Good news for stopping carbon pollution in BC

Today, on Earth Day, the NDP under Adrian Dix made a convincing case for British Columbians' support in the upcoming provincial election by re-affirming its opposition to the Enbridge Northern Gateway pipeline and stating its opposition to the proposed KinderMorgan expansion of the Trans Mountain pipeline. Our political leaders must have the honesty and courage to reject jobs that involve accelerating carbon pollution, yet the BC Liberals under Christy Clark have been completely silent on this ethical duty to our kids - in spite of claims to care about families. As an economist, I have seen strong evidence that we can create sustainable jobs to replace the earth-destroying jobs from expanding coal and oil production. In 2007 the BC government stopped two coal-fired and one natural gas-fired power plants and the replacement electricity from wood waste, small hydro, wind and other renewables created far more jobs according to independent analysis by leading accounting firms.

Climate and Voting – the environmental, social justice and survival issue of our times

British Columbia, where I live, will have a provincial election in May 2013. By a strange set of circumstances, BC voters have a rare opportunity, for the second provincial election in a row, to significantly influence the global climate struggle with their vote. Ironically, this means switching their vote from what it was in 2009 – it can’t get more non-partisan than that!

In 2009, the NDP opposition crassly promised if elected to kill in the cradle North America’s only true carbon tax, even though they had previously argued for its implementation. Many climate-concerned voters, who might have normally voted for the Greens or the NDP, voted for the governing Liberals in order to save the tax. During the campaign, I joined with experts from a diversity of ideological perspectives to try to convince people to vote strategically in our first-past-the-post system, hoping to ensure the NDP would lose swing ridings and not form government. (The NDP often emphasizes its concern for social justice, but sometimes seems to forget that climate change is one of humanity’s greatest social justice issues – just ask someone from Bangladesh, or a similarly vulnerable poor country, who understands the human implications of climate change.)

The Liberals just barely won the election and the carbon tax was saved, a victory that was even more significant than we thought at the time – since the global financial crisis soon blunted climate policy initiatives in most, but not all, jurisdictions. Today, the tax stands symbolically as the only significant carbon tax in North America, representing a model for future policy efforts. Policy advisors study the tax, the New YorkTimes writes about it, even Republican politicians have talked favorably about it. Preventing the NDP from destroying the tax was the most critical outcome of that election. The struggle was stressful, but successful.

In this election, however, the roles are reversed. The reason is the proposed Northern Gateway pipeline.

Recent papers in Science and Nature on our global carbon emission limits – summarized in Bill McKibben’s article inRolling Stone – explain what many of us have known for at least two decades. Humanity cannot develop our massive unconventional oil resources while at the same time preventing the 2 C temperature increase that scientists believe could destabilize the climate, perhaps leading to runaway global warming. In Canada, this means that we cannot be expanding production levels and transport infrastructure for Alberta’s tar sands. This does not mean shutting down the tar sands tomorrow. With existing production facilities and pipeline infrastructure, its operation would continue for decades. But it cannot be expanding with new major developments and additional pipeline capacity. As McKibben points out, the math is ridiculously simple – and terrifying.

This means that the proposed Keystone XL pipeline from Alberta to the US and the Northern Gateway pipeline from Alberta to the BC coast should not be built. They would allow tar sands production to double from its current level of 2 million barrels per day.

The past three decades have shown that the vast majority of politicians have proven adept at expressing great concern for the threat of global warming, while not actually committing to policies that would stop or reduce emissions growth. The governing Liberals in BC, for example, have said they still believe in reducing greenhouse gas emissions, yet promote rapid expansion of shale gas production and new coal mines. They express “concerns” about Northern Gateway, yet refuse to promise to stop it if re-elected in May. We all know what this means.

In contrast, the opposition NDP has promised to kill the project. And believe me, a provincial government that wanted to kill a project like this would be able to do it – even if the federal government had the jurisdiction to approve its construction and had already done so.

The NDP is leading in the polls, but that does not mean they will win the election. The Conservatives have all but collapsed, which will mostly help the Liberals. And the Greens are still capturing a large share of voter interest, which will mostly hurt the NDP. Meanwhile Liberal supporters pound away with personal attack ads – a strategy that has worked well for Stephen Harper in election after election – and one wonders if some desperate oil patch money is behind this. The election outcome is definitely not a foregone conclusion.

All of this sets the stage for well-meaning people concerned about climate to make a tragic mistake this May – by voting Green in ridings where it could have ensured the election of an NDP member instead of a Liberal. (We must never forget how Ralph Nader’s Green candidacy helped George Bush just barely defeat Al Gore.)

