China's Migration to a Green Economy and Shale Gas, Concurrently! The War on Coal

China has declared war on coal and coal consumption is down as a result. But this coal war offers good news, not so good news for Canada and bad news, concurrently.  

The good news pertains to 1) China having become an unparalleled leader and investor in the global migration to a the green economy and 2) China's ongoing adoption of ambitious new policies and targets to accelerate this migration at a spellbinding rate.   

Unfortunately, the aforementioned good news for China also has serious implications for Canada in that not only is Canada falling further and further behind China regarding the green economy at an incredible rate but also Trudeau and Harper via FIPA are set on selling Canada's resources to China while opening the doors for China to dump its clean technologies in Canada.

The bad news angle is that China's war on coal has also given rise to ambitious, but environmentally reckless, development of shale gas, wrongly perceived to be a cleaner, or less environmentally harmful, alternative to coal.

The Good News: The Spellbinding Migration to a Green Economy, and the War on Coal
In an my article published in The Common Sense Canadian on October 14, 2013, China's Chaotic Leap Forword to a Green Economy, the incredible pace of China's initiatives to go green was highlighted.  

In a nutshell, China 1) has become world's the largest investor in clean energy technologies, with $61.3B spent on renewable energy technologies in 2013 that in turn resulted in 28 GW of solar and wind capacity added in that year alone;  2) has awesome green job numbers such as 300,000 jobs in its solar PV sector and 800,000 jobs in the solar thermal sector; 3) has evolved from a domestic solar manufacturing sector that served 1% of global markets in 2004 to 50% by 2012; 4) has a plan for 7 pilots on cap and trade; and 3) has laid the policy ground work for world leadership in the manufacturing and deployment of electric vehicles. As result of these measures, the above-mentioned October 2013 Common Sense Canadian article projected that coal consumption in China would peak in 2015.

But China is going green so quickly that projections tend to be too conservative. As a case in point, for the first time in this century, coal consumption and coal imports in China are down. The prediction is that this trend will continue and translate into a 15% reduction or 300M metric tonnes less by the end of 2014 compared to 2013. Moreover, evidence that this trend is long term comes from the Beijing government's announcement that it will ban coal use in 6 city districts by 2020 and turn to clean energy for replacements.

Also worth noting, China's war on coal includes the banning of sales and imports of coal containing high quantities of ash and sulfur.  The new regulation bans from sales and imports, coal with ash content of more than 40% and more than 3% sulfur content.  This ban would effectively eliminate low heating value coal from Indonesia and coal with arsenic from Australia. 

Yet, notwithstanding the extraordinary progress China has made in such a short period -- and proving that the progress achieved are not just aberrations -- China is currently working on policies to accelerate its migration to a green economy.  

Regarding the acceleration of the pace of green initiatives, rumors are rife as to what to expect from China's five year plan for 2015-20.  This includes the possibility of China introducing a cap and trade system in 2016.  China already has a pilot cap and trade system in Shenzhen, the first of seven pilots in the country.

Other indicators on China's intention to move quickly, pertain to China being well-positioned to lead the world in electric vehicles (ev's), not only now, but more importantly, in the years to come. In particular, 1) China's BYD is already manufacturing electric buses; 2) China's central government has set an objective for 30% of its vehicle purchases to be electric vehicles beginning 2016, 3) a $16B program is under review to set up charging stations across the country and 4) electric and hybrid Made-in-China vehicles are now exempt from a 10% purchase tax.  As well, several regional governments are targeting for 30% of their vehicle purchases to be hybrid and electric vehicles by 2016.

The Potentially Not so Good News for Canada
What does China's exceptional progress and policy leadership for years to come mean for Canada, in particular, in the context of China having become the world's largest energy consumer and consequently a major influence in global energy paradigms and related economics?  In crude terms, Canada will have an enormous green economy gap to close beginning 2015, after the upcoming federal election.  

It also means that Canada will have to shed the mindset to the effect that Canada's future economic well-being lies with increasing its exports of fossil fuels, a mindset shared by both Harper and Trudeau. 

Further accentuating the challenges for Canada posed by China's leadership and the implications for redefining global energy/economic paradigms, are the ramifications of FIPA, the Canada-China trade agreement recently ratified by the Harper administration.   

That is, the US and the EU have responded to China's highly subsidized dumping of clean techs on global markets with the imposition of steep tariffs.  But FIPA stipulates that there will be no commercial barriers associated with environmental technologies. This stipulation could seriously handicap the development of Canada's clean tech sectors.

