The Critical Role of Public Financial Institutions in the Green Economy

Purpose

Both the Intergovernmental Panel and Climate Change and the International Energy Agency have concluded that public policies, rather than the availability of resources, are among the key determinants for a shift from fossil fuels to clean technology development and deployment.  This article is about the role of public banks as critical agents for change along these lines.

The article begins with a review of public financial institutions around the globe that support the development of the clean technology sectors and concludes with options for Canada to build upon these models from elsewhere.

Public Financial Institutions and the Green Economy

Starting with some of the largest public banks, in July 2013, both the World Bank and the European Investment Bank announced that they will limit to the bare minimum, investments in fossil fuel projects, while shifting the lion's share of their respective energy investments to renewables.

World Bank's Jim Yong Kim – the first scientist to head the institution – said it is impossible to tackle poverty without dealing with the effects of a warmer world.  “We need affordable energy to help end poverty and to build shared prosperity. We will also scale-up efforts to increase renewable energy and improve energy efficiency – according to countries’ needs and opportunities.”

Based on perspectives not very different from that of the World Bank, in July 2013, The European Investment Bank (EIB), in line with the current European Union climate policy, announced it will implement new lending criteria that skew heavily towards renewables and screen out nearly all coal and lignite plants.

The significance of the EIB shift is illustrated by the fact that the EIB invests, lends and leverages $13.2B/year for energy initiatives.  The leveraging of EIB investments in turn fosters private financing, especially important for the capital intensive offshore wind sector.  Many offshore wind projects have benefited from the low cost EIB loans in recent years.
 

Also in Europe, in the UK, the Green Investment Bank, headquartered in Glasgow, was created in 2012 with $3.6B (£3B) in initial capital to carry it through until 2015.  Its mission is to respond to the specific financing challenges of commercial green infrastructure projects by tackling the finance gaps which remain despite the advent of new government policies.  Like the EIB, this mission includes leveraging its investments to bring in other lenders and investors.

To raise additional capital, GIB’s capital base is, and will be, regularly reinforced with pollution permit proceeds and the newly announced carbon tax revenues.  Beginning in the 2014-2015 period, bonds will be issued to raise additional capital.
 

Meanwhile in Germany, the state bank, kfw, is backing offshore wind development to the tune of $7.2B (5B€).

With respect to China, the Chinese Development Bank (CDB), has been a key player in making China the world's largest clean tech player.  In 2012, total investments in renewables was $67.7B, compared to its closest rival, the US, with $56B in investments in that same year.
 

The CDB is a formidable player, especially because the CDB appears to have no limits on the billions of dollars with which to work.  About 2 years ago, the CDB committed a whopping $45B over 5 years to smart grid development and deployment.-- Smart grid platforms are the key to the massive integration of intermittent renewable energy production such as energy from wind and solar sources, by storing surplus energy for redeployment, as required.  

More recently, the CDB provided Goldwind, a state-owned wind turbine manufacturer, with $6B to finance international business development.  Similarly, Ming Yang, a smaller Chinese turbine manufacturer, acquired $5B from the CDB for loans and credit facilities between 2011 and 2015 to prepare its way to enter international markets.
 

The aforementioned orders of magnitude of CDB support for China's clean tech sectors have contributed to accusations of global clean tech dumping, specifically, accusations from the US and the European Union.  Both the US and the EU have responded to the alleged dumping by imposing steep tariffs on imports of clean tech products from China.

By way of contrast, Canada has taken on an opposite type of course of action by being oblivious to the problem of dumping of clean techs by China.  To this effect, the proposed Canada-China trade deal stipulates that there will be no commercial barriers applied to environmental technologies.  Evidently, the Harper regime is prepared to give China what it wants, in order for Canada to sell tar sands oil them. -- Either the Harper administration is unaware of the significance of China's request, it simply does not care or a combination of both!
 

Yet another variant of an innovative public financial institution model for supporting domestic clean tech manufacturing, is that of Brazil's Banco Nacional de Desenvolvimento Economico e Social.  As of Jan. 2013, Banco Nacional requires that wind turbine manufacturers source 60% of components in Brazil and produce or assemble in Brazil at least 3 of the 4 main wind technology components-- towers, blades, nacelles and hubs, between now and 2016.  Under the Banco Nacional model, turbine makers have to meet the staggered manufacturing phases established by the bank, which would be stepped up every six months, until 2016.

