BC Business
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When David Wayne, manager of Stanley Park’s Brockton Oval, turned out the lights and slipped into bed beside his wife on the evening of December 14, nothing could have prepared him for the fury that would awaken them in the inky darkness of the following morning.
At 1 a.m. there wasn’t a puff of wind to rustle the leaves on the centuries-old maple outside. But while the Waynes slept, the first gusts of a ferocious storm front gathering over the Pacific began buffeting the Lower Mainland. The big old maple grew restless; the forest came to life. Wayne stirred in his bed. When the gusts grew in intensity, he glanced at his bedside clock. “Things started to get crazy at 2:30 a.m. I went outside and I could literally hear trees screaming and snapping in the forest around us,” Wayne explains on a foggy January morning outside the 90-year-old stone and timber house. “We’ve experienced a lot of windstorms before, but never one like this. It would go from being completely quiet to wild gusts and then back to quiet again, like you had suddenly walked into a giant fan.” At 3:30 a.m. Wayne started pacing. He woke his wife Normande and 19-year-old son Jared and moved them to the other side of the house away from the copse of old conifers now swaying dangerously. Wind speeds in Stanley Park quickly approached 120 kilometres an hour, and on Race Rocks near Victoria the weather vane recorded staggering velocities of up to 157 kilometres an hour. Just before 4 a.m., the Waynes’ dog and two cats started circling presciently. Suddenly there was a deafening crack, the sound of a 30-metre-tall cedar’s thick trunk finally succumbing to the relentless force of the wind. A fraction of a second later, before the Waynes could react, the tree came crashing down on the peak of the roof. Miraculously, not a single rafter was broken. Not even a cedar shingle was cracked. It’s been called the “miracle in Stanley Park,” as much a testament to building standards of a bygone era as to sheer luck. Chance had placed the Waynes at the fierce heart of a storm that laid waste to Stanley Park and large parts of the Lower Mainland in just hours, and chance had spared them. “I guess I’ve had my 15 minutes of fame,” Wayne says, chuckling at the media frenzy that bubbled up after his gripping story was made public. No question: Canadians love to talk weather. However, the sheer concentration of extreme events that ripped through B.C. last November and December had ominous undertones. The events also sparked a tidal wave of public and political debate over global warming and climate change – a wave whose impact on local businesses remains a question mark. It started with some severe weather events that began with chart-topping rainfalls. On the fifth and sixth of November, a Pineapple Express left over from Typhoon Cimaron drenched us in 15-millimetre-an-hour rain. On November 15, 150 millimetres of rain fell in 15 hours in some parts of the southern coast. Vancouver tied its all-time precipitation record for November, with 350.8 millimetres of water. Two hundred thousand people in eight communities were left without power. Most Lower Mainland rivers were flowing at levels that are only seen an average of once a decade. On November 26, Abbottsford broke its one-day snowfall record with more than 44 centimetres. Then, in December, not one but three consecutive storms, each of them one day apart, battered the south coast. The third, and most devastating, culminated in David Wayne’s 15 minutes of fame and left Hydro crews scrambling to restore power to 250,000 customers while insurance adjusters tallied up an estimated $100 million in property damage. These three powerful storms touched land in almost the exact same locations, something Environment Canada’s senior climatologist David Phillips says is unprecedented for as long as weather records have been kept on the coast. The wild fall of 2006 might soon have been filed in the memory scrap heap if it weren’t for something else afoot. As legions of climate-change believers and skeptics alike drove their gas-guzzlers down to the theatres to see Al Gore’s slick Academy Award-winning documentary, An Inconvenient Truth, a paradigm shift was well underway. With pine beetles gorging on Interior forests, glaciers melting, ocean temperatures rising and sending salmon northward in search of colder climes, and polar bears marooned on shrinking arctic ice floes, people were already alarmed. When the climate-change debate converged with the extreme weather of 2006, it formed a perfect storm of consciousness-raising that seemed to solidify the notion among the public that global warming has largely human causes. Today, you can’t crack open the Vancouver Sun or Globe and Mail without finding at least a few front-page stories devoted to climate change. Companies are hastily coming out with public policy statements on climate change and carbon-dioxide reductions. And if you’re a conservative politician who’s not a born-again environmentalist, your stock is tubing. Stephen Harper – who deep-sixed Canada’s Kyoto commitments ratified by former PM Jean Chrétien in 2002, pulled funding from the One-Tonne Challenge program and barely mentioned the