There is growing momentum for a low-carbon reboot of our high-carbon economy as we emerge from a pandemic-induced shutdown. Since business-as-usual has been so disrupted, the timing for a major leap has never been better. Earlier this year, the Australian wildfires provided humanity’s latest wake-up call. Many are nervous about what this summer could bring in terms of extreme weather.
The main contribution of COVID-19 is to expand the realm of the possible. An overhaul of the unemployment insurance system. Huge wage subsidies to keep employees on the payroll. Housing the homeless in vacant hotel rooms. Safe drug supply. Free transit. All backed by money creation from the Bank of Canada.
Our COVID-19 experience invites us to reimagine alternative futures with vastly different rules and social norms, based on different principles, starting with public health and collective well-being. While the pre-COVID Green New Deal discourse is an obvious and logical starting point, the unique situation we find ourselves in bears some deeper reflection and more outside-the-box thinking.
While the public health and economic response to COVID-19 cast aside business-as-usual in dramatic fashion and with incredible speed, climate action over the past couple decades has been slow and plodding. The climate conversation in Canada needs to move beyond noble aspirations accompanied by awkward contradictions around the expansion of fossil fuel extraction and production. We need to cast aside the pre-COVID notion that it is ‘too difficult’ or ‘impossible’ to drastically cut emissions or take quick and decisive action on the climate crisis.
The climate conversation in Canada needs to move beyond noble aspirations accompanied by awkward contradictions around the expansion of fossil fuel extraction and production.
The other great challenge before us—one that is more intertwined with the climate fight than many realize—is the profound inequality of the human condition. Through the window of COVID-19 our eyes have been opened to the vast differences in resources across households, access to paid work and ability to work at home. Both racial and gender inequities have been exposed, including some ugly incidents of discrimination and abuse.
We also clearly see a wide range of housing situations: some people are crowded with roommates and kids while others are isolated and alone; some have access to indoor space and outdoor gardens while others live in small, cramped apartments, and of course some have no home at all. We are also seeing that access to services, like the quality of internet connections and communications equipment ranges widely among other inequities individuals face.
As much as we aim to reduce carbon emissions, we need to inject that fight with climate justice and a push to eradicate extremes of both poverty and wealth. It’s not good enough to move to solar-powered sweatshops or precarious workers driving electric vehicles.
In spite of the huge disruption to our hypermobile lifestyles, the carbon impact of shutting down due to the pandemic appears to be comparably small. We’re still waiting for the detailed results to come in, and the final word will depend on how long this all goes on for and how quickly we bounce back.
According to the International Energy Agency (IEA) year-over-year energy demand (for many comparable countries) was down 20-25% from lockdowns and other physical distancing measures. Transportation has taken the biggest hit, down 50-75% for road use, and 60-70% air travel.
A new study put global carbon emissions down between 11 and 25% per day in April 2020 compared to a year earlier. Canada’s emission drop is likely to be at the lower end due to a much smaller share of emissions from electricity generation and a much larger share from heavy industry, where we have not seen the same COVID-induced declines.
This exercise, while crude, highlights the role of industry in Canada’s emissions profile.
The major areas where emissions fell during the pandemic shutdown—passenger transportation, commercial buildings and electricity generation—represent some 29% of Canadian emissions. Based on the IEA numbers above (which do not single out Canada), these areas would thus represent about a 9-10% drop in Canada’s carbon emissions during the shutdown period (compared to the same timeframe in previous years).
While some of this drop could become locked in as a permanent change in how we do things (less business travel, more work from home), other parts could roar back when restrictions are lifted. Moreover, this exercise, while crude, highlights the role of industry in Canada’s emissions profile. Unlike buildings and transportation, most of us don’t see the massive complex of industrial emissions needed to get materials out of the ground, constructed into capital goods, processed into useful goods and services, and eventual incineration or landfilling at the end of life.
