and 100% by 2040.  On July 30, B.C. followed up with new ZEV regulations under the Act which set phased-in annual targets and other compliance requirements, as well as a ZEV advisory council to be comprised of industry, ENGOs, local governments, First Nations, infrastructure providers and academics, to provide input into the ministry’s EV programming and policies .  

The Clean Energy Media Brief links to many supporting documents, including a recent academic discussion, “Which plug-in electric vehicle policies are best? A multi-criteria evaluation framework applied to Canada”  which appeared in the June 2020 issue of Energy Research and Social Science.  

Canada’s Speech from the Throne sketches out its plans for Covid recovery in pale green

The Liberal government opened the new session of Parliament on September 23 with a Speech from the Throne titled A Stronger and More Resilient Canada.  Acknowledging the perilous moment of history in which it was delivered, Catherine Abreu of Climate Action Network Canada states: “Today the Government of Canada delivered the most progressive speech from the throne heard in a generation. The promises made acknowledged the inequalities and vulnerabilities that have been laid bare by the COVID-19 pandemic and spoke to the scale of action needed to confront them. Of course, we’ve heard similar promises before from this government. It is the policy and investment decisions made in the coming months that will determine whether the spirit articulated in this historic speech is turned into meaningful action.”

Stating that “this is not the time for austerity”, the Speech emphasizes measures to deal with the impact of Covid-19.  General summaries by the CBC here and the Toronto Star are here;  Trish Hennessy of the Canadian Centre for Policy Alternatives summarizes and critiques the speech with a focus on inequality, the workplace, and health care.  The Canadian Union of Public Employees response appears in  “Promises are good Proof is better”. The Canadian Labour Congress reaction  is supportive of the Speech and highlights provisions of greatest impact to workers, including the government’s promise to create one million jobs through  “direct investments in the social sector and infrastructure, immediate training to quickly skill up workers, and incentives for employers to hire and retain workers.”  Other key promises: the Canada Emergency Wage Subsidy will be extended through to summer 2021; modernization of the Employment Insurance system will address the growth of the self-employed and gig workers; and yet again, “significant, long-term, sustained investment to create a Canada-wide early learning and childcare system “.

From the Speech from the Throne:  The section titled, Taking action on extreme risks from climate change” :

“….Climate action will be a cornerstone of our plan to support and create a million jobs across the country….. The Government will immediately bring forward a plan to exceed Canada’s 2030 climate goal. The Government will also legislate Canada’s goal of net-zero emissions by 2050.

As part of its plan, the Government will:

Create thousands of jobs retrofitting homes and buildings, cutting energy costs for Canadian families and businesses;

Invest in reducing the impact of climate-related disasters, like floods and wildfires, to make communities safer and more resilient;

Help deliver more transit and active transit options;

And make zero-emissions vehicles more affordable while investing in more charging stations across the country.

The Government will launch a new fund to attract investments in making zero-emissions products and cut the corporate tax rate in half for these companies to create jobs and make Canada a world leader in clean technology. The Government will ensure Canada is the most competitive jurisdiction in the world for clean technology companies.

Additionally, the Government will:

Transform how we power our economy and communities by moving forward with the Clean Power Fund, including with projects like the Atlantic Loop that will connect surplus clean power to regions transitioning away from coal;

And support investments in renewable energy and next-generation clean energy and technology solutions.

Canada cannot reach net zero without the know-how of the energy sector, and the innovative ideas of all Canadians, including people in places like British Columbia, Alberta, Saskatchewan, and Newfoundland and Labrador.

The Government will:

Support manufacturing, natural resource, and energy sectors as they work to transform to meet a net zero future, creating good-paying and long-lasting jobs;

And recognize farmers, foresters, and ranchers as key partners in the fight against climate change, supporting their efforts to reduce emissions and build resilience.

The Government will continue its policy of putting a price on pollution, while putting that money back in the pockets of Canadians. It cannot be free to pollute.

This pandemic has reminded Canadians of the importance of nature. The Government will work with municipalities as part of a new commitment to expand urban parks, so that everyone has access to green space. This will be done while protecting a quarter of Canada’s land and a quarter of Canada’s oceans in five years, and using nature-based solutions to fight climate change, including by planting two billion trees.

