Category: The environment

Atmosphere, biosphere, lithosphere, hydrosphere, etc – everything about life and the state of this planet

On the cusp of the next Trans Mountain decision

Canadian politics has an unhealthy fixation on the profits associated with fossil fuel production and use. It’s the threat of losing those that is always evoked by pro-fossil interests when they are asserting that this or that piece of new fossil fuel infrastructure (this pipeline, that bitumen mine or in situ extraction project) needs to be built.

This analysis of course misses the climatic impacts on third parties. Oil advocates want to think of the transaction as just a happy buyer and a happy seller, ignoring the people losing their homes, financial security, and even their lives because the climatic stability that we have depended on for millennia is being disrupted and destabilized by fossil fuel use. These risks aren’t notional or set in the future, but happening now as this CBC article illustrates: ‘It’s a problem for society’: Climate change is making some homes uninsurable.

Tomorrow the Trudeau government is expected to announce the Trans Mountain pipeline expansion into B.C. Whether it is later stopped by public protest, the courts, or other means or not, I think it will cement the view that rather than trying to seek a sensible compromise the Trudeau Liberals chose a fundamentally incoherent strategy. It makes no sense to try to gently decrease economy-wide oil demand with a carbon price as a route to decarbonization while simultaneously approving projects that would only have a viable role in a future where we choose to ignore climate change. If we end up with an Andrew Scheer Conservative government it will be even worse, both for a fossil fuel industry which misunderstands the fundamental problem it is facing and to Canada’s economy as a whole, but that’s not necessarily enough to save Trudeau, especially while Canada’s relatively pro-decarbonization left is fragmented into support for Greens, the NDP, and Liberals.

Related:

Canada’s oil and pipeline controversy in a line

In an article called “Oilpatch in open rebellion as Ottawa ignores industry’s input on Bill C-69” Chris Varcoe notes:

The uproar over the bill came as CAPP released its annual outlook, forecasting oil production will grow by a tepid 1.4 per cent annually — less than half the pace anticipated five years ago — by 2035 with total output reaching almost 5.9 million barrels per day.

This is unhappy news for pro-oil advocates because Canada’s oil production is growing more slowly, and it is bad news for climate advocates because it is continuing to grow at a time when we desperately need it to shrink.

Phasing out an industry is never easy, but it’s necessary here. The alternative of unconstrained climate change is awful to contemplate, and would be a grave injustice to all those who will come after us and to non-human nature. If we want the world as a whole to dismantle the suicide pact which we have established through ever-rising fossil fuel production and use, countries like Canada cannot continue to hope to enlarge their fossil fuel industries. We have already taken way more than our fair share, and neither Canada nor any province in it has the right to demand any more.

Shareholder activism and fossil fuel corporations

One argument routinely used against divestment from fossil fuels is that, as investors, institutions like universities and pension funds might be able to discourage the most wasteful and damaging new fossil fuel investments and encourage fossil fuel corporations to use their resources and expertise to advance decarbonization.

In the U of T divestment brief we explained our doubts about this justification. Nonetheless, it remains an approach that some are trying:

Bruce Duguid of Hermes Investment Management, who worked with bp on behalf of Climate Action 100+, says that disclosure will help investors understand if the billions which bp continues to spend on oil and gas creates too much risk. bp will describe how big new capital projects stack up against the Paris goal of keeping warming “well below” 2°C relative to preindustrial times. Equinor, Norway’s state behemoth, agreed to something similar in April. As with Shell, bp’s resolution does not require it to cut oil and gas output. Greenpeace, a combative ngo, blocked entrances to bp’s headquarters in London ahead of its annual meeting on May 21st.

…

For the time being, though, Shell, bp and ExxonMobil remain members of the American Petroleum Institute, which has sought to ease rules on emissions of methane, a potent greenhouse gas. They also maintain links with the Western States Petroleum Association, which last year fought a carbon tax in Washington state. bp spent over $13m directly to help defeat a ballot initiative in favour of the levy.

…

Others are beginning to question the value of shareholder engagement. The Church of England has said it will divest by 2023 if no advances are made. “Investors’ patience is not limitless,” says Mr Logan. “It’s going to be measured in years, not decades.”

There are many reasons to doubt how meaningful shareholder activism can be, and to ask whether it’s a “shadow solution” that creates the impression that action on climate change will happen, while really justifying the continuation of the status quo. These firms have an enormous financial interest in keeping the fossil fuel reserves they own usable, which in turn means blocking climate change action. Furthermore, neither executives nor shareholders can be expected to meaningfully support a transition to decarbonization which would make these firms irrelevant.

Delaying climate action is the most expensive thing we will ever do

Figure from my 2009 blog post, showing why delaying the global peak year for greenhouse gas pollution emissions means having to cut emissions much faster in the 2020s and 2030s to achieve the same temperature target:

Emissions pathways to give 75% chance of limiting global warming to 2ºC

Tweeted by Greta Thunberg today:

All this delay mutually reinforces the risks of catastrophes. People keep investing in fossil fuels, so they have more to lose from decarbonization. We keep putting off emission cuts, meaning that their eventual rate will need to be much more draconian than if we had started promptly when the risk of catastrophic climate change became well-recognized in the 1990s. We’re committing ourselves to more severe climate change effects, meaning more forced relocation, severe droughts, extreme weather events, and adaptation costs in general measured in both wealth and lives. We’re missing the chance to build global cooperation and overcome the parochial one-country-mindset mentality that makes global environmental problems into collective action problems.