Proposals for a green transition that is just and inclusive in Ontario

decent_work_in_the_green_economy-coverDecent Work in the Green Economy, released on October 11 , combines research on green transitions worldwide with the reality of  labour market trends in Ontario, and includes economic modelling of  Ontario’s cap and trade program, conducted by EnviroEconomics and Navius Research.  The resulting analysis identifies which sectors are expected to grow strongly under a green transition (e.g. utilities and waste management and remediation),  which will see lower growth (e.g. petroleum refining and petrochemical production), and which will see a transformation of skills requirements (e.g. mining, manufacturing, and  forestry). Section 3 of the report discusses the impacts on job quality (including wages, benefits, unionization, and job permanence), as well as skills requirements.  The general discussion in Section 3 is supplemented by two detailed Appendices about the employment impacts by economic sector,  and by disadvantaged and equity-seeking groups (which includes racialized workers, Indigenous people, workers with disabilities, newcomers, women, and rural Ontarians.) A final  Appendix describes the modelling behind the analysis, which projects employment impacts of low carbon technologies by 2030.

The paper calls for a comprehensive Just Transition Strategy for Ontario, and proposes  six core elements illustrated by case study “success stories”.   These case studies include the Solar City Program in Halifax, Nova Scotia, (which uses local supply chains and accounted for local employment impacts), and the UK Transport Infrastructure Skills Strategy (which incorporated diversity goals and explicit targets in workforce development and retraining initiatives).  An important element of the recommended Just Transition Strategy includes a dedicated Green Transitions Fund, to transfer funding for targeted programs to communities facing disproportionate job loss; to universities or colleges to provide specialized academic programs; to social enterprise or service providers to carry out re-training programs; to directly impacted companies to invest in their employees; and to individuals in transition (much like EI payments).

The authors also call for better data collection to measure and monitor the link between green economy policies and employment outcomes, and better mechanisms for regular, ongoing dialogue.  This call for ongoing dialogue seems intended to provide a role for workers (and unions, though they are less often mentioned). The authors state: “No effort to ensure decent work in the green economy will be successful without meaningfully engaging workers who are directly impacted by the transition, to understand where and how they might need support. Just as important will be the ongoing engagement with employers and industry to understand the changing employment landscape, and how workers can best prepare for it.” And, on page 39,  “Public policy will be a key driver in ensuring that this transition is just and equitable. …. Everyone has a role to play in this transition. Governments, employers, workers, unions and non-profit organizations alike must remember that if we fail to ensure that the green transition is just and inclusive, we will have missed a vital opportunity to address today’s most pressing challenges. But if we design policies and programs that facilitate this transition with decent work in mind, they have the potential to benefit all Ontarians.”

Decent Work in the Green Economy was published by the  Mowat Centre at the University of Toronto, in cooperation with the Smart Prosperity Institute at the University of Ottawa.  In addition to economic modelling, the analysis and policy discussion is based on an extensive literature review as well as expert interviews and input from government, industry, labour and social justice representatives. Part of the purpose of the report is to initiate discussion “between those actively supporting the transition to a green economy and those advocating for decent work” as defined by the ILO.  Further, the report states: “ Importantly, this conversation must address the need for equal opportunities among historically disadvantaged and equity-seeking groups who currently face barriers to accessing decent work.”

The new British Columbia government tackles climate change policy and controversies: Site C, Kinder Morgan, and Carbon Tax neutrality

As the smoke from over 100  forest fires enveloped British Columbia during the summer of 2017, a new brand of climate change and environmental policy emerged after June 29, when the New Democratic Party (NDP) government assumed power , thanks to a Confidence and Supply Agreement with the Green Party Caucus.  Premier John Horgan appointed Vancouver-area MLA George Heyman, a former executive director of Sierra Club B.C. and president of the B.C. Government Employees and Service Employees’ Union, as Minister of Environment and Climate Change Strategy, with a mandate letter which directed Heyman to, among other priorities, re-establish a Climate Leadership team,  set a new 2030 GHG reduction target, expand and increase the existing carbon tax, and “employ every tool available to defend B.C.’s interests in the face of the expansion of the Kinder Morgan pipeline.”  A separate mandate letter to the Ministry of Energy, Mines and Petroleum Resources, directed the Minister to create a roadmap for the province’s energy future, to consider all Liquified Natural Gas proposals in light of the impact on climate change goals, to freeze hydro rates and to  “immediately refer the Site C dam construction project to the B.C. Utilities Commission on the question of economic viability and consequences to British Columbians in the context of the current supply and demand conditions prevailing in the B.C. market.” In addition, the government “will be fully adopting and implementing the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP), and the Calls to Action of the Truth and Reconciliation Commission.”

