The Green New Deal Is Cheap, Actually

Decarbonizing will cost trillions of dollars, but it’s an investment that will have big return — for the economy and the environment

Ortley Beach, New Jersey, in 2012, after Hurricane Sandy. A recent study shows 2 degrees of global warming will cause $36 trillion in damages. Tim Larsen/New Jersey Governor’s Office

Opposition to the Green New Deal is often framed as a matter of cost. President Trump’s re-election campaign blasted the “radical” plan, claiming it would “cost trillions of dollars, wreck our economy, and decimate millions of energy jobs.” But science shows that the costs of unchecked global temperature rise are far higher than transitioning to clean energy — which will, in fact, boost the economy. “Everybody thinks, ‘Oh, you have to spend a huge amount of money,’” says Mark Jacobson, a civil and environmental engineering professor at Stanford University. “Well, yeah, there’s an upfront cost, but this is something that pays itself back.”

The coronavirus crisis is changing the world’s comfort levels with massive expenditures. Fresh on the heels of a $2.2 trillion economic rescue package, President Trump has begun calling for another $2 trillion infrastructure package to create jobs. Across the political spectrum, politicians are anticipating that the economy will need something approximating a New Deal to spring back to life after the pandemic subsides. And climate advocates are making the case that we can use this disaster response to invest in renewable energy, to ward off an even more dangerous crisis down the line.

The price of not acting on climate change is staggering. The Paris climate accord aims to limit global temperature rise to 2 C. But a recent study in Nature shows that settling for that outcome — rather than a more ambitious limit of 1.5 C — will cost the world $36 trillion in climate damages. Global warming lowers global GDP, according to a 2019 paper co-authored by Cambridge University economists, who project that “a persistent rise in temperature, changes in precipitation patterns and … more volatile weather events” will slow productivity and investment, as well as damage human health. Holding warming to 2 C can limit the negative impact to one percent of global GDP per capita by 2100. But runaway climate change would crater that GDP figure by seven percent worldwide, and by 10.5 percent in the United States. “Climate change is pain,” Michael Mann, a top climate scientist, recently testified to Congress. “Anyone who tells you differently is selling something — most likely fossil fuels.”

The heart of the Green New Deal is a commitment to largely transition America to renewable energy by 2030, and wholly by 2050. That will require an upfront investment of $7.8 trillion, says Jacobson, who recently published a study in the journal One Earth that modeled the economic and climate impacts of moving to 100 percent clean energy in the U.S. These upfront costs, however, are a true investment. “It’s not just a doling out of government money with no return on it,” Jacobson says. By 2050, this transition avoids $3.1 trillion a year in climate damages. The green energy itself is also cheaper — saving $1.3 trillion a year for consumers over the fossil-fueled status quo. Ending combustion would also save 63,000 lives a year otherwise lost to air pollution. Most surprising: The study projects that a carbon-free economy increases energy employment. While 2.2 million fossil-fuel jobs would be lost, they would be replaced by 5.2 million permanent clean-energy jobs.

America has the clean-power technology it needs to transition to a combustion-free economy. The only thing that’s missing, Jacobson says, is political leadership to drive action with the urgency the climate crisis requires. “You need somebody who really understands the problem,” he says, “and knows you can’t have a half-ass solution.” SOURCE

The Trudeau Government Defers to Experts on COVID-19. Why Not Climate Change?

And maybe this is a turning point for Canada?

COVER.Trudeau-COVID19.jpg

‘In response to COVID-19, the government really has had to choose human lives over the economy. But in response to climate change, the government could get the best of both worlds: human lives and a better economy.’ Photo via Justin Trudeau’s Flickr.

When the media asked Prime Minister Justin Trudeau if he would continue to quarantine after his two weeks of self-isolation are complete, Trudeau responded: “I am going to make sure that we continue to follow all recommendations of public health officers.”He crushed a fellowship in our newsroom. Now, he’s receiving national recognition for his Tyee work.

This has been a common theme during the COVID-19 crisis in Canada. It’s certainly brought me reassurance, knowing that our elected officials listen to the experts and the science — especially when compared with the choices of the United States administration. When Canadian politicians don’t have the answer, they defer to the people who do.

The policies taken by the government in response to the COVID-19 crisis have been extreme. The Parliamentary Budget Office estimates that in 2020, GDP growth could be -5.1 per cent, the weakest on record since 1962. This compared to the PBO’s November 2019 projection, which expected GDP to grow 1.7 per cent.

The alternative? Well, yesterday, the federal government released for the first time its models, which project 11,000 – 22,000 deaths even if strong measures are followed.

Throughout this crisis, our government has chosen human lives over the economy, and they’ve based hard policy choices on what public health officials and scientists have said.

But this is where my praise of the federal government ends. How can a government that so quickly defers to scientists on COVID-19 at the same time ignore the clear recommendations of scientists when it comes to the very real threat of climate change?

If we think the projections related to COVID-19 are stark, what about the projections surrounding climate change?

