Wednesday, 6 April 2016


PART I: BUDGET 2016-17                                 
PART II: MORE ON PIPELINES                      
PART III: PRICE ON CARBON                        



1) Liberal Greenwashing and Budget 2016-17: Continuity on the Absence of Credible Plans

In his current capacity as Minister of Foreign Affairs, Stéphane Dion's response on Obama's official rejection of KeystoneXL was that the world will need the oil anyway.  

Further on Stéphane Dion, the reasons why emissions went up under his watch during the previous Liberal governments -- despite the government commitment to Kyoto at that time -- are greater than that described in the overview to this document. 

For example, to "meet" the Kyoto target, Dion had proposed to the United Nations (UN), the classification of Canada's forests as "carbon sinks".  By way of explanation, since trees absorb carbon, Dion wanted to get credits for Canada's trees. -- a doing nothing for credits scheme. The UN rejected the Canadian request.

As if the carbon sinks were insufficient on the greenwashing scale, included in one of the final climate change action plans of Stéphane Dion, was a $1B Climate Fund, a concept proposed just prior to the defeat to the first Harper government.  Under that fund, the government would purchase GHG reductions from Canada's largest emitters.  

Accordingly, the program was set up to pay the largest polluters the most money, including the petroleum industry, and the fossil fuel sector at-large. -- Rather than adhere to the principle of polluter pays, Dion and the Liberals chose the model of rewarding the largest polluters with the most money.  This also would have meant little funding for Québec.

Consistent,  the Budget 2016-17 proposed $2B Low Carbon Economy Carbon Fund for 2017-18 and 2018-19 appears similar to the above-mentioned still-born $1B Climate Fund of the previous Liberal government, as per the extremely vague language of the Budget text. This is to say that the exceptionally short description of what this money is to be used for is as follows:  "Resources will be allocated towards those projects that yield the greatest absolute greenhouse gas reductions for the lowest cost per tonne."   

Also worrisome about the current Liberal government, 1) there is considerably less annual funding for clean technologies in 2016-17 than in the annual budgets of previous Liberal governments, the period during which emissions went up -- Refer to Section #3 -- 2) past and current Liberal governments never established credible plans to address climate change, as exemplified by this document's preceding and subsequent content; and 3) since the Low Carbon Economy Fund is supposed to be started in the next fiscal year, immediately after tripling the current year's deficit relative to the figures offered during the election campaign -- it leaves the possibility of changes to the proposal in the next federal budget. 

As a former Government of Canada employee who served on sustainable development initiatives under the various Liberal climate change actions plans of the Chrétien/Dion era,  I can well explain the weak links in the chains of both past and current Liberal governments and why emissions went during the Chrétien government era.  

It was not just that previous Liberal governments showed an unwillingness to take on the powerful lobbies.  It was also that the former Chrétien government reigns never came up with a plan to achieve Kyoto objectives. Eddy Goldenberg, Chrétien's right hand man, admitted as much.  My experience as a Government of Canada employee confirms this-- The article associated with the preceding link covers some of the points raised across this document.  

True, there was funding for, and consultations with, everyone, including funding for contradictory causes and round tables, but the government had selective hearing --those with the most money won. With all sides dependent on the largess of the then Liberal government, criticism, even from environmental groups, was kept to a minimum.


2) Trudeau the Budget: Bonafide Environmental Impact Analyses for Pipelines, A Broken Promise

Trudeau had promised a bonafide environmental impact analyses for the proposed pipelines.  But once elected, he merely prolonged the National Energy Board (NEB) review by 3 months to take into account other issues, like emissions.  But 3 months is not even enough to prepare research contracts and sign off proper scientific studies on tar sands-related GHGs.  As well, the NEB does not have the expertise for reviewing emissions ---- This represents a broken promise.

Equally discouraging, Budget 2016-17 indicates that the "too close" to the oil industry NEB will continue to be the authority for future pipeline assessments.  

To add insult to injury, Budget 2016-17 refers to the future role of the much dismantled Canadian Environmental Assessment Agency to become that of an advisory body, rather than an organization that will repatriate it's past authority and rebuild its team to undertake competent environmental impact analyses.

A bonafide review would entail starting the review process over, with the right parameters from the outset, and overseen by a competent team. -- comparable to that of the former Canadian Environmental Assessment Agency.


3) Budget 2016-17: Less Support for Clean Technologies than During Previous Liberal Governments

Additional key components of Budget 2016-17 on funding for clean technologies are as follows:

The Budget 2016-17 allotment for Sustainable Development Technology Canada (SDTC) is $50M over 4 years starting in 2017-18.  That compares unfavourably to the funding for SDTC under previous Liberal governments, roughly $40M/year.

And there is no new equivalent in Budget 2016-17 to the former Liberal program, Technology Early Action Measures (TEAM), a program that was complementary to SDTC with a budget of $56M over the 3 year period, 1999 to 2001.

Then there is that significant nuance in Budget 2016-17 represented by the title "Cleaner Transportation" rather than clean transportation.  In effect,  the $56.9M over 2 years under this heading is not only less than the amounts allotted to clean transportation by previous Liberal governments, this funding is divided up to entail the development of regulations and standards, including international emission standards for the air, rail and marine sectors.  

