GreenPolicyProf

George Hoberg
May 3, 2011

The 2011 Canadian election is very bad news for the climate movement. Climate, and the environment more broadly, was not a significant issue in the election campaign. Canada’s dysfunctional electoral system handed a party that received less than 40% of the vote on the right side of the political spectrum a commanding majority government that will be in power for 4 years. Stephen Harper’s Conservative Party of Canada had the least ambitious climate platform; the parties representing the other 60% of voters had more aggressive policies in their platforms.

Nonetheless, the results are in and we need to adapt to the new reality. I recommend focusing on three core strategies:

1. Build a much broader and deeper climate action movement outside the formal political process, focusing on youth. The root cause of the failure of the climate movement is the inability to mobilize sufficient public pressure on government. This effort needs to be intensified.

2. Put pressure on Stephen Harper to deliver cost-effective policies that have a realistic prospect of achieving their near term target of a 17% reduction in greenhouse gases below 2005 levels by 2020. The silver lining in a Harper majority is that he is a man of Alberta, and the leader most likely to be able to convince the oil patch and the Government of Alberta of the need to act. If he is going to be Canada’s Nixon, let him be like Nixon going to China and deliver Alberta and its industry on climate action. We need to promote an effective national dialogue and steer Harper away from his platform’s peculiar focus on command and control regulations and towards a cost-effective strategy to meet his platform’s emission reduction targets. He won’t do this without strong political mobilization (see strategy 1).

3. The one bright green lining in the blue Tory storm is the election of Elizabeth May to the Green Party of Canada’s first seat in the House of Commons. This position will give Ms. May a distinctive opportunity to focus attention on the cause of climate action. This voice of commitment will need support.

In the urgent human race to combat dangerous climate change, four years is too long to wait in Canada. We need to adapt to the new political situation and intensify efforts.

George Hoberg
April 29, 2011

Our last post called for using the Canadian election campaign to begin a national conversation on climate policy. That may finally have begun on Thursday, but the early discussion has been very discouraging. As the dramatic surge of the NDP has forced Harper to refocus his attacks away from the Liberals and onto the NDP, the NDP’s cap and trade proposal has been part of his critique. Harper has charged that the NDP cap and trade program will lead to soaring gas prices. Layton has responded by denying that the program will increase the price of gas.

Harper and Layton can only say these things by being disingenuous about their own policies. Harper’s proposals are widely recognized to be economically counterproductive, and inadequate to meet his own emission targets. Layton’s proposals will in fact lead to moderate increases in gas prices, and if they don’t, they won’t be effective.

This exchange reveals the central dilemma of the politics of climate action: We rely on elected politicians to make policy that by necessity increases the costs of some activities and goods. But politicians are loath to be seen to increase costs. The only durable way to escape this dilemma is to have voters accept the necessity of increased costs. Ignoring the climate problem is irresponsible, and an honest discussion of Canada’s choices is long overdue.

I believe there is a broad consensus among climate policy experts on four major points. Politicians who ignore these realities are not being sincere about their commitment to taking meaningful action on climate change. Voters who ignore these realities are not being realistic about what it will take to avoid dangerous climate change.

1. Substantial reductions are needed in greenhouse gases to improve the probability of ensuring a safe climate for future generations. There may be disagreement about the magnitude and appropriate timing of these reductions, but there is widespread consensus that a wholesale change in our energy system is required, and the sooner we start the more effective and efficient we’ll be.

2. There will be costs to these reductions. Any politician who hides from this fact is either insincere about their commitment to meaningful action, or is not being honest. We need a national dialogue to focus on how to design policy to get the most bang for our buck and fairly distribute the burden. These issues are addressed by the next two points.

3. There are a variety of ways to achieve necessary emission reductions that come with different consequences. The economists’ favourite solution is an economy-wide carbon tax. It is widely considered to be the most cost-effective instrument in terms of delivering a given target level of reductions for the lowest possible cost. The alternative market-based policy instrument, economy-wide cap and trade, is also considered cost-effective. The main difference between these two instruments is that cap and trade gives you a fixed quantity of greenhouse gases and allows the price to fluctuate. Carbon taxes do the opposite: they fix the price but allow the quantity to vary.