The Intergovernmental Panel on Climate Change — a body of the United Nations, made up of the world’s leading scientists — released its damning report in 2018 that warned the world needed to make “rapid, far-reaching and unprecedented” transitions in all aspects of our infrastructure and systems of living. Otherwise, the IPCC predicted, extreme weather events will increase (they already are), and we may even get to the point of runaway climate change.

But what does this mean in practical terms? Well, the IPCC’s report points to the European heat wave of 2003 as an example of what we can expect more of in the future as the effects of climate change worsen.

At least 30,000 people died in that single extreme weather event. There have been many other such disasters. In 2015, India lost an estimated 2,000 people to one of its deadliest heat waves in recent history; Puerto Rico suffered more than 4,500 deaths in the 2017 Hurricane Maria and its aftermath; and the recent Australian wildfires resulted in more than 400 deaths, mainly due to smoke inhalation.

Meanwhile, the World Health Organize estimates that approximately 4.2 million people die every year from outdoor air pollution. So far, more than 70,000 people have died as a result of the coronavirus.

In response to COVID-19, the government really has had to choose human lives over the economy. But in response to climate change, the government could get the best of both worlds: human lives and a better economy.

Sadly, because the effects are less immediate and the causes less direct, the Canadian government continues to choose the “economy” over the environment. When the Liberal government purchased the Trans Mountain pipeline in 2018 from Kinder Morgan, Trudeau repeatedly emphasized the government’s action was in the “national interest” and that international investors expected as much from Canada. The Trans Mountain pipeline is estimated to release 400,000 tonnes of greenhouse gas emissions annually.

In 2017, Trudeau spoke at an energy conference in Houston, Texas: “No country would find 173 billion barrels of oil in the ground and just leave them there.” Fast forward to today, and Canadians can expect to see yet another bail-out of the oil and gas sector, in a matter of “hours, potentially days.” At least that’s what Finance Minister Bill Morneau said on March 25.

And even though it’s less direct and immediate, we do know the numbers. In 2018, a report published in medical journal The Lancet estimated the death of 7,142 Canadians per year due to exposure to air pollution.

Climate change is also linked with increased spread of infectious diseases. Dr. Theresa Tam, Canada’s Chief Public Safety Health Officer — now a staple on our daily news cycle — has long been warning Canadians of the rise of infectious diseases. Vectors like mosquitos and ticks thrive in warmer temperatures, and indeed, from 2009 to 2017 cases of the tick-borne Lyme disease in Canada increased from 150 to 1,500.

Similar to the pressure media is putting on the government now to release COVID-19 numbers, we could be putting similar pressures on the government to release the numbers of projected deaths due to climate change.

Maybe this is a turning point for Canada, and maybe the government will begin to take the science-guided action that is required of Canada to meet its international commitments. And, if not, we can point to this time of COVID-19 of a time when the government did listen to the science — and we were better off for it.  [Tyee] SOURCE

COVID-19 ‘Shock Doctrine’ has begun

In some places, the need for a collective response to the coronavirus crisis is bringing out the best of humanity, as people and mutual aid groups work to help and protect others.

Unfortunately, some people are already using this crisis to push through devastating changes that will enrich polluters and harm public health.

Take the $2 trillion relief package Congress passed to provide emergency aid to people and businesses facing an economic downturn from the crisis.

There are commendable elements of the bill, such as its expansion of unemployment benefits and its direct cash payments. But while ordinary families get just $1,200 per adult and $500 per child – a one-time payment not enough to cover rent in many places – big businesses are slated to get $454 billion in designated relief.

These corporations are eligible for federal loans and loan guarantees, if Treasury Secretary Steve Mnuchin determines they qualify. Will businesses with political ties to the administration make out like bandits? Do we even need to ask?

Meanwhile, President Donald Trump’s Environmental Protection Agency has unilaterally suspended enforcement of critical environmental regulations after a request from the American Petroleum Institute, along with finalizing a cutback on auto fuel efficiency standards.

The EPA is also trying to fast-track a controversial regulatory change that would make it easier to ignore public health considerations when making rule changes. In a pandemic and a recession, these changes will certainly make people sicker.

Similar opportunism is on display at the Interior Department, which is going full steam ahead with handing out more leases for fossil fuel extraction on federal lands, while weakening environmental regulations and sneaking in loopholes that let companies make lower royalty payments.

Several states, meanwhile, are passing bills that would criminalize oil pipeline protests.

The common thread here is what author Naomi Klein terms the “Shock Doctrine” – the strategic use of a crisis to seize the levers of power.

As the nation copes with job loss, a huge and growing public health threat, and the stress that these bring, it becomes easier to ram through changes that might otherwise have been blocked.

But, amid the coronavirus crisis, there are still powerful signs of protest.

Workers from companies like Amazon and Instacart have walked off the job, demanding better pay and protection. General Electric workers in Massachusetts went on strike, demanding the company retool its factories to make ventilators instead of laying off workers. There are calls for rent strikes by struggling tenants and for moratoriums on student debt collection.