Turning to the US, there the US Export-Import Bank, which represents 7 US government agencies, was created to finance renewable energy projects in emerging markets and, most important, support the US clean tech industry with its requirement for 30% US content.  India, one of Bank’s 9 key markets, accounted for approximately $7B of the Bank’s worldwide credit exposure as of the end of FY 2011.  Another example of Ex-Im Bank loans was the $1B credit package to fund wind power development in the Mekong Delta, Vietnam, in collaboration with the Vietnam Development Bank.
 

Lastly, there is the pension fund green investment model such as that established by Denmark's Dong Energy.-- Dong is 75% owned by the Government of Denmark and is involved in 30% of all offshore wind projects in the world.  Currently, Dong uses Danish pension funds for its financial activity in offshore wind projects in Denmark and partners with the Japanese trading firm Marubeni for equity financing for projects outside Denmark.

The aforementioned government and pension fund financial and policy connections have translated into Dong being a very special kind of energy investor in that 85% of its current portfolio is associated with fossil fuels and 15% renewables, but its mission is to reverse this ratio by 2040.
 

Canada

With the examples of the World Bank, the European Investment Bank China, the UK Green Investment Bank, Germany's kfw, the Chinese Development Bank, the US' Ex-Im Bank and Brazil's Banco nacional, showing the way to the effect that publicly funded investment institutions can play critical roles in assuring a migration to renewables and clean techs, the question to raise in Canada is as follows:  Why can't Canada do similar things via the Business Development Bank of Canada (BDC) and Export Development Canada?

Indeed these Canadian investment vehicles offer excellent options for the financing the development of Canada's clean tech sectors.  The BDC, like the other institutions mentioned in this article, could leverage its venture capital funds to attract additional support from Canada's private banks and financial cooperatives.  What an excellent way to take on the challenge of reaching US equivalency with regard to 20% of US venture capital activity in 2011 and 2012 represented by investments in the US clean tech sectors.
 

As well, the BDC could take a page from Brazil's Banco Nacional de Desenvolvimento Economico e Social and include Canadian content requirements, thus assuring optimal benefits for Canadian economic development and job creation.  It is  conceivable that BDC supported local economic development along these lines could fly under the radar of free trade agreements.

As for an approach for supporting Canadian exports of clean technologies, the models described in this article, in particular the Chinese Development Bank and the US Export-Import Bank, are tough acts to follow since these institutions have billions of dollars to work with. 
 

Nevertheless, the fact that the US Ex-Im Bank brings together 7 US national government organizations, suggests this US model could provide some insights for a Made in Canada model.  For example, if the Canadian International Development Agency  would partner with Export Development Canada, the Government of Canada would be able to support the setting up of clean energy micro-grids in isolated communities without necessitating the prohibitively expensive land infrastructure connections to very distant centralized electricity generation plants.  

On the subject of pension fund models, in the previous section, mention was made of Government of Denmark investing pension funds in Dong Energy, a company 75% owned by the Government of Denmark, and planning to reverse its investment ratios, from the current 85% in fossil fuels to 15% renewables, to the very opposite ratio by 2040.
 

Well, as it happens, contrary to what most may think, there are Canadian precedents for major investments of pension funds in clean tech sectors.  That is, in February 2013, the Caisse de dépôt et placement du Québec, the financial arm for Quebec pension funds, invested $757M to purchase half of Dong Energy's 50% share in the world's largest offshore wind energy project, UK's 850 MW London Array.  Just prior to that, in January 2013, the Caisse purchased $500M in shares of 11 Invenergy wind farms in the US and Canada, representing 1500 MW and including 2 wind projects in Canada, one of which is in Quebec.

This raises a second question.  Why can't the Canada Pension Plan Investment Board (CPPIB) create a Canadian clean tech portfolio to support optimal Canadian participation in one of the world's largest growth and job creation sectors, the clean tech sector?
 

From my previous dealings with the CPPIB, I know that the CPPIB answer is that their job is to get the maximum return for pensioners and consequently no particular preference is given for Canadian investments.  This is faulty logic for 2 reasons.  First, it is not unusual for investment vehicles to be associated with more than one objective.  Second, and most important, investments in growth sectors in Canada that offer high paying jobs, would bring additional revenues for the CPPIB in the form of greater contributions from both employers and employees -- in addition to the traditional form of returns on investments.   Indeed, from time-to-time, the Caisse has adopted priorities for investments in Quebec with similar motivations.