Some notes on each of these priorities:

Re the B.C. Climate Leadership Plan The recommendations of the B.C. Climate Leadership Team were ignored by the Liberal government when delivered in 2016.  In mid-September 2017, the reasons for that became clear, as reported by the National Observer , DeSmog Canada, Rabble.ca and Energy Mix . According to the National Observer,  “provincial officials travelled to Calgary to hold five rounds of secret meetings over three months in the boardroom of the Canadian Association of Petroleum Producers (CAPP). Representatives from Alberta-based oil giants Encana and Canadian Natural Resources Ltd (CNRL) are shown on the list of participants meeting with B.C.’s ministry of natural gas development.”  In the article for DeSmog Canada, Shannon Daub and Zoe Yunker state that the Climate Leadership process was a stunning example of institutional corruption: “what can only now be characterized as a pretend consultation process was acted out publicly….  The whole charade also represents an abuse of the climate leadership team’s time and a mockery of B.C.’s claims to leadership during the Paris climate talks, not to mention a tremendous waste of public resources.”  The documents underlying the revelations were obtained under Freedom of Information requests by Corporate Mapping Project  of the Canadian Centre for Policy Alternatives, of which Shannon Daub is Associate Director.

Re the  Carbon Tax:  The Budget Update released on September 11 states: “The Province will act to reduce carbon emissions by increasing the carbon tax rate on April 1, 2018 by $5 per tonne of CO2 equivalent emissions, while increasing the climate action tax credit to support low and middle income families. The requirement for the carbon tax to be revenue-neutral is eliminated so carbon tax revenues can support families and fund green initiatives that help us address our climate action commitments.” For context, see “B.C. overturns carbon tax revenue-neutrality”  (Sept. 22) by the Pacific Institute for Climate Solutions;  for reaction, see the Canadian Centre for Policy Alternatives-B.C. or the Pembina Institute .

Re the Kinder Morgan Trans Mountain Pipeline:  On October 2, 2017, the Federal Court of Appeal  is scheduled to start the longest hearing in its history, for the consolidated challenges to the National Energy Board and Federal Cabinet approval of Kinder Morgan’s Trans Mountain Project.  The government has applied for intervenor status, and in August  hired environmental lawyer and former B.C. Supreme Court Justice  Thomas Berger as an external legal advisor on the matter.  West Coast Environmental Law blogged, “See you in court, Kinder Morgan” , which provides a thorough summary of the 17 cases against the TransMountain expansion; WCEL has also published a Legal Toolbox to Defend BC from Kinder Morgan, which goes into the legal arguments in more detail.  The NEB website provides all official regulatory documents. Ecojustice is also involved in the complex court challenge.

Re the Site C Dam:  In early August, the B.C. government announced a review of the Site C project by the B.C. Utilities Commission.  The Preliminary Inquiry Report was released on September 20,  calling for more information before passing judgement on whether BC Hydro should complete the project. The Inquiry Panel also finds “a reasonable estimate of the cost to terminate the project and remediate the site” would be $1.1 billion, based on the figures provided by BC Hydro and Deloitte consultants. The Inquiry report is  summarized by  CBC . Next steps:  a series of round-the-province hearings and final recommendations to government to be released in a final report on November 1.

After years of protests about Site C, evidence against it seems to be piling up. A series of reports from the University of British Columbia Program on Water Governance, begun in 2016, have addressed the range of issues involved in the controversial project : First Nations issues; environmental impacts; regulatory process; greenhouse gas emissions; and economics.  In April, an overview summary of these reports appeared  in Policy Options as  “Site C: It’s not too late to hit Pause”,  stating that Site C is “neither the greenest nor the cheapest option, and makes a mockery of Indigenous Rights in the process.”   On the issue of Indigenous Rights, the UN Committee on the Elimination of Racial Discrimination called for a halt on construction in August, pending a full review of how Site C will affects Indigenous land.

If Site C is a good project, it’s time for Trudeau to trot out the evidence” in  iPolitics (Sept. 17), calls Site C “an acid test for Trudeau’s promise of evidence-based policy” and an environmental and economic disaster in the making.  The iPolitics article summarizes the findings of a submission to the BC Utilities Commission review by Robert McCullough, who concluded that BC Hydro electricity demand forecasts overestimate demand by 30%, that its cost overruns on the project will likely hit $1.7 to $4.3 billion, and that wind and geothermal are cleaner alternatives to the project. McCullough’s conclusions were partly based on his review of the technical report by Deloitte LLP, commissioned by the Inquiry.