Across the country, more than 800 organizations from all walks of life are calling for a “People’s Bailout” that puts the needs of workers, communities, and the environment over corporate interests.

The same pattern has repeated in every crisis-hit region, where the poorest in society pay the price through extreme austerity and the privatisation of public assets and services, despite being the least to blame for causing the crisis in the first place. (Photo: eyewashdesgin: A. Golden, Flickr/cc)

Armed with an understanding of how the Shock Doctrine works, a bold vision of what’s possible, and resolute action, movements like these might not just reverse the corporate power grab, but also use the crisis to build a more equitable, sustainable economy for the future. SOURCE

Basav Sen, Tribune News Service. The writer directs the Climate Policy Project at the Institute for Policy Studies.

Switzerland switches off nuclear plant as it begins exit from atomic power

MUEHLEBERG, Switzerland (Reuters) – Switzerland’s Muehleberg nuclear power station went off the grid on Friday after 47 years, marking the end of an era as the shutdown starts the country’s exit from atomic power.

Switzerland switches off nuclear plant as it begins exit from ...
Swiss energy company BKW’s Muehleberg nuclear power plant and the fog-covered Aare river are seen in Muehleberg near Bern, Switzerland, April 6, 2018. REUTERS/Arnd Wiegmann/File Photo

 

The 373-megawatt-capacity plant which opened in 1972 has generated enough electricity to cover the energy consumption of the nearby city of Bern for more than 100 years.

In scenes shown live on Swiss TV, at 12.30 pm (1130 GMT) a technician pressed two buttons in the control room to stop the chain reaction and deactivate the reactor, shutting down the plant for good.

The closure is the first of Switzerland’s five nuclear reactors to be shuttered following the 2011 nuclear accident in Fukushima, Japan, which triggered safety concerns about nuclear power around the world.

Neighboring Germany is due to abandon nuclear power stations by 2022, while Switzerland’s government has said it would build no new nuclear reactors and decommission its existing plants at their end of their lifespan.

The Swiss decision to quit nuclear power was upheld in a 2017 referendum which also supported government plans to push forward sustainable energy with subsidies to develop solar, wind and hydroelectric power.

No dates have been set for the shutdown of Switzerland’s other nuclear power stations, although the Beznau plant near the German border, which dates back to 1969, is expected to be next.

As recently as 2017, Switzerland’s nuclear power stations generated a third of the country’s power, compared with around 60% from hydroelectric and 5% from renewable.

Muehleberg’s operator, the state-controlled energy company BKW, decided in October 2013 to shutter the plant, saying plans to invest in its long-term future were no longer viable.

Output has been winding down in the last few weeks as the final fuel loaded in the summer of 2018 was depleted.

After the shutdown, a 15-year decommissioning process will get under way, costing 3 billion Swiss francs ($3.06 billion). No plans have been agreed for how the site will be redeveloped.

Shutting down Muehleberg has generated mixed emotions.

“There is a lot of Swiss know-how in the power plant. Old valves, for example, which still come from (Swiss engineering company) Sulzer. A piece of factory and economic history is lost,” said one worker, who asked not to be named.

“It also hurts when we cut up everything that we have nurtured over the years.”

Anti-nuclear campaigners, however, hailed the move.

“Clearly, we welcome the decision to close the plant,” said Philippe de Rougement, president of the campaign group Sortir du Nucleaire. “We would have loved it to close much earlier.”

Switzerland’s use of nuclear energy had delayed its development of renewable energy sources, he said.

“Nuclear energy was a grave mistake for Switzerland. We have had the electricity, but the future generations will have to manage the toxic waste and they won’t thank us.” SOURCE

Women bearing the brunt of economic losses: One in five has been laid off or had hours cut

Women are at the forefront of the economic crisis as yesterday’s labour force report from Statistics Canada reveals.  

In March, employment among women aged 25 to 54 years fell by 298,500, more than twice the decrease among men. Nearly half of this decrease (144,000) was among women working part-time, many in low paid service and care work who were already living on the financial edge before the pandemic struck.

Women make up just under half (47%) of all workers, but account for two-thirds (63%) of all job losses.  Among workers in the core demographic aged 25 to 54 years, women represent 70% of all job losses. 

The largest proportional losses were among youth (aged 15 to 24 years), accounting for almost 40% of total jobs losses in March. Young women have experienced the majority of these losses (at 59%), and over one-third of all job losses reported by women (36%).

Unemployment and Loss of Hours
Job losses of this scale have pushed up the unemployment rate among women by 3.4 percentage points over the space of a month. In March, 8.7% of all women reported being unemployed, the largest one-month increase on record.

Another 1.2 million women have seen at least half of their hours cut. This includes the many women working contract to contract, in precarious low wage jobs, as personal care assistants, cleaners and cashiers—a group that is not currently eligible for Canadian Emergency Response Benefit (CERB).

Altogether, over 1.8 million women have lost their jobs or lost at least half of their usual hours of employment. Average hours of employment among all female workers dropped from 30.1 per week in February to 24.8 hours in March, a decrease of 5.3 hours. By comparison, the decrease among male workers was only 3.9 hours.