Conclusion

In conclusion, 1) innovative clean technology roles for the BDC and EDC to support and leverage venture capital and finance exports and 2) the creation of the clean tech portfolio for the CPPIB, could significantly contribute to Canada's catching up to its competitors in the global migration to the high growth and high job creation green economy, all while making good money in the process.  Earnings from completed projects would in turn finance more projects. -- These are opportunities that make good sense for Canada to embrace.

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

Will Dubitsky, 14 08 13
willdubitsky@gmail.com

Canada Missing Out on Job Creating Green Economy

Introduction

“The real-life global competition over clean energy is growing increasingly intense, as countries around the world sense a huge economic opportunity and the opportunity for cleaner air, water, and a healthier planet.” 

                Former US Energy Secretary Steven Chu May 2012

The current Conservative government wants Canadians to believe that economic development and sustainable development are opposing forces. Consequently, Conservative see their Bills C-38 and C-45, with their draconian anti-environmental components, as justified.  Nothing could be further from the truth.

First, the clean tech sectors are one of the globe's fastest growing and highest job creation sectors.  In 2012, global investments in renewable energy amounted to $268.7B, down from $302.3B in 2011 due to decline in prices and costs; policy uncertainty in the US; and European economic woes. 

China led the way with $67.7B in clean energy investments in 2012, an increase of 20% over the previous year due to a surge in its solar tech sector. The 2012 US, Japan and German investments were $42.2B, $16.3B and $22.8B respectively.

On jobs, the employment to date in these sectors that only a few years ago were nascent sectors are extraordinary.    The global total numbers of jobs in 2011 in clean energy sectors were 5M with China, once again leading the way with 1.6M, followed by Europe with 1.1M and Germany and India with 372,000 and 350,000 respectively.

Canada, as a result of the absence of adequate federal support for being a full participant in this growth misses out on job opportunities by the 1000's every year and the gap between Canada and other developed nations grows yearly.

For a sense of lost employment opportunities for Canadians, the November 2012 report of BlueGreen Canada, an organization that represents unions and environmentalists, indicated that, if the $1.3B in subsidies allocated to the oil and gas sector that currently supports 2,300 jobs in the oil and gas sectors were to be transferred to renewable energy, energy efficiency and public transit, this same amount of money would create 18,000-20,000 jobs in clean energy sectors --- 6 to 8 times more jobs per investment unit.

Behind the aforementioned growth figures, lies the fact that the point of departure for much of this leadership by other nations is government support for innovation.  Specifically, innovation leads to product development and ultimately manufacturing jobs.  However, the Conservative Budget 2013-2014, for the first time in over 40 years, did not assign any financing for clean tech innovation, zero!

To catch up, Canada's requires a highly aggressive climate change action plan that includes substantive fiscal, legislative, program and research components for immediate implementation after the next federal election in 2015.  Put another way, Canada's catching up to the rest of the world should not be principally that of a dependency on importations clean techs, and the sacrificing of the potential for domestic clean tech innovation and manufacturing in Canada.

China

In 2009, China became the largest single energy consumer in the world, putting the US in second place.   But since then, China  has also become the largest clean energy market in the world and a leader in the manufacturing of clean technologies for both domestic and international markets.

While thermal coal-fired generating plants) continued to dominate new installations of electrical power generation, with 50.7 GW in 2012, wind energy came in second with a record 13.2 GW added in 2012.  Total 2012 installed wind capacity was 67.7 GW and the installed projections are for 2020 are 200 GW. (Note, for comparative purposes, Quebec's total electricity capacity is 37 GW not including Churchill).

From the 150,000 jobs in the Chinese wind sector in 2009, the projections for 2020 in this sector are 500,000 jobs.

With respect to solar energy, there are 14 GW in the pipeline.  There were 300,000 who worked in the photovoltaic sector and  800,000 employed in solar heating/cooling in 2011.  Projections  for total installed solar capacity for 2020 are in the order of 50 GW.

 The US

The US is the second largest clean tech market and consequently its energy portrait is changing very quickly.  Wind was the largest new source of electrical power generation in 2012 with 13.1 GW of new installations bringing the total US installed capacity to 60 GW.

This US migration to a green economy was kick-started with the American Recovery and Reinvestment Act (ARRA) which pumped $70B into the green economy, including major investments in innovation, during the 2009 to 2011 period, the first half of the first Obama mandate.  Grants, tax credits loans, loan guarantees and investments in research were among the principle mechanisms applied during the 2009-2011 period. Republicans have since put the brakes on this, nevertheless a strong momentum has been established.

