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Archive for June 27th, 2014

Making the wrong choices

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“No matter what they say, no country is going to take actions that are going to deliberately destroy jobs and growth in their country.”

Stephen Harper (source: CBC)

This post is inspired by an email from David Suzuki “Here’s to a radical Canada Day!”

Stephen Harper’s statement is willfully misleading.

Many countries are taking actions to tackle climate change. The record to date is that they are performing better in terms of jobs and growth than the very few (like Canada and Australia) who have decided to destroy the environment on which all life depends. Countries like Germany, that have far less sunshine than we do but make half of their electricity from it now. Solar power is now cheaper than electricity made from fossil fuels.

The tar sands have long presented a possible source of energy, but for a very long time they remained untapped simply because there were so many other sources which were easier to extract. Usable fuel from tar sands was simply too expensive to make. What changed that was the willingness of the Canadian government to pour billions of tax dollars into its extraction and processing. The subsidies to the fossil fuel industries are unconscionable. If these were cut – in the same way that so many other public expenditures that Canadians actually need and care about have been cut – then other sources would have been much more competitive much sooner. We have been burning money mining a nonrenewable resource that is causing widespread carnage in terms of its impact on local water and air quality as well the long term effect of increasing carbon and methane emissions at a time when all sorts of tipping points in climate change were passing. The only reaction to the melting of the polar ice cap seems to be a willingness to immediately seize this as an opportunity to open up yet more oil and gas exploration.

Canada has huge untapped reserves of energy – sunlight, wind, waves, tides, geothermal – which are not going to be utilized in time to save life as we know it, because our governments are obsessed with oil and gas. Yet we get very little from oil and gas in terms of jobs, or revenues or even economic activity. Unless you are the sort of economist who seriously advances the notion that cleaning up oil spills is good for economic growth.

Norway continues to  extract oil from underneath the North Sea. This was also regarded as a very expensive, risky option at one time. Yet Norway did not respond with tax breaks and subsidies. On the contrary it has some of the highest royalty revenue stream per barrel of any oil economy. And the money did not go to income tax reductions for the rich but into a wealth building fund  that will continue to serve the best interests of Norwegians in general long after their oil reserves are exhausted. BC, of course, is currently pursuing a highly risky fracking and LNG export path based on reducing royalty payments that are already low.

The other day I was in Squamish. I once again heard that the name comes from the First Nations term for “place of the winds”. It is apparently a world class sailboarding destination due to the strength and reliability of the winds. I could just about hear what the guide was saying over the roar of the diesel generator. He was telling us about how the new Sea to Sky Gondola is taking care of the environment.

Of course, wind and solar are not “reliable” in the sense that power is not available all the time. But this energy storage problem is close to being resolved. There always has been the option of pumped hydraulic storage (used in North Wales to store otherwise useless electricity produced by a nuclear power station which cannot be shut off at times of low demand). Now there are promising new battery storage technologies like vanadium and sulphuric acid, readily scalable and with very long life, and ideal for solar and wind power storage.

We sit on huge reserves of geothermal energy – but the only use we make of them is for a few hot baths, here and there.

We could have already replaced thousands of gasoline powered passenger trips by existing electric transport technologies – trams, trolleybuses, trains – but we chose instead to invest in highways, despite evidence of declining car use! There are many more potential jobs operating public transport than there are in freeway maintenance!

When I first got into greenhouse gas action plans, I decided that we should not be concerned about climate change as a selling point. There was already a cognitive dissonance in the message: the planet is heating up, so you should check your tire pressures more often. We simply concentrated on the economic/financial message. Twenty years ago, when hydro was still cheap and even gas prices looked reasonable, basic energy efficiency measures were still attractive with two to three years payback on projects which had potentially much longer lives. I still adhere to the notion that it is utterly pointless to argue with climate change deniers. But even they cannot argue that something isn’t happening that is – increasing wildfires, floods, tornadoes – and that remediation and essential protection for the future is costing us a fortune. The basic cost benefit calculations can be assessed in real dollars – without getting into any arguments about the value of life or time. The economy and job effect of energy efficiency by itself is worth having. Switching to renewable energy is even better in terms of rate of return on capital employed.

The carbon tax is working. It would have worked even better if it had not been frittered away on being “revenue neutral” but invested in sensible activities like increasing transit supply where there is already excess demand. Better still if the amounts had continued to increase and not been foolishly frozen.

Canada’s Economic Action Plan, on the other hand, manifestly is NOT working. Throwing money at billionaires is a very silly idea indeed. It does not trickle down nor are they any more willing to pay low taxes than they were to pay high taxes. Employing people to chase fugitive income and capital gains is a lot more productive than attacking the poor for trivial sums.

The actions we need to take will not destroy jobs or growth. What they will do is heavily impact the fortunes of the fossil fuel companies and those who remain invested in them. Stephen Harper does not actually care very much about Canada, or Canadian values. He does care very much indeed about holding on to power. And to do that he needs a steady flow of cash from the oil companies. And he is very unlikely indeed to insist that they leave their reserves in the ground. But if we are to stay below the 2℃ target that is what has to happen. The costs of missing that target are horrendous, no matter how you count them.


In a comment below I am (quite properly) chided for the lack of data in this opinion piece. Here are some routes where those who are curious can follow up on my assertions – points to an IMF study

Tackling Climate Change while growing the economy – “Over 50 percent of the country’s energy was generated from photovoltaic panels” for a short period recently

But the there is also this:

investments in renewable energy and energy efficiency would create more jobs than the same amount of investment in fossil fuels. source: – compares Norway to Canada and Alberta

See also

Written by Stephen Rees

June 27, 2014 at 10:04 am