Another way of looking at this is to track the number of dual earner families. In March 2020, there was a decrease in the number of spouses or partners living in dual earner families and an increase in single and non-earner couples by 918,000 (or +11.7%).

Women leaving the labour market
As stark as they are, the unemployment figures don’t include those who have left the labour market altogether and are now at home caring for children or others who are ill with no prospect of immediate return.

Between February and March there was a significant increase in the number of women “not in the labour market.” Among core-aged women (aged 25-54 years), that number grew by 145,800 (or 10.5%).

This is a number that bears watching, along with the employment rate. The employment gap between men and women among core aged workers—a key indicator of gender (in)equality—is already widening by 2.8 percentage points in a single month (from 91.7% to 88.9%). Many of these women leaving the labour force will be involved in child care and home schooling. Others will be caring for relatives who are ill. Will women return to the labour market—and in what capacity? Or will this crisis end up turning back the clock on gender equality?

Beneath the headlines statistics
In mid March, large swaths of the retail, food and accommodation sector were laid off in a single week. Civil servants were sent home—while others in the community sector are now struggling to deliver desperately needed services with skeleton staffs. With few exceptions, women again account for the majority of losses, and in some instances, such as care providers, health care technicians, and office support workers, the overwhelming majority.

Yesterday’s labour force release identifies the public-facing industries and occupations that were hardest hit in this first wave of closures and layoffs. This includes accommodation and food services (-25.6%), information, culture and recreation (-16.6%), educational services (-10.4%) and wholesale and retail trade (-7.4%). In all of these sectors, women account for the majority of losses.

In some sectors such as health care and social assistance, finance, insurance, real estate, rental and leasing, and business, building and other support services, women account for almost 100% of the losses.

Losses have been heaviest among certain types of jobs such as sales and services occupations. At 600,000 jobs, this group of workers accounted for 59% of all job losses posted in March.

There were also large job losses among those employed in educational services (-64,400), paraprofessionals in legal, social and community services (-50,100), and caregivers in support occupations (-37,600). Nine percent of those employed in technical occupations in health (-31,500) and five percent of those in occupations in support of health services (-17,500) experienced job loss. Those working in art, culture, recreation and sport have also reported a significant decline in employment (-88,700).

With few exceptions, women again account for the majority of losses, and in some instances, such as care providers, health care technicians, and office support workers, the overwhelming majority.

Among senior managers,  men experienced employment gains even as the number of women employed dropped—resulting in an even larger employment gap. Efforts to increase women’s representation at leadership tables seem to be falling by the wayside.

A harbinger of things to come
Given the timing of the March labour force survey, we won’t get the full picture until next month. But as my colleague, David MacDonald, notes these figures are “a harbinger of things to come as the unemployment calculations catch up to what’s actually happening to Canadian workers.”

We are shutting down key sectors of the economy, as we must, to contain the devastating impact of the coronavirus and protect our collective future. The costs will be high—especially for women. And we know the people facing intersecting forms of discrimination will suffer the largest and most profound losses and have the greatest difficulty springing back after the crisis.

Which is why it is critical to understand and document the gendered dimensions of the economic crisis—and take immediate action to make the changes necessary in the emergency income programs now rolling out to extend support to the hundreds of thousands who soon won’t be able to meet their basic needs. It is also the moment to lay the foundation for a more gender equal and inclusive world for tomorrow.

The temptation will be to say that gender is a side issue to the real crisis. There are a 1.8 million reasons why that couldn’t be further from the truth.  SOURCE


Katherine ScottKatherine Scott is a Senior Economist with the Canadian Centre for Policy Alternatives. Follow her on Twitter @ScottKatherineJ

New renewable energy capacity hit record levels in 2019

Most new electricity globally was green and coronavirus bailouts must boost this further, says agency

Solar power accounted for 55% of the new capacity. Photograph: Steve Parsons/PA

Almost three-quarters of new electricity generation capacity built in 2019 uses renewable energy, representing an all-time record. New data from the International Renewable Energy Agency (Irena) shows solar, wind and other green technologies now provide more than one-third of the world’s power, marking another record.

Fossil fuel power plants are in decline in Europe and the US, with more decommissioned than built in 2019. But the number of coal and gas plants grew in Asia, the Middle East and Africa. In the Middle East, which owns half the world’s oil reserves, just 26% of new electricity generation capacity built in 2019 was renewable.

The world has invested about $3tn in renewables over the past decade, according to Irena, but annual investments must double by 2030 to tackle the climate emergency.

 

“While the trajectory is positive, more is required to put global energy on a path with sustainable development and climate mitigation,” said Francesco La Camera, director general of Irena. “At this challenging time, we are reminded of the importance of building resilience into our economies.”

La Camera said the huge spending planned by governments in response to the coronavirus pandemic must support green initiatives rather than fossil fuels. “In responding to today’s crisis, governments may be tempted to focus on short-term solutions,” he said. “Yet distinctions between short-, medium- and long-term challenges may be deceptive. The pandemic shows that delayed action brings significant economic consequences.”