There are about 75,000 people working in the US wind sector and over 500 facilities manufacturing turbine components. There were about 119,000 jobs in the US solar in 2012, a 13% increase over 2011 and the biomass and geothermal sectors provided 152,000 and 10,000 jobs respectively in 2011.   When one adds the sum of the various parts of the renewable energy sectors, renewable energy capacity in the US doubled in the 5 years from 2008 to 2012.

Meanwhile in parallel, between 2007 and 2012, oil consumption as a percentage of total US energy consumption,  dropped from 39.3% to 36.7%. As well, the consumption of coal has dropped from 22.5% of total US energy consumption in 2007 to 18.1% in 2012. 

The impacts of the above-mentioned factors combined with investments in energy efficiency by power utilities and improved average fuel consumption of US vehicles, have resulted in a 13% drop in US CO2 emissions from 2007 to 2012.

In his late June 2013 statement on new actions on climate Change, President Obama announced an objective of a reduction of 3B metric tons by 2030.  Unfortunately, the new support proposed for clean energy in his pronouncements were very modest.  

The good news is that President Obama June 2013 announcement stated that the process for approving clean energy production and distribution on federal lands would be accelerated.  This is good because federal lands represent 20% of the US continental land mass.  The bad news is the June 2013 proposals are in effect an accelerated version a Department of the Interior mandate assigned during the ARRA 2009-2011 period.  No details have been provided as to the nature of initiatives to speed up DOI approvals.

Disappointing in the June 2013 action plan, is the lion's share of new funding, $8B, is to be allocated to technologies to reduce fossil fuel emissions, in particular to support carbon capture and storage technologies (CCS).  CCS technologies are prohibitively expensive and consume enormous amounts of energy while only offering modest carbon reduction.

Short time line extensions from the ARRA days are 1) the Investment Tax Credit of 30% on investments, primarily applied for the construction of solar farms and 2) the Production Tax Credit of 2.2 cents/kWh used mainly by wind farm developers.

Europe

In Europe, renewable energy represented 69% of new electrical power capacity installed in 2012 while the oil, coal and nuclear sectors experienced negative growth.  

There were 11.6 GW of wind power installed in 2012 bringing the total installed capacity in 2012 to 105.6 GW.  Wind is expected to reach 136.5 GW by 2014 and 230 GW of installed capacity by 2020. 

Solar installations surpassed wind in 2012 with 21 GW of installations representing one quarter of 2012 global solar installations in that year.

This rapid growth of the European renewable sectors is generating rapid growth in employment in these sectors.  From 192,000 jobs in Europe's wind sector in 2009, the European Wind Energy Association (EWEA)  is predicting  280,000 jobs in 2015 and 450,000 by 2020.  So quickly is the industry growing that despite the exceptionally high unemployment in many parts of Europe, the EWEA estimates that the industry will experience a skilled labour shortage of 5500 jobs/year.

Germany is a leader among European nations with about 372,000 jobs in its renewable energy sectors for the year 2011.  That's bigger than the German auto sector.  By 2020, the projections are for 400,000 to 500,000 employed in the renewable sectors.  

In parallel, Germany's nuclear sector is on the way out, a consequence of the Fukushima crisis.  Germany has shut down 8 of its nuclear plants and intends to shut down the remaining 9 by 2022.

Germany's installed wind capacity was 31.3 GW in 2012, representing 30% of the European Union total. It's installed capacity of solar energy in 2012 reached 32 GW making it the second largest solar market in the world after China.  With respect to its renewables targets for the percentage of total energy consumption by 2020 (total energy consumption including the transportation sector) , Germany has a higher target than the 20% target of the European Union.  Germany is going for 35% target and offshore wind will play a major role in pursuing this target. To this end, the German development bank, kfw will be backing offshore wind development with $7.2B (€5B) in financing.

Conclusion

The US, Europe, China and other developed nations are well-engaged in the migration to a green economy -- from supporting domestic innovation; to the construction of green technology manufacturing plants; to the development of clean energy production sites; and more generally, to the expansion of national and international markets. 

These developments continue to give rise to the creation of jobs by the thousands in most regions of the developed world - with the exception of Canada.  They also offer hope for developing countries where more than 50% of the global potential for renewable energy power production exists. 

Conversely, all the evidence indicates that the old model, the fossil fuel-based economy, no longer makes sense.  The old model not only requires massive dependencies on importing energy and the resulting exportation of ,and concentration of, energy wealth, but it is also not good for the planet.  Surely a healthy economy cannot exist in a planet that cannot sustain healthy life.

