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The Progressive Economics Forum

Is BC breaking its GHG law by pursuing natural gas development?

Today CCPA’s Climate Justice Project released a new report by yours truly, BC’s Legislated Greenhouse Gas Targets vs Natural Gas Development: The Good, The Bad and the Ugly. It was just five years ago that BC brought in the Greenhouse Gas Reduction Targets Act, a signal that BC was serious about climate action. The Act calls for a 33% cut in emissions by 2020 (relative to 2007 levels) and 80% by 2050, with interim targets for 2012 and 2016. My report provides a reality check on progress toward and prospects for the 2020 target.

The good news is that BC’s emissions were down 4.5% as of 2010, the last year for which we have data (and we won’t get 2011 and 2012 data until 2014). Clearly, the economic downturn had its impact but I think there is case to be made that climate actions, and the general conversation in BC about climate change, have also played a role. Interestingly, BC would already be at its 2012 target of a 6% reduction if not for the growth of the natural gas industry.

Which brings me to the core theme of the report. BC’s Natural Gas Strategy aims to double or even triple gas production via fracking in the Northeast, pipeline that gas to the coast, compress it to LNG, and ship it to Asia. If realized, it would be like putting at least 24 million cars on the roads of the world, at a time when the adverse impacts of climate change are becoming hard to ignore.

As for BC’s targets, accommodating this emissions growth would require an 80% reduction in emissions by 2020 for the rest of the economy. In other words, it would make it virtually impossible to meet the targets set out in the GHG law, which would become the climate equivalent of balanced budget legislation. I’m an economist not a lawyer, but it seems to me that the government is breaking its own law by ramping up an industry that actually needs to be wound down.

But it’s not just that the Natural Gas Strategy is immoral and illegal, it is bad economics. Very few jobs would be created in exchange for all of these environmental and climate impacts – even taking some recent (and unverified) government estimates of 2,500 long-term jobs, that is still just 0.1% of BC employment. As for royalties to the government, don’t bank on them. Current year natural gas royalties are estimated at $157 million, 0.3% of the BC budget, in spite of record high production levels.

The report gets into these issues and does the math with the hope that BC takes a sober second look at the Natural Gas Strategy. We would be much better off sticking to BC’s GHG law, and making investments in a Climate Action Plan 2.0 that gets us to our 2020 target, creating more and greener jobs along the way.

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