The global oil market is in turmoil, hit by collapsing demand due to Covid-19 lockdowns and a savage price war between Saudi Arabia, Russia and the US. La Camera said: “Renewable energy is a cost-effective source of new power that insulates power markets and consumers from volatility.” Solar and wind power are now the cheapest form of electricity in two-thirds of the world.

The Irena data shows the increase in new renewable energy capacity slowed slightly in 2019 – from 179GW to 176GW – but that new fossil fuel power also fell. The total green energy installed to date around the world grew by 7.6%, with the UK’s total rising 6.1%. The UK is now 11th in the world for installed renewables.

New solar power provided 55% of the new capacity, most of which was installed in Asia, with China, India, Japan, South Korea and Vietnam leading the way. Other major increases were seen in the US, Australia, Spain, Germany and Ukraine.

Wind power made up 34% of the total, with almost half in China and significant additions in the US. Global wind power capacity remains just ahead of solar, with 95% being onshore turbines.

Other green technologies – hydropower, bioenergy, geothermal and marine energy – all grew modestly year-on-year. While small compared with solar and wind power, geothermal energy – tapping the heat of deep rocks – is growing, with Turkey, Indonesia and Kenya leading the way. SOURCE

Scientists create mutant enzyme that recycles plastic bottles in hours

Bacterial enzyme originally found in compost can be used to make high-quality new bottles

The company behind the breakthough, Carbios, has partnered with major companies including Pepsi and L’Oréal. Photograph: Mario Anzuoni/Reuters

A mutant bacterial enzyme that breaks down plastic bottles for recycling in hours has been created by scientists.

The enzyme, originally discovered in a compost heap of leaves, reduced the bottles to chemical building blocks that were then used to make high-quality new bottles. Existing recycling technologies usually produce plastic only good enough for clothing and carpets.

The company behind the breakthrough, Carbios, said it was aiming for industrial-scale recycling within five years. It has partnered with major companies including Pepsi and L’Oréal to accelerate development. Independent experts called the new enzyme a major advance.

Billions of tonnes of plastic waste have polluted the planet, from the Arctic to the deepest ocean trench, and pose a particular risk to sea life. Campaigners say reducing the use of plastic is key, but the company said the strong, lightweight material was very useful and that true recycling was part of the solution.

The new enzyme was revealed in research published on Wednesday in the journal Nature. The work began with the screening of 100,000 micro-organisms for promising candidates, including the leaf compost bug, which was first discovered in 2012.

“It had been completely forgotten, but it turned out to be the best,” said Prof Alain Marty at the Université de Toulouse, France, the chief science officer at Carbios.

The scientists analysed the enzyme and introduced mutations to improve its ability to break down the PET plastic from which drinks bottles are made. They also made it stable at 72C, close to the perfect temperature for fast degradation.

The team used the optimised enzyme to break down a tonne of waste plastic bottles, which were 90% degraded within 10 hours. The scientists then used the material to create new food-grade plastic bottles.

Carbios has a deal with the biotechnology company Novozymes to produce the new enzyme at scale using fungi. It said the cost of the enzyme was just 4% of the cost of virgin plastic made from oil.

Waste bottles also have to be ground up and heated before the enzyme is added, so the recycled PET will be more expensive than virgin plastic. But Martin Stephan, the deputy chief executive at Carbios, said existing lower-quality recycled plastic sells at a premium due to a shortage of supply.

“We are the first company to bring this technology on the market,” said Stephan. “Our goal is to be up and running by 2024, 2025, at large industrial scale.”

He said a reduction in plastic use was one part of solving the waste problem. “But we all know that plastic brings a lot of value to society, in food, medical care, transportation. The problem is plastic waste.” Increasing the collection of plastic waste was key, Stephan said, with about half of all plastic ending up in the environment or in landfill.

Another team of scientists revealed in 2018 that they had accidentally created an enzyme that breaks down plastic drinks bottles. One of the team behind this advance, Prof John McGeehan, the director of the Centre for Enzyme Innovation at the University of Portsmouth, said Carbios was the leading company engineering enzymes to break down PET at large scale and that the new work was a major advance.

“It makes the possibility of true industrial-scale biological recycling of PET a possibility. This is a very large advance in terms of speed, efficiency and heat tolerance,” McGeehan said. “It represents a significant step forward for true circular recycling of PET and has the potential to reduce our reliance on oil, cut carbon emissions and energy use, and incentivise the collection and recycling of waste plastic.”

Scientists are also making progress in finding biological ways to break down other major types of plastic. In March, German researchers revealed a bug that feasts on toxic polyurethane, while earlier work has shown that wax moth larvae – usually bred as fish bait – can eat up polythene bags.