In my view, this election is, and should be presented by people concerned about climate, as a referendum on Northern Gateway, and we should be encouraging individuals to vote NDP in any riding where the NDP has a chance of defeating the Liberal candidate, even if that individual would prefer to vote Green in an electoral system with proportional representation. The only riding where I am suggesting climate-focused people might vote Green is in the Victoria riding where climate scientist Andrew Weaver has an excellent chance of winning (hence not a wasted vote) and would be supporting an NDP or Liberal government where it did the right thing and hounding it where it did not. (For example, both the Liberals AND the NDP are too bullish on shale gas and LNG exports – a subject for a future blog.)

At this point, the prevention of Northern Gateway would be a (second) unique occasion in which British Columbian voters would be able to influence the broader struggle to stop global warming with one X on a ballot. Its cancellation would embolden activists and average citizens to realize that the tar sands and other carbon polluters can be stopped and would contribute to a rethinking of climate policies and emission reduction efforts in the two biggest carbon polluting countries in the world: the US and China.

BC’s Clean Energy Act: Balancing government control and independent regulation

By Mark Jaccard
Originally published in the Vancouver Sun June 4, 2010

BC’s proposed clean energy act has triggered extreme statements pro and con. “Great, because our elected representatives are taking responsibility for electricity policy.” “Disastrous, because it reduces utilities commission control over BC Hydro.”

While the new act covers many issues, the key controversy is its proposed replacement of the utilities commission with the provincial cabinet for approving major BC Hydro projects and programs. These include turbines at existing dams, electricity from independent power producers, mass replacement of home meters, extensions of the transmission grid and, most importantly, the Site C dam on the Peace River. With the Site C dam as the heavyweight, the cabinet-approved bill to BC Hydro customers approaches $10 billion.

Supporting the act is the argument that our elected representatives should make these big financial commitments, not the unelected technocrats at the utilities commission. If BC is to meet its energy security and environmental challenges, it needs policy consistency throughout government. The counter argument is that only the utilities commission has the expertise, the opportunities for public input, and the distance from short-term political pressures to make sound decisions having such long-term implications.

Today, the governing Liberals argue in favour of cabinet control while the opposition NDP argue in favour of the commission. But both parties have been on both sides of this issue over the past two decades.

Indeed, both perspectives competed within the NDP government of the 1990s. Premier Mike Harcourt and his energy minister, Ann Edwards, believed the utilities commission offered the best means of providing a check on BC Hydro. They appointed me in 1992 to chair the commission, which I did for five years, introducing intervener funding, an integrated resource planning process with obligatory public involvement, and a negotiated settlement process involving key interests including environmentalists and consumer groups. These reforms are still integral to the commission’s operation, whether applied to Hydro or other utilities.

Within the NDP government, however, Glen Clark questioned why unelected commissioners, who never face the electorate to defend their decisions, should determine major investments by BC’s largest crown corporation. When Clark became premier in 1996, he effectively removed Hydro from commission oversight and the corporation ceased its open planning process. To everyone’s surprise it unveiled a new strategy to build a natural gas pipeline to Vancouver Island and several natural gas-fired plants, which would dramatically increase greenhouse gas emissions. Political control over Hydro had clearly become paramount.

When Gordon Campbell campaigned for premier, he promised to re-instate commission control over Hydro, which he did in 2003. Subsequent open reviews and commission decisions finally convinced Hydro to abandon natural gas and return to its earlier pursuit of renewable electricity for Vancouver Island and the rest of the province. This approach meshed with Campbell’s climate policy initiatives of 2007, which included a requirement that Hydro acquire zero-emission sources of electricity, be these from independent power producers or a future BC Hydro project like the Site C dam.

Recent frustrations, however, have convinced Campbell to once again liberate Hydro from commission control, at least for the projects and programs listed in his new act. The commission’s processes are slow and its decisions can act against government policy goals, an example being its decision (since overruled) that Hydro should continue using its greenhouse gas-emitting Burrard Thermal plant.

Thus, Campbell and the NDP have now been on both sides of this debate. So which approach is better?

There is no easy answer and, indeed, one should mistrust anyone who argues vociferously for either extreme. It is important that the commission, which is after all unelected, not thwart legitimate government policy objectives. At the same time, the commission has demonstrated through the years the value of an arms-length agency that provides a check on major electricity investment decisions, restricting the influence of short-term political considerations. In fact, I have been invited over the years to explain the commission’s regulation of Hydro to other jurisdictions that ended up emulating the BC model, including Hungary (1993), Brazil (1997) and Quebec (1999).

