Federal government about to release its proposals for promised national carbon pricing system as California debates radical changes to its cap-and-trade program

In advance of a consultation paper by the federal government, expected to be released in the week of May 15, the Pembina Institute released a Backgrounder report , Putting a price on carbon pollution across Canada . The Pembina report  outlines the current federal and provincial carbon pricing policies in Canada, and makes recommendations for the national benchmark plan promised by 2018. Recommendations  include that any benchmark should at least  provide guidance on treatment of Export Import Trade Exposed sectors and be designed to minimize carbon leakage and competitiveness impacts; and stipulate that cap-and-trade systems must have a cap decline rate in line with a 30% reduction below 2005 levels by 2030. Pembina places emphasis on the need for a 2020 carbon pricing review, as well as frequent carbon pricing and climate policy reviews to ensure that Canada meets its obligations under the Paris Agreement.

A briefer paper on carbon pricing, also released in May, also summarizes the existing provincial carbon pricing plans – but from a right-wing point of view. From the Fraser Institute:   Poor Implementation undermines Carbon Tax efficiency in Canada  .

Also on the topic of carbon pricing, Pembina posted a blog  on May 11 “Time for Premier Brad Wall to focus on carbon price implementation” , in which Nathalie Chalifour, a Professor of Law at University of Ottawa, explains her opinion that the federal government is within its constitutional authority to impose a carbon pricing mechanism on the provinces, despite Saskatchewan Premier Brad Wall`s recently stated opinion to the contrary.

Meanwhile, as reported in the National Observer (May 4) , “California tables new cap-and-trade plan that jumps ahead of Quebec and Ontario” . Quebec and California  have a linked carbon credit market that expires at the end of 2020, and Ontario`s cap and trade plan is schedule to link to the California−Quebec system in 2018.  Continued partnership with California  will demand that those provinces raise their minimum price per tonne of carbon and abolish offsets, among other changes outlined in the  bill currently before the California state Senate . For a full discussion of the proposed legislation, read “California is about to revolutionize climate policy … again” (May 3) in Vox.  Author David Roberts states: ” The changes that SB 775 proposes for the state’s carbon trading program are dramatic — and, to my eyes, amazingly thoughtful. I know some environmental groups have reservations (on which more later), but in my opinion, if it passes in anything close to its current form, it will represent the most important advance in carbon-pricing policy in the US in a decade. Maybe ever.”

Ontario’s Climate Action Plan: beyond job creation to job quality for building trades workers

solar-panel-house_4A report released on April 19th aims to contribute to a strong, future-proofed green jobs strategy for Ontario.  Building An Ontario Green Job Strategy: Ensuring the Climate Change Action Plan creates good Jobs where they are needed most  focuses on the building sector provisions within Ontario’s Climate Change Action Plan (June 2016)  – which are estimated at 28 – 31% of the budget allocations of the Action Plan.

Building an Ontario Green Job Strategy states:  “Ontario’s investment of C$1.91 billion to $2.73 billion in retooling buildings, as outlined in the Climate Change Action Plan of 2016 , could create between 24,500 to 32,900 green jobs over the five-year funding plan with a further 16,800 to 24,000 jobs created from the reinvestments of energy cost savings into the economy.”  Job creation forecasts were calculated using  three  job multipliers, including that from the 2012 report by Heidi Garrett-Peltier, Analysis of Job Creation and Energy Costs Savings , published  by the Institute for Market Transformation and the Political Economy Research Institute at University of Massachusetts.

Beyond the evidence of the job creation potential of energy efficiency investments, the report also makes significant recommendations to ensure job quality.  Amongst the recommendations for the provincial government: Conduct a high-carbon jobs census and low-carbon skills survey so that workforce planning will work from an accurate base; make use of existing training programs and facilities; push for rigorous standards (specifically, run a pilot project of a Canadian Building Performance Institute, modelled after the U.S. BPI, to oversee credentialling and certification for trades), and consider an Energy Efficiency Portfolio Standard; investigate support for domestic industries (avoiding any WTO sanctions by following  a Sustainable Energy Trade Agreement model); work to implement carbon border adjustments to avoid carbon leakage ; and design programs to stand the test of time and changes to the governing party.

Building an Ontario Green Job Strategy recognizes that the Ontario Climate Change Action Plan included language about Just Transition, but it recommends strengthening and clarifying that language.  It also holds up two models for  tendering and procurement processes:  Community Benefits Agreements (CBA), which ensure that infrastructure investments result in social and economic benefits to the community and citizens of the  immediate neighbourhood –  with a case study of the Eglinton Crosstown LRT project in Toronto,  and High Road Agreements,  where contractors are assessed against an established set of sustainable contracting standards and community benefits- with a  case study of a  Portland Oregon retrofit project.

