Can Canadians handle climate-change truths? ~ David Wilkin

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The new federal carbon tax has ignited the political global-warming fires, right on queue for the federal election. First, a quick recap from my past articles. The latest IPCC report warned us only 12 years remain to cut global carbon emissions in half, on the path to zero-emissions in 30 years. This establishes the near-term boundary to transition from today’s carbon-energy economy. The outside boundary is about 50 years due to depletion of proven global “economically viable” oil and gas reserves. Led by China and India, global emissions rose 2.7 per cent in 2018, but likely much more due to significant discrepancies in China’s reported coal consumption.

The Liberal government’s climate-change plan demand-side features a small carbon tax and some energy saving incentives/subsidies. More concerning, their restrictive supply-side policies strangle our carbon-energy sector. Our economy will need this revenue stream to help fund the future energy transition. We have a highly motivated buyer, the USA – without secure Canadian oil (99% of our oil exports), they have just ten years of proven reserves remaining.

Now to debunk the political rhetoric:

  1. The carbon tax reduces emissions. The Liberal $20/ton tax ($50 by 2022) will have no meaningful impact on consumption behavior. To do so, the tax would need to be much higher. Worse, its costs are hidden, regressive, and ripple through the entire economy. My table below clearly shows Ontario, without a carbon tax, handily beat both BC and Quebec (each with carbon-pricing) on key metrics (assisted by nuclear and wind replacing coal). Even the USA managed an 13 per cent decline without a carbon tax. Global climate-leader Sweden, with a high carbon tax, is included for comparisons – they achieved a 29 per cent emissions decline in 10 years. It’s little surprise then that only 20 per cent of all countries (80 per cent European – geographically small, lacking carbon-energy sectors) have carbon-pricing, covering just 13 per cent of global emissions.
  2. PM Trudeau says: Fighting climate change and growing the economy go hand-in-hand”. This totally ignores the scale of the coming transformation – replacing our carbon-energy system. The cost is never discussed, so the table below shows my ball-park estimates, built from recent US EIA and National Energy Board data. The electrical system capital cost for blended Scenario D, is  approximately $3 trillion, excluding customer/business equipment replacement costs and business competitive losses (point four below). This builds a new smart electrical system with approximately four times the current electrical system capacity, removing >90% of emissions. For context, this capital cost is 1.5 times our entire economy GDP, almost tripling hydro rates and raising heating costs six-seven times (vs. natural gas today). Canada’s oil and gas sector’s 900,000 dependent jobs, $220B of GDP, and $182 Billion in Foreign Direct Investment cut in half, or more. This is risk cost. It will take many decades to complete with costs and impacts varying significantly by province. There is growth in the electrical and nuclear power sectors, but far from offsetting the costs – a serious energy supply-side strategy is long over-due.

  3. Renewable wind and solar energy ‘is the future’. In Canada (and globally) this energy represents approximately 1.5 per cent of all energy (electrical sector  approximately 5 per cent). Its share is growing, but due to its highly intermittent nature, it’s much more expensive and is ‘grid-capped’, meaning beyond an approximately 20 per cent share (in Canada), very expensive power storage and extra capacity supply grows rapidly. Without substantial growth in Advanced Nuclear power, by 2040 carbon-sourced energy still provides over 70 per cent of our energy. Carbon capture and storage will help, but it is growing much too slowly.
  4. Real emission reductions are required from developed countries – only. Rapid growth in developing countries, led by China and India, doubles global GDP by 2040 (80 per cent from  approximately 2.5 billion people joining the middle-class), growing energy demand 32 per cent. They made only weak commitments to lower emission intensity (to GDP) not actual emissions, meaning emissions rise regardless of developed countries’ actions. Getting an emissions-reduction pass further disadvantages our manufacturing sector, already hollowed-out over the last 20 years. It is naïve to expect them to follow our “lead”, voluntarily prioritizing emission reductions over economic/middle-class growth. What geniuses negotiated this deal? Perhaps fear of running out of affordable oil and gas (sooner) will have more success?
  5. Immigration’s impact on climate change – only government silence. Canada takes in approximately 360,000 immigrants per year ( about 1 per cent of the population, excluding temporary workers), driving >80% of our population growth. Here’s the problem: most come from countries with 1/4 our carbon intensity/capita. Maintaining the planned 1.1 per cent immigration rate, adds another 6 million to Canada’s population (up 16 per cent) by 2030. This adds to global emissions and at our current intensity improvement rate, 87 MTCO2E more to Canada’s 2030 emissions target gap. For context, that’s more than the emissions from all our passenger vehicles today. Is this wise?

I understand these are tough messages, but Canadians need to understand the truth if we are to take meaningful actions and avoid catastrophic blunders. Trudeau’s plans create the illusion of fighting climate-change – buzz words and minimalist actions to acquiesce/fool the people – while weakening Canada’s economy in the process. Let’s see if the other political parties have better plans.

