Archive for the ‘WEEKLY ORATOR’ Category

The Shining Path to Lima

Sunday, November 23rd, 2014

by Felix von Geyer

As the world’s climate negotiators pack their bags this week for darkest Peru where the United Nations Framework Convention on Climate Change will host its twentieth Convention of the Parties (COP 20), New Orator sheds light on what some of the key issues will be.

The Lima UN Climate Change Conference will aim to hammer out as much of the draft text required for next year’s Paris COP 21 as possible for the world’s governments to commit to a global climate treaty and framework ‘with legal force’ that is to be implemented by 2020.

This is what governments agreed to at the 2011 COP 17 in Durban where they agreed that any 2015 agreement would be informed by the Fifth Assessment Report of the Intergovernmental Panel on Climate Change. The IPCC was quite categorical in its report that fossil fuels needed to be phased out by the end of the 21st century.

More specifically, the International Energy Agency stated in its recent World Economic Outlook, that the IPCC’s global carbon budget is likely as much as 1000 gigatonnes of CO2 before global warming would exceed 2 degrees increase in average global temperatures and deliver serious climate change.

According to the IEA, the current state of the world’s global energy infrastructure means that carbon budget will be used up by 2040. Only in 2011 the IEA stated that to avoid exceeding 2 degrees, the world had until 2017 to avoid a 100 percent locking-in of the global energy infrastructure that would create serious climate change.

The IEA message remains clear. All parties to the framework should include a mitigation component that should address their country’s energy infrastructure and transition to a low-carbon future. Speaking on Thursday, IEA Executive Director Maria van der Hoeven outlined 5 pathways for negotiators and policy-makers to consider as climate talks reconvene in December:-

A downward bend of the global emissions curve by 2020 is necessary to create a pathway to reduce global emissions; a focus on decarbonisation of electricity; an immediate reshape to accelerate innovation in low-carbon technologies; a mobilisation of otherwise non-climate goals such as economic development, air quality improvement and liveable communities and achieving fiscal balance as goals best promoted through emissions reductions within the energy sector. Finally, strengthening the energy sector’s resilience to climate change.

Van der Hoeven was forthright that governments must get started immediately in addressing these fundamentalsand should reflect these pathways within their INDCs. Essential components of an Intended Nationally Determined Contributions (INDCs) should include policies and actions to unlock existing high emissions assets; the new landscape of emissions trading schemes; energy metrics to track decarbonisation progress and targets to reduce air pollution and GHG emissions.

To achieve this requires an agreement to phase-out fossil fuel subsidies and transfer that investment into renewable energies between 2014-2035 to achieve a so-called 450 Scenario – where emissions do not increase beyond 450 parts per million by volume, the level at which IPCC scientists believe serious climate change will be unleashed.

Yet the question remains, how will governments and the UN framework approach the whole issue of INDCs at the Lima climate talks?

The task ahead of Manuel Pulgar-Vidal, Peru’s Minister of the Environment and President-Designate of COP 20 will be to create an ‘elements’ text that comprises elements of a draft negotiating text with the express view that it will become the negotiating text for Paris 2015. The starting point will be a ‘non-paper’ due from the Chairs of the Ad Hoc Working Group on the Durban Platform for Enhanced Action set up in 2011.

As Elliot Diringer, Executive Vice-President of the Center for Climate and Energy Solutions (C2ES – formerly the Pew Center for Climate Change) think-tank said during a webinar on Thursday, there are three options. One is to have mitigation included with adaptation, finance, technology and capacity-building. The second is to have differentiated mitigation levels for developed and developing countries following the line of thinking of Common but Differentiated Responsibilities and Respective Capabilities (CBDRRC) that could also take the same approach as the Kyoto Protocol in partitioning emitters into Annex 1 countries – effectively developed nations who are historically responsible for the bulk of GHG emissions, and non-Annex 1 developing countries who may be allowed a higher emissions profile in their quest for economic development and poverty alleviation or eradication.

The final option is mitigation only.

However, the timeframe for mitigation and other national commitments might be contentious with 2025 and 2030 becoming likely competing timeframes. However, the recent US-China accord agreed between US President Obama and Chinese President Xi two weeks ago could create a spirit and intent akin to previous language of contraction and convergence, where developed countries supposedly act first to reduce emissions while develop countries converge mitigation efforts to meet developed countries’ efforts but at a later point, similar to the 2007 Montreal Protocol agreement to eliminate ozone depleting substances.

