Posted by Marc Lee under carbon pricing, ccs, climate change, economic growth, employment, energy, environment, housing, industrial policy, investment, labour market, macroeconomics, oil and gas, progressive economic strategies, public infrastructure, public transit, tar sands, transportation.
June 12th, 2012
Today the CCPA released a new big picture report by myself and student researcher Amanda Card calling for a Green Industrial Revolution. The report builds on work done for the BC-focused Climate Justice Project, bringing to bear a national analysis of green and not-so-green jobs. We take a close look at GHG emissions and employment by industry category, and show how few jobs – but how massive the emissions – are from our obsession with fossil fuel extraction and export. But we also outline how to overcome our carbon-intensive industrial policies and the prospects for new green investments that would create more jobs. Below is the summary.
A Green Industrial Revolution: Summary
In spite of widespread evidence that climate change is underway, and that a business-as-usual path of greenhouse gas emissions will lead to catastrophe, political will for climate action has, if anything, weakened in recent years. Canada’s federal government officially pulled out of the Kyoto Protocol at the end of 2011, and has championed the expansion of an oil and gas industry that is at the root of the problem.
The shift away from climate policies is typically made on economic grounds – that accelerated oil and gas extraction (including new pipelines) is needed to support job creation and economic growth. In fact, few jobs are associated with fossil fuel production in Canada, and these come at a high price in environmental and climate terms.
We argue that climate action opens up new opportunities for economic development and prosperity in the transition to a zero carbon Canada. With this report, we hope to contribute to a growing conversation about industrial and employment strategies the federal government can use to transition to a sustainable economy and create a new generation of well-paying green jobs.
To meet the climate challenge, Canada needs to reduce greenhouse gas (GHG) emissions to near-zero by mid-century. This amounts to a green industrial revolution that phases out fossil fuels – which account for about three-quarters of Canada’s GHG emissions – as a source of energy.
Past industrial revolutions have caused great upheaval and hardship. If this green industrial revolution is to occur in a just manner, we need to help workers make the transition to new employment, and provide economically marginalized people with new opportunities to secure decent work and economic security. Creating green jobs allows us not only to confront climate change, but also to achieve climate justice.
Green Jobs: The Canadian Context
At the broadest level, green jobs are the work done in a sustainable economy. That is, at the end of a successful green industrial revolution, all jobs would be inherently green. For our purposes here, green jobs are well-paid, meaningful jobs that contribute to a reduction in greenhouse gas emissions, produce no or low environmental impact, and/or help the economy or society adapt to the impacts of climate change.
While it is challenging to precisely count the number of green jobs due to measurement and data collection issues, we look more closely at Canada’s commercial and industrial GHG emissions (i.e., non-household emissions) and employment:
• More than one-quarter of commercial and industrial GHG emissions come from the oil and gas sector, including extraction, processing and distribution. Conversely, these areas employ less than 1% of Canadian workers.
• Another one-fifth of emissions came from electricity generation, and are associated with coal and natural gas generation, particularly in Alberta, New Brunswick, Nova Scotia and Saskatchewan. Data on emissions by specific facilities shows that this sector includes 7 of the top 10 largest point-source emitters in Canada.
• The GHG emissions impact of fossil fuel industries is much worse when we consider exports because emissions from exported fuels are counted in the inventories of other nations. GHG emissions from Canadian coal, oil and gas combusted in other jurisdictions (primarily, the US, China and Japan) are about 1.2 times Canada’s own domestic emissions from combusting fossil fuels.
A key challenge is that many of the jobs that have high levels of GHG emissions per employee are highly-paid unionized jobs. This must be addressed with “just transition” plans that support workers as they change to sustainable careers. In contrast, many service sector jobs may have a small carbon footprint, but are low paying and provide little job satisfaction. For a green industrial revolution to truly fulfill its potential, green jobs must be synonymous with decent work.
Overcoming Carbon-Intensive Industrial Policies
Canada was founded as a “staples economy,” driven by the extraction and export of unprocessed or semi-processed raw materials. While some progress was made in developing value-added industries and services in the post-WW2 era, the role of oil sands bitumen in the early 21st century has shifted Canada back to a focus on resource extraction. The federal government’s industrial policies support the resource sector through substantial subsidies and tax breaks, estimated at $2.8 billion in 2008.
While development of natural resources is primarily within the jurisdiction of provincial governments, the federal government is involved in territorial and coastal resource development, and has done much to encourage resource extraction, with a recent emphasis on expanding oil and gas trade with Asian markets. Expansion of oil sands production is a top priority for the Conservative government, evident in the promotion of pipeline projects, including Trans-Canada’s Keystone XL pipeline and Enbridge’s Northern Gateway project to the West Coast.