 

Federal government releases “Backstop” policies for provinces not already pricing carbon – Comment period open till June 30

As part of the Pan-Canadian Framework on Clean Growth and Climate Change, the federal government had outlined the  Pan-Canadian Approach to Pricing Carbon Pollution,  a national carbon pricing system with mandatory benchmarks for each province.  Most provinces, representing 97% of the population, already have, or are in the process of designing, their own systems – British Columbia, Alberta, Ontario, Quebec, and Nova Scotia (in process).   On May 18, the Government of Canada addressed the remaining 3%  – most notably in the province of Saskatchewan –  with the release of its Technical Paper on the Federal Carbon Pricing Backstop .

The “Backstop” refers to the fact that the policies  will only apply to provinces that do not have a carbon pricing system of their own  in place by 2018.  The proposal is composed of two parts:  a levy on fossil fuels, and a cap and trade system,  patterned after Alberta’s output-based allocation system, to price pollution from industry.  The levy system would include solid, liquid and gaseous fossil fuels: gasoline, diesel fuel, natural gas, coal and coke – and notably, aviation fuel.  Rates would initially be set for 2018 to 2022, progressing with $10 per tonne increments annually from $10 per tonne of CO2-equivalent (CO2e) in 2018 to $50 per tonne in 2022.  The federal commits to  return direct revenues from the carbon levy to the jurisdiction of origin, but there is flexibility about how the provinces can redirect that revenue.

UPDATE:  The EcoFiscal Commission released a helpful blog post on May 24: Explaining Output-Based Allocations (OBAs),  with a promise of a further explainer about the pitfalls of OBAs, to be released soon.

Public comments about the proposals are accepted until June 30, 2017, at Carbonpricing-tarificationcarbone@canada.ca and will be used to design the final carbon system and enabling legislation and regulations.  A sampling of reaction (below)  gives the government high marks for protecting Canadian competitiveness while reducing emissions.

“Is Canada’s carbon-pricing policy striking the right balance?” (May 18) in the Globe and Mail is a general affirmation of the federal proposals by three experts from varied points of view: Christopher Ragan (Chair of the Ecofiscal Commission), Peter Robinson (CEO of the David Suzuki Foundation), and  Steve Williams ( CEO of Suncor Energy).  A business response, in a press release from  TD Economics, covers similar ground: “ Feds Stick to their carbon- pricing guns” (May 18).  It states: “Botton Line: Carbon pricing is the most efficient way of reducing emissions, and today’s announcement should help Canada achieve meaningful emissions reductions. However, follow-through post-2022 will be crucial to achieving the 2030 target. The details of the carbon pricing backstop strike a good balance, providing clear incentives for emissions reduction while taking competitiveness issues into account, recognizing that a large industrial base cannot be “turned on a dime” and will continue to face competition from non-carbon priced jurisdictions.”

From environmental advocacy groups : In “Five things to know about Ottawa’s carbon pricing plan” , Clean Energy Canada highlights the similarities of the Alberta and Saskatchewan economies, and commends the output-based credit system, saying “there’s no question that a made-in-Alberta approach will also fit Saskatchewan’s economy very well.”  Clean Energy notes that the open question of distribution of revenues will cause much future debate, as will working out the details of the allocations for heavy industry, due by 2019.

The Pembina Institute response, “Ottawa taking carbon pricing cues from provinces”  also commends the output-based allocation system, and concludes:  “It’s worth taking a moment to celebrate how far we’ve come as a country – in large part due to the vision and ambition of provincial premiers – and to reflect on how to maintain this momentum despite choppy international waters.”

The elephant is the room that everyone is talking about is the anticipated court challenge from the government of Saskatchewan, whose Premier Brad Wall has stated that the federal government lacks the constitutional authority to enact a federal carbon price, and who likened  the Technical paper to “a ransom note.”   The Globe and Mail summarizes the tension in “Ottawa, Saskatchewan brace for battle over carbon pricing” .  The Pembina Institute has published a  Q& A interview with Professor Nathalie Chalifour of the University of Ottawa, who also wrote  “The feds have every legal right to set a carbon price” in October 2016 in iPolitics .

Saskatchewan’s preferred route to emissions reduction was clearly laid out in its White Paper on Climate Change released in October 2016, which states: “We should be focusing our efforts on innovation and adaptation, not taxation” – “innovation” largely meaning Saskatchewan’s investment in carbon capture and storage.  And while CBC reports  that Saskatchewan environmental groups are backing the federal Technical paper, there is widespread support for the Premier’s opposition.  According to a CBC report in March, the  Saskatchewan Taxpayers Federation,  the Saskatchewan Heavy Construction Association, and the United Steelworkers Local 5890, sent Prime Minister Trudeau a  joint letter outlining how a federal carbon tax would hurt Western Canada.  In  a CBC report on May 19, ‘You can’t buy a Prius and move dirt’: Critics say carbon tax will punish industry , those two industry groups make the case that  “there aren’t green alternatives for building roads, hauling trailers and working with heavy machinery.”