However, the level of ambition remains essentially contested as does the concept of a binding agreement ‘with legal force’ as agreed at the Durban climate talks during the infamous huddle in the early hours of Sunday morning.

Diringer for one cannot see how a Paris Agreement next year could be any more legally binding than the Kyoto Protocol – from which Canada, the world’s leading rogue nation on climate change, withdrew during the final year of the first period without penalty despite failing to reduce any of its greenhouse gas emissions below 1990 levels. Instead Canada’s own emissions projections for 2035 will likely be 35 percent beyond 1990 levels. This emissions profile will exceed 2005 levels by around 15 percent compromising Canada’s pledge at the Copenhagen 2009 talks to reduce its emissions in line with the US to 17 percent below 2005 levels by 2020.

Consequently Diringer stated that a binding commitment will not actually guarantee countries will meet their commitments. However, he did offer the caveat that any substantive agreement might be slow, as is often the case until the last moment at climate talks. But where van der Hoeven’s first request is for countries to seek to a downward bend on the global emissions curve by 2020, Diringer cannot see that initial INDCs will put the world onto a 2 degree or 450 ppm pathway.

For Lima to prove a success and provide any shining path on the way to Paris will require having all the elements in place for an agreement that can be seamlessly scalable to increase all future levels of ambition for mitigation, adaptation, technology and finance without the need to renegotiate the framework agreement itself.

Alberta’s oil sands fail Canadians on economic benefits

Monday, November 18th, 2013

by Felix von Geyer

Canada’s oil sands is a curse to its economy and not the boon Stephen Harper’s Conservative government claim it to, according to a new report released Wednesday.

The report: ‘Booms, Busts and Bitumen: The economic implications of Canadian oilsands development’ revealed the impact of the rise of the Canadian dollar – or Loonie – is proportional to the increased demand for Canada’s oil sands and other resource commodities. There is a variation in estimates however; the IMF indicated as much as 75 percent of the Loonie’s rise over the past decade is due to increased commodity prices while the Bank of Canada estimated this impact to be 50 percent. Academics such as Serge Coulombe, Professor of Economics at the University of Ottawa and author of the report’s foreword estimate have indicated the increase is 42 percent.

Sarah Dobson an economist in the oil sands programme at environmental think-tank the Pembina Institute who produced the report in conjunction with Montreal-based environmental NGO Equiterre, said that oil was behind 20 percent of the Loonie’s value in 2002 and by 2013 75 percent of its value was attributable to oil.

While the increased dollar strength has harmed the rest of Canada’s economy, particularly the manufacturing industries of Ontario and Quebec; elsewhere the supposedly positive impacts of the oil sands again fall short of government and industry hype, according to the report.

Dobson said that 94 percent of the GDP economic benefits remain within Alberta while as much as 86 percent of jobs are confined to Alberta, she said.

Indeed the United States benefits more than the rest of Canada, added Dobson with a GDP impact of 220 percent greater than the rest of Canada and job creation worth 190 percent of job creation in the rest of Canada outside of Alberta. Furthermore, outsourcing for the industry was increasingly assigned outside of Canada, she said.

Even Albertans are not receiving the gains expected with the Provincial government racking up a C$6.2 billion shortfall in the resource revenues budgeted for 2013. Despite the warnings, more of the same has been called for by the government. President of the Board of Trade, Tony Clement has stated that if healthcare and schools are wanted, “We need these resources out of the ground,” said Dobson.

The report also sought to explode the myth that Alberta’s oil sands are a driver of so-called ‘equalization’ payments between Canada’s provinces and Territories, where receipts from richer jurisdictions are distributed by the federal government in Ottawa to poorer jurisdictions.

Ottawa only receives 1 percent of its total revenues from the oil sands, according to Dobson, mostly stemming from corporate taxes. Professor Coulombe stressed that financial disparity between provinces had increased in the decade 2001-2011 and that after taking equalization payments into consideration, a 10 percent fiscal disparity remained.

Federal Finance Minister Jim Flaherty’s cap on equalization caps in 2009 has exacerbated the trend, said Coulombe who called for the cap’s removal.

