Tuesday, December 7, 2010

Change is Upon Us, Part 4: Decarbonizing Our Economy

We are at a crossroads. The future is not going to be like the past. Our economic model, which requires growth to occur through economic development, is not sustainable. Climate change is happening as a result of human industrial development. We are currently living in an age of Peak Oil, where less oil is now being produced each year than there has been in the past, since about 2005-06, despite demand generally tending to grow year by year. As demand outpaces supply, the price of oil will increase. Higher oil prices will affect everything we do, especially the way in which we grow, harvest, and transport our food.

Yet these crises are not the sort which have an immediate and acknowledged impact, such as an earthquake or a tsunami. Instead, the impacts of climate change are very gradual, sort of like the lobster in the pot of water, set to boil: the lobster feels ok, maybe there is some warmth, but by the time it’s apparent that something has to be done, it’s too late. The impacts of Peak Oil might be more like a roller-coaster ride: a sudden drop occurs (in the economy), and then things begin to level out, and then climb again (and it feels nice to climb), but then, there’s another sudden drop. Repeat.

It’s because impacts are not felt immediately that many deny the severity of the crises which face us. The media, which operates in a world of “crisis today / gone tomorrow”, has a hard time following and reporting stories about climate change and Peak Oil, because the cause and effects are sometimes difficult to explain, and because a slowly changing climate or rising oil prices don’t make for good copy.

Nevertheless, we are in the midst of these crises. The sooner we acknowledge the severity of the crises facing us, the sooner that we will be able to move forward with solutions. Yet, many of us continue to refuse to acknowledge that there’s anything wrong at all. How can we move forward in such circumstances?

As I’ve indicated before, the first step is to tune out those who deny that climate change is happening. They have nothing to contribute when it comes to looking for solutions. Indeed, many who deny the science of climate change do so for their own corporatists agendas: they have an acknowledged interest in the continued perpetuation of the status quo, often an economic interest. The fact is, though, the status quo can not continue, because of the nature of the crises which we face. One way or the other, the status quo that we have come to expect is gone forever. We are living in a time of transition. The only question is, on whose terms are we going to change? Our own terms, or are we going to let nature take its course and react to whatever is thrown at us? That’s the crossroads where we find ourselves.

If we are going to take matters into our own hands, and collectively decide our own fate, there are many things which we must do. To address the climate change crisis and Peak Oil, at the top of the list is the need to “decarbonize” our economy.

Some have suggested that the very nature of our capitalist economic system imperils our future, and our children’s future, as capitalism is predicated on the notion that growth must occur if the system is to remain viable. Some have advocated for the need to do away with this system altogether, and replace it with a system based on sustainability.

Well, that’s not going to happen, or at least not within the timeframe for which action needs to be taken. We’re not going to get rid of our current economic system, nor can we abandon the infrastructure which we have created to service the society of the past. The term “sunk costs” describes past investments made by our society, often in the context of infrastructure (although I believe that the term is equally applicable to our current economic system in general).

We’ve sunk a lot of costs in some pretty big infrastructure projects, and we’ve not always realized the value for dollars paid in doing so. For example, in Ontario, we’ve invested billions in nuclear reactors, and we continue to spend billions on repairs and upgrades. The only way to recoup these costs is to continue to use these reactors for energy generation. Although it may seem socially responsible to stop the use of nuclear power, the fact is we’ve put so much money into this form of energy, we can’t just simply flick the switch to “off” right now.

Instead, what we must do is stop investing in technology and infrastructure which will prove unhelpful, and indeed, wasteful, in the future in which we anticipate we’ll live. For example, the Conservative government is investing $300 million in untried carbon capture and storage technology. At best, should this technology prove to be workable, we can expect to see a 5% reduction in Canada’s greenhouse gas emissions (and then only starting in about 2017 or so). However, since one of the goals behind carbon capture and storage is to use stored CO2 to facilitate underground oil extraction in place of water, what we’ll end up doing is losing the very modest gains we have made to emissions reduction to…increase emissions. It’s this bizarre form of investment which gets us nowhere.

The fact is, if we are going to take the future into our own hands, we need to begin the process of decarbonising our economy. That must start by putting a price on carbon, but it certainly must not end there. As you can imagine, if an international cap and trade system was initiated, or a carbon tax was added to purchases (be they bulk fuel purchases for industries or just to the price of manufactured goods), we can expect to see prices on just about everything rise.

Rest assured that carbon dioxide is a pollutant, in that it is an unwanted by-product which has proven to be detrimental to our health, and the health of our climate. Yet, for too long, industries have been paying nothing for polluting our atmosphere. This has to change. But it must change responsibly. And by responsibly, I mean that it must change in a way which is affordable, and change must actually reduce emissions.

Canadians must be given the opportunity to make sound choices when it comes to purchasing everything, from food to houses. Right now, middle class Canadians see a considerable amount of their personal incomes lost to income taxes. Richer Canadians, who can afford to pay more in income taxes, do so, but only marginally so relative to income. The ultra rich, it seems, have numerous tax loopholes at their disposal, and we often hear about how they are not paying their fair share of tax.