For at least the next 2 and a half years until the federal election of 2015, Canada will largely miss out on the global green economy opportunities both in terms of spreading the energy related wealth across the country and in terms of green technology market possibilities, domestic and export markets alike.  Perhaps more important, under the present circumstances, Canadian innovation capabilities cannot be adequately supported to keep pace with the rest of the world and ultimately offer Canada high-job creating manufacturing and export opportunities.

In a recent special report on renewables to the United Nations, the International Panel on Climate Change concluded that public policies, rather than the availability of the resource, are the key determinants regarding expansion or constraints to renewable energy development/deployment. In it's June 2013 report, the International Energy Agency came to similar conclusions and added that uncertainty about renewable policies may hamper investment and growth.

In other words the extent to which ,nations benefit from the high job-creating clean tech sectors while reducing emissions, is a matter of political will.  There certainly are no lack of possiblities for those who choose to be a part of the solution in light of the fact that  less than 2.5% of the globally available technical potential for renewables is currently exploited— over 97 % is untapped. 

Indeed, the technical potential of renewable energy technologies exceeds the current global energy demand by a considerable amount.  As well, the prices of clean technologies have declined considerably.

Will Dubitsky, July 10, 2013
willdubitsky@gmail.com

WARNING, PMO False + Misleading Info: EcoEnergy Innovation Initiative

Here is an excellent example of false and misleading info straight from the Prime Minister's Office regarding the EcoEnergy Innovation Initiative, and Government of Canada investments in clean tech in general.

 

First, the EcoEnergy Innovation Initiative call for statements of interest came in the form of regional launchings across Canada in September 2011. The deadline for submissions of statements of interest for one part of the program was just two weeks after the launchings, the second part in mid-October 2011.

 

While those who have had their projects approved were advised to this effect 2 years ago, the Prime Minister made the official announcement on approved projects May 3, 2013, to purposely mislead the public to the effect that the government is doing something now.  http://pm.gc.ca/eng/media.asp?id=5460 BUT THERE IS NO NEW FUNDING FOR CLEAN TECH INNOVATION IN 2013-2014, ZERO! 

 

Note as well, that 30% of the EcoEnergy Innovation Initiative funding awarded-- $24.942M out of the total $82M --- went to carbon capture and storage (CCS) technologies, the green washing technologies to make it appear that the fossil fuel industry has the environment at heart. Also $8.826M or 11% of all funding went to tar sands projects.

 

As for the merits of CCS, the article for which the link follows, states that 1) one third of the energy produced by a pilot CCS application to a coal-fired generating unit of the Boundary Dam facility in SK is necessary to run the CCS component and 2) TranAlta, despite $800M in funding from Ottawa, abandoned it CCS project in Pioneer, AB. http://www.lapresse.ca/environnement/dossiers/changements-climatiques/201306/29/01-4666247-une-centrale-thermique-pionniere-dans-la-captation-du-carbone.php

 

Further on recent investments in clean tech, note that:

1) Sustainable Development Technology Canada, which averaged $56.4M/year in investments in clean tech innovation in the past, was allocated in the last Budget only $1M for 2013-2014 and $12M for 2014-2015;.

2) Obama recently announced an increase in clean tech research funding by 30% to reach $7.9B and an acceleration of the permitting approval process for renewable energy production and distribution projects on federal lands - federal lands make up 20% of the continental US land mass;

3) in August 2012, the Government of China announced financial commitments up to the year 2015 in the amount of $372B for emissions and pollution reductions and energy efficiency. http://www.ibtimes.com/china-spend-372-billion-reduce-pollution-encourage-energy-efficiency-759575 This complements the $67.7B in investments in clean techs in China for the year 2012; and

4) the global totals for clean tech investments in 2011 and 2012 respectively were $302.3B and $268.7B, the drop in investments in 2012 in part a reflection of the decline in clean tech prices, policy uncertainty in the US and European economic woes.

 

Will Dubitsky, July 5, 2013

willdubitsky@gmail.com

How Canadian Political Opinion Polls Skew Results: Leading Questions and False and Misleading Contexts

If you have wondered about the credibility of Canadian opinion polls, the Probit online poll on Canadian federal politics sent to me on June 13, 2012, and in which I participated, offers an excellent example as to why the credibility of surveys are suspect.  