In short, a successful Canadian plan for a migration to a green economy must take into account China.  To do otherwise would be at Canada's peril.

The Bad News: China's Shale Gas Frenzy and the War on Coal

In collaboration with US partners, and in accord with a US-China agreement on developing China's resources, China is setting the stage to develop what may be the largest shale gas resources in the world, 1.7 times the potential of that of the US.  With fewer than 200 wells drilled to-date, China is projected to produce 1058 billion cubic feet of natural gas annually by 2020.  And the environmental implications identified to-date of China's pending shale gas boom are enormous.

First, fracking regulations in China are almost non-existent.  Second fracking in China requires twice as much water than in the US because China's shale gas lies deeper underground and in more complex geological formations.  

This, in a country with dangerously low water per capita and where land twice the size of New York City turns into desert every year.  

This, in a country where fracking waste water often goes untreated.

Nevertheless, all is in place to speed up the tempo of shale gas development.  Already foreign multinationals are investing heavily in China while companies like the state-owned China National Offshore Oil Corporation (CNOOC) - the same company that bought out Nexen in Alberta -- have spent $8.7B in buying shares in US shale gas operations. One can suspect that this will offer Chinese firms opportunities to obtain patents on technologies; ultimately manufacture these technologies in China; and then export these very same technologies to the US at a cheaper price.

All this is going on while the US experience has taught us that that methane leaks associated from shale gas development are grossly underestimated and the potential for regulations to control these emissions are overestimated.  Drilling creates fractures in surrounding rock that cement cannot completely fill, thus opening paths for the escaping of gases and liquids.  As well, as the cement ages, it pulls away from the surrounding rock reducing the tightness of the seals, thereby generating greater danger for methane leaks and water and air pollution.

Will History Repeat Itself with China Ultimately Focusing on the Right Thing To Do?

The good  and bad news have been presented in this article to demonstrate the incredible ability for China to head in opposite directions at a tremendous speed. 

On one hand, China's amazingly rapid migration to a green economy, accompanied by a reduction coal, suggests that China will be a major vector in the global replacement of fossil fuels with clean technologies alternatives.

On the other hand, the fracking activities, while nowhere near the scale of what is happening on China's clean technology side of the equation, raises the weakness for which China is so famous --- first go full speed ahead, wait for the problems to accumulate and then engage with incredible zeal in gestures to solve the problems created by their previous humongous mistakes.

Clean Transportation: Canada Can Set its Own Agenda for Uptake in an Integrated North American Market

The Integrated North American Market is Not a Barrier

There will be those, the automobile industry in particular, who will tell us that Canada cannot set different objectives for reducing emissions and improving the fuel consumption of vehicles sold in Canada because Canada and the US represent an integrated market.  By that, they mean that cars manufactured in the US and Canada are destined for the US and Canadian markets. 

Other manufacturers, those with no manufacturing facilities in North America, produce vehicles specifically tailored to the North American market. 

Yet, notwithstanding these considerations, the integrated market reasoning to the effect that Canada cannot set itself apart from the US, is faulty for several reasons.

The California Difference and Leadership

For many years, California had more stringent smog regulations for new vehicles than the rest of North America.  Yet all vehicle manufacturers, regardless of the locations of their respective manufacturing plants, managed to make the necessary modifications to meet the California standards for new vehicles destined for sale in that state.  Since California has roughly the same population as Canada, then it stands to reason that Canada can do things differently than the US, should it desire to do so.

More recently, California and 7 other states announced plans to introduce requirements concerning the percentage of zero emission (eg electric and hydrogen vehicles)and low emission/hybrid vehicles sold in their respective markets beginning with the year 2018.  There is no reason why Canada cannot join them and thereby contribute to the improvement in the North American economies of scale for providing proportionally greater numbers of low and zero emission vehicles for the Canadian market.

Corporate Average Fuel Economy (CAFE) Standards

The only important existing mechanism for improving the fuel consumption of new vehicles sold in Canada are the corporate average fuel economy (CAFE) standards.  Beginning 2016, a new set of standards will come into effect.  The Canadian standards are identical to those of the US.  

Since  a given manufacturer's CAFE performance for a given year is weighted by the total sales and the fuel consumption of each model, aggregated over the total vehicle sales of the manufacturer for the year in question, a more stringent Canadian CAFE standard than that of the US would merely mean that the distribution of models placed on the Canadian market would be different than the arrays of models of the same manufacturer makes available on the US market -- e.g. proportionally fewer big SUV models; and higher numbers of intermediate sedans; small cars; and hybrid and zero emission vehicles destined for the Canadian market.  