SOURCE

Kenney’s billions for Keystone XL is ballast for a sinking ship

Alberta Premier Jason Kenney in Calgary on Feb. 26, 2020. Photo by The Canadian Press/Jeff McIntosh. Pipes intended for construction of the Keystone XL pipeline, April 22, 2015. Photo by The Canadian Press/Alex Panetta

Kenney’s announcement came just a day after Finance press secretary, Jerrica Goodwin, justified the layoff of 26,000 public sector education workers because there were limits to the amount of money Alberta could borrow during the economic downturn. While it’s certainly deplorable and disingenuous to prioritize corporate welfare over the day-to-day needs of Albertans, it shouldn’t distract us from a bigger problem: How recklessly Kenney is betting on Alberta’s increasingly unstable oil industry for its long-term economic salvation.

The first question Albertans should be asking themselves is why TC Energy Corp. needed the Alberta government’s help in the first place. It’s because big banks and other major investors are swearing off oil and gas projects because of the inherent risk involved in high-carbon fuels in the age of climate change.

Over the last three years, some of the biggest banks and international financiers in the world — HSBC, BNP Paribas, Natixis, ING, insurance and investment giant Axa, and Sweden’s largest national pension fund, AP7— confirmed they would no longer provide financing for oilsands projects, including the Keystone XL pipeline.

Just three months ago, Larry Fink, the CEO of investment firm BlackRock, which manages more than $6 trillion in assets, and one of the most influential investors in the world, wrote that “climate risk is investment risk” and announced his company would be “exiting investments that present a high sustainability-related risk” and creating “new investment products that screen fossil fuels.” This, he continued, was to help solve the climate challenge, “because every government, company and shareholder must confront climate change.”

Obviously, Kenney didn’t get Fink’s memo. Glen Hodgson at the C.D. Howe Institute, a think tank not known for its anti-oil rhetoric, almost certainly did. While Kenney was brokering a deal to further chain Alberta to its sinking oil ship, Hodgson was reminding Canadians that the triple whammy of COVID-19, the oil price war between Saudi Arabia and Russia and the rapid growth of ever-cheaper renewable energy sources means that only a fool would bet their entire economy on one of the dirtiest, most expensive kinds of oil on the planet.

“For affected firms and for governments, assuming a return to ‘business as usual’ may no longer be realistic or prudent,” Hodgson writes. “At this stage, companies and governments need to include multiple scenarios, examining a range of possible outcomes, to inform decision-making. To cope with the extraordinary forces at play, planning and action by both business and government ought to be founded on realism, adaptation, and innovation – and a readiness to continually adjust.”

Even as Teck Resources considers a complete shutdown of its Fort Hills mine, just a month after cancelling its Frontier mine, the Alberta government seems either incapable or unwilling of heeding such sage advice, which leaves it to the federal government to do the difficult and courageous work of weaning Canada off its unhealthy reliance on oil and gas revenues.

The fact that Prime Minister Justin Trudeau’s government stayed the course on its plan to increase the national price on carbon pollution from $20 to $30 a tonne, despite howls of protest from Conservative politicians, is a good sign and a positive signal to investors. But the federal government’s own buyout of the Trans Mountain Pipeline expansion, is also an example of our government pouring billions of taxpayer dollars into fossil fuel subsidies years after commitments made at the G20 that those would be phased out.

As rumors swirl about a multibillion-dollar federal bailout package for the Alberta oil industry in Canada, federal officials should focus their efforts on supporting workers and their families in the short term, not loan guarantees or share purchases to buoy up struggling oil companies (of which there will be many).

Even before the COVID-19 pandemic, oil, gas and pipeline companies were performing at the bottom of the S&P and going bankrupt in record numbers. Oil companies in Alberta have been increasing production while laying people off, returning fewer royalties to government coffers, leaving massive toxic public liabilities, and requiring huge and increasing government subsidies to stay in business.

“Emissions from oil and gas production are now the largest and fastest growing emissions in Canada. Propping up failing fossil fuel projects and companies is not an economic strategy in the climate era, it’s simply political.”

Instead, our governments would do well to listen to the advice of the International Energy Agency. No enemy of the oil and gas industry, the IEA is encouraging governments to “put clean energy at the heart of stimulus plans to counter the coronavirus crisis.” Government bailout funds could be invested in a post-pandemic economy that is cleaner and more resilient than the increasingly volatile hydrocarbon markets we rely on today.

Any financial assistance for corporations should come with commitments to help Canada meet its climate obligations under the Paris Agreement. Airlines and auto manufacturers, for instance, can commit to reduce their GHG emissions, banks can pledge to stop funding oil and gas expansion, and hard-working Canadians can be put to work cleaning up abandoned oil and gas infrastructure, which pollutes groundwater and emits methane.

If COVID-19 teaches us anything, it’s that we need to adequately assess future risks to society and then act quickly to prevent them or decrease their severity.

Given the risk of runaway climate change, it’s time to act with the same urgency we have given the COVID-19 crisis. These last few weeks have reminded us that there is nothing we can’t accomplish if we work together. In Canada, this starts with courage and leadership from the federal government, and an investment not only in our short-term basic needs, but in a clean-energy future that will provide stability and security for our generations to come.