Steve Guilbeault, Co-founder and Senior Director of Equiterre called for the elimination of the $1.3 billion preferential tax treatment the industry receives from Ottawa, pointing out that Canada had signed up to the elimination of fossil-fuel subsidies at the 2009 Pittsburg meeting of the G20.

Guilbeault called for Canada to manage its one-time resource wealth and find other sources of revenue and to abandon its short-termism, especially considering the environmental degradation of the oil sands. He singled out the expansion of Shell Canada’s Jackpine oil sands mine which was given the green light for the short-term economic benefits through supposed jobs, taxes and royalties.

Guilbeault also pointed to Environment Canada’s own recent report that stated Canada would miss its 2020 emissions reduction target pledged under the 2009 Copenhagen Accord at the UN Climate Change Conference of that year by 112 million metric tons. Guilbeault reinterpreted former Environment Minister Peter Kent’s statements that Canada was halfway to meeting its 2020 target of 17 percent below 2005 levels. What he meant is that by 2020 we will be halfway towards meeting our 2020 target,” said Guilbeault.

 

Albertan Energy Minister strikes deal with China but Korea might move on by Felix von Geyer

Saturday, October 19th, 2013

Alberta signed a legally non-binding Moratorium of Understanding with Beijing on Friday, Albertan Energy Minister Ken Hughes told reporters via a telephone press conference, although the relationship with Korea looks more uncertain.

The MOU provides Alberta with “highly unusual access” at Chinese policy level including sharing knowledge on best practice, other technology knowledge-sharing including on carbon capture and storage, said Hughes who signed the MOU in the presence of China’s President Xi Xinping and Canada’s Governor-General David Johnston.

Hughes who had toured both South Korea and China during this visit told New Orator that China was particularly interested in Canada’s natural resources, particularly its natural gas that provided a cleaner energy option than the coal which helped create poor air quality over many areas in China through the resulting smog. Despite the new MOU, Hughes stated that it was “Too early days” to suggest any forthcoming synergy between China and Canada in combatting climate change through any shared action in reducing greenhouse gas emissions.

On the question of Korea’s position on using Canada as an energy provider, Hughes admitted that Korea had indicated it had “many other choices and will move on” if it cannot see Canada putting its relevant infrastructure in place. In Wednesday’s Throne Speech, federal Prime Minister Stephen Harper stated that Ottawa was keen to work with provinces such as Ontario and BC and other willing jurisdictions to establish co-operation, especially around natural resources.

In his Throne Speech, Harper stressed that Canada’s energy reserves are “vast… but we must be able to sell them,” he said, stressing the country’s infrastructure shortages at a time when there was “unprecedented demand” for its energy resources.

Hughes stated that he had been on tour with the Deputy Premier of British Columbia, Rick Coleman, and that both provinces were “completely aligned” in their need to get their products to market. British Columbia is keen to sell its LNG to South-East Asia while Alberta’s oil sands is facing a continuing struggle to have both its Keystone XL pipeline to the US sanctioned by the US government as well as a pipeline such as the Northern Gateway stretching over to the West Coast.

Addressing the fact that a combination of the US shale oil and gas boom had reduced demand for Canadian energy as much as there is doubt as to any imminent green light for the Keystone pipeline, Hughes said: “We need to get our products to somewhere other than the United States of America.”

Food security – a distribution, growth or technological problem? by Felix von Geyer

Saturday, October 19th, 2013

Increasing population growth of 80 million people per year while increased affluence is moving three billion people further up the food chain is placing increased pressure on food security, said Lester Brown of the Earth Policy Institute during a teleconference on Wednesday.

Only the previous week at the Food Security conference hosted annually by Montreal’s McGill University, two divided camps were clearly in evidence between those in favour of increased technological uptake in global food production being marginalized by many who called for a return to ecosystem restoral to feed the world. Back in the 1980’s Amartya Sen advocated that food availability was less of a problem than its distribution, with acquirement undermined by people’s lack of ‘entitlement’ or income to buy food.

However, with population growth and overdrafting of water from finite or fossil aquifers, hundreds of millions of people in China, India and the US are currently being sustained through crops that are rapidly depleting non-renewable water sources such as overpumping in the North China Plains’ aquifer that Brown stated is reducing at the rate of ten feet per year. Eighty per cent of India’s grain land is similarly irrigated from groundwater from its 26 million irrigation wells, many of which are starting to run dry. The World Bank predicted 190 million Indians are being fed through overpumping of non-renewable water, said Brown who stated that the world has reached Peak Water, where water consumption is outstripping the renewable supply of water.