The nice thing about above-described more stringent than US Canadian CAFE, is that this approach does not require any requirements for technological changes, or undue burdens on the part of the vehicle manufacturers.  Of course, the manufacturers can be expected to squeal anyway. 

In any case, vehicle selections and standard equipment have always been different on the US and Canadian sides of the border.  A case in point, the Ford Motor Company discontinued the Mercury line-up in Canada many years before the company did the same in the US.  Another example, you're out of luck if you had wanted to buy a 2014 Accord Hybrid in Canada while they are readily available in the US.

Fuel Consumption Ratings:  Implications for CAFE and Consumer Choices

The fuel consumption ratings of vehicles sold in Canada are different than the ratings of the similar and the same vehicles rated by the US Environmental Protection Agency (EPA).  Unlike the US ratings, the Canadian ratings are supplied by the manufacturers and are not verified by any third party government organization.  By contrast, in the US, the fuel consumption ratings are based on test procedures and calibrations to reflect on the road experiences.  To keep the manufacturers honest, the EPA conducts verifications of around 15% of the models of new vehicles placed on the US market.

The result of the aforementioned differences are such that 1) US ratings are viewed as a reliable and realistic relative guides as to what one could expect from the vehicles on the US market while 2) the Canadian fuel consumption numbers are so exaggerated, that few Canadians consider the Canadian numbers relevant when it comes time to making their choices for a new vehicle.

Accordingly, if Canada is to have an effective and more stringent than US CAFE standards, it would be necessary to introduce testing and calibration procedures similar to that of the US EPA but with adjustments for taking into account winter driving conditions, including the use of snow tires.  This approach is essential to  assure that the Canadian CAFE achieved by each manufacturer reflects the "real world" (actual)  results of each manufacturer in reaching the more stringent Canadian targets.

As well, the more realistic data on fuel consumption stemming from the aforementioned approach is critical for assuring that Canadian consumers have credible fuel consumption information which they can rely on when comparing vehicles on the Canadian market.

Complimentary Government Leadership Roles

With respect to the influencing of consumer purchases to favour more fuel efficient and low or zero emission vehicles, the federal sales tax could be modulated in a revenue neutral fashion to charge less for the low and zero fuel consumption/emission vehicles and higher rates for the high energy consuming vehicles. 

France and Finland have adopted this model.   China is considering going one step further by eliminating the purchase tax (10%) for all new energy vehicles, in particular electric vehicles.

Lastly, the federal government could play a major leadership role in advancing clean transportation in Canada by 1) adopting a meaningful vehicle green procurement targets and 2) participating in clean transportation demo projects funded by government sustainable development and clean transportation innovation funds. 

With respect to the first item, once again China is leading the way by requiring that, beginning in 2016, 30% of vehicles purchased by the central government must be electric vehicles.   In parallel, regional government bodies in Beijing-Tianjin-Hebei region, the Yangtze River Delta, and the Pearl River Delta are aiming for electric vehicles and hybrids to makeup at least  15% of all new vehicle procurements by 2015 and 30% by 2016.

Conclusion

All of the aforementioned measures are readily applicable without major efforts on the part of both government and industry, as soon as Canada has federal government is willing to implement them. The only thing standing in the way of pursuing these progressive measures are political will and popular support to make this happen.... in Canada.

As Jack Layton used to say, "Don't let them tell you it can't be done."

Linking Clean Energy to Clean Transportation: Barriers are Primarily "Cultural" Rather than Technological

PART I

WE ARE RIPE FOR THE MIGRATION TO A GREEN ECONOMY NOW:

ALL THAT'S MISSING IS THE POLITICAL WILL

There are those who suggest that a migration to a green economy is too expensive, that we must convert to natural gas as a transition fuel, that the subsidies for clean technologies are driving up the cost of energy, that we need to sell more fossil fuels to finance the transition to clean technologies.  What all these views have in common is "denial".  Indeed, these arguments may be referred to as today's version of the case for The Flat Earth Society.

Clean Energy Investments Offer Better Long Term Economics

For starters, investments in fossil fuels no longer make any long term sense.  The oil companies know the writing is on the wall in light of 1) the need to shift more emphasis to non-conventional fuels that are more expensive to exploit and refine --- such as Canada's tar sands and offshore oil and 2)  market prices that do not reflect the increases in fossil fuel project costs.  On the latter point, market prices are based on speculation more than anything else. 

