BC Business
When former premier Gordon Campbell introduced the Climate Action Plan in 2008, it was revolutionary for North America—long considered an environmental laggard in the western world. The provincial government’s plan included a revenue-neutral carbon tax (intended to rise over time), a zero emission policy for 93 per cent of new power generation projects, an emissions cap for the natural gas industry and legislation requiring B.C.’s public sector to be carbon neutral (a goal first achieved in 2010). While celebrated by environmentalists, the plan was decidedly out of sync with the federal government—which, under Prime Minister Stephen Harper’s Conservatives, had become a climate change pariah; by 2013, Canada ranked 55th out of 58 countries in terms of reducing greenhouse gas emissions, according to a report by Climate Action Network Europe, keeping company with low achievers such as Iran, Kazakhstan and Saudi Arabia.
While the global climate continues to warm, the political winds in Canada have shifted. With new Prime Minister Justin Trudeau, the federal government is once again committing to making Canada a serious player on the environmental front; meanwhile, under current Premier Christy Clark, environmental green has been replaced with resource gold. In 2012, Clark’s government froze the carbon tax at $30 per tonne (a rate that had been scheduled to rise to $100 by 2020), converted an absolute emission cap for the natural gas industry into an intensity cap, set at 0.16 carbon dioxide equivalent tonnes for every tonne of LNG produced (meaning that fracking could expand and absolute emissions rise even as industry reduced its intensity), and made the LNG sector exempt from the Clean Energy Act. According to Environment Canada’s 2014 Emissions Trend Report, B.C. is on track to increase emissions 11 per cent by 2020 from 2005 levels—driven largely by natural gas production, transportation and energy imports.
Critics like SFU economist Mark Jaccard have been assailing Clark for dropping the ball in the fight against global warming. “Gordon Campbell made B.C. a leader between 2006 and 2010; Christy Clark has gone in the opposite direction,” Jaccard says. Even the government acknowledges the province will not meet the Campbell pledge to cut greenhouse gas emissions 33 per cent below 2007 emissions by 2020. B.C. Environment Minister Mary Polak declined to speak with BCBusiness for this story, but ministry spokesperson David Karn says the government is “proud of its accomplishments to date” and is “working with other Canadian provinces and territories, as well as the federal government, to help Canada meet its international climate obligations.”
Climate change has risen to the forefront of the national political agenda with the election of the green-hued federal Liberals. Clark joined a delegation of other premiers and provincial environment ministers, invited by the newly elected prime minister, to the United Nations Climate Change Conference last December. Trudeau—anxious to reposition Canada from pariah to saviour in the fight against global warming—signed on to the Paris Agreement, along with 194 other nations, which establishes a long-term goal of keeping global temperature increases at 2 C. The deal requires ratification by at least 55 nations responsible for 55 per cent of global GHG emissions—China and the United States alone contribute 44.5 per cent of emissions—but experts say that only if countries accounting for 90 per cent of emissions ratify the agreement will the 2 C limit be achieved. Back at home, Trudeau is struggling to get the provinces to agree on a minimum national carbon price of $15 per tonne—a key plank from his 2015 election platform.
Like Prime Minister Trudeau—and many of the premiers from the resource-rich West—Premier Clark has a difficult political balancing act on climate change. While she touts B.C.’s green milestones, selling B.C. as a leader in the eyes of the world, she’s also pushing hard to launch an energy-intensive LNG sector. In mid-February, the Canadian Environmental Assessment Agency released a preliminary report that said the Pacific Northwest LNG project in Prince Rupert—the LNG project proposed by Malaysian energy giant Petronas that’s closest to launch—would generate 5.25 million tonnes of carbon dioxide annually while upstream activities would contribute another 6.5 to 8.7 million tonnes, calling into question the compatibility of greenhouse gas (GHG) emission reductions and promoting an LNG industry.
TALK AND ACTION | (Left) Prime Minister Justin Trudeau met with premiers to talk about a climate plan in Vancouver in March; (Right) Neil Suldanha, manager of R&D at Nexterra, checks out the GE engine that runs on syngas and produces electricity *Image courtesy of Province of British Columbia
Perhaps seeing which way the federal political winds were blowing, Clark struck an all-star Climate Leadership Team (CLT) in May 2015 that included representatives from business, environmental NGOs, First Nations, academia and provincial and municipal politicians—among them, UBC Sauder School of Business professor and co-founder of Offsetters, James Tansey, and James Gorman, West Fraser Timber’s VP of corporate and government relations. It was tasked with revitalizing “the climate plan to keep the province on a path towards its long-term climate goals,” according to a government spokesperson.