The report was written by Glave Communications for the Clean Economy Alliance , Environmental Defence, and Blue Green Canada , “with the participation of the United Steelworkers, UNIFOR, Clean Energy Canada, the Toronto Atmospheric Fund, the Toronto and York Region Labour Council, the Labour Education Centre, the Columbia Institute, Canadian Solar Industries Association, Ontario Sustainability, the Registered Nurses Association of Ontario, and Evergreen.”

 

Ontario investing in transit, vehicle R & D

GO transit stationOn March 31, the Government of Ontario announced  that it will invest  $13.5 billion in the GO Regional Express Rail  project – expanding the existing GO commuter rail system in the Toronto-Hamilton area by building 12 new stations and  increasing  the frequency of service. This expansion will also include  creating a “transportation hub” at  the western terminus of the Toronto subway, according to a subsequent announcement on April 3 .  The goal is to increase the number of weekly trips across the GO train network from 1,500 today to roughly 6,000 by 2025.   The federal government will also contribute more than $1.8 billion to the GO Transit Regional Express rail project, using  funds from the Harper-era  New Building Canada Fund – Provincial-Territorial Infrastructure Component.   A further $200 million has been committed to 312 projects across Ontario through the Public Transit Infrastructure Fund  . Click here  for a list of Ontario projects. Click here for the corporate explanation of the Regional Express Rail project.

Newmarket – a bedroom community of the Toronto area – announced  on March 27 that it will be part of  the Pan-Ontario Electric Bus Demonstration and Integration Trial, joining another GTA suburb, Brampton, already enrolled.  Newmarket will purchase six electric powered heavy-duty transit buses – four  from New Flyer Industries of Winnipeg, Manitoba and two more from Nova Bus, of St. Eustache, Quebec. Overhead-charging stations will be designed and manufactured by Siemens and ABBGroup. The local utility,  Newmarket-TayPower Distribution Limited, will  purchase and operate an on-route charging station.  The initiative is the result of a partnership between the municipality, the utility, and the Canadian Urban Transit Research and Innovation Consortium (CUTRIC)  , incorporated in August 2014 to support industry-academic collaborations to develop next generation technologies for Canadian transit and transportation systems.

In another press release , the government of Ontario announced a joint partnership with the federal government and Ford Motor Company of Canada, providing Ford with a conditional grant of up to $102.4 million to establish an advanced manufacturing program at its Windsor plant. According to the press release, “the investment will create 300 new jobs at Ford operations in Ontario and protect hundreds more.”  Ford will also establish a Research and Engineering Centre in Ottawa, employing engineers and scientists  to focus on infotainment, in-vehicle modems, gateway modules, driver-assist features and autonomous vehicles.

Reaction from Canada, California as Trump attacks Obama fuel emissions standards

solar-power-1020194_1920The rest of the world is driving towards new technologies, but U.S. state governments are rolling back EV incentives   and  on March 15,  Donald Trump took the U.S. a further  step away from reducing  transportation emissions.  Following pressure from U.S. auto companies, and in the name of creating American jobs and reviving American manufacturing,  the White House announced that the EPA and the National Highway Traffic Safety Administration (NHTSA) will re-open the evaluation of the  Corporate Average Fuel Economy (CAFE) and greenhouse gas emissions (GHG) standards for light-duty vehicles manufactured in 2022- 2025 .  Never mind that the EPA, in the waning days of the Obama presidency in January 2017, had already issued its official  Determination  to leave the standards in place, stating that they  “are projected to reduce oil consumption by 50 billion gallons and to save U.S. consumers nearly $92 billion in fuel cost over the lifetime of MY2022-2025 vehicles”, with minimal employment impacts.  The New York Times   compiles some of the U.S. reaction to the announcement, quoting Harvard’s Robert Stavins, who states that rolling back the Obama-level regulations would make it  impossible for the United States to meet its obligations under the Paris Agreement.   A sample of  U.S. concerns appear in:   “Trump Fuel economy rollback would kill jobs and cost each car-buyer $1650 per year “ by Joe Romm in  Think Progress ; DeSmog BlogTrump Takes Aim at Fuel Efficiency Requirements, Prompting Concern US Automakers Will Lag on Innovation”   ; and the Detroit Free Press,  reporting on a lead-up Trump speech in Ypsilanti, Michigan ,  “Trump visit puts UAW politics in crosshairs”  http://www.freep.com/story/money/business/2017/03/14/trump-visit-puts-uaw-politics-crosshairs/99165906/    (March 14). The Detroit Free Press  states that autoworkers were bused in to the Trump event by their employers, with Fiat Chrysler and General Motors offering their workers a day’s pay as well.  No immediate reaction to the announcement came from the United Autoworkers union, although  the DFP article states: “UAW President Dennis Williams has repeatedly said he disagrees with Trump on health care, immigration, the environment and most other major issues. But Williams supports Trump’s desire to renegotiate the North American Free Trade Agreement (NAFTA) …..”