In the case of Site C, the decision is too monumental, in my view, to be delegated to unelected officials. That decision must be made by cabinet. But I am not convinced, however, that these other projects and programs should be exempt from commission oversight. I think government can achieve its policy objectives with language it has in the new act directing the commission to be “guided by” government climate and energy security policies. And it can require the commission to accelerate its procedures. When I chaired the commission, for example, we limited every hearing to two weeks and allowed ourselves only one month to issue a decision.

While quick actions are needed to transition BC toward a cleaner, more electricity-intensive economy, we must be careful not to jettison oversight mechanisms that have served us quite well.

Climate policy misinformation: Pity the voter

By Mark Jaccard
Originally published in the Vancouver Sun April 20, 2009

A recent BC NDP press release states that Canada’s National Roundtable on the Environment and the Economy (on which I serve) “clearly supports” the NDP’s climate policy proposal to scrap the carbon tax and that I am Premier Campbell’s “top advisor” on BC’s carbon tax. Neither of these statements is true.

I have never met or communicated with Premier Campbell and did not advise the BC government as it rolled out its key climate policies in 2007 and early 2008, including the carbon tax. My only recent advisory role in BC was for the Climate Action Team, a committee of citizens and experts proposing future climate policy for BC in the period 2012 to 2020. In the first half of 2008, I attended six meetings as the team prepared the report it publicly released in July, long after the carbon tax had been implemented in the February 2008 budget. Ironically, my role advising a citizen’s committee (rather than politicians) was identical to the function I performed in 1998 for the Greenhouse Gas Forum, a citizen advisory committee created by BC’s NDP government.

Of course, the NDP did not call me Gordon Campbell’s “top advisor” from 2001 to 2006 when I repeatedly criticized his ineffective climate policies of that period. But now that I am applauding his recent climate policies and sharply criticizing the NDP’s alternatives, their strategy is to claim I am no longer independent.

Had I been Campbell’s policy advisor in 2007, when he finally got serious about the climate risk, I would have counseled him against implementing the carbon tax. This is the recommendation I gave, when asked, to Rona Ambrose as Canada’s Conservative environment minister in 2006, to Michael Ignatieff during his campaign for Liberal leader in the same year, and to Stephane Dion in May 2008. I would have told Campbell that while a carbon tax is the most economically efficient and effective way of reducing greenhouse gas emissions, it would be politically safer to implement an equivalent cap-and-trade system instead.

With cap-and-trade, the government allocates tradable emissions permits that add up to a fixed cap – which would decline over time in order to reduce emissions. As the cap declines, the value of the smaller number of permits starts to rise, which in turn increases the price of fossil fuels like natural gas, gasoline and home heating oil. Thus, an “economy-wide” cap-and-trade system has the same effect on the price of gasoline as the carbon tax. But when comparing the two, political optics favours cap-and-trade.I know this sounds cynical. But politicians implementing a carbon tax face a great risk that unscrupulous political opponents will mislead the public by claiming we can reduce emissions without taxing gasoline, conveniently failing to mention that their cap-and-trade alternative should have the same upward effect on its price for the same emissions reductions. The NDP have taken the game one step further. They are promising British Columbians that their cap-and-trade “alternative” would only apply to industrial emissions, meaning that the price of gasoline would not increase. Yet, they claim they can match Campbell’s promise to reduce emissions 33% by 2020.

Think of that. The current carbon tax in BC covers 75% of emissions, which makes it a leading policy in terms of its coverage. (Not-yet-taxed emissions sources include municipal landfills, agriculture and a few unique industrial process emissions, although the government is apparently working on this.) The NDP alternative would role this coverage back to about 35% of emissions, yet it promises to achieve the same reductions in 2020. In a recent study, I estimated that major emissions reductions from a cap-and-trade that applied only to industry (with accompanying regulations in transportation and other sectors) would lead to dramatic increases in industrial production costs, forcing cutbacks and even plant closures. Direct and indirect job losses in BC would be at least 60,000 from the NDP policy.

This is one of the reasons why we members of the National Roundtable say repeatedly in our report that the important issue is not cap-and-trade versus carbon tax, but rather emissions coverage. The report and its technical background documents are full of quotes like “Good design is more important than instrument choice. Either carbon taxes or cap-and-trade systems could be designed to be cost-effective.” Instead, it is emissions coverage that is the key feature to look for, “the carbon pricing policy must be able to implement a unified carbon price across all emissions.” Note the emphasis on “all” emissions.

The important message from the Roundtable’s new report is to ignore the debate on cap-and-trade versus carbon tax and instead focus on emissions coverage. For a given level of emissions reduction, the fairer, more effective and more efficient policy is one that covers more emissions. In BC, it is a choice between 75% and 35%.