Brown also pointed to climate change and the fact that 40 per cent of the world’s grain is now produced in countries facing photosynthesis issues and limits in addition to other nutrient and moisture constraints through being exposed to too many hot days. Photosynthesis typically breaks down at temperatures of 40 degrees Celsius.

Furthermore, increased urbanization, for example 80 per cent of Americans live in cities, is threatening the nutrient cycle said Brown, who pointed to the example that human waste now ends up in a river or the ocean rather than back on the land.

Improved water productivity and meshing population growth with water and land policy are essential to addressing the food security issues ahead of us, according to Brown who added that improved education was also key to reducing population growth. Water productivity would be best improved if there was a price on it, suggested Brown.

However, Brown was ambivalent about the future role of technology. “Scientists have used traditional technology to improve yields before biotechnology came along. Biotech has no single advance that has raised yields that traditional plant breeding has not achieved,” said Brown.

Yet Marco Ferroni, Executive Director of Syngenta Foundation for Sustainable Agriculture told a McGill University public lecture that providing food security requires an end to conventional approaches; that farmers want genetics and plant breeding technology, soil fertility solutions, crop protection and irrigation and mechanization, all of which come under the general umbrella of technology. Combined with technological solutions, farmers also need services such as organization, property rights, financial services, connectivity and insurance as well as access to markets, transportation and storage. As many of the world’s 500 million small-scale farmers are also subsistence farmers tilling an average of 2 hectares, the need to scale-up agriculture is something they also want and need to transcend their existence from being subsistence farmers.

Annette Desmarais from the University of Manitoba in the heart of Canada’s prairies whose own grain production is predominantly owned by Cargill and Glencore, pointed to September’s report from the United Nations Commission on Trade and Development entitled ‘Wake Up Before It’s Too Late’.

The UNCTAD report called for developing and developed countries to make a paradigm shift in agricultural development: from a ‘green revolution’ to a ‘truly ecological intensification’ approach requiring a rapid shift from conventional, monoculture-based industrial production that was highly dependent on external inputs and instead adopt ‘mosaics of sustainable, regenerative production systems’ that could considerably improve the productivity of small-scale farmers. “We need to see a move from a linear to a holistic approach in agricultural management,” said the report where farmers are not only producers of agricultural goods, but managers of “an agro-ecological system that provides quite a number of public goods and services” that would include water, soil, landscape, energy, biodiversity, and recreation.

However, as 3 billion people moving through the food chain start to eat increasingly more meat, growing the feedstock for this will also place further stress on agricultural and water productivity in addition to an extra 80 million more mouths to feed per year. It may only be a matter of time before the issue of availability supercedes arguments over distribution but an intelligent and transparent debate over the role, implementation and implications of technology is long overdue.

When a tax is not a tax, Mr Harper

Sunday, September 23rd, 2012

Canada’s government is wrong about carbon pricing – Felix von Geyer

Where politics is about power and interests and who controls the agenda and message in their own image, ideology and self-interest, issues are usually presented as essentially contested concepts that cannot be transcended – the art of the impossible is in fact to do precisely that, transcend them.

So, when a spokesman for Canada’s Conservative government, Fred Delorey accused Canada’s official opposition, the New Democrats, of wanting to impose a carbon price, the biggest thing on show was in fact Prime Minister Stephen Harper’s highly efficient spin machine.

How much longer a government can live on spin and courtesy of a divided majority opposition is a different question to answer. Crucially, the message given this week by the Conservative Party’s strategist and spokesman, Fred Delorey that any price on carbon is a carbon tax is, in short, designed to mislead. In the language of playwright Tennessee Williams, it’s downright mendacity.

Quite simply, the government is wrong. Selling 100,000 carbon credits on the market at, for example, $15/tonne is not a tax. It is an incentive to reduce greenhouse gas emissions at less than $15/tonne.

Back in 2007, former US President Bill Clinton told New Orator that carbon taxes are great because no-one can avoid them: but cap and trade is better as it energizes entrepreneurs.

Some weeks later after he made a speech advocating a carbon tax over cap and trade, Mayor Michael Bloomberg told New Orator a carbon tax would also energize entrepreneurs.