Emissions from oil and gas production are now the largest and fastest growing emissions in Canada. Propping up failing fossil fuel projects and companies is not an economic strategy in the climate era, it’s simply political.

Canadians and the world deserve better from elected officials, given the dramatic rise in extreme weather and fires sweeping the globe. Canada has shown true leadership in our carbon price and our coal phase out. It’s past time to show the world that we have the courage to say no to Big Oil, that we have the courage to diversify our economy, to cap expansion of fossil fuels and begin the wind down of production and emissions that our commitment to net zero by 2050 requires. SOURCE

Investing in climate goals could play key role in coronavirus economic recovery

Environment and Climate Change Minister Jonathan Wilkinson responds to a question during Question Period in the House of Commons Tuesday March 10, 2020 in Ottawa. .

Environment and Climate Change Minister Jonathan Wilkinson responds to a question during Question Period in the House of Commons Tuesday March 10, 2020 in Ottawa. . THE CANADIAN PRESS/Adrian Wyld

OTTAWA — The federal government is quietly looking at longer-term recovery plans from the COVID-19 crisis even as its focus remains squarely on getting more than $100 billion in emergency economic aid out the door.

The plan, while still in its infancy, is picking up in part from where the government’s economic strategy was headed before COVID-19 turned everything topsy-turvy: with a climatebudget.

“When the recovery begins, Canada can build a stronger and more resilient economy by investing in a cleaner and healthier future for everyone,” said Moira Kelly, a spokeswoman for Environment Minister Jonathan Wilkinson.

Women and Gender Equality Minister Maryam Monsef said in a recent interview that there are three prongs to the government’s response, starting with direct aid to people, then supporting businesses so they can continue through and after the COVID-19 pandemic.

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“At the same time we are laying another track so that when it’s time to begin the quote unquote cleanup and the economic and community recovery, that my team has done its work in preparing a blueprint for what steps we take next,” she said.

Some ministers, whose portfolios are less directly connected to the pandemic response, are looking more closely at the longer-term picture. That includes ministers like Wilkinson and Infrastructure Minister Catherine McKenna.

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Before COVID-19, both Wilkinson and McKenna were major players in the federal budget preparations, which was promised to be a down payment on the government’s strategy to reach net-zero emissions by 2050. That policy, an election promise Trudeau made last fall, would reduce emissions to the point where the remainder can be absorbed naturally or with technology, leaving none in the atmosphere to trap heat and warm the planet even further.

Some of the budget’s plans are expected soon, including a massive investment to clean up abandoned oil wells in Alberta that is part of the federal strategy to find new jobs for energy workers leaving the oil patch. Finance Minister Bill Morneau said March 18 such an investment was coming, and Alberta Premier Jason Kenney told his province last week to expect an “extraordinary” federal investment for orphan wells.

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Another election promise, interest-free loans of up to $40,000 for homeowners to install cleaner energy solutions and efficiencies like solar panels and better windows, is also said to be in the works. It would mimic previous stimulus programs that inject money into the economy by making it easier for consumers to make home improvements.

Wesley Johnston, president of the Canadian Solar Industries Association, said Ottawa has indicated some programs it is working on for clean energy investments. He said the government mostly wants programs that can be implemented quickly and will create jobs and liquidity in the economy.

Johnston was one of the signatories on an open letter to Trudeau last week encouraging him to look at clean technology and energy investments as keys to the economic recovery package.

On Thursday, the Green Budget Coalition also wrote the government asking for it to ensure that the global climate emergency and biodiversity loss remain front and centre in the recovery process planning.

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Conservative Leader Andrew Scheer said his party will have more to say about the recovery plan once the immediate health crisis is over, but added the government can’t return to Liberal policies as usual, particularly as it relates to the damaged oil and gas sector.

“We will have to start having conversations about how we can have a much more competitive tax system, much less and fewer regulations that block investment from coming in,” he said. “We’re going to have to talk about how we’re going to kick-start big projects that are already on the books and those conversations will happen.”

Ralph Goodale, a former minister of public safety and finance, oversaw a number of recovery plans following smaller-scale disasters like major floods and forest fires. Still he said there will be people not needed on the front lines asked to chip in efforts for the recovery plan, which will be complex and forge some new ground.

“Figuring out exactly how to do it is going to take a lot of ingenuity,” he said.

Goodale said he thinks there will have to be some longer-term stimulus for sectors like transportation, tourism, and energy, which are going to feel the hurt of this slowdown more deeply and longer than others. He also encouraged his former cabinet colleagues to be creative in packaging recovery programs that do more than one thing, such as address climate change and Canadian self-sufficiency in medical supplies or agriculture, at the same time.

The positive environmental impact of COVID-19

 

Conference Board of Canada chief economist Pedro Antunes told The Canadian Press a big economic stimulus package to restore the economy, like we saw in the 2009 financial crisis, might be unnecessary as the harm done now should reverse itself when the COVID-19 restrictions are lifted.

