Canada – Page 66 – a sibilant intake of breath

Short-term versus long-term resource economics

The Globe and Mail is reporting on a letter send by former Alaska Governor Sarah Palin to British Columbia Premier Gordon Campbell. It complains about acid mine drainage from the Tulsequah Chief Mine in northwest B.C. Similar problems with the long-term leaching of acid and heavy metal affect many mines in Canada and around the world, including the former copper mine at Britannia, between Vancouver and Whistler.

The general pattern here is one that Frederic Bastiat would have appreciated. People can readily see the apparent economic gains associated with an operating mine, in the form of tax revenues, jobs, foreign exchange earnings, etc. What cannot be clearly seen are the long-term costs associated with all the consequences of that mining. In some cases, these significantly exceed the short-term benefits, meaning the mine has actually been a net destroyer of wealth and human welfare. Jared Diamond’s Collapse also makes this point forcefully, with many examples. Quite possibly, this is the case with fossil fuel industries today, particularly those exploiting unconventional sources of hydrocarbons like the oil sands. By tapping into hydrocarbon reserves that would otherwise remain dormant, they increase the total quantity of greenhouse gasses humanity will add to the atmosphere, increasing the severity of climate change and the probability of abrupt, catastrophic, or runaway warming. Of course, there are also the toxic effects of pollution at the sites of fossil fuel production and use, as well as the destruction of habitat and any associated reclamation costs.

The problem is not one that can be easily solved. Politicians will always be more swayed by apparent and immediate gains and losses than by distant and concealed ones. That being said, we do have the opportunity to counter some of the flawed arguments used to justify harmful practices. Next time someone claims that exports from the oil sands are crucial to Canada’s economic development, consider raising the possibility that their exploitation probably destroys wealth in the bigger picture.

CRTC public submissions and privacy

Quite conveniently, the Canadian Radio-television Telecommunications Commission allows citizens to comment on ongoing matters through their website. Unfortunately, the privacy protections employed in relation to the submissions are lacking. Their website says the following:

The information you provide to the Commission as part of a public process (i.e. comments, interventions or observations) is entered into an unsearchable database dedicated to that specific public process. This database is accessible only from the webpage of that particular public process. As a result, a general search of our website with the help of either our own search engine or a third-party search engine will not provide access to the information which was provided as part of a public process.

This doesn’t seem to be true. Searching for my own name in Google brings up the submissions I made to them opposing Bell’s efforts to introduce Usage Based Billing (UBB). The submission includes my full name, personal email address, and phone number.

I complained electronically to the CRTC about this, but got no response. I then sent a letter to the Office of the Privacy Commissioner, with a carbon copy to them. At the very least, the CRTC should obscure email addresses and phone numbers in a way that prevents robots from harvesting them. For instance, obfuscated email addresses can be made to look normal for standard browsers, but like gibberish for most robots. Alternatively, the CRTC could provide a web contact form that lets people contact submitters, without learning their email address. I have no problem with submissions being made public, in the interest of transparency. If it is going to happen, however, people should be clearly informed about it on the page where they submit the information (not some separate privacy information page) and reasonable efforts should be taken to prevent the inappropriate collection of personal information by either people or automated systems.

[Update: 7 August 2009] The CRTC responded to my complaint, and it seems they have come into compliance with their privacy policy.

Ranking the quality of carbon offsets

Carbon offsets have been a contentious subject on this and other environmental blogs. On one side, people argue that their sale produces better outcomes than would otherwise arise, since people voluntarily help to eliminate emissions where it is cheapest to do so. On the other, people argue that many offsets are of dubious quality, and that the very idea of offsetting perpetuates harmful behaviours and the false sense that climate change can be addressed without lifestyle changes. Not everyone can offset, after all.

In response to the former concern, about the quality of offsets, the Pembina Institute and David Suzuki Foundation has produced a survey of 20 Canadian vendors of offsets. According to Pembina, offsets from renewable energy and energy-efficiency projects are the most credible sort available. Others have pointed out that forestry-based offsets and those based on Kyoto Protocol CDM credits are among the most dubious.

In the end, I think buying offsets is a much less worthwhile exercise than reducing your own emissions or lobbying for political action on climate change. That being said, if there is going to be a market in offsets, it is good that the various firms providing them are being subjected to outside scrutiny.

