Canadian Climate Policy

An economist pretending to be a geologist

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Last night, I wrote a long post on the EU Fuel Quality Directive, on which a vote is expected next week. The Fuel Quality Directive has attracted a great deal of attention here in Canada because it would assign a higher emissions rating to Alberta oilsands than to other sources of crude oil, and I have argued that it will do so despite the fact that some of these other crudes may or may not actually have higher emissions per barrel than oilsands.

The response to the blog post was quick.  Naturally, both Government and industry representatives were supportive as it reinforced their positions, while environmental groups were less enthusiastic since it called into question their contention that the FQD would apply to oil other than oilsands, including that produced from Venezuela. Thanks in particular are due to Hannah McKinnon of the Climate Action Network who was most helpful in providing context for her comments which I referenced in my blog.

I’ve spent a lot of time today sorting through reports to either refute or validate my own conclusions about this policy, but I haven’t been able to do either conclusively. At least I have learned a lot about the resource bases in both Canada and Venezuela as a result of this search.  Here’s a little of what I’ve discovered.

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Some clarification please, Mr. Mulcair.

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Yesterday, NDP leadership candidate and environmental hawk Thomas Mulcair announced his intention to implement a, “new comprehensive plan to combat climate change.”  According to his press release, “Mulcair’s new plan would still be industry-focused and based on the principle that ‘polluters pay’, but it would expand beyond the 700 largest emitters in Canada to cover all major sources of climate change pollution.” Want to understand what this means?  Here are three questions you should ask – Who’s covered? What’s the cap?  Who gets the permits?

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Globe Article and Reader Comments

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Last week, I summarized my two (#1 and #2) posts on Kyoto compliance and withdrawal into a shorter piece on the Globe and Mail’s Economy Lab.  One of my regular readers, who unfortunately prefers to remain in anonymity and wrap his/her sometimes insightful comments in insults and derision, points out that there are important differences in timing between the Kyoto compliance period and the period in which penalties for non-compliance would be levied.

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Canada’s climate challenge: 1 out of 3 ain’t good enough.

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Canada needs to offer up more than easy soundbites and appeals to Nature editorials to move from a climate change laggard to a leader. Today, Canada re-affirmed its position that it would not be signing on to a new commitment period for the Kyoto protocol, and you can count me among those who expect an announcement later this month that Canada is withdrawing from the Kyoto protocol in general.    The question which remains is, “what now?”

Today in the House of Commons, Conservative MP after Conservative MP detailed the government’s commitment to putting the policies in place to meet their pledge to reduce emissions to 17% below 2005 levels by 2020. Even if that proves to be the case, I fear it will not be good enough to move Canada from laggard to leader in the eyes of both international observers and more importantly Canadians. In order to do that, I think there are three elements on which Canada needs to deliver, and meeting our targets is just one of the three.

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Thinking in terms of renovated bungalows, not megatons.

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Greenhouse gas emissions are an abstract concept for most people. Ask a sample of Canadians what Canada’s annual GHG emissions are, and you’ll likely get a very broad range of answers (they’re about 750 million metric tons (Mt) per year).

The figures are so abstract that errors like Gasland producer Josh Fox claiming that Canada’s oilsands emit 36 Mt of GHGs per day go unnoticed by many – likely because they don’t have the context to catch the mistake rather than because they don’t care about the exaggeration. If you’re one of those people who didn’t catch the error, 36 Mt per day is about half of the world’s total GHG emissions, while oilsands emissions are about 40 Mt per year.

I am guilty of this abstraction myself – I deal in megatons all the time, whether it’s talking about carbon capture and storage, oilsands, or just about anything else I do – and I don’t often stop to think about the scale of those numbers. I decided to do something about this, using the example of Keystone XL.

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The AUC and Maxim Power: No steps forward, 3 steps back.

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Last week, on June 30th, the Alberta Utilities Commission approved the Milner Expansion Project, a 500Mw coal-fired generating facility, to be built 20km north of Grande Cache, west of Edmonton. This decision raises more issues that I can possibly cover in a single post, so I’ll narrow it down to my top 3.

First and foremost, I do not understand how it makes sense for the Alberta Utilities Commission, based on a request from Maxim Power,  to provide expeditious approval (see item 5 on page 1 here) based on the need for the plant (which the AUC is no longer supposed to consider in our de-regulated power market), and so that a utility project can be built in Alberta before federal GHG regulations come into place.

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David Roberts and Stephen Gordon are saying almost the same thing about green jobs

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Over the last couple of days, my Twitter feed has been swamped with discussion about green jobs.  Yesterday, Worthwhile Canadian Initiative blogger and Laval Professor Stephen Gordon (@stephenfgordon) posted a piece on the Globe and Mail’s Economy Lab arguing that presenting, “the employment opportunities generated by a set of proposals…as an additional benefit of the policy agenda..(is) a mistake.” I expected this would generate some push-back when I read the headline, but didn’t expect that Grist.org blogger David Roberts (@drgrist) would be one of those weighing in.  He did, with this post. I think they agree on more than either might believe.  Here’s why.

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Twice the offsets, half the credibility for the offset system

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The Governments of Alberta and Canada announced today that a final funding formula had been reached for Shell’s Quest project, a carbon capture and storage operation housed at Shell’s Scotford Upgrader in Fort Saskatchewan.  The fact that the funding model has been agreed upon is great news, since although I have been critical of Alberta’s carbon capture and storage strategy in the past, I think that these pilots provide a crucial opportunity for technological advancement.  In this case, proving that CCS can work, at scale, in an oilsands upgrader has the potential to be a game-changer.

The good news in this press release ended for me when I read, “Alberta is updating its carbon offset program to allow multiple-credits…(for)…large-scale, direct injection CCS projects.”  Under this arrangement, projects, “will receive a bonus credit for every tonne of offset credit created through the capture and storage of their CO2.” In other words, capture and store 1, get 2.  A similar bonus credit regime for CCS had been proposed under both the Waxman-Markey and Kerry-Lieberman cap-and-trade bills in the US.

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