The CLT submitted an exhaustive list of 32 recommendations last fall covering all aspects of the B.C. economy, with a focus on carbon pricing and new targets for emissions reductions set for 2035 (40 per cent below 2007 levels) and 2050 (80 per cent below 2007 levels). In response, Premier Clark appointed herself chair of a new cabinet working group on climate change in January and launched a public and industry consultation period on the CLT recommendations, set to end March 25. The goal: have a Climate Action Plan 2.0 to announce later in 2016.
Those in the clean energy sector have been quick to respond. On February 9, the Energy Forum—an ensemble of 17 clean energy industry firms and NGOs, led by the Pembina Institute—sent a letter to Clark urging action on all 32 of the CLT recommendations. “Whether B.C. meets its future emission reduction targets depends on whether or not the province is serious about meeting emission reduction targets,” says Stephen Cheeseman, chair and CEO of Vancouver-based wind power firm Chinook Power Corp. and a member of the Energy Forum.
Meanwhile, the CLT report is getting mixed reviews from others in industry. David Keane, president of the BC LNG Alliance and a member of the Climate Leadership Team, failed to agree with fellow CLT members on a recommendation to increase the carbon tax by $10 a year, starting in 2018. Keane says the LNG sector is an emission-sensitive industry and that a tax increase could cause industry to back away from investing here—choosing other countries with lower emissions standards. “We recognize that climate change is an issue and we have a responsibility,” says Keane, “but we need to ensure that our policies keep us on a level field with other LNG producers, like Russia and Australia, if we want to bring LNG projects across the finish line in B.C.”
Jock Finlayson, executive vice-president and chief policy officer at the Business Council of British Columbia, says the problem with the CLT was more fundamental: its mandate was too inward-looking and B.C.-focused. From the outset, Finlayson says, his group did not support B.C.-only emission reduction targets but that it does, in theory, support the Trudeau government’s move toward developing a coherent climate policy for Canada. (Currently, policies vary from province to province, with B.C. and Alberta charging a carbon tax, Ontario and Quebec doing cap-and-trade—and the rest of the country without any pricing at all.) “From a business and economic analysis point of view, a national strategy for carbon pricing and emission reductions makes sense,” says Finlayson. “The next phase of climate policy should be looking at a pan-Canadian approach and making market linkages with other jurisdictions.”
While SFU’s Jaccard declined an offer to join the Climate Leadership Team—arguing, “we don’t need any more public consultation”—others are more optimistic that the province will start moving again on reducing GHG emissions. Paul Ives, mayor of the Town of Comox, was one of three municipal politicians to sit on the CLT. As part of the province’s carbon neutrality commitment for the public sector, Comox has been chipping away at emission reductions with modest efforts such as bike lanes and building infrastructure improvements, like solar heating in public washrooms. The town currently spends roughly $2,000 annually to offset remaining emissions, and Ives says he’s hopeful that the government will move swiftly on the team’s recommendations: “LNG is going to be a huge challenge. The province has a real balancing act to play between that industry and GHG emissions.”
Merran Smith, a long-time environmental activist who sat on the CLT and is currently executive director of the nonprofit Clean Energy Canada, says that if the Clark government ignores the team’s report, it will be at its own political peril. “The fact is, it’s hard to call ourselves a climate leader when our emissions are going up in B.C. The government publicly appointed a team of experts to help devise a new plan, so you’d have to think they’d look pretty stupid if they did nothing.”
If for no other reason, the premier might be spurred to action by the environmental thrust of Canada’s popular new prime minister. During a speech in her backyard, at March’s Globe 2016 Conference in Vancouver, Justin Trudeau announced more than $125 million in federal funding for two new clean tech funds to help build capacity in the burgeoning sector. B.C., with standout companies like Nexterra (with five waste-to-energy projects in North America and two in development in the United Kingdom) and smaller innovators like Humpback Hydro and Zolair, is well-positioned to capitalize on surging green energy demand, says Smith. And according to the United Nations Environmental Program, global investments in green energy hit US$270 billion in 2014—up 17 per cent from the previous year, with the massive economies of China, India and the United States leading the way. “This is what the marketplace is telling us,” says Smith, “and B.C. needs to be out front.”