The costly nuclear option

Writing in The Toronto Star, Tyler Hamilton reveals that the AECL bid to add two new Advanced CANDU reactors to Ontario’s Darlington nuclear station was approximately $26 billion. That works out to a shocking $10,800 per kilowatt of electricity, compared with the $2,900 per kilowatt reference figure the Ontario Power Authority was using for planning back in 2007. The French firm Areva apparently put in a lower bid – $7,375 per kilowatt – but was unwilling to take on as much risk as AECL. The article also notes the untested nature of the Advanced CANDU design, which is especially worrisome given the failure of AECL to deploy two planned isotope reactors, due to design failures.

If this is the true contemporary cost of nuclear power, it seems plausible that we shouldn’t be bothering with it, given all the other associated risks. For $10,800 per kilowatt, it is quite possible we could get more value by funding energy efficiency, conservation, and renewables. Taking some cost figures from MacKay, we can compare $26 billion for 2,000MW (2GW) of nuclear with other options:

Onshore wind: $2.8 billion for 2GW
Offshore wind: $3.0 billion for 2GW
Concentrating solar in deserts : $31 billion for 2GW
Solar photovoltaic: $14.5 billion for 2GW

We also wouldn’t be taking on the additional risks associated with proliferation, accidents, wastes, and so forth. Admittedly, MacKay’s figures are approximate and there are other considerations to be made. Even so, the staggering cost of the AECL bid has to give pause to anyone who hopes nuclear could be a cheap and relatively easy solution to climate change. It may be that The Economist will be proved correct in saying: “Since the 1970s, far from being ‘too cheap to meter’—as it proponents once blithely claimed—nuclear power has proved too expensive to matter.”

Pine beetles spreading into the US

According to the BBC, the climate-linked mountain pine beetle epidemic in British Columbia is threatening to spread south and west, into the United States. Forests with a mixture of species and small regular fires would be more resilient, overall.

In addition to mentioning the importance of warm winters in aiding the spread of the insects, the article describes how past fire suppression policies have produced huge areas of mature lodgepole pine, which are especially susceptible to the beetles.

The continuing spread represents not only an economic and environmental cost linked to climate change, but also a potentially serious positive feedback effect. It is estimated that Canada’s boreal forests alone contain about 186 billion tonnes of carbon dioxide equivalent: an amount equivalent to about 25 years of global emissions at the present level.

G8 insufficiently wary of climate change

Writing in The Toronto Star Christopher Hume has produced a short but trenchant criticism of this government’s position on climate change: Political expediency trumps fate of planet.

As Hume explains:

In the face of overwhelming evidence that global warming is happening, and faster than the most pessimistic climatologists had expected, how can such extraordinary stupidity be justified?

Inaction of this sort goes well beyond ordinary human idiocy; it represents a collective rush to self-destruction on an unprecedented scale. And through it all, our leaders smile and assure us they won’t let our standard of living be threatened.

The G8 leaders would do well to read Jared Diamond’s work on civilizational collapse, so as to better understand the extent to which civilizational success depends absolutely on maintaining agricultural productivity, which in turn depends on avoiding massive environmental degradation and responding intelligently to the problems that arise.

As I have pointed out before, it is a false to suggest that we can continue to enjoy economic and social prosperity without dealing with the problem of climate change. Runaway climate change could literally kill everyone, and even increases of as little as 2°C “stands a strong chance of provoking drought and storm responses that could challenge civilized society” according to the scientists at RealClimate.

This government needs to realize that climate change isn’t some minor political issue to be managed, but rather a major civilizational challenge for humanity. So far, Canada has influenced this process primarily be serving as an anchor, holding back those with greater vision and determination.

Who is vulnerable to climate change?

Yesterday, I attended a meeting on climate change, security, and human rights (mentioned before). One thing about it disturbed me: namely, that the entire perspective offered was a north-south narrative of industrialized states causing harm to vulnerable populations around the world. The discussion was largely about how that harm could be reduced, and whether any legal mechanism exist through which states could be called to account, for the damage they do to the prospects of vulnerable groups.

Sadly, this perspective is over-optimistic, given the world’s track record so far. While highly vulnerable groups and poor states may be hit first and hardest by climate change, the idea that they will be the only people profoundly affected is misleading and potentially dangerous. It feeds into the flawed notion that rich states can basically keep behaving as they have in the past, with the worst possible outcome being a lot of suffering for poor people elsewhere.