Dave Wilkin, Masters, Electrical Engineering, P. Eng.

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7 Comments

  1. Dave,
    Thanks for this submission.
    It is one of the most realistic articles on this subject I have seen. Of course it isn’t strictly politicaly correct but we need more realism and less BS.
    The facts around Canada’s place among world carbon producers seem not to matter to those who would willingly beggar our economy by subscribing to every trendy notion put up by unthinking progressives, liberal idealogues and their nitwit media enablers.
    Canada will not sustain present economic performance much less meet required growth without growing our fossil based energy output. That is a fact which will be found inconvenient by many but fact none the less.
    The country can not survive on a new renewable energy dreamland economy. It is a dreamland concept fit only for dreamers.
    Any country in the world which has tried this has failed utterly.
    Spain and Germany are prominent examples.
    Solar events and other naturally occurring phenomena are the principle causes of Earth’s climate changes. This has been going on for millennia. Way before mankind entered the picture. These facts can’t be argued.
    Human kind may be contributing in a relatively miniscule way and those who would attempt to change this continuum are delusional. Climate change has been a natural fact since the beginning of time.
    I’d say we should mitigate actual polution as a global cause. Save the Earth as best we can. But change the climate? Change natural patterns? The notion is absurd. People should study Geology, Paleontology and Earth Sciences. This humbling study would reveal that the present focus on man-made climate change is a huge conceit and a massive waste of time.
    World wealth redistribution is the underlying goal of the UN and the useful idiots, in the west especially, who tirelessly bang on about climate change. It has all been a huge distraction and diversion from where attention should actualy be focused.

  2. Lesley hastie on

    Ending the use of coal in Ontario was a major factor in reducing its carbon emissions. See below. That was a one-off initiative. It was in the past. It can’t be repeated. We cannot pull that rabbit out of the hat again.

    And ignoring the elimination of coal negates your arguments (first paragraph) about Ontario not needing a carbon tax going forward. (And yes it should be much higher and will be as each year passes). The carbon tax will encourage people to change their behavior as price always does. (The alternative of making corporations pay for their emissions would lead to those charges also being passed on to consumers, and truly hidden, without consumers being incentivized to change their behaviors away from carbon emitting purchases).

    One of the outcomes of taxing carbon at the pump is to encourage purchase of energy-saving vehicles. All manner of electric vehicles are now being produced starting at around $35,000 US. They are getting cheaper all the time as most manufacturers are switching to electric. Now we need the Ontario government to encourage their purchase by giving buyers rebates on all lower priced electric vehicles.

    Ontario’s story:
    “Coal went from 25% of Ontario’s supply mix in 2003 to zero in 2014, all while grid reliability and domestic supply improved. The elimination of coal stands as the single largest GHG emissions reduction action on the continent and was primarily responsible for Ontario achieving its ambitious 2014 emissions reduction target of 6% below 1990 levels.

    The elimination of coal-fired electricity was a shared effort between the Ontario Ministry of Energy and two of its agencies:

    Ontario Power Generation (OPG), the largest generator of electricity in the province, primarily through hydroelectric and nuclear sites.
    The Independent Electricity System Operator (IESO), whose duties include both procuring electricity supply and planning the electricity system over the long-term.

    Total coal-fired capacity at year end
    Year 2003 2005 2010 2011 2012 2013 2014
    Megawatts (MW) 7587 6437 4487 3507 3296 306 0

    • Leslie thanks for your comment. Just to be clear, I did acknowledge removal of coal as a factor in Ontario’s success in lowering emissions… in point 1. It was a major factor in lowering emissions here for sure, and yes a 1 time opportunity. I didn’t ignor it. That is part of the reason our electricity rates went up so high. The high cost of putting wind energy in, combined with some additional expensive nuclear capacity did the trick. Note that BC gets >90% of their electricity from hydro generation (about 2x ours), and they probably have some additional reserves to tap (but not cheaply now).

      Also, look at the energy per capita measure improvement. Ontario beat both BC and Quebec there as well. That has nothing to do with energy source, but with energy efficiency.

      The core point remains true, a small carbon tax is no where near sufficient. If we’re serious about transitioning, many big things must happen.. including higher taxes to help pay for the enormous costs ahead. But prematurely restraining supply of carbon-based energy would be a catastrophic mistake.. closing down Alberta’s oil and gas sector being the biggest one. It is impossible to do. Before any Federal government completed that blunder, Alberta and Saskatchewan would be long gone…becoming US states. Remember, the US has about 10 yrs of proven oil reserves left without imports… They have an even bigger challenge than we face in transitioning. They are coming for our oil, one way or the other, before this transformation is done.