The 2012 federal budget committed to a significant streamlining of approval processes for major projects, most of which are oil and gas projects or new mines, and about one-third of the budget bill is dedicated to dismantling federal environmental laws. This new framework will facilitate putting hundreds of millions of tonnes of CO2 into the atmosphere, as well as other environmental damages from air and water-borne pollutants.
Given the above, it is no surprise that climate action sits in direct conflict with expansion of capital-intensive resource industries that are important contributors to our national inventory of GHG emissions. A very different direction from the federal government will be needed to develop and implement more coherent and integrated climate, industrial and labour market policies if a green industrial revolution that decarbonizes Canada’s economy is to occur.
Canada will eventually need to shift its policy of ignoring climate change to a commitment to significant action. Pressure will likely emerge from the international arena, and action could be swift in the wake of one or more major climate disasters that affect major population centres. Rather than throwing a tantrum, Canada can derive substantial economic advantages – from the development of new green jobs to innovation to improved health outcomes – by embracing aggressive climate action.
Investing in Green Jobs
A focal point for green jobs is in rebuilding Canada ‘s physical infrastructure: the buildings in which we live and work, how those buildings connect together as communities, the ways in which we move ourselves, and how we get and use energy. These actions will cost money, and the most obvious source of revenues for such a transition is a steadily rising carbon tax. Commitments to support households in the transition will also be required to create the demand for low-carbon investments, while guarding against adverse equity impacts on low-income households.
The more robust a green jobs program in delivering new employment opportunities, the smoother will be the transition. Importantly, investments in fossil fuel industries create far fewer jobs than green economy investments. In addition, many public service jobs (civil service, health care work or early childhood education, for example) could be considered a major source of inherently green jobs. Green jobs should also be actively linked to gains for traditionally disadvantaged populations, including women, visible minorities, immigrants and aboriginal people, as well as low-income households in general.
Renewable sources of power, accompanied by large gains in energy efficiency, are central to achieving a zero-carbon economy. Developing a robust east-west electricity grid in Canada, based on clean energy, could greatly reduce emissions in provinces currently dependent on coal and gas generation.
Renewable energy also contributes to a greater number of direct jobs than fossil fuels per unit of energy delivered. There are additional green manufacturing jobs to be generated in the fabrication of products such as wind turbines and solar panels that can prove to be more economically viable to manufacture domestically than import.
New Building Construction and Retrofits
The concept of “net zero” energy buildings is considered an ideal for residential, commercial and institutional buildings in the future. A major gap, however, is a need for funding of coordinated education and training programs to develop Canada’s knowledge capital in this area and ensure a supply of skilled workers. There are also opportunities to develop local green jobs in the supply of equipment, like hyper-efficient windows, heat pumps and other parts currently imported from Europe and Asia.
Because housing stock takes a very long time to turn over, a key green jobs strategy is to start with retrofits of existing buildings. Because so many buildings need energy efficiency upgrades, and this is local, labour-intensive work, building retrofits are the low-hanging fruit of green job development. Specific policy actions will stimulate the demand for retrofits and increase the supply of skilled workers: home and business financing reform, rising marketplace standards, and coordination with post-secondary institutions and apprenticeship and training programs.
As an alternative to highway and air travel, high-speed rail corridors, powered by clean energy sources along the route, would reduce GHG emissions. New high-speed rail corridors should be considered, such as the Quebec City to Windsor corridor, and Vancouver to Calgary to make necessary business and personal travel sustainable. A full coast-to-coast high-speed rail network could eventually emerge out of these first developments. In urban areas, a national program of public transit expansion should also form a major part of a green jobs plan. The creation of new railway corridors and transit lines will produce employment gains in construction and green manufacturing.
Over the long run, a zero-emissions transportation system must be rooted in more complete communities, where high-density housing is located close to public and private services and amenities. Without the need for long commutes, walking and biking could eventually encompass half of all trips, supplemented by transit, taxis and car-sharing, all of which would be powered by clean electricity.
Similar strategies are relevant to freight movement. Reducing GHG emissions from freight transportation requires shifting from high-GHG transportation modes like airplanes and trucks to low-emissions modes like trains and ships. Perhaps more importantly, freight emissions would be reduced by decreased consumption and less resource extraction for export.
Manufacturing has been on the decline in Canada due to the shift to oil and gas production. Moving to zero carbon economy offers new possibilities to re-invigorate domestic manufacturing by making the price of imports reflect true costs of production. This includes carbon tariffs on imports to level the playing field for any carbon pricing that occurs in Canada.
Canada needs an industrial strategy that: (1) develops new green manufacturing capacity, (2) dramatically improves energy efficiency and use of renewable power in existing manufacturing operations, and (3) closes the loop on materials in the economy through aggressive reuse and recycling. Long-term economic and employment strategies must also consider the development of new technologies. The federal government should significantly ramp up support for the development and diffusion of green technologies.