Taken together, the rising costs of fossil fuels,  the declining costs of clean technologies and energy storage, the long term financing associated with major energy projects -- typically a 20 to 25 year cycle --plus the introduction of government measures to reduce fossil fuel related emissions around the globe, indicate that already long term clean energy investments are now cheaper than fossil fuels.

 Add to this portrait that fossil fuel sectors represent the most subsidized sectors in the world, to the tune of $1.9T/year in 2011 dollars or roughly $110/tonne.   If we were to eliminate these fossil subsidies, not only would clean energy be cheaper in the long run, but also clean energy would be immediately competitive without any subsidies.

While some will argue that shale gas discoveries have injected new life into the longevity of the fossil fuel sectors, the evidence is accumulating to the effect that the US shale gas is headed towards boom and bust cycles because only the initial extractions of the sweet spot gas are economically sound investments.  To this effect US shale gas stakeholders have already begun writing off billions in investments in the US.

 As well, one might say that the case for a shift away from fossil fuels has been internalized in China and the green shift is gaining momentum in the EU and the US --- but not in Canada.  Pity!

PART II

THE TRANSPORTATION SECTOR:

 DIFFICULT BUT NOT INSURMOUNTABLE CHALLENGES TO GO GREEN

For the migration to a green economy, the transportation sector may appear to be the most difficult challenge.  This is so because this sector is currently nearly 100% dependent on fossil fuels and there are no obvious immediate large scale practical alternatives for making the switch to clean transportation.   But these barriers are more psychological than technological.  Those jurisdictions with the courage to make the right political decisions today can change the paradigm, and some have already begun to do so.

The Role of Electrical Utilities

Electric utilities for the most part have not paid much attention to the new market possibilities associated with the electrification of transport.  This is so, despite the advancements in batteries, bi-directional fast charging stations that can be networked to use parked electric vehicles as energy storage facilities, plus the arrival of both plug-in hybrids and electric vehicles.

As to why the utilities haven't paid attention may best be described as a internal cultural mindset.  One would think that electricity utilities would be actively investigating new types of markets because the combination energy efficiency, the prevailing economic slow or no growth, and the emerging trend entailing individuals, corporations and communities getting into the act of producing their own clean energy, all suggest growth in traditional markets may be low or stagnant in the coming years.  In effect, without efforts to pursue the possibilities in the transportation sector, the utilities may find themselves faced with higher costs without the proportionate additional revenues to go with it.

Accordingly, utility investments in clean transportation are logical next steps given the 1) size of the transportation sector and 2) government initiatives around the globe to reduce dependencies on fossil fuels and 3) the current near total reliance on fossil fuels for transportation.  With the latter two considerations in mind a UN report indicated that electric vehicles could make up close to 100% of US new vehicle sales within the next 15 years.

Utility incentives for electric vehicles could range of discounts for charging stations, vehicle purchase discounts or loan payment arrangements with dealers/manufacturers; and off peak rates for charging vehicles at night.

 In Canada where many utilities are public, the preceding incentives could be part of overall provincial government incentive packages to foster a migration towards electric vehicles.

Infrastructures: Local and Regional

As implied by the preceding information, one of the keys to making the shift to electric  transportation is that of infrastructure, in particular clean energy large scale smart grids and micro-grids. 

Contrary to prevailing conventional wisdom, the complexities of semi-autonomous micro-grids supplied by local intermittent clean energy sources (e.g: solar and wind); and supported by energy storage,combined with linkages to regional large scale clean energy utilities, do not entail any greater than the complexities of today's centralized electricity infrastructures.

US and California Leadership

In keeping with the aforementioned holistic path for assuring that the aforementioned infrastructures are developed and in use, in February 2014, the US federal Department of Energy announced $7M for advancing the design of community-scale micro-grids with capacities going up to 10 MW.  In addition, the DOE is offering$6.5M in matching grants for the development of integration technologies to accommodate both multiple intermittent renewable energy sources and energy storage in a  grid.

Going bolder than the US national government, the state of California has adopted the Self-Generation Incentive Program that will provide $415M over 5 years to install micro-grid components on the customer's side of the grid, including wind turbines, waste heat to power technologies and advanced energy storage systems.  This program will help meet California's energy storage mandate, which among other things requires that investor-owned utilities add 1.3 GW of energy storage for their respective grids by 2020. 

Electric Vehicles as Extensions Micro-grids and Energy Storage

With the support of electric vehicle bi-directional charging stations, during the energy surplus periods, regionally networked plugged in parked electric vehicles would serve as energy storage facilities  via their respective batteries. -- Parked electric vehicles would become extensions of the energy storage network to be called upon during periods of high electricity demand.