environment during the January 2006 election campaign – is now trying to recast himself as a green environmental champion. And in an astonishing about-face, the Gordon Campbell Liberals, who not long ago were helping condemn the moribund Kyoto protocol, came out swinging like superheroes against climate change in the February 13 throne speech. (Campbell did it with the First Nations file, why not try it with global warming?) “The science is clear. It leaves no room for procrastination. Global warming is real,” proclaimed Lieutenant Governor Iona Campagnolo. It was an obvious nod to the United Nations Intergovernmental Panel on Climate Change’s most recent report, the so-called Fourth Assessment, which declared that the debate around the science of climate change is over and the time for action is now. (The report has its critics, many who argue that yes, the globe may be warming, but human activity is not the cause.) When it comes to climate-change rhetoric, at least, Campbell is a Canadian pioneer. The recent throne speech reads like a breathtaking shopping list of climate-change-fighting goals. It boasts a 33-per-cent reduction in current levels of greenhouse-gas emissions by 2020, going further than California’s tough new legislation passed last August that aims to cut emissions by 25 per cent. By 2009, new automobile tailpipe standards will be in place, aimed at reducing emissions 30 per cent by 2016. Landfills will be required to capture methane gas. Consumers will be offered tax incentives to buy hybrid cars and install energy-efficient windows in their houses. And B.C. will have the first carbon-neutral government by 2010, thanks to measures that include making all new government vehicles hybrids. However, throne speeches are just that – speeches. The fact that our total emissions have soared by almost 30 per cent between 1990 and 2004 can’t be anything but sobering for our ambitious premier. So on 2007 budget day, the Tuesday following the throne speech, details about the government’s climate-change plan were scant. Those that did exist were buried deep within the weighty document, lending credence to the skeptics’ claim that government was simply engaged in pragmatic vote-grabbing. To them, it seemed the procrastination had already begun. Others, who see drastic action on climate change as potentially damaging to the economy, were relieved that Victoria was taking it slow and methodical. Then on February 27, more details about the long-awaited energy plan emerged, including a goal to make the province self-sufficient in electricity by 2016, creating a new building code by 2010 that incorporates energy-saving design, eliminating gas flaring in the energy industry by 2016, establishing a green levy on utility bills to raise $25 million annually and educating consumers to cut energy consumption at home. (Thanks to our rich endowment of hydro power, B.C. residents pay some of the nation’s lowest utility rates, so teaching energy conservation could be an upstream struggle.) When it comes to reaction from inside B.C. business circles, what’s the verdict? Jock Finlayson, executive VP with the Business Council of B.C., says business was blindsided by the sudden tough talk on climate change. “2020 is a hugely ambitious target. Let’s be honest here: our emissions are going up as we speak. It will require a lot of homework on behalf of the government to find low-cost options to reduce emissions.” “There is little doubt that it was hastily cobbled together,” adds Shane Gunster, an SFU assistant professor who studies political communications. “The budget, for instance, had virtually no real expenditures set aside for meeting the targets identified in the throne speech. The contrast between the lofty rhetoric in the first document and the almost complete lack of hard numbers in the second suggests that the environmental themes were largely thrown together at the last minute.” [pagebreak] For its part, business wants to know if this is about Campbell jumping on the green train, or if the BC Liberals are serious about moving beyond tough rhetoric. Werner Knittel, VP of the B.C. division of the Canadian Manufacturers and Exporters industry association, says the devil will be in the details, which are scant so far. Manufacturing in B.C. employs an estimated 400,000 people and accounts for more than $24 billion in annual exports, and Knittel is ready to school the provincial government with some concrete suggestions for helping companies reduce emissions while ensuring they stay afloat amid stiff competition from low-cost overseas producers. “Right now, it’s just talk. The policy makers need to put in place programs that reflect the nuances of individual sectors,” Knittel says. “We’re mostly small and medium-sized businesses and there’s a huge cost to investing in green technology. There’s a misconception out there that the manufacturing sector is against cleaning up the environment, but I don’t know a CEO out there who isn’t interested in cleaning up his company’s act.” For starters, suggests Knittel, Victoria should build on federal tax credits that already exist under the Scientific Research and Experimental Development program, which would encourage R & D in clean technologies. The B.C. government