01 May 2007

ecoAction: Real or Greenwashing?

Several months ago the minority Conservative federal government of Canada made a big gear-change and overhauled their environmental policy. Gone were the efforts to suppress the validity of climate change science, and in came a six-point plan encapsulated as ecoAction. The six components are based on: a biofuels initiative, a new bill on toxic chemicals and a similar clean air act for airborne pollutants. In addition there was two grab-bag programs for transportation (ecoTransport) and residential/commercial/industrial (ecoEnergy), as well as a trust-fund to fund specific programs in the individual provinces. With such 'eco' branding, my natural reaction was to assume it was a major green-washing program. Closer examination reveals a little more beef (or pork, as the program goes).

Politically, I think this sea change was arrived at for a variety of reasons. One certainly has to be the nomination of Stephen Dion as leader of the Liberal Party. Dion was previously the environment minister in the previous government and an active supporter of Kyoto and a carbon tax. The conservative greening stole much of his thunder.

Furthermore, Harper has long been accused of pushing Canada conservatism towards neo-conservative tenants. On issues such as the environment and personal freedoms they were moving out of touch with their base; As a result, they seem to have been losing votes to the Green party, which is now polling around 9-12 % nationally and gaining substantial support in rural Alberta. I think the Conservative government grew concerned with changing demographics and that their policies were risking freezing out support for them from important special interest groups. The change appeared to me to be signaled when the government moved away from the US administration and sharply criticized them over Maher Arar and his deportation from the USA to Syria and subsequent torture. Right now they are facing all sorts of trouble over insufficient oversight of Afghan prisoners handed over to the Afghan government.

In addition, political party donations from corporations has been sharply curtailed following the patronage scandals that saw the Liberal party fall from grace. That in turn will signal a welcome strengthening of the importance of individual citizens for fund raising purposes. Nor is corporate opposition to Kyoto uniform. A number of corporate leaders want some form of climate change legislation to help indemnify them from the associated liabilities.

Also, we must remember that the Conservatives are in a minority position in parliament, and much of this could be a fig leaf to gain the support of the New Democratic Party on other issues, such as the intervention in Afghanistan.

Environmental Trust

The biggest budgetary item is an environmental trust fund that is disbursing funds to the provinces, at $1.5 billion per year. To a certain extent, this is a reflection of the decentralized nature of governance in Canada. After all, the provinces are the ones with the control over electrical power generation. Basically it appears to be providing matching funds with a healthy dose of pork. For example, British Columbia is receiving funds for, "Support for the development of a, “hydrogen highway,” a network of hydrogen fueling stations for fuel celled buses and vehicles;" which is unsurprising given the presence of a (struggling) fuel cell industry in the province. Similarly, Alberta's focusing its efforts on oxymoronic 'clean coal' and sequestration.

Biofuels

The biofuel initiative appears to be an example of pure pork, with $200 million in subsidies to ethanol and biodiesel producers and $145 million for research, probably centered around cellulosic ethanol (-cough- Iogen -cough-). The goal is E5/B5 by 2010.

Chemical Regulation

Environment Canada has been engaged in a program since 1999 to categorize a wide variety of chemicals used in industry and to produce goods for human consumption to gauge how hazardous they are. Chemicals are categorized on whether they are persistent and bioaccumulative. Essentially, the database is at the point now where they can start implementing some regulations to insure bad chemicals are properly handled or not at all. I don't think there's any serious opposition to this plan except from some of the giant chemical producer multinationals.

Airborne Pollution

The original clean air act of the conservatives did not contain significant regulations on CO2 emissions. Instead, it mostly was oriented around regulating smog and particle pollution. The opposition parties conspired to insert an amendment that would force the government to meet Kyoto-treaty targets. This caused a great deal of political posturing on both sides of the aisle, as I talked about previously.

The Conservatives then turned back around and came up with their own plan: a 20 % reduction in greenhouse gas emissions (from 2007 levels) by 2020. It's hard not to notice how similar these numbers are in terms of timescale and reduction to Kyoto, but with everything pushed forward a decade. Kyoto originally came into effect in 1997, when the Liberals were in power.

I have not yet had the time to review this piece of legislation, but criticism has been fierce. If we ignore the political attacks, one of the most vitriolic critics is David Suzuki, who has every right to vent criticism. He essentially seems to think that the act is a sham. Al Gore has also been critical, pointing out that the bill language contains references to 'intensity reductions'. The idea behind 'intensity reductions' is that greenhouse gas producing industries are allowed to produce as much as they can sell, but they have to improve the efficiency of their processes. I.e. for every ton of aluminium you smelt, or bitumen you refine, you need to progressively improve the efficiency of the process. I'm a little of two minds on this: for one, this seems like a weasel way out. On the other hand, it seems logical that we should place the onus for reducing consumption on consumers and not producers. I'm sure once I have an opportunity to read the legislation I'll have more to say but as of today the government's website still is carrying the old version of bill C-30.