At the micro-level, the combination of 1) a parked electric vehicle in an employer/industrial park parking lot or at one's home, and 2) a clean energy micro-gird supplied by local solar roof-top and/or wind power sources, supplemented by the regional utility, as required, would offer several attractive features.  Key features would encompass 1) building to vehicle and vehicle to building off-centralized opportunities off the regional grid and 2) possibilities to supply/sell surplus energy to the regional grid, as appropriate.  Also, in times of blackouts, the parked vehicles would be sources of stored energy to bridge the loss of power period until the regional source is restored.

Utilities, Hydrogen and Energy Storage

Other types of utility partnerships could be with the Canadian hydrogen sector regarding energy storage -- the electrolysis of water using clean energy generated from hydro,wind and solar sources to produce and compress hydrogen or leave it in a liquid form as long as necessary for later use in fuel cells to create electricity.

Conversely, the governments and utilities can continue to play and wait and see attitude regarding competition in the transportation sector from fuel cells and bio-fuels.

Hydrogen Vehicles

Germany has already started down the hydrogen vehicle path with a mass program to set up hydrogen fueling stations across the country.

Under the  €350 million "H2 Mobility" Initiative, a partnership involving --  Air Liquide, Daimler, Linde, OMV, Shell and Total --  by 2015, Germany will have 50 hydrogen fueling stations around the country, 100 by 2017 and 400 stations by 2023.  This will mean that, in Germany's metropolitan centres, drivers of fuel cell vehicles will have at least 10 hydrogen refueling stations available, starting in 2023.  Integrated into this plan, there will be one hydrogen station for every 90 kilometers of highway between densely populated areas.

At the EU level, the ‘Fuel Cell sand Hydrogen (FCH) Joint Technology Initiative’ (JTI), a partnership between the European Commission and EU industry will invest $1.8B  on the development of market-ready fuel celland hydrogen technologies over the next 10 years.

PART III

THE CASE FOR STRONGER CLEAN TRANSPORTATION OBJECTIVES IN CANADA IN

THE NORTH AMERICAN INTEGRATED NEW VEHICLE MARKET

There will be those, the automobile industry in particular, who will tell us that Canada cannot set different objectives for reducing emissions and improving the fuel consumption of vehicles sold in Canada because Canada and the US represent an integrated market.  By that, they mean that cars manufactured in the US and Canada are destined for the US and Canadian markets. 

Other manufacturers, those with no manufacturing facilities in North America, produce vehicles specifically tailored to the North American market. 

Yet, notwithstanding these considerations, the integrated market reasoning to the effect that Canada cannot set itself apart from the US, is faulty for several reasons.

The California Difference and Leadership

For many years, California had more stringent smog regulations for new vehicles than the rest of North America.  Yet all vehicle manufacturers, regardless of the locations of their respective manufacturing plants, managed to make the necessary modifications to meet the California standards for new vehicles destined for sale in that state.  Since California has roughly the same population as Canada, then it stands to reason that Canada can do things differently than the US, should it desire to do so.

More recently, California and 7 other states announced plans to introduce requirementsconcerning the percentage of zero emission (eg electric and hydrogen vehicles)and low emission/hybrid vehicles sold in their respective markets beginningwith the year 2018.  There is no reason why Canada cannot join them and thereby contribute to the improvement in the North American economies of scale for providing proportionally greater numbers of low and zero emission vehicles for the Canadian market.

Corporate Average Fuel Economy (CAFE) Standards

The only important existing mechanism for improving the fuel consumption of new vehicles sold in Canada are the corporate average fuel economy (CAFE) standards.  Beginning 2016, a new set of standards will come into effect.  The Canadian standards are identical to those of the US.  

Since  a given manufacturer's CAFE performance for a given year is weighted by the total sales and the fuel consumption of each model, aggregated over the total vehicle sales of the manufacturer for the year in question, a more stringent Canadian CAFE standard than that of the US would merely mean that the distribution of models placed on the Canadian market would be different than the arrays of models of the same manufacturer makes available on the US market -- e.g. proportionally fewer big SUV models; and higher numbers of intermediate sedans; small cars; and hybrid and zero emission vehicles destined for the Canadian market.  

The nice thing about above-described more stringent than US Canadian CAFE, is that this approach does not require any requirements for technological changes, or undue burdens on the part of the vehicle manufacturers.  Of course, the manufacturers can be expected to squeal anyway. 