      • Thanks Hugh.. totally agree on need for Nuclear to replace gas usage for our carbon-energy sector needs in particular.
        To be very clear, I totally understand higher taxes are coming to pay for the enormous transition costs. My main issue is the government is basically ignoring the scale of the problem… likely just to stay in power. They likely know 20$ or even 50$ won’t do much to change behaviour.. Worse, rather than put those modest tax $ to work on helping to building out our Grids and Nuclear sector they give it back to the people in tax refunds. It’s all for show, sadly.
        I do fully understand the make up of current GHG contributions in Canada. We need to focus on all sectors. But, even replacing the 20% in transportation with EV’s will take decades.. and we better start on upgrading our grid and Nuclear generation now, given the scale required.
        These things have enormous lead times, as you know.

        Last, on immigration. I am not anti-immigration at all. I just question the amount. I have run the numbers, and 1% immigration maintained does double our population by 2070. So, it’s a big tradeoff now. Without immigration and large number of non-permanent residents, our population begins declining in under 8 years… and would be cut in half before 2070… down to just 18M people. That would be very bad.

        • Dave, the question is who is ignoring the scale of the problem most, the Liberals with a carbon tax that will have at least some immediate effect and a steadily increasing effect on all sectors, or the Conservatives with their yet to be announced regulations on a few yet to be announced sectors. What is taking them so long? Is it a secret? If so, why is it a secret? As I keep saying, these 2 approaches would complement each other and Canada would make more progress if the two parties could work together on just this one very important file.

  3. Hugh Holland on

    Dave, you make many good points and I agree with much of what you said. However, here are a few points you should reconsider.
    • The tools used to reduce emissions must address all sources. The sources of emissions in Canada are #1transportation, #2 oil and gas extraction and refining, #3 electricity generation, #4 residential and commercial buildings, #5 other mining / manufacturing, #6 agriculture. # 7 waste management.
    • Electricity, Oil and gas. In your comparison of Ontario with BC and Quebec, you must recognize that Ontario had a unique opportunity to reduce emissions by closing our coal-based power plants. BC and Quebec were already at 90% clean hydro power and had no coal plants to close. Nova Scotia is well on the way to replacing coal with the new hydro plant that is almost complete in Labrador. The remaining big opportunities to reduce emissions from electricity are in Alberta and Saskatchewan. That will be more difficult for them because they are coal producers, but it must be done, and as you point out, advanced nuclear with a smaller contribution from wind is their only viable solution. Solar is ideal as long as it is sized for the mid-day peak increment in summer because that does not require storage.
    • Oil and gas. Alberta and Saskatchewan should also use the emission-free and cost-free heat from nuclear reactors to replace the heat from burning natural gas for oil extraction and upgrading.
    • Reducing emissions from all other sources will require the full set of economic and technical tools. The Liberals advocate for the more general carbon tax and Conservatives prefer the more specific regulation approach. We will need both approaches to solve the urgent and tough problem of climate change. THOSE WHO BELIEVE THAT GOVERNMENTS ARE GOOD AT PICKING FAVORITES SHOULD PREFER REGULATION. But regulation requires the government to have experts in every field who will take years to draft and negotiate a full set of fair and effective regulations.
    • Naïve? It may be naïve “to expect developing countries to follow the lead of developed countries.” But it is fair to say “it is MORE naïve to expect countries with a GDP per capita at 1/25th to ¼ of ours to act if we do not”. Besides it is in our economic interest to be among the first to adapt the latest and best economic and technical tools.
    • Immigration. Canada’s natural birthrate is well below replacement rate. Too little immigration will result in the many problems of a no-growth or shrinking economy. Canada already suffers from relatively low economies of scale in many areas. Setting the precise desirable rate of immigration is another big topic for another day, but 1% does not seem unreasonable.

  4. Thanks Hugh.. totally agree on need for Nuclear to replace gas usage for our carbon-energy sector needs in particular.
    To be clear, I totally understand higher taxes are coming to pay for the enormous transition costs. My main issue is the government is basically ignoring the scale of the problem… likely just to stay in power. They likely know 20$ or even 50$ won’t do much to change behaviour.. Worse, rather than put those modest tax $ to work on helping to building out our Grids and Nuclear sector they give it back to the people in tax refunds. It’s all for show, sadly.
    I fully understand the make up of current GHG contributions in Canada. We need to focus on all sectors. But, even replacing the 20% in transportation with EV’s will take decades.. the cars & SUVs first, the heavy trucks & transports much longer. We better start on upgrading our grid and Nuclear generation now, given the scale required. These things have enormous lead times, as you know.

    Last, on immigration. I am not anti-immigration at all. I just question the amount we need to maintain the economy. I have run the numbers, and 1% immigration maintained does double our population by 2070. So, it’s a big tradeoff now. Without immigration and the large number of non-permanent residents, our population begins declining in under 7 years… and would be cut in half before 2065 .. down to just 18M people. That would be very bad.

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