Beyond reducing GHG emissions, adaption to a warmer, climate-changed Canada will be necessary. Strategies that improve our resilience to climate change will support green jobs in building physical infrastructure. Adaptation-related jobs could include reinforcing dykes in low-lying areas, planting trees in areas decimated by forest fires and mountain pine beetle, and upgrading storm sewers and water treatment facilities. The development of more localized, sustainable food systems is another aspect of resilience planning, as climate change may affect global food supply chains.
A Green Social Contract
Fear of job loss could have a paralyzing impact on progress towards GHG emissions mitigation. With the development of new green jobs in Canada, there are likely to be job losses within certain industries like oil and gas. But on balance, there will be a net increase in jobs — if public and private investments can be leveraged to develop green jobs.
The term “social contract” is generally used to describe the agreement — written or assumed — between a government and the citizens it governs. A “green social contract” would guide a government to prioritize both the environment and the well-being of its citizens in any decision-making process. This would include strategies for helping workers transition to green jobs and protect against widespread unemployment.
In the vast majority of cases, skills will be readily transitioned to other needed work that will be created in green industries. “Just transition” packages should include education and training, income support and mobility allowances for workers who need assistance in changing careers. Coordination with secondary, post-secondary and training/apprenticeship programs to ensure appropriate skills development will be necessary.
A Carbon Transfer
The principle that prices should tell the truth about costs of production (e.g. that environmental costs should be factored in) is fundamental to the shift to a sustainable economy. But doing so poses a huge transitional problem for low- to middle-income households who spend a higher percentage of their incomes on energy and necessities. To ensure that carbon pricing or higher energy prices do not have net detrimental impacts on low-income households, we propose a “carbon transfer” system that would be designed similarly to the income transfers for Old Age Security and the Canada Child Tax Benefit. These transfers have a maximum amount for the lowest income families, and phase out slowly over the income distribution, so that a very high proportion of families get something.
In the near term, we recommend the following steps be taken by the federal government:
1. Commit to zero fossil fuels by 2040 at the latest, with all energy requirements met by clean electric sources, plus some biofuels and hydrogen fuel cells where alternatives are required. All remaining non-fossil-fuel GHG emissions should be eliminated by 2050.
2. Enact a moratorium on new fossil fuel extraction unless 100% of emissions can be captured and stored underground permanently.
3. Put a price on carbon through a national carbon tax and/or a cap-and-trade system. Revenues should be put towards further emissions reductions and reducing carbon price impacts on low- to middle-income families.
4. Establish a rapid action plan on climate change to approach our 2020 target, funded by a mix of carbon revenues, increased royalties and eliminated subsidies from fossil fuel industries, and reallocated expenditures from unsustainable activities (e.g. highway expansion).
5. Develop a comprehensive national green industrial strategy, including green jobs and capital plans, with priority focus on the following areas: green building construction and retrofitting; transportation; green manufacturing and waste management; and adaptation planning. The strategy must be coordinated across business, trade unions, secondary and post-secondary institutions and all levels of government, and should actively engage traditionally disadvantaged populations.
6. Increase national model regulations to “net zero” new buildings as quickly as possible. An expansion of the ecoEnergy program for building retrofits is also in order, with special attention paid to low- to middle-income households, older housing stock and coverage of multi-unit buildings.
7. Implement a national transportation planning framework that focuses on building regional rail corridors, complete communities and shifting to more sustainable modes of transportation (such walking, biking and transit, rather than just on electric vehicles).
8. Create a national green energy Framework that includes investments in infrastructure to improve regional transmission of clean energy (e.g. hydro) and efficiency.
9. Increase support for research and development of new technologies with green economy applications through direct government funding, direct or indirect support for commercialization and production, and support for learning and diffusion of knowledge and technology.
10. Develop adaptation plans for all regions of the country, focused on the security of basic needs in areas such as food, water, electricity and housing.
11. Launch a broad-based participatory exercise aimed at defining the parameters of a new “green social contract” that ensures no one is left behind in the transition to a sustainable economy.
12. Develop a framework for a new carbon transfer to households that would, minimally, be equivalent to existing energy expenditures (and ideally more) to insulate low- to middle-income households from increases in energy and carbon prices, funded by revenues from those sources.
- Will Nova Scotia Implement a Carbon Tax? (February 16th, 2015)
- Trudeau, Carbon Pricing, Regional Politics, and Technology Policy (January 23rd, 2015)
- The case against a revenue-neutral carbon tax (January 15th, 2015)
- Low Oil Prices, Good or Bad for Canada? (January 14th, 2015)
- The Ecofiscal Commission and Polluter Pay (December 8th, 2014)