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Why Canada’s climate change policies have failed.

This was a lecture at SFU last night by Mark Jaccard in part to promote his new book written with Jeffrey Simpson. He has been a prof at SFU since 1986, and sometimes, he said, he feels like he is in that movie “Groundhog Day“. Politicians make bold statements about how they are going to cut our emissions, but then hold back on the necessary tough policies and emissions continue to grow.

UPDATE Oct 24: The substance of what he said is now available as an op ed piece in the Vancouver Sun 

The problem is that we (and I include myself here) thought that the economies of greenhouse gas reduction were so good, and would improve as oil prices increased, that there would be significant changes as a result of better fuel efficiency and conservation. “Experts” like Amory Lovins thought that technological change would be so rapid that we could reduce emissions and save the world and make money at the same time.

It turns out that energy efficiency is not as profitable as you might think. For example, Jaccard had been one of the earliest adopters of compact fluorescent light bulbs, back when they were $25 each. He estimated that within ten years they would pay for themselves – but that assumed they would actually last ten years. But accidents, and simple failures, meant the few did. And once one was broken the pay back calculation no longer worked.

While this was a good and entertaining story, the track record of CF has been better than that in reality. Most of us got them from free from BC Hydro, because it was cheaper for them to pursue this way of cutting demand than buying more electricity. This also shifted the risk to an organisation better able to tolerate it than the average household. And by that time, increasing production had brought the wholesale price (which is what BC Hydro would have paid) much lower. Similar programmes have also worked to get rid of torchieres, old fridges and gas powered lawn mowers. And I am sure that Home Depot and Home Hardware appreciated the increase in store visits.

What the emissions record shows however is that “fridge labels and Rick Mercer commercials” had no discernible effect – and Canadian emissions of ghg have grown steadily.

Partly this is because efficiency measures always have other consequences. Fridges have been getting more efficient anyway but at the same time people have been getting better off, so they buy bigger fridges, add deepfreezes, wine and water coolers to their household cooling load. Offering subsidies has also been popular, but it is almost impossible to tell the extent to which that actually changes behaviour. “Is it additive?” is a very difficult question to get an answer to. For instance, does a $2,000 rebate actually change anyone’s mind about the desirability of a Prius? Might not they have bought one anyway?

The other issue that needs to be faced is that the rate at which our capital stock turns over is quite slow. For instance, a car has an average life of 14 years. But the process of designing, building and selling new types of car, and seeing how acceptable they are in the market, adds a significant lag to that. So the replacement of the entire fleet of older technology cars by newer, more fuel efficient models is taking 25 years or more. Of course, it would have helped if the response of the big three North American manufacturers to the California regulations (which set time limits by which a rising percentage of vehicles sold had to be low emission, ultra-low emission and zero emission) had been to start some R&D (as Toyota and Honda did) rather then just launch a law suit.

But information program and subsidies are an easier sell to politicians than increased taxes and regulations, and it seems to Jaccard that both are essential to get any significant change. “People respond to price not policy” and the signals the market is sending is not enough to get the change we need. Increasing oil prices – and the prospect of peak oil, simply raise the rate of return for oil replacement technologies like liquid and gaseous fuels from coal. These technologies have been around since the 1920’s and already account for 40% of South Africa’s fuel needs (development of the facilities being boosted early by the trade sanctions on the apartheid regime).

One of the problems in Canada is that there has not been an open evaluation process. In the US there is an Energy Information Administration tasked with maintaining the model, similar to the one the Jaccard and his colleagues developed and which they can only support from their research grants. Even so, both models show that information and subsidies alone are too slow to achieve the necessary reductions in emissions. He is an advocate of a carbon tax, and suggested that its impact on the average household would be to see their overall energy bill rise from 6% of their budget to 8% – and this would happen slowly and while incomes continue to rise. Overall he felt that the economic impact of a $150 to $180 a tonne of CO2 equivalent would be the loss of one year’s growth in GDP. (That also translates to 30c extra on a litre of gas). But he did concede that depended on how the money raised by the carbon tax was used: he felt that if it was recycled – through a device such as the “cap and trade” emissions regulation – then the economic effects would be modest. This is based on his mathematical modelling, and not on recent and current experience of Canadian and BC governments use of budgetary surpluses.