The Government will ban harmful single-use plastics next year and ensure more plastic is recycled. And the Government will also modernize the Canadian Environmental Protection Act.

When the Prairie Farm Rehabilitation Administration was closed by a previous government, Canada lost an important tool to manage its waters. The Government will create a new Canada Water Agency to keep our water safe, clean, and well-managed. The Government will also identify opportunities to build more resilient water and irrigation infrastructure.

At the same time, the Government will look at continuing to grow Canada’s ocean economy to create opportunities for fishers and coastal communities, while advancing reconciliation and conservation objectives. Investing in the Blue Economy will help Canada prosper.”

Reaction to climate change provisions:

From The Tyee ,“What’s in This Throne Speech Stew? Straight from the pandemic cookbook, it’s light on green garnishes. No election on the menu.”  Reporters at The National Observer agree in “Liberal throne speech targets COVID-19 over climate” (Sept. 23), stating: “Though the Trudeau Liberals promised an “ambitious green agenda” ahead of the throne speech, the vision for the coming months unveiled Wednesday focused more on COVID-19 and its economic fallout.”  Their compilation of reaction from green groups echoes the cautious optimism in a Greenpeace Canada statement  and from West Coast Environmental Law  – which commends “promising signals” but asks “how the climate goals set out in the Throne Speech tally with the federal government’s continued support for climate-destructive projects such as the Trans Mountain pipeline and tankers project.”

In the lead up to the Throne Speech, many green groups had lobbied with their specific proposals : a few examples include an Open Letter to Ministers coordinated by the Climate Action Network; the One Earth One Voice campaign;  and the Draft Throne Speech offered by Greenpeace Canada.

The National Observer highlighted the proposals of the Smart Prosperity Institute in an  Opinion Piece by Mike Moffatt and John McNally ,  “ Want a green, inclusive recovery? You can’t rush that” (Sept. 24).  They condense the arguments from an earlier blog post, ” Making a green recovery inclusive for all Canadians which lays out specific green recovery proposals but warns that a “full recovery” cannot begin until Covid-19 has been brought under control: “The risks of infection from bringing people together, potentially leading to future lockdowns, are too great.”

Recommendations and research from Scotland’s Just Transition Commission

The Just Transition Commission in Scotland released an Interim Report in February 2020, and has continued to provide research as it works towards its Final Report and recommendations for a green and fair transition.  In August, the Commission released Just Transition: Comparative Perspectives, which provides both theoretical discussion and case studies of JT experiences in  Canada, Germany, Peru ,Norway and the U.S.. In a section on Lessons Learned, the report states that the experiences of Norway’s oil and gas industry, and of Peru, are the most relevant to the Scottish situation.  

In July, the Just Transition Commission released its Advice for a Green Recovery from Covid-19. Subsequently, Government’s measures were announced in early September, in Protecting Scotland, Renewing Scotland: the Government’s Programme for Scotland 2020-2021.  The government’s press release highlights “nearly £1.6 billion to directly support up to 5,000 jobs and tackle fuel poverty”. Specific commitments include £100 million for a Green Job Fund; £60 million to help industrial and manufacturing sectors decarbonise, grow and diversify; boosting youth employment opportunities in nature and land-based jobs by expanding apprenticeship and undergraduate schemes in public agencies”….; and  £70 million to improve refuse collection infrastructure , improve recycling, and achieve a circular economy. The plan received lukewarm reaction from Friends of the Earth Scotland.

Green skills training for recovery

Many green recovery proposals have recognized the importance of energy efficiency and retrofitting. Below, some examples from voices within the Canadian building sector itself, focusing on green skills training:

Workforce 2030 is a practical initiative launched in Toronto on July 23 –  a cross-sectoral coalition of employers, educators, and workers in Ontario’s  building sector, coordinated by by The Atmospheric Fund (TAF) and Canada Green Building Council (CaGBC).  John Cartwright, President of Toronto and York Region Labour Council, and a member of the 14-person Advisory Council states:  “Workforce 2030 is a collaboration that will increase the capacity of the skilled trades to meet the low-carbon standards required in the built form of tomorrow. We need to continuously improve low-carbon skills for the entire sector, deepen our commitment to high-quality training, and grow our workforce through equity and inclusion.”  The Statement of Principles outlines values of collaboration, accountability, and equity.  More details are here.  