The IMF’s 2008 WEO stated a carbon market is better than a carbon tax if you want a global price for carbon as having the best part of 200 governments agree a carbon price is nigh impossible.

Harper’s press secretary Andrew MacDougall did not respond to New Orator’s comments and questions concerning Delorey’s and the government’s myopic perspective on carbon pricing.

However, Canada’s resource-based sister economy Australia has recently introduced a carbon reduction scheme that at $15 per tonne expects to triple tax-free personal income tax thresholds to AUD$18,000 per year. In Canada, you could almost have free university education for that – and very topical it would be in Quebec as well as allowing more funds to be channeled into education, R&D, environmental science and technology.

According to the government’s own statistics for 2009, GDP was C$1,286 billion and its GHG emissions 690 million tonnes. That equivocates to just under 537 tonnes per C$million turnover. Therefore a C$50/tonne price on carbon would equal about 2.5% of GDP, less than the government’s own estimation of Canada’s 2008-2009 economic shrinkage caused by the global financial crisis.

At $50/tonne, what revenue neutrality and fiscal shifting could be achieved and also invested in a low-carbon future? In short, much.

The political reality however is that any government addressing the carbon tax or cap and trade will face a barrage of pressure against either. Iron pelletizers will cry foul play that they have incorporated more carbon footprint for the benefit of their downstream supply chain. Ditto aluminium producers will argue their carbon intensity has benefits for their downstream clients in terms of lighter transportation, although RioTintoAlcan will likely demand early action credits for emissions reductions resulting from implementing their innovative technologies since 1992.

RioTintoAlcan’s carbon footprint may be good in Quebec where Lac St Jean provides their hydro power, but in coal-fired South Africa, the reality is far different.

Data analyst company Trucost noted in 2009 that the average carbon footprint of mutual and hedge fund investment targets was 335 tonnes per million turnover; the worst offender China’s biggest coal-fired polluting power stations with over 1,500 tonnes per $million turnover. At $50/tonne, 335 tonnes equivocates to $16,750 per $million turnover, 1.675 per cent of corporate turnover – and that would be to address all emissions, not just reduce them between 25-40 per cent.

Each industry sector faces its own challenges; its own opportunities. Aviation emissions require better navigation and direct flights, otherwise technology improvements will gradually reduce energy consumption, a shift towards biofuels and alternative fuels is the only other alternative and large-scale take-up is difficult to project.

The mining and metals industry can achieve a lot, particularly in metals processing where waste heat recovery technology can make certain reductions; Alcan’s Pecheny technology has again set out to achieve a further 20 per cent emissions reduction over and above the original Pecheny 35 technology that reduced emissions from 6 tonnes of CO2/tonne of aluminium to 2.8 tonnes of CO2.

The cement industry has made its own advances.

It does not take much imagination for the Canadian, or any government yet to seriously address its greenhouse gas emissions, to devise sector-based targets that are deeply science-based, these days trending towards the higher end of the 25-40 per cent reduction target below 1990 levels, and then offer a 1% corporation tax reduction for companies who achieve them.

On face value, it would cost companies nothing if they choose to make no reductions at all.

Importantly, however, the signal to investors is that if they want to maximize their return on investment (ROI), they will need to demand their executive boards to achieve these targets. They will ask for no excuses or otherwise they will start to identify alternative investment targets that are capable of reaching these standards.

More curiously, companies who just miss qualifying for their corporation tax reduction might start to ask for a carbon market in order to buy the surplus emissions from companies over achieving their reductions targets but who qualify for no further reward. This could kick-start both an informal market price for carbon emissions, create a multiplier effect hopefully within the economy among companies addressing their emissions but furthermore sow the seeds for a grass-roots call for a carbon market.

Also, depending on where thresholds are set could include more than just the big emitters, instead embracing a wider selection of Small and Medium Enterprises (SMEs) The subsequent need to verify, audit and report corporate energy and emissions profile would create its own service industry as well as reduce operating costs of companies identifying emissions reductions and energy improvements who  can seek to reduce emissions accordingly, whether through fuel-switching in the case of a power station or reducing sales representatives’ mileage.

So the answer Fred Delorey is that a any carbon price at all is far from a tax. Technology push and market pull or a vice versa scenario of market push and technology pull just requires good government policy, not irresponsible spin.