Yet Quebec has a significant critical mass in its electric vehicle sector.  What is important in this sector, is that the advent of electric vehicles entails the vehicle manufacturers becoming more dependent on outside suppliers.  Cases in point are that the Chevrolet Volt and the upcoming Chevrolet Bolt electric vehicle technologies, are largely those of LG Chem.

Consequently, the $62.5M over two years for clean transportation electric vehicle charging stations and hydrogen fueling centres just won't cut it.  

Moreover, dedicated funds like the former Liberal Canadian Transportation Fuel Cell Alliance program, are things of the past.


4) Trudeau and Ties with Big Oil Lobbies Impedes Diversification of Energy Sector

Trudeau's ties with the oil industry were evident when it was revealed that his co-campaign chair was lobbying for Energy East.

But the Budget's token $50M over 2 years for the oil and gas sectors to reduce their emissions is not only about cynical greenwashing, it is the wrong direction for the industry.  That is, the wrong direction compared to the opportunity to redirect the $46B USD in 2015 for Canadian fossil fuel sector subsidies to diversify this sector.  

If the right fiscal measures were in place for the fossil fuel sector to diversify quickly, that could translate into a new industrialization of Western Canada, and Canada at-large, regarding one of the highest growth and job creation sectors of our times, clean techs.  THIS IS POSSIBLE- Norway's Statoil is doing just that and this includes avant garde investments in clean tech innovation. 

The failure of the Budget to live up to Trudeau's promise to reduce subsidies to the fossil fuel sector in this fiscal year was explained as it not being the right time to do so because the sector is in a slump and many have been laid off as a result.  But this is no excuse for not transferring some of that $46B USD to invest in fossil fuel sector energy diversification pertaining to clean technologies.   There lies a missed opportunity to both provide alternative employment for laid off people from the oil industry and develop a momentum in Canada to catch up with its competitors in the global green economy.

5) Trudeau Tells Leonardo DiCaprio to Tone It Down on Climate Change

In light of the above and below factors, it is not surprising that Trudeau told Leonardo DiCaprio to tone it down on climate change.



6) Trudeau and Opposition to Pipelines is Not Based on Science

Trudeau has repeatedly said that the opposition KeystoneXL and Energy East is not based on science.  In his pre-election comments to this effect on KeystoneXL, Trudeau referred to a study funded by the US State Department and authored by a consulting group close to the petroleum industry. This study erroneously "concluded"  that KeystoneXL would have no impact on emissions.  The rationale offered by the US study stated that if it is not Canadian oil exported, the "void" would be filled by another nation.  

In effect, as indicated in Section #7, demand is flattening for all fossil fuels as result of rapidly advancing progress on the green economy in China, the EU, and the US and this phenomenon is destined to become more pronounced between now and 2020 as the transportation sector migrates to a momentum for low and zero emission vehicles.

On Radio-Canada's "Tout-le-Monde-en-Parle",  during the 2015 election campaign, Trudeau spoke of opposition to Energy East not being based on science.

7) Pipelines and the Flattening of Fossil Fuel Demand: Economic Redundancy

If the aim of the current Liberal government is to increase the oil supply on international markets via Energy East and Kinder Morgan, then the underlying objective is to respond to an increase in demand. But these 2 pipelines may be economically redundant.

Indeed, it is none other than the International Energy Agency, which reported that 90% of all new electrical generation capacity added in 2015 have renewables as their energy sources and emissions have been flat since 2013. 

In effect, since 2013 more than half of new electricity generation installations were represented by renewables and this is a key factor in the flattening of demand for fossil fuels.  Nearly 100% of China's new electricity capacity added in 2015 was associated with renewables, and in the US, renewables accounted for 68% of newly installed capacity in that year.

Now, it is the transportation sector that is poised to be the next fossil fuel market to weaken. Consider that a) 331,000 electric vehicles were sold in China in 2015 and China's BYD expects to triple its electric vehicle sales in 2016 b) 30% of all Government of China vehicle purchases as of this year will be electric and c) China's projection is that it will manufacture 2M eco-vehicles/year by 2020.

California is also moving fast on policies to support a transition to low and zero emission vehicles (ZEVs) with a) an aim to have 1.5M zero emission vehicles on its roads by 2025; b) government support for clean transportation innovation and manufacturing; c) a 10% goal for light duty vehicles purchased by the State government, beginning in 2015,  a goal that is to be incrementally increased to 25% by 2025; d) a 15.4% target for all vehicle manufacturers' sales to be ZEVs by 2015 and e) a building code requirement to the effect that all new buildings and parking lots must have the basic infrastructure in place to accommodate electric vehicles. 

Then there is Norway, where one out of 4 new vehicles sold in 2015 were electric, thanks in part to a large palette of incentives.

Clearly the actions described above will lead to a substantial penetration rates of electric vehicles in the medium term that will be devastating for the demand for oil on global markets.  Such are the conclusions of independent energy advisors Salman Ghouri and Andreas de Vries.  Their research of low, medium and high electric vehicle market penetration scenarios indicated that, even the low penetration scenario, in the medium term, would have a major impact on crude oil demand bringing about an imbalance between supply and demand.