In Canada, where Unifor represents autoworkers,  president Jerry Dias spoke out  in “ Auto workers union takes aim at Trump’s examination of fuel standards ” in the Globe and Mail (March 16), and in a CTV News report . He  states that “ he would fight any attempt to roll back environmentally friendly regulations in the auto industry following Trump’s announcement”. Canada’s Minister of Environment and Climate Change was in Washington on March 15th,  meeting with EPA head Scott Pruitt, but her reaction was guarded and diplomatic,  as reported in “As Trump eyes reprieve for gas guzzlers, Canada looks to China  ”  in the National Observer and in “Trump targets fuel-efficiency standards” in the Globe and Mail  (March 16).  Traditionally, Canadian  fuel emissions standards have been harmonized with the U.S. , as a result of the strongly integrated auto industry.  For example, at the end of February, Canada released  its proposed regulations for heavy-duty vehicles, and according to the International Council on Clean Transportation, Canada continued to follow the  U.S. model.  Similarly,  Ontario announced a Memorandum of Understanding on auto manufacturing with the state of  Michigan on March 13, pledging cooperation on regulatory standards as well as technology  and supply chain management.

Harmonization will be more difficult after Trump’s announcement on March 15, just as Canada and Ontario are reviewing their own revisions to fuel emissions regulation . Ontario reacted to the Trump  announcement with a  pledge to continue to cooperate with California and Quebec in the Western Climate Initiative – read “Ontario plans to team up with California against Trump on climate change” in the National Observer (March 16). California won the right to set its own fuel emission standards in the 1970’s, and today, fifteen other states voluntarily follow  California’s tougher standards, including Georgia, Pennsylvania, North Carolina, and the New York metropolitan area – translating into more than 40% of the U.S. population.  “The Coming Clean-Air war between Trump and California” in The Atlantic surveys this  latest conflict between California and the Trump administration .  A press release from Governor Gerry Brown called the fuel standards  announcement  “a cynical ploy” that puts politics ahead of science, and pledged that California will fight it in court.

Low Carbon Fuel Standards vs. Renewable Fuel Standards

A new report from Smart Prosperity (formerly Sustainable Prosperity) contrasts the advantages and features of a Renewable Fuel Standard –  in force federally and in five provinces – with a Low Carbon Fuel Standard, in force in Canada only in British Columbia . The discussion is timely, given that the federal government and the province of Ontario are both considering Low Carbon Fuel Standard policies. In “ How a Low Carbon Fuel Standard could reduce your GHG footprint without you even noticing”,  Smart Prosperity answers “what it is” and “what it does” questions;  its Policy Brief   discusses the complex questions of policy design, “ particularly around regional impacts, equity concerns, cost effectiveness, and innovation impacts”.  Read also the Ontario Discussion paper: Developing a modern renewal fuel standard for gasoline in Ontario   . The federal government posted a  clean fuel standard Backgrounder  about its goals (November 2016), which include using life cycle analysis of fuel production, and  extending coverage beyond transportation fuels.  Other jurisdictions which use a LCFS include California, Oregon,  and the state of Washington.

UPDATE:  On February 23, Friends of the Earth released a discussion paper, Working Towards A Clean Fuel Strategy for Canada:Key QuestionsThe subtitle says a lot:  How to make a Canadian Clean Fuel Strategy more than a cosmetic exercise to sanitize the image of the oil industry. Noting that  Environment and Climate Change Canada has provided only vague information so far in its consideration of the Low Carbon Fuel Standard,  Friends of the Earth states its concern that an inadequate policy could greenwash the use of fossil fuels and thus prolong their use ,  rather than supporting a just transition off fossil fuels and  stimulating the development of alternative fuels.   The discussion paper is a thorough  review of past experience with biofuel and ethanol policies .