I’d like to have more of my personal income left in my bank account so that I can choose how best to spend it. While prices on some goods and services may rise as a result of carbon pricing, I’ll be able to choose more easily where I target my own spending. Instead of buying two cars, perhaps one car will be enough, along with a transit pass. Instead of taking an airplane on a business trip, I will take the train or bus. Instead of cranking the air conditioning up in the summer time, I’ll sweat it out. Whatever the choices will be, they will be mine to make.

Now, not everyone will be in my position. The poorest amongst us will be the most vulnerable in this situation, along with those living on fixed incomes and those living in rural areas. For carbon pricing to be effective for all segments of our society, we will be able to figure out ways of levelling the playing field. Lately, some have suggested that it’s time to look at the idea of a guaranteed annual income, which would go a long way to assist with the transition to a decarbonized economy. There are actually lots of ways which governments can address this issue.

Over time, during the transition from carbon economy to a decarbonized economy, we can expect to see carbon prices go up, which will act as a disincentive for carbon use. We must also stop subsidizing the fossil fuel industry. Instead, we must invest smarter, so as to avoid those future “sunk costs”. We must invest in alternative energy, curbing urban sprawl, public transportation and rail infrastructure. We must stop building highways and roads (in anticipation of their being fewer cars on the road, due to high oil prices), and we must stop investing in expensive energy, such as nuclear power.

We must also leave in the ground most of the fossil fuels which are left in the world. For Canada, this means that we must stop investing in the tar sands. If the world were to continue to emit greenhouse gases produced by tar sands sources alone, we can certainly expect to blow through the 2 degrees Celsius threshold identified as being the upper limit of warming we can tolerate before triggering positive feedback loops (such as permafrost melting and the release of stored methane, which is a greenhouse gas 7 times as potent as carbon dioxide). Investments in off shore oil must also come to a close, as the risks of warming posed by extracting deep-water oil are also significant.

Let’s not kid ourselves here: decarbonising our economy is not going to happen overnight, nor is it going to be something easy to do. The sectors of the brown economy which will be impacted are numerous, and unfortunately they are the ones which we have sunk considerable costs in: the oil sector and the auto sector. Yet, if we don’t begin to turn things around, we can expect to reap the whirlwind of an economy ill-prepared for the future.

Green tech jobs are being created in Europe and China, while Canada and the USA fall behind. It doesn’t have to be this way, even with the considerable sunk costs we’ve experienced. By ending subsidies to the oil industry, investing smarter, returning people’s income to their own wallets, and by putting a price on carbon, we will begin to turn things around. It’s not going to be easy. First, we need to find the political will to make these choices. While a majority of Canadians want our government to take action to address climate change, our current government has instead chosen to be an obstruction. This can’t continue; if it does, we will put too much at risk, including our livelihoods.

If our Prime Minister believes that taking action to address climate change will cost millions of jobs (which he recently stated as a justification for having his hand-picked unelected Senators defeat Bill C-311 after parliament approved it), than he is misleading Canadians. Prepping our economy for the future which we can expect does not need to cost jobs; in fact, if we transition smoothly, we can expect to create jobs. The number of jobs which will be lost due to a changing climate and peak oil will be considerable if we continue to spend our tax dollars on projects which don’t make sense for the future we can expect.


Sudbury Steve said...

We like to think that Canada is a world leader in technology. Increasingly, that’s less and less the case each year. We have an opportunity here to get a jump start on the green economy of the future, if only we were to seize it. Other nations are doing this already; Denmark, Germany, South Korea and China are much further ahead than we are. It’s a matter of choice for us, though: do we continue to invest our resources in the brown economy of the past, or do we invest in the green economy of the future? Our Liberal and Conservative federal governments have consistently chosen brown over green, with reckless disregard to our future well-being. There is no longer a competitive advantage to be had by being a leader in the brown economy, given that the brown economic model has proven to be unsustainable. What’s a surprise is that our government refuses to acknowledge that they’ve bet on a loser, and worse, that they continue to use our tax dollars to up the ante on this losing hand.

The Mound of Sound said...

Globally, Canadian companies produce 20% of the world's geo-thermal energy. In Canada they produce none nor does any other company. My own British Columbia is rich in geo-thermal opportunities but fossil fuel still rules the day politically.

The idea of a supertanker port on the BC coast to ship Athabasca synthetic crude to Asia is overwhelmingly opposed by British Columbians but our government simply avoids mentioning the issue while continuing development out of the public eye.

Decarbonizing our society and our economy entails a fundamental restructuring that won't be attempted until the public demands it. Sadly, we are like frogs in the pot atop the stove.

Jared Diamond, in his book "Collapse" describes a phenomenon he calls "landscape amnesia." As our world changes we quickly come to accept the current situation as normal and quietly forget what formerly existed. By steadily shedding our memories of the past we undermine our will to reclaim it.

The Mound of Sound said...

By the way Steve there have been great strides in developing fourth and fifth generation nuclear power reactors. These are non-breeder technology that can actually burn spent fuel rods, weapons grade material, pretty much the whole detritus of the nuclear power/nuclear weapons era of the past.

There's an Australian professor, Barry Brook, who is quite the advocate for these new-generation reactors. He has a web site www.bravenewclimate.com where he explores this technology and why he believes it is the best short-term solution to weaning ourselves from fossil fuels. He presents some very compelling arguments.

rashid1891 said...

et these crises are not the sort which have an immediate and acknowledged impact, such as an earthquake or a tsunami. Instead, the impacts of climate change are very gradual,