A third approach is the one proposed by Harper’s Conservatives: regulation of specific facilities. The consensus within the expert climate policy community is that regulation is the least cost-effective of these approaches. If Harper really believes his plan would cost less than the NDP’s, it is because he would be aiming for much smaller emission reductions. For the same level of emission reductions, the NDP cap and trade approach would be considerably less expensive. For the same economic investment, the NDP approach could accomplish greater emission reductions.

We need a national dialogue on which approach is most appropriate for Canada. I suspect when we do so, the outcome may be something of a surprise. Many climate policy experts, including economists, have advocated cap and trade not because they think it is a superior instrument to a carbon tax, but because they believe it will be more politically acceptable. But cap and trade is much more complex to administer, and as we learn more about the political response to cap and trade, the argument for its political advantages over carbon taxes becomes less compelling. In particular, the price certainty of a carbon tax is far preferable to large emitting industries. Once they sense the political inevitability of carbon pricing, they will insist it be through their preferred instrument. When faced with big business advocating a carbon tax, the supporters of cap and trade may happily climb on board.

My sense is that most climate policy experts would be supportive of either a carbon tax or cap and trade, as long as they are effectively designed to cover all significant sources of emissions. It is much more important to get on with greenhouse gas reductions than it is to quibble over the relative superiority of these two instruments. There is strong consensus that these two market-based instruments are far preferable to the source-specific regulatory approach favoured by the Conservatives.

4. Finally, there are ways to design these instruments to address transition and distributional issues. We can’t eliminate the fact that the transition to a low-carbon economy will be costly. But we can, through smart policy design, mitigate many of the concerns about adjusting to these new costs. Most importantly, there is general agreement on the merits of phasing in carbon pricing by starting with small increases and ramping them up over time, giving the economy time to adjust. There are also a range of fiscal instruments that can be used to moderate the income and regional distribution impacts. In Canada, the regional distributional issues are particularly controversial, but there are well-considered mechanisms to address these concerns. We need a national dialogue on the fairest way to share the burden of the imperative of climate action.

Let’s hope our party leaders can acknowledge this general consensus and engage in a more productive dialogue in the remaining days of the campaign. We need to give them the political space to do so by acknowledging that meaningful climate action will come with some costs. And after the election, let’s get busy on the long-overdue national dialogue on climate action.

If you think my summary of these consensus points is inaccurate or incomplete, please comment.

George Hoberg and Stephanie Taylor
April 26, 2011 (updated from April 15 post)

We are a now into the last week of the 2011 Canadian election campaign. Despite an escalating sense of urgency among climate scientists, climate policy has not been an important issue in the campaign. This election is in marked contrast to the previous 2008 election, in which the Liberal Party made a carbon tax a centrepiece of their campaign. That election was disastrous for the Liberal Party and the political reputation of the carbon tax. During that campaign, Conservative Prime Minister mocked the Liberals’ proposal, saying a carbon tax “will actually screw everybody across the country.” Harper went on the win a minority government and Liberal leader Stephane Dion resigned.

Environmental issues are facing an uphill battle again this year given Canada’s tenuous recovery from the Great Recession. Recent polls on the most important national issue of concern place environment around 5 to 6%, well below the dominant issues of health care and jobs/economy.

All five parties in the federal election now having released their election platforms, and it is useful to take stock of what each of them has to offer in terms of climate policy. We analyze the platforms of each party around three central questions: (1) what targets have the parties proposed for greenhouse gas reductions? (2) what policy instrument do they intend to use to implement the target? and (3) how do they propose to deal with the distributional issues?

Conservative Party

The Conservative Party platform makes very general references to acting on climate change, but is virtually silent on plans to address it.  It mentions its Copenhagen Accord commitment target of 17% reduction in greenhouse gases below 2005 levels by 2020, “aligned” with those of the Obama administration (p. 41). But the platform does not mention any specific proposals for action other than the ecoENERGY Retrofit-Homes program. There is no discussion of their proposal to use command and control regulations for large sources, although in other campaign communications they have made clear this continues to be their preferred policy instrument. They have been openly critical of other parties’ plans for cap and trade. One-time Environment Minister John Baird held a news conference on April 5^th in which he attacked the Liberal Party’s plan for a cap-and-trade system as “un-Canadian”, calling it unpatriotic for pitting regions against one another. (The Conservatives supported cap and trade in the 2008 election.) Their platform does not discuss how to deal with any distributional issues or cost impacts of implementing regulations.