could also push for tweaking tax laws to allow what Knittel calls an accelerated depreciation allowance, to hasten the replacement of aging equipment. Add to that a tax credit for companies that adopt so-called “lean” principles aimed at increasing productivity while reducing energy use and waste, and, Knittel says, you have the elements of a solid emission-reduction plan. “I don’t think B.C. can be the Boy Scout and say we’re going to do this alone and set general targets without implementing some very sophisticated programs,” he says. The automobile industry isn’t particularly enamoured with Campbell’s policies either. B.C. car dealers have tough words for the premier’s plan to offer a $2,000 tax incentive to anyone buying a hybrid. “Listen, if you’re going to give a tax benefit to buy a new vehicle, then apply it to all fuel-efficient vehicles, not just hybrids,” insists Tony Raybould, president of Jimmy Pattison’s auto group empire and manager of two Vancouver Island Metro Lexus Toyota dealerships. “The discussion should be about getting all the old crap off the roads and getting people into modern, fuel-efficient cars.” The process of getting oil and gas out of the ground and into fuel tanks is also a major greenhouse-gas contributor, accounting for roughly 18 per cent of B.C.’s total emissions, mostly through gas flaring. Calgary-based energy powerhouse EnCana Corp. is a significant player in B.C.’s $9.5-billion oil-and-gas industry and, in 2005, pumped an average of 311 million cubic feet a day of natural gas from its Greater Sierra and Cutbank Ridge fields in northeastern B.C. Not surprisingly, the company has observed with some interest the climate-change banter emanating from Victoria but finds it hard to comment on a plan made up of little more than sweeping targets and generalizations. “It’s too early to know what the implications are for the industry and for EnCana’s operations. We’re looking to learn more from the British Columbia government,” says Alan Boras, EnCana’s director of media relations, over the phone from Calgary. “Emissions are something we take very seriously and we’ve already made significant reductions in emissions from gas flaring, but our sector is growing, so that means our total emissions are going up.” The forest industry is also awaiting details that will put some meat on the bones of a made-in-B.C. climate-change action plan. Lee Coonfer, Canfor Corp.’s public affairs spokesperson, says until there are some specific targets to examine, it will likely be business as usual for the forestry giant. However, he says Canfor has already reduced emissions by generating steam through wood-waste burning and the phasing out of beehive burners. For business leaders in the sustainable-energy sector, these are exciting times – but it’s too soon to break out the bubbly. When Xantrex Technology Inc. chair and former Ballard Power Systems Inc. executive Mossadiq Umedaly returned in early February from an overseas business trip, he liked what he heard. The provincial government was talking a big game on climate change and supporting the development of a power grid with a zero-greenhouse-gas footprint – the kind of talk that could translate into hefty profits for a firm such as Xantrex, which produces electronics for alternative-energy applications and has annual sales tipping $130 million. But as Umedaly points out, the operative word is “could.” “We in the industry have been working on this for decades. What’s coming together now is that people understand that this is a very serious problem. It’s not episodic like oil prices or terrorism. Climate change will affect every person on the planet,” says Umedaly, who wrote a report for Victoria last spring on how to grow a sustainable-energy cluster in B.C. “I’m really pleased that we’re showing some vision, something we haven’t seen before in this province or country.” Umedaly calls the $25-million Innovative Clean Energy Fund, announced in the budget and energy plan (to be pooled from soon-to-be-implemented utility premiums), a good start – a way to assist companies to bring proven technologies such as wind, solar and other green energy technologies to market on a mass commercial scale. But it’s just that: a start. “If this vision laid out in the throne speech is without a solid implementation plan, it could be an embarrassment down the road for the government.” Like Umedaly, the Business Council of B.C.’s Finlayson expects that opportunities will come in the sustainable-energy sector, mass transit and green-building design. The downside? Possible curtailed investment in the oil-and-gas sector, which has expanded dramatically over the past decade – along with its emissions, Finlayson adds. For any made-in-B.C. climate-change plan to be successful, Finlayson believes it needs to be aligned with whatever emerges from Ottawa. And these days that’s about as clear as a smoggy summer afternoon in the Lower Mainland. “Right now the country’s a mess on the climate-change file. The targets won’t be met through voluntary compliance. There will have to be tough regulations and emission targets,” Finlayson says. That, asserts Aldyen Donnelly, the president of the Vancouver-based Greenhouse Emissions Management Consortium and a greenhouse-gas