“Once we start to reopen the economy, take this prescription of social distancing out, I think the economy will bounce back fairly well by itself,” he said.

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Antunes said some industries will take longer to get back to normal, as the government signals things will reopen slowly, rather than all at once. Travel, in particular, will take longer to return, and industries with large gatherings, such as sporting events or theatres. SOURCE

Morneau, provinces must apply climate lens to COVID-19 recovery efforts

“Science is providing the world with clear evidence of a looming catastrophe, but our response has been halting and inadequate. A temporary decline in GHG emissions due to economic distress is no reason for complacency.”

Minister of Finance Bill Morneau holds a press conference to speak about the government’s measures to help Canadians with the effects of COVID-19 pandemic from West Block in Ottawa on March 27, 2020. Andrew Meade/iPolitics

As we grapple with the urgency of the COVID-19 pandemic, the climate crisis gathers force, posing long-term threats at least as severe as the current, more temporary distress.

The steep slump in fuel consumption is resulting in a decline in Canadian and global carbon emissions. However, we can expect that to rebound once the COVID-19 crisis passes and consumers look to satisfy their pent-up demand for goods, services and travel.

This decline and resurgence of emissions occurred during and following the 2008-2009 recession. It will almost certainly happen again, though how long it takes to get back to pre-pandemic levels of economic activity and emissions is uncertain.

In the coming weeks and months, governments at all levels will shift their focus from the critical immediate needs of the health-care system, vulnerable Canadians and impacted businesses to medium- and longer-term efforts to revive the economy.

In doing so, Finance Minister Bill Morneau and his provincial counterparts must apply a rigorous climate lens.

The International Energy Agency is urging governments to focus their economic stimulus on measures that revive the economy while reducing carbon-intensive investments and accelerating the energy transition. IEA executive director Fatih Birol called the looming stimulus effort “an historic opportunity” to change gears.

There are short term and longer term strategies.

Money should quickly flow to public works projects such as tree planting, wetland restoration and energy-efficiency retrofits of public buildings like schools and hospitals. Each of those endeavours would yield a range of benefits — helping Canada meet its greenhouse gas targets and making communities more resilient to the inevitable impacts that climate change will bring, while putting people back to work today.

Federal and provincial governments should ensure their own stimulus spending takes into account climate risks and opportunities. And they should send strong signals to the private sector — the bankers, asset managers, and corporate executives — that they are expected to adhere to principles of “sustainable finance” as they prepare to re-invest.

Ottawa and the provinces are going to ramp up their spending on infrastructure and will encourage banks, pension funds and other asset managers to co-finance projects.

As they do so, governments should move aggressively to make “sustainable finance” a mainstream principle in the financial sector, as recommended by a federally-appointed expert panel led by former Bank of Canada deputy governor Tiff Macklem.

That means requiring companies to disclose to investors how they are managing climate risks and opportunities, including how their business models would fare in a successful transition to a low-carbon economy. It means clarifying to asset managers that their fiduciary duty includes ensuring their investments do not contribute to a global climate crisis. And it includes embedding climate-related risk into the monitoring and regulation of the financial sector.

Federal Infrastructure Minister Catherine McKenna is keen to move forward on projects that can provide stimulus while offering long-term economic and environmental benefits.

The tools are in place. She should focus on expediting capital-seeking projects through existing channels rather than creating new programs. The Canadian Infrastructure Bank (CIB) has already signed off on a list of projects that are awaiting a green-light from Ottawa and then federal and provincial permits. To the degree possible, approvals should be fast-tracked.

The CIB should also be prepared to take on more risk. Its new chair Michael Sabia placed sustainable finance principles at the heart of investment practices when he led Quebec’s Caisse de dépôt et placement du Québec (CDPQ), and can do the same at the CIB.

Ottawa should allow maximum flexibility for funds earmarked for provinces, territories and municipalities, albeit while insisting on a broadening of t sustainability test.

Government officials also need to quickly analyze clean-energy supply chains. Where there are bottlenecks or tariffs that prevent project developers from accessing materials, they should be removed.

Support for clean energy innovation will help ensure Canadian firms are participating in the transition, while government procurement policies can provide them with a ready market.

More broadly, and most importantly, Prime Minister Justin Trudeau and his leading ministers need to communicate that the climate crisis remains a top priority. Economic stimulus must be designed and rolled out in ways that further this overarching and no-less imperative agenda.

We would be wise to learn a key lesson from this pandemic: how dangerous it is to confront a collective threat only when it is at our doorstep, or indeed has entered our homes and work places.

We are repeating this pattern with climate change. Science is providing the world with clear evidence of a looming catastrophe, but our response has been halting and inadequate. A temporary decline in GHG emissions due to economic distress is no reason for complacency.

We need to act now, while — not after — dealing with COVID-19. SOURCE


Shawn McCarthy writes on energy & climate change, and is a senior counsel at Sussex Strategy group. Devin McCarthy is vice-president in Sussex Strategys energy and environment practice, based in Ottawa.


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