A Globe and Mail Economy Lab piece by Andrew Leach shows that the regulatory and other proposals announced by the Conservatives thus far will come no where near meeting their 202o target.

Liberal Party

After the disastrous 2008 election campaign in which a carbon tax was the cornerstone of their platform, the Liberals have opted for what they consider to be the more palatable option of a cap-and-trade system. Their platform pledges that a Liberal government would reduce greenhouse gas emissions by 80% below 1990 levels by 2050, in line with the now-defeated Climate Accountability Act (Bill C-311) (p. 46). They do not list interim targets, but instead say they will commission recommendations for a series of mid-term targets by the National Round Table on Energy and Economy.  Their proposed instrument is a cap and trade system, with auctions for permits, that “applies to all sectors of the economy with no exceptions.” The Liberals offer little in regards to distributional issues, except to say that they will work with the provinces and that the system “will be equitable across all regions of the country.”

New Democratic Party

The New Democratic platform echoes that of the Liberals in its support for the Bill C-311 targets (which was introduced by the NDP in the 40^th Parliament) and a Canada-US cap-and-trade system. They recommit to the target of 80% below 1990 targets by 2050 (p. 13). They commit to establishing interim targets, but do not say what they are or how they will be developed. The NDP cap and trade plan “will establish hard emissions limits for Canada’s biggest polluters.“ The scope of coverage for the system thus seems to be narrower than the Liberals’ economy-wide commitment. The NDP go beyond the commitments of their Liberal counterparts in detailing how they would use the action revenues raised through their cap-and-trade program. According to their platform, a New Democratic government would use the revenues to invest in a host of priorities, including green technologies, business and household energy conservation, public transit, renewable energy development, and helping workers transition to the new green economy. Questions about the plausibility of generating the revenues required to fund all of these commitments so quickly from an auction were raised by Andrew Leach and reported in the Canadian Press. The platform does not, however, specify how the party plans to deal with regional equity issues.

Bloc Québécois

The Bloc plan pushes for the 2012 achievement of those Kyoto commitments that are still possible, while moving toward a medium-term target of a 25% reduction in emissions below 1990 levels by 2020 (p. 121). As can be expected from a regionally-based party, the Bloc Quebecois eschew the current sectoral approach in favour of a territorial approach like the one used in the European Union (p. 122). While it is not stated explicitly, presumably this means that each province would have an individual emissions target. Under such a plan, each province would be able to implement their own GHG mitigation measures, while the federal government would be free to undertake national programs so long as the target policy arena fell under its exclusive jurisdiction. Integral to the achievement of this reduction target is the setting of a hard cap on carbon emissions and the creation of a “carbon market”. This is in essence a cap-and-trade system for corporations, and would be monitored by a new independent watchdog organization (pp. 122-123). Financial penalties would be imposed on companies that failed to meet their targets (p. 123). The Bloc’s plan does not make clear whether the initial permits would be auctioned off or given away.

Green Party

Not surprisingly, the full Green Party platform contains remarkably ambitious greenhouse gas reduction targets: “reduce Canadian emissions 30% below 1990 levels by 2020, and to 85% reduction

below 1990 by 2040 regardless of what other countries do” (p. 35). These targets will be pursued both through carbon tax and cap and trade. The platform specifies that the carbon tax will be carbon neutral, and that revenues from the tax will be used to reduce incomes taxes, introduce income splitting, and provide a carbon pricing rebate. The platform does not, however, describe how the plan will deal with regional equity issues.

Comparative analysis

All five parties set targets that, if implemented, would have substantial impacts on the trajectory of Canada’s emissions its energy system. There are significant differences in base years used, target years, and percentage reductions. The Green Party’s are unquestionably the most ambitious. The NDP and Liberals use the same 2050 target but do not specify interim targets. The Conservatives have an interim target but no long term target.