The stark contrast is with the performance of Norway, which has had a carbon tax and is also a producer of oil and gas. While Jaccard claimed that their ghg emissions per capita have been falling at the same time as their oil and gas production has increased I have been unable to find a data set that verifies that.

Asked how he thought the developing countries would respond he pointed to the example of China, which though not bound by Kyoto has been moving swiftly to reduce its own emissions and produce alternative fuels, as well as carbon sequestration. When asked why they said that they were sure that they would be penalised in future trade rounds with other countries, and he went to point out that this is indeed the case as there are several congressional bills in preparation for the post Bush era which contain language that would punish nations that do not take comparable steps to the US in reducing emissions. He cited the US strategy over softwood lumber to show how effective such moves can be to change behaviour of nations dependent on selling to the US market.

He did say that this was only the second time he had given the lecture, and it certainly lacked organisation. He used very few of his prepared slides, but the ones he did use were very telling. He is a good raconteur, but he needed to have rehearsed some of the stories better and cut the length of the explanations a lot. I think he is right about both tax and regulation. But mostly about the need for an independent watchdog to keep track of how we are doing. Countries like Norway and Sweden have a much more stable political process than we do: they are generally social democrat, middle of the road, with a high degree of consensus on the issues. Canada (like the US and Britain) is subject to much greater swings between – I was going to say left and right – but what I think I mean is right and righter. And in the political arena we are bedevilled by organisations that pretend to be independent researchers but in reality are simply sources of propaganda.

I did not buy the book. It was being sold at 20% off, but the cover price was $30 Canada, $20 US – and I find that offensive and indefensible. Anyway, I have it on order from the library.

Written by Stephen Rees

October 19, 2007 at 9:02 am

3 Responses

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  1. I read Mark’s book “Sustainable Fossil Fuels” a short while back. And although I disagreed with a lot of what he said, he made a very good argument that fossil fuels are not going away any time soon, and that we learn how to deal with this fact by decreasing their harm to the atmosphere through various policies and technologies. We need to realize that as appliances become more efficient, people simply buy more of them to make up for it. That is one of the main problems of a purely market-driven approach. People’s consciousnesses need to be raised to start thinking about these issues in their everyday lives (just as people’s consciousness has been raised about things like smoking, littering, and to a lesser extent AIDS).

    I did not buy the book. It was being sold at 20% off, but the cover price was $30 Canada, $20 US – and I find that offensive and indefensible. Anyway, I have it on order from the library.

    Lucky you, who has a library that you can reserve from. Us here in Vancouver are still reeling from the strike. I have spent more money on books these past few months than I have in the last few years.

    Andrew E

    October 19, 2007 at 10:28 am

  2. I think you can get a library card that works anywhere in the lower mainland – but I understand that the Vancouver Library workers will be going back soon. Putting my stuff into storage was a forcible reminder of how many books I own and how few of them I actually refer to, or am likely to read again.

    Its not just a question of consciousness, there have to be real consequences for actions. Canada’s record on ghg reductions shows that voluntary measures, information and subsidies by themselves simply do not work.

    “It’s time for an Act of Political Courage, Minister.”

    Stephen Rees

    October 19, 2007 at 11:21 am

  3. The Guardian

    A supermarket chain is to give away 1m energy-saving light bulbs this weekend.

    On October 27, Sainsbury’s will be giving away energy-saving light bulbs to customers who agree make an energy-saving pledge.

    To claim a free Philips 11 watt bulb (equivalent to 60w incandescent light bulb), customers at 450 of its stores around the UK will be asked to choose from a variety of pledges ranging from switching to energy-saving lighting, taking reusable bags for shopping rather than use disposable bags, or drying clothes outdoors or hanging them up inside rather than using a tumble dryer.

    Sainsbury’s says that the 1m energy-saving light bulbs, which is the number the supermarket normally sells in a year, will save 40,000 tonnes of C02.

    Stephen Rees

    October 22, 2007 at 11:10 am

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