In any case, vehicle selections and standard equipment have always been different on the US and Canadian sides of the border.  A case in point, the Ford Motor Company discontinued the Mercury line-up in Canada many years before the company did the same in the US.  Another example, you're out of luck if you had wanted to buy a 2014 Accord Hybrid in Canada while they are readily available in the US.

Fuel Consumption Ratings:  Implications for CAFE and Consumer Choices

The fuel consumption ratings of vehicles sold in Canada are different than the ratings of the similar and the same vehicles rated by the US Environmental Protection Agency (EPA).  Unlike the US ratings, the Canadian ratings are supplied by the manufacturers and are not verified by any third party government organization.  By contrast, in the US, the fuel consumption ratings are based on test procedures and calibrations to reflect on the road experiences.  To keep the manufacturers honest, the EPA conducts verifications of around 15% of the models of new vehicles placed on the US market.

The result of the aforementioned differences are such that 1) US ratings are viewed as a reliable and realistic relative guides as to what one could expect from the vehicles on the US market while 2) the Canadian fuel consumption numbers are so exaggerated, that few Canadians consider the Canadian numbers relevant when it comes time to making their choices for a new vehicle.

Accordingly, if Canada is to have an effective and more stringent than US CAFE standards, it would be necessary to introduce testing and calibration procedures similar to that of the US EPA but with adjustments for taking into account winter driving conditions, including the use of snow tires.  This approach is essential to  assure that the Canadian CAFE achieved by each manufacturer reflects the "real world" (actual)  results of each manufacturer in reaching the more stringent Canadian targets.

As well, the more realistic data on fuel consumption stemming from the aforementioned approach is critical for assuring that Canadian consumers have credible fuel consumption information which they can rely on when comparing vehicles on the Canadian market.

Complimentary Government Leadership Roles

With respect to the influencing of consumer purchases to favour more fuel efficient and low or zero emission vehicles, the federal sales tax could be modulated in a revenue neutral fashion to charge less for the low and zero fuel consumption/emission vehicles and higher rates for the high energy consuming vehicles. 

France and Finland have adopted this model.   China is considering going one step further by eliminating the purchase tax (10%) for all new energy vehicles, in particular electric vehicles.

Lastly, the federal government could play a major leadership role in advancing clean transportation in Canada by 1) adopting a meaningful vehicle green procurement targets and 2) participating in clean transportation demo projects funded by government sustainable development and clean transportation innovation funds. 

With respect to the first item, once again China is leading the way by requiring that, beginning in 2016, 30% of vehicles purchased by the central government must be electric vehicles.   In parallel, regional government bodies in Beijing-Tianjin-Hebei region, the Yangtze River Delta, and the Pearl River Delta are aiming for electric vehicles and hybrids to makeup at least  15% of all new vehicle procurements by 2015 and 30% by 2016.

Conclusion

All of the aforementioned measures are readily applicable without major efforts on the part of both government and industry, as soon as Canada has federal government is willing to implement them. The only thing standing in the way of pursuing these progressive measures are political will and popular support to make this happen.... in Canada.

As Jack Layton used to say, "Don't let them tell you it can't be done."

THE FEDERAL LIBERAL GREEN WASHING LEGACY AND TRUDEAU AS VECTOR FOR NO CHANGE/CONTINUITY

INTRODUCTION

Liberal Party of Canada (LPC) Absence of a Serious Commitment to Climate Change

Once in power, the window-dressing technique of LPC past governments was to introduce multiple and overlapping R&D and demo funds to support the development of clean techs.  Each climate change action plan was the same in that regard, and was accompanied with boastful press releases on how much money the LPC would be investing in sustainable development.

But Stéphane Dion, as the former minister of the environment, introduced no comprehensive packages of legislation, fiscal measures, programs and policies to make much of a difference in addressing climate change.

   

As a former Government of Canada employee, I can attest, from a unique insider's perspective, that the several Dion/Liberal climate change action plans were all designed to fail, or more politely said, were lacking in substance to achieve LPC GHG targets. Eddie Goldenberg, Chétien's highest ranked government employee and key adviser, admitted as much in February 2007 when he revealed that the LPC had no idea how it would meet Kyoto objectives when it ratified the Kyoto Protocol.

The product of the LPC focus on sustainable development appearances rather than on results was such that emissions spiked up as much under his Liberal government as during the current Harper government.  Michael Ignatieff got it right when he said to Dion, during one of the Liberal leadership debates, that Dion failed to get the job done. 