The five parties use different policy instruments to attempt to meet their targets: the Conservatives rely on emission regulations, Liberals, BQ, and NDP on cap and trade, and the Greens on a carbon tax and cap and trade. It is one of the great ironies of current political positioning on the issue that the Greens have adopted the instrument most favoured by economists and the Conservatives have adopted the demonstrably least market-oriented and least cost-effective initiative. This curiosity was highlighted in the last week of the campaign by Mike De Souza of the Canadian Press.

The five parties have dramatically different levels of specificity in how they would address the distributional issues of implementing effective climate policy. The Conservatives and Bloc are silent on the issue. The NDP and Greens both have considerable detail on how would use revenue raised from the carbon pricing, but do not address regional equity issues. The Liberal platform provides a general commitment to regional equity, but no details on how auction revenues would be used.

Canada needs a national conversation: Let’s start now

Through its inaction, Canada’s international reputation on climate change has been tarnished. All five parties commit to climate action, but with varying levels of detail and some quite sharp differences on targets, instruments, and distributional issues. Canada needs a serious national conversation on climate action. Why not get it started now when so much of the public is focused on national politics? Let’s spend at least part of the last week of the campaign focused on this vital issue.

Resources:

Links for Platforms:

Green Party: http://greenparty.ca/files/attachments/vision_green_2011en_0.pdf
Liberal Party: http://cdn.liberal.ca/files/2011/04/liberal_platform.pdf
Conservative Party: http://www.conservative.ca/media/ConservativePlatform2011_ENs.pdf
NDP: http://xfer.ndp.ca/2011/2011-Platform/NDP-2011-Platform-En.pdf
Bloc Québécois http://www.blocquebecois.org/document.aspx?doc=788E6B46-7F22-4474-B71D-B7C807EF7137

Stakeholder reactions to the environmental portions of the party platforms can be found at:

Canadian Youth Climate Coalition

Pembina Institute

Canadian Centre for Policy Alternatives (Green)

Greenpeace Canada (Green and NDP, Liberal and Bloc Quebecois, and Conservative)

West Coast Environmental Law

Environmental Defence et al survey of parties (all parties respond except Conservatives)

March 21, 2011
George Hoberg

The nuclear crisis in Japan has created a surprising response. Columnists and commentators from a range of perspectives normally considered skeptical or even hostile to nuclear power are showing a surprising amount of support for increased reliance on nuclear despite the risks brought into tragic relief by the Fukushima disaster. This position has been articulated by Canada’s leading foreign affairs columnist and the UK’s uber-climate hawk George Monbiot. The essential argument is that given the gravity of the climate crisis, the increasing energy needs of the world’s population, and the absence of realistic alternatives for baseload power, nuclear will need to play an important role in the future of the global energy system despite its risks.

Before rallying around the nuclear flag, however, it is important to examine the third part of that argument. Are there really no non-carbon alternatives to providing the backbone of the energy system? Before jumping to that conclusion, please read the vitally important work by Mark Jacobson of Stanford University and Mark Delucchi of the University of California at Davis.  In a two-part series published in the journal Energy Policy, they argue that all of the world’s energy needs can be provided by a nuclear-free wind, water, and solar energy system by 2050. These are not environmental group publications but peer reviewed journal articles in the world’s leading outlet for academic energy research. Their sole acknowledgement is “This paper was not funded by any interest group, company, or government agency.”

The articles are available on the web without a subscription here. Jacobson also has a TED debate against Stewart Brand where he makes many of these arguments in a form readily accessible to a general audience. He and Delucchi have a highly accessible article in Scientific American that comes along with swank interactive graphics. But even their journal articles on the issue are relatively accessible, and I highly recommend reading them carefully (Part I and Part II).

The short version of their argument is the following:

“We suggest producing all new energy with [water, wind, and solar] by 2030 and replacing the pre-existing energy by 2050. Barriers to the plan are primarily social and political, not technological or economic. The energy cost in a WWS world should be similar to that today.”

I’ve extracted and condensed the concluding sections of their two part article in Energy Policy below (all text verbatim).

Because of the gravity of the climate crisis and growing global energy demand, it certainly makes sense to consider all options even in the wake of Fukushima. But given health, safety, economic, and geopolitical risks of nuclear power, a low or no nuclear future would be preferable if it is feasible. To be convincing, those rallying around the nuclear flag will have to refute the formidable findings of Jacobson and Delucchi.