The reality is that business-as-usual emissions would probably produce a mean global temperature increase of 5.5°C to 7.1°C by 2100. That is a massive enough change to raise doubts about the future of even some rich societies. Could Australian agriculture cope with that much of an increase? Could cities in the southern United States continue to provide the minimum level of water required to sustain their populations? (US Energy Secretary Stephen Chu suggested perhaps not.)

My fear is that people who expect that only the poor and vulnerable will suffer from climate change will not be sufficiently motivated to deal with the problem. Such a belief strikes me as a serious misunderstanding of both the best scientific and political assessments. It would be hard to read the Fourth Assessment Report of the IPCC and not conclude that people in rich countries face acute vulnerability to unchecked climate change. Similarly, the basic message of economic analyses like those performed by Nicholas Stern is that the costs of inaction are very high, especially when compared with the real but comparatively modest price of dealing with the problem.

The credit crunch and Canada’s national debt

Canada’s Parliamentary Budget Office recently projected that Canada will remain in deficit until 2014, with a total deficit of $156 billion to be accumulated. Those are figures that should be worrisome to everyone, even if you accept the argument that the consequences of being more fiscally prudent would have been even worse, because they would have caused a deep recession and exploding unemployment.

What seems most regrettable to me about this is that we have basically failed to use the opportunity to make necessary investments in reducing greenhouse gas emissions. In exchange for the support given to carmakers, for instance, we could have demanded a lot more movement on efficiency and the deployment of hybrid and electric vehicles. More of our infrastructure spending could have been directed at the energy sources of the future (renewables) and less at perpetuating activities that climate change and dwindling fossil fuels have rendered unsustainable. We need to realize that many aspects of how we now live simply need to change – particularly dependence on fossil fuels for both wealth and our energy needs.

Canada has too many future liabilities to be unconcerned about our degraded financial position. Inevitably, the money we are borrowing is going to need to be paid back with interest and, when we are not using it to invest in productive future assets and capabilities, the cost of that will inevitably be borne in future service cuts and tax rises. As a general pattern, it is awfully frustrating how Conservatives everywhere like to cut taxes without decreasing spending, wreck the financial balance of countries, lose power, and then leave it to the next government to repair. They can then win power again and restart the cycle.

The Globe and Mail has more on the announcement.

Grouse Mountain’s 1.5MW wind turbine

According to the Megawatt blog and The Vancouver Sun, the Grouse Mountain ski resort is going to put a highly visible 1.5MW wind turbine near the mountain’s highest point.

While the move is more symbolic than substantive, the turbine is expected to provide about 20% of the power requirements of the resort. It will also be a tourist attraction in and of itself, with a viewing platform 58m up. The turbine is meant to go up in August or September, and produce power in early 2010, in time for the Vancouver Olympics.

The most important impact may be making people gradually more tolerant of visible renewable energy facilities. If we are going to escape our harmful dependence on fossil fuels, we are going to need a lot of them.

Ontario rethinking new nukes

Apparently, the government of Ontario is reconsidering its decision to build more nuclear power plants, due to concerns about cost overruns and the status of Atomic Energy of Canada Ltd (AECL). The province was previously planning to spend $26 billion over the next few decades, expanding and refurbishing nuclear reactors.

Apparently, the Ontario government has rejected foreign bids from France’s AREVA and the American Westinghouse corporation, but doesn’t have sufficient confidence in AECL to commit for sure at this stage. They want guarantees from the federal government, in order to proceed.

I am torn on the question of whether to support nuclear power. It is certainly more appealing than additional coal power, when all the risks of each are taken into account. That being said, nuclear has always benefitted from large direct and indirect subsidies. It isn’t clear whether that public money would be better spent on alternatives, such as renewable generation, an improved electrical grid, energy storage, or demand management. I also have serious doubts about the competence of AECL, as well as our government’s effectiveness in regulating and managing it. It would have been nice for a foreign corporation with domestic support from its own government and taxpayers had taken on some of the risk associated with the new projects, rather than leaving it all in Canadian hands.

As an aside, Canadian nuclear regulators have discovered that Canada’s existing CANDU reactors are more dangerous than previously appreciated. In the event of a coolant leak, the chain reaction inside them actually speeds up, instead of slowing down. This could lead to dangerous overheating if a serious leak isn’t followed by a rapid shutdown.