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September 6, 2013

Canada: Climate Change Promoter

SS Editorial

Oil Sands

As we approach the next Intergovernmental Panel on Climate Change (IPCC) report, indicating we have passed the carbon emission threshold to guarantee a temperature rise above two degrees Celsius – and permanent environment change, Canada has the unique distinction of being the first country to renounce the Kyoto Protocol on Global Warming, the United Nations Desertification Convention, and to have significantly weakened national environmental assessment laws in regards to citizen consultation, energy, soil and water management.

This retreat has occurred in the midst of extreme weather events, Alberta’s High River flood, Toronto’s flash flood, and the man-made disaster of the Lac Megantic Rail line explosion in which forty-seven people have been killed.

What is the environmental crisis we face, why is the Canadian Conservative government so intent on promoting development over any concern for conservation management, and what can we do about this fundamental challenge to the very quality of our life?

Environmental Engagement Crisis
The earth’s environmental systems – air, land, water, and the biodiversity that inhabits these systems – are inherently dynamic. Since the industrial revolution, however, the pace of change has accelerated threatening catastrophic change to air quality (as in China) and higher average temperatures (bringing extreme weather events and rising ocean levels); soil degradation (with the challenge of feeding a world population heading towards nine billion people); water acidification (ruining 10% of world reefs, with 60% at risk when reefs contain 25% of all ocean biodiversity); and a much higher rate of species extinctions (with the loss of potential biodiversity resources for a variety of purposes).

This man-made (anthropogenic) environmental change has created what Marxist environmentalist John Bellamy Foster calls a ‘metabolic rift’, a tipping point where human civilization on a global scale can be imperiled because we have destroyed the earth’s carrying capacity.

Since the UN Rio Summit on the Environment in 1992, there is growing recognition that global development and security rest on a conservation approach. This led to Agenda 21 (to combat global poverty through the Millennial Development Goals) and to conventions on biodiversity and climate change – such as the Kyoto Protocol in 1997, which pledged developed nations to reduce their carbon emissions to 6% below 1990 levels and to promote carbon offset strategies for developing nations who are still industrializing. However, major nations like China, India, and the United States refused to sign and those that did have not invested sufficiently to lower emissions or promote alternative sustainable energy.

Canada, in fact, despite revised targets (to hold emissions below its 2005 level) is headed towards 17% more emissions by 2020. Indeed Canada is the worst per capita polluter among developed nations in terms of carbon emissions, waste, and water usage.

But, since the election of the Harper Conservatives in 2006, Canada has been on a retreat from conservation management (though the Chretien Liberals who signed Kyoto never devoted resources to conservation management). This retreat has become pronounced since the fiscal crisis of 2008 as the federal government has promoted austerity; oil sands development, oil and natural gas fracking, pipelines across fragile terrains; and free trade agreements with the European Union and the Transpacific Partnership as means to an economic recovery.

The result is, for the first time since World War Two, the Canadian economy has reverted to a relatively unprocessed; raw materials led economy– with oil exports now surpassing manufacturing as the single largest economic sector.

A stagnant market has also led the Harper Conservatives to drop carbon trading and emphasize sectoral regulation (not even completed for the energy sector), and technical fixes to pollution problems like carbon sequestration (down to two projects) and better fracking methods based on a modest publicly financed university research fund ($25 million).

Then in the 2013 omnibus budget bill C-38 the Conservatives radically reduced energy and water management project reviews, altering the Environmental Assessment Act, the Fisheries Act, and the Internal Navigable Waters Act. Essentially, the vast majority of environmental reviews have been offloaded to the provinces with little review capacity.

Even the Prairie Farm Rehabilitation Act has been abolished, leaving Manitoba and Saskatchewan to manage soil conservation issues dating to the great drought of the 1930s.

Included in these mandate changes is a redefinition of who can participate in environmental assessments. Under the new criteria of expertise and interest, it is estimated 90% of participants will be excluded from National Energy Board (NEB) reviews (a figure proved by the limits imposed on Southern Ontario’s Project 9 Pipeline review).

And the authority of the NEB has been changed, from an autonomous administrative tribunal that has made hundreds of rulings on the environment and resource use to a potentially advisory body where the federal cabinet will make the ultimate decision on resource projects. As well, the government’s own private industry advisory board has been abolished, the National Roundtable on the Economy and Environment.

One of the biggest blows against environmental advocacy, through Bill C-38, is to redefine what a charity is. If a charitable organization advocates in a political manner beyond 10% of its activities, it will lose its tax-free status, an important consideration for donors. The big target appears to be Tides Canada with a budget of $13 million, which it delegates to a variety of environmental advocacy groups like Forest Ethics.

Engagement Alternatives I – From Above
From a market point of view, the fundamental problem in balancing profit driven enterprise with the need for conservation management is how to ‘internalize’ environmental costs – when the consequences of pollution have been ‘externalized’, that is dumped into our environmental systems for next to no cost. Such a transition is a very expensive proposition and raises the question of who will pay?

Direct internalization of pollution costs measures includes carbon taxes and cap and trade systems. Regulation is seen as the least efficient and most costly internalization strategy.