Article excerpts:

 A large-scale wind, water, and solar energy system can reliably supply all of the world’s energy needs, with significant benefit to climate, air quality, water quality, ecological systems, and energy security, at reasonable cost. To accomplish this, we need about 4 million 5-MW wind turbines, 90,000 300-MW solar PV plus CSP power plants, 1.9 billion 3 kW solar PV rooftop systems, and lesser amounts of geothermal, tidal, wave, and hydroelectric plants and devices.

 The equivalent footprint area on the ground for the sum of WWS devices needed to power the world is … and spacing of devices on land required are only 0.41% and !0.59% of the world land area, respectively.

 The development of WWS power systems is not likely to be constrained by the availability of bulk materials, such as steel and concrete.

[…]

 A 100% WWS world can employ several methods of dealing with short-term variability in WWS generation potential, to ensure that supply reliably matches demand. Complementary and gap-filling WWS resources (such as hydropower), smart demand-response management, and better forecasting have little or no additional cost and hence will be employed as much as is technically and socially feasible. A WWS system also will need to interconnect resources over wide regions, and might need to have decentralized [vehicle to grid] or perhaps centralized energy storage. Finally, it will be advantageous for WWS generation capacity to significantly exceed peak inflexible power demand in order to minimize the times when available WWS power is less than demand and, when generation capacity does exceed inflexible supply, to provide power to produce hydrogen for flexible transportation and heating/cooling uses.

 [...]

 The private cost of generating electricity from onshore wind power is less than the private cost of conventional, fossil-fuel generation, and is likely to be even lower in the future. By 2030, the social cost of generating electricity from any WWS power source, including solar photovoltaics, is likely to be less than the social cost of conventional fossil-fuel generation, even when the additional cost of a supergrid and [vehicle to grid] storage (probably on the order of $0.02/kWh, for both)  is included. The social cost of electric transportation, based either on batteries or hydrogen fuel cells, is likely to be comparable to or less than the social cost of transportation based on liquid fossil fuels.

[...]

 We recognize that historically, changes to the energy system, driven at least partly by market forces, have occurred more slowly than we are envisioning here (e.g., Kramer and Haigh, 2009). However, our plan is for governments to implement policies to mobilize infrastructure changes more rapidly than would occur if development were left mainly to the private market. We believe that manpower, materials, and energy resources do not constrain the development of WWS power to historical rates of growth for the energy sector, and that government subsidies and support can be redirected to accelerate the growth of WWS industries. A concerted international effort can lead to scale-up and conversion of manufacturing capabilities such that by around 2030, the world no longer will be building new fossil-fuel or nuclear electricity generation power plants or new transportation equipment using internal-combustion engines, but rather will be manufacturing new wind turbines and solar power plants and new electric and fuel-cell vehicles (excepting aviation, which will use liquid hydrogen in jet engines). Once this WWS power-plant and electric vehicle manufacturing and distribution infrastructure is in place, the remaining stock of fossil-fuel and nuclear power plants and internal-combustion-engine vehicles can be retired and replaced with WWS-power-based systems gradually, so that by 2050, the world is powered by WWS.

 The obstacles to realizing this transformation of the energy sector are primarily social and political, not technological. As discussed herein, a combination of feed-in tariffs, other incentives, and an intelligently expanded and re-organized transmission system may be necessary but not sufficient to enough ensure rapid deployment of WWS technologies. With sensible broad-based policies and social changes, it may be possible to convert 25% of the current energy system to WWS in 10–15 years and 85% in 20–30 years, and 100% by 2050. Absent that clear direction, the conversion will take longer.

 Sources

Jacobson, M.Z., Delucchi, M.A., Providing all global energy with wind, water, and solar power, Part I: Technologies, energy resources, quantities and areas of infrastructure, and materials. Energy Policy (2010), doi:10.1016/j.enpol.2010.11.040

Delucchi, M.A., Jacobson, M.Z., Providing all global energy with wind, water, and solar power, Part II: Reliability, system and transmission costs, and policies. Energy Policy (2010), doi:10.1016/j.enpol.2010.11.045