The Probit survey had very many questions about Trudeau's image - distracting attention, as Trudeau himself would want it --  from his policy content to superficial/airhead responses/options  along the lines of image-specific adjectives/anecdotes such as "hopeful," "interested," excited," and "curious" coupled with other end of image spectrum terms such as "angry" and "resentful."  If leading questions are those which tell the respondent what's important, this survey fits the bill. There were no questions on policy statements to-date from Trudeau  - most of Trudeau's policy statement thus far from Trudeau are similar to those of Harper. http://willdubitsky.blogspot.ca/2013/04/canada-now-has-2-conservative-parties_29.html  

For me, the closest on the Probit lists of response choices for the Trudeau questions was  "disinterested," an image related term which does not accurately represent my point of view - not everyone who responds to a Probit survey is an airhead!  Nothing on the lists related to substance such as offering a response choice pertaining to Trudeau's very conservative policies, very similar to those of the Conservative Party, on the Senate, guns, wealth distribution, corporate taxes, trade with China and Nexen, health, Keystone, the environment, and EI.  

In other words, with the list of choices provided by Probit regarding the Trudeau image, it was not possible to reflect my opinion because this should not be about picking a winner for Canadian Idol  but rather should be about the ideas, credibility and competence of someone who wants to be Prime Minister. 

Further on numbers of questions per party/leader, Harper made it to second place for the numbers of Probit questions about his government. In last place for numbers of Probit questions, was Mulcair.  The numbers of questions on each party constitutes not so subliminal messages regarding the importance of each of the political options.  

In addition to the aforementioned nonsense, there were questions that demonstrated an appalling ignorance on the part of the Probit people who crafted the questions.  In this regard, one question asked whether one's preference is for a focus on the "environmental damage from energy development and pipelines" or for focus representing "a strong preference for a government that was more excited about the jobs created by energy development and pipelines." .  This is a factually inaccurate/misleading and partisan leading question as Harper would pose it. To be more specific, the facts are that 1) green energy sectors are high job creation sectors and among the fastest growing sectors in the world and 2) the numbers of jobs created for a given level of investment are several times higher for clean energy development when compared with fossil fuel sector development. -- There were 5 million jobs in the rapidly growing clean tech sectors in 2011; with China in the lead with 1.6 million jobs; with the US in second place with about 400,000 jobs in these sectors in 2011; with over 500 US wind tech manufacturing facilities and with wind power being the US largest new source of electrical power in 2012; with a 13% annual increase in jobs in the US solar sector to reach 119,000 jobs in the this sector in 2012; with Germany at 372,000 jobs in the renewable energy sectors in 2011; with $67.7 billion and $42.2 billion invested in clean tech sectors in China and the US respectively in 2012 ; and with 20% of US venture capital activity invested in the clean tech sectors in 2011 and 2012.  Simply because Canada is not a full participant in these growth sectors --thanks to Conservative policies -- is not an excuse for the extraordinary ignorance/denial of Probit.

Another leading question asked if one favours a socially progressive and fiscally conservative model.  This is a tired old Liberal Party of Canada cliché that Liberals like, but as a motherhood statement, it means nothing. As such it is another leading question. I do not know of any party that calls itself socially regressive or fiscally irresponsible. Are the Conservatives fiscally conservative on F-35 jets?  Are Trudeau and Harper fiscally conservative because they both believe in our extraordinarily low corporate taxes, tax rates that have contributed tremendously to government debt while $600B lay dormant in corporate liquidity in 2012? 

Having participated in many online surveys, I can confirm that the aforementioned Probit poll is not an exception to the rule.

 

Will Dubitsky

willdubitsky@gmail.com

Developing Canada's Clean Techs Sectors: WTO Decision on Local Content

Recently the World Trade Organization ruled against Ontario in an Appeal decision regarding complaints from Japan and the European Union concerning the Ontario content eligibility requirements under Ontario's Green Energy Act.  The content exigencies in question link approvals of clean energy projects to the development of Ontario's clean energy technology manufacturing sectors.

This ruling stands in contrast with the "US model" for which the $70B invested the US green economy under the American Recovery and Reinvestment Act (ARRA), and covering the years 2009 to 2011, was subject to a Buy American Provision. http://www1.eere.energy.gov/recovery/buy_american_provision.html  Thanks to these investments coupled with the US content rules, 1) there are now 500 wind tech manufacturing plants in the US; 2) the largest new source of electrical power generation in the US in 2012 was wind energy; 3) 20% of US venture capital activity in 2011 and 2012 was invested in the US clean tech sectors; and 4) there were 119,000 employed in the US solar sector in 2012.

The US cash grants, 30% Investment Tax Credit for solar projects and  2.2 cents/kWh Production Tax Credit for wind projects have survived the post ARRA years, post 2011, but are no longer as well-financed as the 2 good years.