So it is not surprising that the world's biggest bank UBS, is predicting the transition to a green economy will be well-entrenched by 2020.  And the BP Chief Economist, Spencer Dale  and the Governor of the Bank of England are on the same page on this.

Add to the information above, the revelations of Alexandre Shields in the October 15, 2016 edition of Le Devoir to the effect that 30% of the Energy East pipeline capacity will be used to transport North Dakota shale oil via Canada for export to the US East Coast.  This reinforces the premise that Energy East is not economically viable and definitely cannot be viable if it had to rely on tar sands derived oil alone.

For more details on the above, I particularly encourage reading my article for which the link is provided below, "Pipelines to Nowhere."
8) Trudeau on Instrumentalizing a Good Environmental Reputation to Promote Tar Sands Exports

During the Harper reign, Trudeau had  criticized Harper for not boasting of Canada's environmental record in order to make it easier to get Obama on side for KeystoneXL.  In a similar vein, Trudeau praised the former Premier of Alberta, Alison Redford, for promoting Canada's environmental record to sway the US administration in favour of KeystoneXL. This is just one of many examples of Trudeau instrumentalizing the environment to sell oil. 

Peter Kent, the former Conservative Minister of the Environment, spoke of the same philosophy.

More recently, Trudeau attempted to trade off infrastructure support for the Mayors of Canada's largest municipalities in exchange for social acceptability for Energy East.



9) Price on Carbon, Infrastructure and Other Federal-Provincial-Municipal Trade-offs: 
Talks with the Provinces to Acquire Social Acceptability for Energy East

Trudeau entered into the fed-prov talks on climate with a trade-off package pitch, a price on carbon in exchange for social acceptability for Energy East.  This is not all that different than his approach referred to in Section 8 with the Mayors of Canada's biggest cities, an approach consisting of putting infrastructure and Energy East on the same agenda.-- That isn't even subtle bribery.

Regarding a price on carbon, note that the European Union in July 2013 withdrew 900M carbon credits from the world's longest running carbon market (been around for more than a decade) while it's large palettes of "other policies" have proven to work well.  

The EU 15, those with the burden of reaching the 2012 Kyoto target of an 8% GHG reduction, had in fact achieved an 12.2% reduction.  Equally important, the EU-wide 2020 target of a 20% GHG reduction is expected to be surpassed with a 24% reduction. This is relative to 1990 levels and despite the ineffectiveness of the EU price on carbon.

The EU's target for 2030 is a 40% GHG reduction while Germany has a 40% target for 2020, 10 years earlier than the rest of the EU.

By contrast, in the event Energy East and Kinder Morgan go ahead, and combining this with Budget 2016-17 deficiencies, it is highly questionable if Canada can meet the timid Conservative target of a 30% GHG reduction by 2030 based on 2005 emission levels. (Reminder: Above EU targets and achievements are based on 1990 GHG levels)



10) The Trans Pacific Partnership and Canada Europe Trade Agreement:
Liberal Denial on Canadian Environmental Stewardship/Sovereignty

The Trudeau government favours the Trans Pacific Partnership (TPP) and the Canada Europe Trade Agreement, which among other things, contain the Investor State Dispute Settlement (ISDS) systems -- similar to that of the North American Free Trade Agreement.  The ISDS allows any corporation to sue a national government in the event that it's environmental laws impede the maximization of profits.  

It is in this context that TransCanada Pipelines is suing the US, under the NAFTA ISDS, over the rejection of KeystoneXL. Lone Pine Resources is suing the Government of Canada over Quebec's moratorium on shale gas development.  Indeed, Canada is the most sued country under the NAFTA ISDS.

Nevertheless, International Trade Minister Chrystia Freeland signed the TPP in February while making purposely creatively ambiguous statements about it being up to Parliament to ratify it.  But in reality, it is Cabinet that will exercise the authority to ratify it.


11) Minister Catherine McKenna Skating on Climate Change

Two interviews with Catherine McKenna demonstrated extraordinary incoherence on pipelines, the environmental impact review process and other large projects that are at odds with environmental considerations.

One of these interviews of Catherine McKenna occurred at the Paris climate conference, a collector's item on political skating, or speaking without saying anything.

Similarly, skating can be found in an interview of Catherine McKenna by Alexandre Shields of Le Devoir in a March 30, 2016 article, an interview during which she cannot make a convincing case as to how Canada will reduce its emissions while the Liberals continue to support the proposed pipelines.

12) Roadmap for a Canadian Transition to a Green Economy:
Palettes of Options for a Better Economic Paradigm

I have prepared a comprehensive Roadmap on a migration to a Canadian green economy based on 1) models from around the globe, adapted and improved upon for a Canadian context and 2) my own Government of Canada experience on sustainable development policies, legislation, programs, projects and other related types of initiatives, with a particular focus on what has been tried, what has worked and not worked etc.  The latest 54 page pdf edition is available for limited distribution and must be requested via 


Will Dubitsky: 03/04/16

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