Justin Trudeau represents a continuation of this LPC legacy, and this article includes a portrait of this continuity.

What follows in the next sections are the insider's detailed view on LPC failures on climate change; leading up to Trudeau's positions to-date and the choices for Canadians going into the 2015 election.

PAST LPC GOVERNMENTS

Subsidizing the Fossil Fuel Sector and Paying the Polluter

Prior to the Liberal defeat, Stéphane Dion, as environment minister, introduced yet another climate change action plan, this one with a $1B Climate Fund designed for the government to purchase emission reductions from Canada's largest emitters, in particular the fossil fuel sectors.  In other words, the more one emits, the more government support one could get under the Dion plan, a pay the polluter formula -- rather than the polluter pays.

And no rewards were offered for the small and medium size private firms that had already contributed, or would like to contribute, significantly to emission reductions.

Price on Carbon, Maybe: But It would Have to be Cheap

Further along the lines of subsidizing the fossil fuel sector, Chrétien made a sweet heart deal with the oil industry to the effect that in the event of a price on carbon, it would be cheap/symbolic.  My guess is that Trudeau's "endorsement" of a price on carbon is the sequel to the Chrétien model.

Ambitious Targets, Ambitious Cheating and Flawed Reasoning
In keeping with the LPC greenwashing tradition, during the 1999 to 2000 period, a key element of the LPC plan to meet their ambitious GHG objectives was an attempt to get UN/international approval for crediting Canada for its forests - including reforestation efforts -- which absorb CO2. The Liberals referred to their forest component of the climate change action plan of the time as "carbon sinks."

In other words, the LPC wanted to get carbon credits for doing absolutely nothing by creating fairly tale "facts" to give the impressions that they were making progress on closing the gap between what LPC initiatives could actually deliver and the LPC GHG reduction targets. Fortunately, the UN rejected the carbon sinks proposal.  

This brilliant idea on carbons sinks has since been adopted by none other than Prime Minister Tony Abbott of Australia, known for being as ferociously anti-environment and Stephen Harper.

Carbon Capture and Storage Technology: Subsidizing Green Washing by the Fossil Fuel Sector

Yet another facet of the LPC subsidizing of the fossil fuel sector was a heavy investment in carbon capture and storage technology (CCS) experiment in Weybun SK. 

The problem with CCS is that this technology 1) is so prohibitively expensive that no one would adopt CCS in the absence of major government subsidies 2) is very energy intensive consuming up to one third of total energy produced from a given generator facility and 3)  offers no assurance that the carbon sequestered in former and empty wells would in fact stay there. 

It is worth noting here that, prior to the Conservative Party of Canada (CPC) elimination of all sustainable development innovation funds, the CPC continued the LPC tradition with more than one CPC sustainable development fund supporting CCS.

One of the CCS initiatives supported by the Conservatives, is the current Boundary Dam CCS project pertaining to one of the five coal-fired generation stations in Estevan SK, a project which received a $240M CCS subsidy from the Harper administration. For the generating station equipped with the CCS technologies, one third of the 165 MW of energy produced, or 55 MW, is dedicated to powering the CCS system, while only capturing 20% of the generator's GHGs, falling well short of the objective to capture 90% of GHGs.

Recently, TransAlta abandoned its CCS project in Pioneer, AB after having received $800M in federal funding.

Corporate Average Fuel Economy (CAFE)

The LPC record on the auto sector also reflects the LPC tradition of putting the emphasis on appearances rather than getting the job done.

 

On this, there is the matter of the auto sector corporate average fuel economy (CAFE) -- A  given manufacturer's CAFE performance for a given year is weighted by the individual sales and fuel consumption of each model, aggregated over the total vehicle sales of the manufacturer in the year in question. 

During the Pierre-Elliot Trudeau reign, CAFE was approved but wasn't presented as a law before Parliament.  In its place, Pierre-Elliot Trudeau's Cabinet adopted a voluntary CAFE without a government verification system in place.

JUSTIN TRUDEAU AND THE CONTINUATION OF THE LPC LEGACY

Justin Trudeau has chosen to continue in the LPC tradition of appearing to be committed on action on climate change, with dosages of window-dressing, while ceding to the powerful interests.

To this end, Justin Trudeau 1) has defined Canada as a resource export economy; 2) claimed that cap and trade and opposition to Keystone are not based on science; 3) also used the line that opposition is not based on science with regard to the proposed largest volume pipeline, the 1.1M bbl/day TransCanada East pipeline, with it's Cacouna QC port planned on the precarious for tankers St-Lawrence River); 4) blindly supported free trade agreements with China and Europe that would allow foreign enterprises, including state-owned foreign enterprises, to sue Canada in the event our environmental laws or aboriginal rights impede the maximization of profits from their investments in Canada; and  5) praised former Premier Redford for boasting of Canada's environmental record as a sales pitch to convince the US to approve Keystone.