Regarding the implications of the WTO ruling for Ontario, under the Ontario Green Energy Act, Ontario has Feed-in-Tariff rates - the price above market rates which are offered to winning bidders for Ontario renewable energy production sites.  These FIT rates, at 13.5 cents/kWh for wind and 34.7 cents/kWh for large solar projects, are content conditional to the effect that solar and wind projects must have 60% and 50% Ontario content respectively.

The content stipulations have given rise to an emerging Ontario clean tech industry base in the province that includes a Siemens blade plant in Tillsonburg; a CS Wind turbine tower plant in Windsor; a GE turbine hub plant in Peterborough; TSP's turbine tower facility in Thorold; the Enercon wind turbine electric components and tower facilities in the Niagara region; and the solar manufacturing plants, Siliken in Windsor and Centennial Global in Kingston.  Other manufacturing facilities are in the planning stages such as the REpower turbine blade plant.

For somewhat similar reasons, Quebec nascent wind technology industrial base is the result of provincial content requirements. The first 1000 MW Request for Proposals (RFP) had a 60% Gaspésian content requirement and the second RFP for 2000 MW had 60% Quebec and 30% Gaspesian content requirements.  Wind tech manufacturers that have set up shop in Quebec include LM blades in Gaspé; Marmen towers in Trois-Rivières and Matane; VCI nacelles in Matane; Enercon towers and switch gears in Matane; REpower/Woodward convertors in New Richmond; and Fabrication Delta towers in St-Siméon.

In response to the WTO decision, a federal government committed to developing Canada's clean tech sectors would intervene to assist these provinces and perhaps establish a national program in this regard. -- Of course we cannot count on the Conservatives for such action.

One option to go around the WTO ruling is to focus new projects on community-led initiatives.  Under this community-led option, the national government might set up a green infrastructure program that includes manufacturing facilities and the construction of renewable energy production sites.  http://www.renewableenergyworld.com/rea/news/article/2013/05/ontario-loses-wto-appeal-what-happens-next

 Will Dubitsky
willdubitsky@gmail.com

 

Wakeboats: The "Hummers" on our Lakes (Updated July 8, 2013)

Wakeboats: The "Hummers" on our Lakes

Just how insane is having wakeboats on our lakes can be expressed in relative terms.  Their HP ranges can go from 330HP to 555HP. http://www.malibuboats.com/boats/  http://www.moomba.com/mobiuslsv/  This is about the same range of HP offered on Volvo tractor-trailer trucks, 325HP to 550HP. http://www.volvotrucks.com/SiteCollectionDocuments/VTNA_Tree/ILF/Products/Powertrain/power_ratings_050510.pdf

Why do they need so much HP? Well for one thing, they have ballasts in the 1500lb to 2000lb range.  These ballasts are what weighs down these boats to cause those exceptionally high waves that not only generate shoreline erosion but also damage docks. 

Furthermore, the combination of the powerful waves bringing shoreline nutrients into the lake and the turbidity caused by their propellers- turbidity which can go down to a length of 9 metres and stay around for 24 hours --contribute to the proliferation of algae.

As for the less tangible merits of peace and quiet on what would otherwise be a peaceful weekend afternoon, one can forget about it when the wakeboats are out in force.  Even at slow speeds, these boats generate high waves, the noise of the waves and the boats combined making reading a newspaper on the dock a real challenge.  Here it is important to note that snowmobiles were banned from the St-Faustin (Québec Laurentides, near Mont-Tremblant) portion of the Parc-Linéaire, in part, because of noise pollution, a judicial precedent.

Then there's the matter of climate change. This May 2013, the planet has reached a most undesirable level of greenhouse gas emissions in the atmosphere, 400 parts per million, heading us into greater frequency and intensity of extreme weather situations and accelerated desertification in Africa.  Those who's wakeboats can burn over 60 litres for one hour's use are obviously not too concerned about this.

On smog related emissions, the US Environmental Protection Agency noted that marine engines being are "among the highest contributors of hydrocarbons (HC) and oxide of nitrogen (NOx)emissions. HC and NOx emissions contribute to ground-level ozone, which irritates the respiratory system causing chest pain and lung inflammation."  http://www.epa.gov/otaq/documents/420f13006.pdf.

Working on Legislative Solutions

This brings us to the matter as to what we can do about these nuisances.  To begin the current legislative context is as follows.