Canada’s Green Building Council published Ready, Set, Grow: How the green building industry can re-ignite Canada’s economy in May 2020.  Some of its proposals are endorsed in Efficiency Canada’s Pre-budget submission to the Government of Canada (August 5)  – specifically, a call to allocate $500 million ($1000 per employee) to access existing training programs, and a further investment of $1 billion to attract and train new people to create energy efficient and green building careers. The pre-Budget submission states:  “The multiple benefits of energy efficiency can help Canada manage both demand and supply shocks from COVID-19 while improving the operation of our buildings to reduce virus transmission.”   Its recommendations also include $1.5 billion in government funding to expand green building workforce training.  

In September, Efficiency Canada released Tiered Energy Codes: Best Practices for Code Compliance , which “explores the evolution of energy codes, reviews compliance regimes, and provides high-level recommendations to assist in the compliant expansion of advanced tiered energy codes nationwide.” As the paper explains, codes and practices vary widely across jurisdictions in Canada. The report points to the British Columbia Step Code, B.C. Hydro projects, and Toronto Ontario as best practice models. Regarding training, it focuses on  the training needs of builders and  building inspectors, rather than on the skilled trades.

The Pembina Institute published recommendations for British Columbia, in Accelerating B.C.’s economic recovery through building retrofits Submission to the Government of British Columbia (July 28). One of its Guiding Principles is : “Build the workforce: Partner with public and private organizations to deliver subsidized training programs, develop design guides, conduct integrated design sessions (charrettes), create data tools (e.g. remote energy audits), etc. Provide retraining support for impacted economic sectors to join the retrofit economy workforce.”

Much more detail is provided by Pembina in Training up for deep retrofits (July), which enumerates what green skills are needed, how governments can help, and where existing training opportunities are currently available in Canada.  The Pembina Institute is one of the partners in the Reframed Initiative, which works with designers, builders, owners, financiers, and policy-makers to scale up deep retrofits.

The  Toronto Atmospheric Fund, partner in Workforce 2030, submitted a formal Presentation to the federal Pre-Budget Consultations, calling for the federal government to invest at least $50 billion over five years in climate-focused clean stimulus measures, including at least $27 billion in climate resilient and energy efficient buildings, with at least $2 billion over 5 years to support deep retrofits that maximize carbon reduction and community benefits.

On July 22,  the Task Force for a Resilient Recovery released  its Interim Report ,  costing out five key policy directions for the next five years, with a total price tag of just under $50 billion.  The Task Force lists key actions and actors to achieve five broad goals:  “Invest in climate resilient and energy efficient buildings; Jumpstart Canada’s production and adoption of zero-emission vehicles; Go big on growing Canada’s clean energy sectors; Invest in the nature that protects and sustains us; Grow clean competitiveness and jobs across the Canadian economy .  As part of #1, investment in climate resilient and energy efficient buildings, the Task Force calls for “investing $1.25 billion in workforce development for energy efficiency and climate resiliency, including for enhancing access to training programs and for developing new approaches.”  The Task Force Final Report is scheduled for release on September 16 at their website .

Seven renewable energy co-ops send a 9-page Letter to federal ministers on June 24 , titled  “Federal Post COVID 19 Recovery Stimulus to Unlock Community Investment in Clean Energy”.  While their suggestions focused on clean community power , they also called for incentive grants of $100 million over 5 years for community- financed mass, deep retrofits of community, institutional, and multi-residential buildings.  Participating co-ops include the Ottawa Renewable Energy Co-op (OREC)/CoEnergy, SES Solar Co-operative Ltd. in Saskatoon, Bow Valley Green Energy Cooperative in Calgary area, Colchester-Cumberland Wind Field Inc. in Tatamagouche, Nova Scotia, the Solar Power Investment Co-operative of Edmonton, Wascana Solar Co-op in Regina, and SolarShare in Toronto.