Transportation

The ecoTransport program appears to establish or repackage a number of public outreach programs surrounding public transport, personal automobiles, and commercial fleets. More importantly, it also contains a feebate program. Fuel efficient vehicles will receive a rebate of $2000 - $1000 depending on their efficiency numbers. There is a separate category for trucks, which will limit the effectiveness of the program. Much less publicized is an excise tax on gas-guzzlers. It's not a terribly aggressive tax but it does slap the Nissan Armada for $3000 and Hummer H3 for $2000.

Unfortunately, this program is hurt by the fact that E85 flex-fuel vehicles will also receive a $1000 rebate. It simply isn't possible to fuel a vehicle in Canada with E85 and it stands to reason that you never will (noting the biofuels initiative goal of E5 by 2010). Even if you think the energy return on ethanol is positive, it's extremely unlikely that supply will ever be sufficient to exceed E10; I don't see the point in paying GM to install ethanol-compatible hardware in their cars to compensate them for their piss-poor fuel economy engineering and design choices.

Another substantial policy change for ecoTransport is a $150 tax credit towards the purchase of public transit passes. This does two things: it helps reduce the relatively high marginal cost of riding public transportation rather than driving an existing car, and more importantly it gives the student councils at universities and colleges an effective tool to continue to push forward with universal transit pass schemes. I'm certainly a believer in getting students to ride transit early in their lives before they become habituated towards driving everywhere and grow fat.

Energy Efficiency

The ecoEnergy program is mostly composed of energy efficiency programs. However, there is a 1 ¢/kWh, 10-year subsidy for renewable power. This subsidy has a minimum entry level of 1 MW with fixed capacity factors, so it's not going to be applicable to solar cells on the roof of someone's garage.

The most important items, from the prospective of Joe Average, are the grant programs for home efficiency, solar-thermal water and space heating. There's up to $5000 (at a 25 % subsidy) available towards home retrofits and $300-1600/m2 for solar water heating systems (evacuated tube collectors being the high end). Unfortunately, there does not appear to be a specific program for ground-source heat pumps. A lot of construction in Canada still has baseboard electric heating, and in a subzero winter environment the ground-source heat pump is the most efficient solution but it comes with a big attached capital cost.

On the issue of energy efficiency of various appliances I feel that more could be done. There have been a pair of amendments to energy efficiency standards recently by the Conservative government but they mostly add more categories (i.e. wine chillers) than apply some meaty standards for the big consumers, like air conditioners and refrigerators. Also, how about a labeling requirement for vampire electric power consumption? A new development that is related to this proposal is a proposed ban on incandescent lighting by 2012.

Conclusion

On the question of genuine or greenwashing, I think the ecoAction program comes down on the genuine side. There's pork, there's loopholes (E85 cars), there's questionable methodology ('intensity reduction'), but there's also a ton of good stuff with billions of real money allocated towards it.

Energy Trust grade: B-
Biofuels Initiative grade: C+
Chemical Substances grade: A-
Clean Air grade: incomplete
ecoEnergy grade: B
ecoTransport grade: B
ecoAction overall grade: B

Overall, from a policy wonk perspective, the mechanisms seem solid and comprehensive. This package covers a lot of new ground so there is bound to be a lot of niggling criticisms from all corners of the political spectrum; I don't see the need to protest too much. I also think that this policy, as it is derived from the Conservative party, is a worth more than it seems on first inspection. The goalposts have been moved along the green-brown line, and that's a helpful thing.

The reason why I don't grade it any higher is simply due to the lack of zeal. It's true that Canada previously had little in the way of federal environmental or energy policy. It's also true that most citizens can only accept change so quickly. However, I think it's clear that a lot of the dollar values could easily be doubled. For example, a public transit pass costs $30-45 a month, whereas the government is only offering a $150 annual tax deduction. How would we pay for these programs you ask? Well, through the $20/ton carbon dioxide tax that the government doesn't want to implement of course.

3 comments:

RD said...

I just found your blog, Robert. There is so much great information here, I have to bookmark you so I can visit regularly. Thanks so much for maintaining this.

Reid

Robert McLeod said...

Thanks for the kind comment. I don't post as often as I might like to, but it takes a lot of effort to incorporate numbers and make sure I don't make any boo-boos.

Cyril R said...

I like some of these policy recommendations.

The bonus-malus system mentioned is working very well in European countries. But it's not aggressive enough, as you say. Should be at least 5k more expensive for hummer class mileage vehicles, and 5k cheaper for prius class mileage vehicles.

What I didn't see but should be attempted is heavily stimulating working at home. And bicycles, electric bicyles, even walking to work.

Public transport is a no-brainer. Hybrid busses get really good mileage per person even with low occupancy rates. Subways and trams are electric and efficient. Always a good thing. And what happened to car-pooling? People just can't make sacrifices.

A gas tax is also useful, although I doubt there would be any political and social momentum behind it to pass such regulations. I've heard somewhere a proposal to add 50 cents per gallon, to be increased nominally by 10 percent per year, up to about 500 cents per gallon. That would really push the market, but again it's never going to get through.

There's not enough attention to infrastructure. We need more and better transmission, a smartgrid, and loads more lightrail (pardon the pun).

My opinion is also that the production tax credits and investment tax credits should be extended to all low carbon energy and guaranteed for at least 10 years.