First, under the Canada Shipping Act, a municipality can submit a request to the federal government for a new regulation concerning safety, the environment and/or a public interest matter but the process is long, up to 5 years, and the existing legislation is not well-adapted to address considerations pertaining to protection of the environment. In effect, in keeping with the Canada Shipping Act encouragement of non-regulatory solutions, a municipality must try a non-regularity social contract with users of the water body concerned for a period of 2 years. Subsequently, only if the municipality claims that after the trial period, it still wants to have a regulatory solution, can the Government of Canada act upon the municipality's request.

Second, up until the legislative revisions by the Conservatives, The Fisheries Act was the key legislation to provide protection for marine life and habitat.  But the new Fisheries Act  regulations stipulate that only commercial, First Nations and recreational fish can be protected -- and this limited protection does not apply to marine habitats.

Against this background, what is required is an overhaul of both of the aforementioned Acts that includes linking them in such a way so that, environmental degradation attributable to certain types of motorized boats, could be used as a basis for imposing effective and binding restrictions on the boats concerned within a reasonable time frame.

That said, with the Conservatives in power until 2015, the overhaul of the two Acts would have to come after the next federal election 2015.  This means that those who want to see legislative changes of the type described here, would operate with a time line to the effect that their innovative proposals for legislative changes would be finalized by 2015.

To achieve these goals, it is clear that, if each small Laurentian community acts on its own,  it would be difficult for any given community to have the attention it wants for its proposals. 

However, since the legislative context is Canada-wide, a more effective approach would be that of establishing inter-municipal alliances across the Laurentians, Quebec and/or with other provinces.  This group approach could be enhanced by including supportive stakeholders such as the Conseil regional de l'environnement, MRCs/regional municipalities, elected representatives of both the federal and provincial governments and others interested in backing a multi-stakeholder approach.  

This multi-stakeholder approach would ensure that their recommendations on legislative changes would get the attention it deserves. Equally important it makes good sense for communities to be open to a cross fertilization of ideas and expertise among communities and stakeholders, given the common legislative challenges and goals.

Accordingly, I invite you to write to me at willdubitsky@gmail.com to share your thoughts or get information on other communities interested in an inter-municipal multi-stakeholder approach to addressing the matter of wakeboats, the "Hummers" on or lakes.

Ombudsman Radio-Canada: l'Intégrité et l'arrière garde

Bonjour Pierre Tourangeau

(I am bilingual, watch RDI 7 days a week, but have difficulty writing in French)

On the panel segment of Le Téléjournal, May 16, 2013, in reference to the BC election, Michel Côté and Tasha Kheiriddin made it clear that the BC Liberals won because of their strong message on the economy and belittled the environmental messages of the NDP suggesting that this is not a prominent consideration when people vote -- the economy trumps over the environment.

While these journalists are entitled to their perspectives, one does expect a little integrity.  Since the NDP got 39% of the vote and the Greens got 8% of the votes,  the pro-environment votes, 47% of the total, were more numerous  than the Liberal votes at 44%, or about 50,000 votes more than the Liberals.  In other words, the so-called views of Michel Côté and Tasha Kheiriddin were factually incorrect and the factual  story is the split in the environmental vote resulted in the victory of the Liberals.

100 years ago, the majority establishment view was that women cannot  be equal in the workplace, 75 years ago the right to abortion was unthinkable for most Canadians, 50 years ago gay rights and marriage was belittled by the majority of the followers of public opinion and today this same arrière-garde belittles references to the environment as an important public issue.

I don't expect Michel Côté and Tasha Kheiriddin to know that the clean technology sectors are among the strongest growth and job creating sectors in the world today, that there were 1.6 million people working in these sectors in China in 2011 and 372,000 employed in these sectors in the same year in Germany, more than the German auto industry.  Nor do I expect them to know that wind energy was the largest source of new electrical power generation in the US in 2012 or that 20% of the US venture capital activity in 2011 and 2012 was invested in the clean tech sectors,  there are now over 500 wind technology manufacturing facilities in the US , 119,000 currently employed in the US solar sector and California is expected to have 1 million employed in the clean tech sectors by 2020.

The arrière-garde always defends a vision of a future that will be the same as the past and belittles indications of any new economic social and environmental orders.   In contrast, the avant-garde promotes a vision, which as Wayne Gretzky might put it, focuses on , "where the puck is going."

I am not saying that Radio-Canada should not have representatives of the arrière-garde.  But I do expect integrity.  And on this score Michel Côté and Tasha Kheiriddin are sadly lacking, time after time.  RDI/Radio-Canada, true to its integrity standards, must ensure that panel members meet these standards or be replaced.

Will Dubitsky