policy wonk, will come down to whether the premier attacks the problem using free-market principles or subsidies and handouts. “It has been very difficult to get civil servants to sit down and work hard on the development of viable policies and regulations,” he says. “For most of the past 10 years, their focus has been on government-operated programs and spending.” How the province’s climate change policy unfolds could depend largely on the people sitting on the premier’s Climate Action Team. Donnelly believes if their focus is market-based solutions to global warming, it will succeed. If they’re looking for subsidies and handouts, it will fail. Full stop. The list of ways to tinker with the economy and lower greenhouse-gas emissions is long and complex. One method for dealing with large industry polluters is a cap-and-allowance system that would set absolute limits on greenhouse-gas emissions. Companies that outperform these limits could enjoy an economic benefit by trading so-called carbon credits. The Montreal Climate Exchange has already been established as a joint venture with the Chicago Climate Exchange, but without federal leadership to establish a regulatory regime around carbon trading, it remains theoretical. Donnelly warns that a system of caps could fail if it creates a lopsided playing field where competitors operating outside of B.C.’s jurisdiction don’t face the same caps and are therefore handed an unfair advantage. Instead, Donnelly favours a system of product standards like those adopted by Massachusetts in 1997 that require all firms selling, producing or manufacturing in the state to report greenhouse-gas emissions. In other words, if you want to play in this market, these are the rules, whether your company is based here or not. Stephen Harper’s Conservatives are pondering intensity-based emission standards based on production, like those being adopted by Alberta; however, critics point out that such systems put no limit on absolute emissions. And these days, the term “carbon offsets” is appearing more and more frequently in the mission statements of B.C. companies. By investing in green projects, a reforestation project (trees absorb carbon dioxide) or a wind-turbine development for example, a firm can offset some of its own greenhouse-gas emissions. However, carbon offsets are criticized by some as simply a form of guilt assuagement, a way for companies and individuals to feel like they’re doing good without actually addressing their own greenhouse-gas emissions. At the end of the day, grand statements about building a cleaner future in B.C. for future generations will net zero actual change in business practices, Donnelly says. The Vancouver Board of Trade, predictably, is giving the Campbell green plan a nod. Vancouver’s business community and its citizens will benefit if climate-change fears result in a more sustainable transportation network through the Lower Mainland and more energy-efficient buildings, says Dave Park, the board’s chief economist. But given that a significant portion of B.C.’s greenhouse-gas emissions come from cars and trucks, cutting emissions requires some hefty investment in public transportation. “It was a surprise the depth to which the government embraced the UN report,” Park adds. “Based on this government’s track record, if they commit to doing something I think they’ll do it.” [pagebreak] While the business community struggles to discern bottom-line impacts of emerging climate-change policy, many observers say it’s about time. For decades, scientists around the world have been ringing the climate-change alarm bells, and when Brit Sir Nicholas Stern, former chief economist of the World Bank, weighed in on the debate, something strange happened: a respected economist was sounding like an ecologist. In a 700-page tome published last October, Stern said taking steps now to curb global warming to acceptable levels through greenhouse-gas-emission reductions would cost, on average, one per cent of a country’s GDP. However, inertia could shrink the global economy by a staggering 20 per cent. Earlier this year, even the clergy went public on global warming. In January, Reverend Michael Ingham, Anglican bishop of the New Westminster diocese, called on the provincial government to set meaningful greenhouse-gas-reduction targets based on the best possible science. He referred to climate change as “the most pressing moral and ethical and spiritual issue of the day.” With global warming dominating the political landscape, David Suzuki’s timing could not have been better when he rolled into Vancouver on February 27, nearing the end of his cross-Canada “If you were Prime Minister” tour. The David Suzuki Foundation’s climate-change specialist Ian Bruce joins the NDP in highlighting opportunities for innovators in the green energy and technology sector. However, he says the government is in danger of dropping the ball on transportation planning that focuses on freeway expansion and bridge widening. “If the government is serious, it needs to immediately rethink the Gateway Program, which measures success by cars and trucks instead of people and goods. It’s a recipe for more congestion and urban sprawl, and that means increased emissions,” Bruce says, adding