In Canada British Columbia has experimented the most with direct strategies, In 2008 the Liberal government introduced a carbon tax that progressively raised the cost of a tonne of emissions from $10 to $30. This tax has been passed on to consumers as a gas tax that makes fossil fuel, in combination with a transit tax, about 10% more expensive than in the rest of Canada. It is claimed the carbon tax has reduced emissions by 14%. This tax has now been frozen for five years by the new Liberal Clarke government.

In theory the carbon tax is neutral with offsets elsewhere. However, upon examination, the tax offsets are targeted to the poor (who use less fuel), business, and northern and rural residents. So urban workers see, and experience, the carbon (and transit) tax as reducing their income.

The other direct approach, a cap and trade system, is the Pacific Carbon Trust. It offers private companies subsidies for emission reductions. Upon review by the Auditor General this year, it appears the Trust has been an enormous, unnecessary subsidy to industry, as public institutions have had to pay into the Trust for private projects that were going to be done anyway - at a fixed contribution rate of $25/tonne when costs of reduction have been as low as $8/tonne.

In both cases, even while emissions were reduced (and there is some argument about whether the reductions have been market driven as opposed to caused by public policy), working people and governments have paid to subsidize private transition costs to internalize carbon emissions.

On an even more limited level Alberta has implemented sectoral (oil sands) emissions taxes ($40/tonne above a certain permissible level of emissions), while Quebec also has a modest carbon tax and cap and trade system.

What about alternative energy? Here Ontario has engaged, briefly, in a strategy to foster a private green energy industry through the Green Energy Act in 2009. The province would subsidize the creation of a micro-generator electricity sector (based on wind, solar and small water power projects) by feed in tariffs (subsidies). It hoped to create 50,000 jobs by made in Ontario provisions. However, the made in Ontario provisions have been abandoned as a result of a WTO ruling that this is illegal protectionism.

There is considerable consumer resentment at significantly higher electricity costs since 2009 that has undercut support for a state driven green energy industrial sector. While Ontario’s rising hydro costs seem to be driven by fixed guaranteed returns to conventional sources, especially nuclear, consumers haven’t distinguished between the sources of power. And, given citizen resistance in rural Ontario to wind farms, the Wynne Liberals appear to have radically scaled back the green industry plan by cancelling its exclusive contract with Samsung for alternative energy jobs.

Engagement Alternative II – From Below
2013 marks the twentieth anniversary of the Clayquot Sound protest campaign in which over 800 people were arrested in defying old forest logging on Vancouver Island. This ‘War in the Woods’ was the largest civil disobedience campaign in Canadian history (only surpassed by the Toronto G-20 arrests in 2010). Whatever the contradictions in opposing aboriginal development plans and unionized workers, it was a success in forcing the NDP government to develop a comprehensive set of environmental forest use practices.

The success of Clayquot has been followed by an environmentalist market strategy in developing two major forest use protocols: the Great Bear Rain Forest Agreement in 2006 and the Boreal Forest Agreement (BFA) in 2011(covering one third of Canada’s physical area). Eleven environmental groups agreed to drop international boycott campaigns for forest company commitments to better harvesting practices and habitat management, though Greenpeace has withdrawn from the BFA over failed habitat protection issues.

Ironically, environmental groups have had more success in lobbying the private sector than government as Forest Ethics is suing the federal government for denying Charter rights to free speech by limiting public participation in environmental reviews and the West Coast Environmental Law Association has filed a complaint at the North American Free Trade Agreement (NAFTA) Tribunal alleging that Bill C-38 has broken Canada’s international environment commitments by violating NAFTA’s Environmental side deal.

These movement successes, in changing public and private policy and practices in one resource sector, has generated a formal political alternative - the Green Party, which has elected its national leader Elizabeth May to the federal parliament and Andrew Weaver to the BC provincial legislature. A populist, middle class liberal alternative has emerged in the absence of any mainstream political party being prepared to challenge resource market interests.

Socialist Engagement?
A generation ago many mainstream figures denied climate change and other environmental concerns. This has changed. The majority in the mainstream now agree there has been and continues to be fundamental, and detrimental, man-made environment change. But in the context of capitalism, from nation-states starting with environmental degradation, as in the Kyoto Protocol, now the emphasis is on adaptation; from the Conservatives’ new Climate Impacts Division to municipal climate mitigation measures like better sea dykes.

No wonder why Canada is going to be a greater carbon emitter with a political system that is less equipped to regulate or recover from environmental threats and disasters. As delinquent as the Harper Conservatives are on the environment, they are only following global ruling class opinion, including the Obama Democrats who rejected a cap and trade system in 2009 and will likely approve the Keystone XL pipeline project.

NDP social democrats and the Greens emphasize a more interventionist market strategy: to ‘internalize’ pollution costs along the value chain through cap and trade systems (at the point of production) and carbon taxes (at the point of consumption). Some bourgeois parties, like Ontario’s Liberals, can even envision a state capitalist strategy to build green energy industries as in the early heroic days of Ontario Hydro.

But the scale and speed of environmental change and its potential catastrophic consequences raise a need to transcend the market. This will require a workers’ state strategy of control and investment by which only a fully nationalized and socialized approach can heal the metabolic rift.

For when we look at the few state environmental interventions in Canada, from internalizing the market costs of fossil fuels to subsidized production of alternative energy, the scale of effort will have to be massive and it will have to share the cost, not shift it downwards to those least able to pay.