On Trudeau's cavalier dismissal of opposition to tar sands exports as not being based on science, this puts him squarely in the same camp as Harper - the denial camp.  

According to the International Energy Agency, to avoid catastrophic climate change, 80% of known reserves must be kept in the ground which translates into a maximum tar sands production rate of 3.3M bbl/day.  But the tar sands production projections, based on current and planned tar sands projects, are for 7.1M bbl/day. 

Furthermore, the facts on the ground are affirming that Trudeau's characterization of Canada as a resource export economy is dated.  -- The fossil fuel party is over.   Specifically,  it has become evident that non-conventional fossil fuel resources, such as the tar sands, cannot be supported by market prices.  Already, Big Oil has pulled out of many non-conventional resource projects around the globe and it has now clear that long term energy and energy-related investments favour clean energy and clean transportation, and more generally a green economy.

As for the FIPA trade agreement with China, Trudeau has gone so far as to proclaim that FIPA, provides a great opportunity for Canada to sell its resources to China.   However, contrary to Trudeau's dated paradigm, China is moving with incredible speed towards a green economy with 1) 28 GW of solar and wind capacity added in the single year of 2013;  2) it's  coal consumption down in 2014; 3) aggressive policies on electric vehicles; and 4) a strong possibility for the introduction of  a national cap and trade system beginning in 2016.  -- China already has two cap and trade pilots, one in Shenzhen and the other in Beijing. 

Of particular significance to Canada, the above-mentioned green economy initiatives of China will ultimately lead to greater energy independence, thus once again showing that Trudeau's FIPA resource export opportunity paradigm is totally out of sync with emerging new realities.  Moreover, the gap between Trudeau's tunnel vision and China's new paradigm will surely widen as China's accelerates its migration to a green economy under their 5 year plan for the 2016-20 period. 

With respect to Trudeau's comments against cap and trade, the empirical evidence from the longest standing existing international cap and trade scheme, the EU Emissions Trading System (ETS), proves otherwise.  That is, the ETS has proven to be critical component of the EU success in meeting Kyoto Protocol objectives. More important, the ETS has put nearly all EU nations on track for meeting their respective 2020 targets

Yet  Justin Trudeau referred to Australia's abolition of a cap and trade system as proof that the cap and trade concept is not supported by science. --  This, despite the fact that Australia's Prime Minister Abbott has views similar to those of Harper on environmental matters.

Lastly, though indirectly related to the green economy, another important Trudeau policy position that would have an adverse impact Canada's ability to go green is that of Trudeau's proposal to maintain Canada's corporate tax rate at 15%, the lowest in the G7.  While $630B lies dormant in corporate liquidity, the low corporate tax will limit a Trudeau government's ability to assure adequate investments of financial resources in Canada's own migration to a green economy.

 Not only does Trudeau propose to maintain the low corporate tax rate, but he is also on record for implying that he might go one step further than Harper by lowering the rate more at some future time

Suffice to day that empirical evidence on the LPC past, together with Justin Trudeau's policy statements to-date, clearly reveal that, for the LPC, environmental issues are primarily political manipulation challenges rather than environmental challenges per se.

One cannot be serious about the environment and support the LPC.

OUR CHOICES GOING INTO THE 2015 ELECTION

 

By contrast, the NDP is committed to a cap and trade system; ending subsidies to the fossil fuel sectors; and using the money saved on fossil sector subsidies to invest massively in the green economy,-- one of the highest growth and job creation sectors of our times.

As for subsidies on fossil fuels, they are one of the most significant barriers to a migration to a green economy -- subsidies at a cost of $110/tonne.  On this matter, the International Monetary Fund has estimated that in 2011 US dollars, Canadian subsidies associated with fossil fuels -- including indirect costs pertaining to climate change and health -- amount to $26.4B/year.

Turning to other parts of the aforementioned puzzle pertaining to adequate financial support for a migration to a green economy --  the NDP, would raise the ridiculously low federal corporate tax rate of 15%.

To conclude, the only barriers stopping Canada from catching up with Canada's competitors in the global migration to a green economy are Harper and Trudeau.  This is something that is very important to remember in election year 2015.

STOP TRUDEAU/HARPER, TRUPER