that the government should immediately tackle so-called low-hanging fruit such as regulating the oil-and-gas industry to limit gas flaring. “I surely hope that the premier’s intentions are sincere, but the proof will be in the pudding.” According to Bruce, the energy plan has some positive points on the green-energy side of the balance sheet but also raises some negatives around continued oil-and-gas industry subsidies and freeway expansion. Back at the office of Xantrex Technology, Mossadiq Umedaly is still bubbling with enthusiasm. This is not the short-term rush of the 100-metre sprinter; addressing the issue of climate change and global warming is the stuff of a long-distance endurance athlete, says Umedaly. “This is not about one small event; it will take years and decades of effort. The science has spoken,” Umedaly says, confidently. Last December, it seemed like climate change had spoken through the vicious windstorm that toppled ancient Stanley Park trees and could have flattened the home of Brockton Oval manager David Wayne. Whether or not that wild storm had anything at all to do with greenhouse gas and global warming is beyond the absolute grasp of any scientific modeling. And perhaps the question is moot. One thing is certain: the extreme weather has become part of a perfect storm that has caused this province to wake up and feel the planet warming. And the business community is feeling the tremors. Six months later, when Wayne looks at the shattered stump of the tree that could have killed him or someone in his family, he is still awestruck. “We had faith that we would be alright that night,” he says. It will take a mountain of faith and determination to grapple with global warming. Politicians are only just beginning to catch up with the public’s, and indeed business’s, evolving attitude toward the issue. Will B.C. become a North American leader, a model vehicle in the fight against global warming as Gordon Campbell has so audaciously promised? How will the government reconcile tough talk on global warming with pressure to limit policies that could tamper with this province’s stellar economic growth, especially in burgeoning sectors like the gas industry, which has a substantial carbon footprint that grows with every new well drilled? Either the nuts and bolts of a practical plan will emerge over the coming months and years, or the skeptics will be right: Campbell’s climate-change plan outlined in the throne speech will be a vehicle without wheels.
Going green: B.C. companies walk the walk Whatever rhetoric spills out of the legislature, going green can mean profit, opportunity and cost savings. Many B.C. firms have already made changes and are meeting the green challenge with creativity. Robert Safrata, CEO of Novex Delivery Solutions, has a fleet of 17 hybrid and three natural-gas vehicles that have reduced his company’s carbon-dioxide emissions by 1,000 pounds a day. Last summer, Thrifty Foods Inc. opened its first carbon-neutral grocery store in Coquitlam by investing in carbon offsets through Tree Canada Foundation. The Victoria-based chain has been tweaking building designs to minimize its carbon footprint, installing energy-efficient light bulbs, capturing waste heat from refrigeration systems to heat water, using LEDs for outdoor lighting, recycling plastic bags and composting spoiled produce. Tourism Vancouver will offset more than 220 tonnes of greenhouse-gas emissions, generated mostly by air flights for staff and visiting media. Across the Strait, Victoria’s Carmanah Technologies Corp. is on target to be a world leader in the design and manufacture of remote solar-powered LED systems. Energy-hungry metal smelters have much to gain from a greener power grid, and according to the Mining Association of Canada, the industry has already taken steps to reduce its carbon footprint. Big players such as Teck Cominco Ltd. have helped the metals sector reduce energy consumption by almost 22 per cent between 1990 and 2001, while increasing energy intensity (or, energy per unit of output) by one-and-a-half per cent. Also motivated by rising energy costs, Canfor Corp. has cut its greenhouse-gas emissions with co-generation power plants that burn wood waste, enabling the company to render its three sawmills in Prince George nearly energy self-sufficient. As an industry, the Forest Products Association of Canada, of which Canfor is a member, reports that member firms have cut fossil-fuel consumption by 45 per cent since 1990 and that 60 per cent of energy needs come from renewable sources, mostly wood waste from logging and milling operations. Down at Vancity Capital Corp., sustainability is so well entrenched in the organizational philosophy that Gordon Campbell’s recent arrival to the topic has the feel of a priest arriving late for Sunday service. More than a dozen years ago, Vancity committed to being carbon neutral by 2010. “We knew that our employees cared about sustainability so it was an easy sell. Our plan is very focused on reducing our emissions internally before looking at [carbon] offsets,” says Andrea Harris, Vancity’s director of community leadership strategy. She estimates that the credit union has reduced energy bills by 50 per cent, saving some $2 million since 1990.