Structural change and emissions
To achieve deep emission reductions that meet the targets in the Paris Agreement necessitates global emission drops of 7.6 per cent per year. To get there requires structural changes in the way we do things and how we organize society. Individual behaviour change helps but it’s time to put the hand-wringing about green consumer choices aside for something more systemic, impactful and just. Canadian households have no agency to control the two-thirds of emissions that come from our collective industrial activity.
If we want bold and rapid COVID-like action, we need to talk about major public investments, regulatory mandates, bans and other new rules to govern carbon in the marketplace. And we need progress on reducing emissions that looks more like the rapid and structural COVID-19 policy response, rather than the incremental, slow-and-steady approaches like carbon pricing that have dominated the public policy discourse on climate action.
Canadian households have no agency to control the two-thirds of emissions that come from our collective industrial activity.
The cumulative impact of “putting a price on carbon” in Canada will be $50 per tonne— a mere 11 cents per litre at the pump—in 2022, after five years of annual increments. Yet, the monthly ebbs and flows of gasoline prices have completely swamped the impact of the carbon tax. Consider that a year ago, gasoline prices peaked at levels about 60-70 cents per litre higher than currently. To get back to those prices would necessitate an additional $300-350 per tonne carbon tax, an amount that would be politically challenging to implement.
In the Canadian experience, carbon pricing increases the price of fuel somewhat, but more importantly it can be a source of revenue to pay for climate-smart investments in people, buildings and infrastructure. This latter strength is too often dismissed in favour of giving the money back to households in the form of tax cuts and credits. Carbon pricing would be more effective, in both public opinion and reducing emissions, if proceeds were used to invest in climate action.
A good example of structural change is the transitioning of electric power generation away from coal. The most successful jurisdictions in reducing their carbon emissions to date have been those removing coal-fired power, which has a major co-benefit in cutting local air pollution that is damaging to health. In the UK, emissions are 38% below 1990 emissions due to this switch—levels not seen since the late 1800s (not a typo). In Canada, Ontario and the Maritime provinces have dramatically lowered their emissions by phasing out coal-fired electricity.
Carbon pricing would be more effective, in both public opinion and reducing emissions, if proceeds were used to invest in climate action.
This shift did not rely on millions of people deciding to switch their homes off of coal because of modest levels of carbon pricing changing incentives at the margin (as economists would say). Instead, it was done at a system-wide level by regulatory fiat. We need more of these types of structural reductions in emissions that span the entire economy. Post-COVID, seeking energy conservation from highly energy-efficient buildings and new renewable power supply for electric vehicles is hardly even pushing the envelope.
There is also good reason to believe that large emission reductions could come from dramatically shrinking the carbon and ecological footprint of our economy by “closing the loop” on material flows. Aggressive zero waste policies could move beyond recycling and composting to redesigning products, and reducing and reusing materials. There is a huge opportunity to displace energy demand and carbon emissions from raw materials extraction and processing.
Keeping it in the ground
Deep emission reductions also mean Canada must come to grips with its alter ego as a major and growing exporter of bitumen and methane gas, while also continuing to export substantial volumes of coal. A big chunk of those industrial emissions—more than one-quarter of Canada’s total emissions—are from the extraction and processing of fossil fuels.
The bulk of extracted fossil fuels are exported and combusted elsewhere. Canada’s contribution to global warming is doubled when we look at carbon taken out of the ground that ends up in the atmosphere, rather than just the emissions from burning fuels in Canada.
The economic backdrop to this fossil fuel extraction is terrible: cheap oil and gas across the world, as a result of over-production. A frenetic boom of fracking and horizontal drilling in North America has brought to the surface previously inaccessible supply of oil and gas. So much so that companies are losing money, and governments are making the problem worse by subsidizing the industry in various ways.
Canada’s contribution to global warming is doubled when we look at carbon taken out of the ground that ends up in the atmosphere.
That was before the huge drop in demand from COVID-19, and a supply bump due to increased oil production from Russia and Saudi Arabia, leading to the incredibly low prices we see at today’s pumps. Continued low prices will eventually drive out high-cost producers in Canada and the US. Already, new investment has been shelved and production cuts are imminent as storage capacity meets its limits.
The energy transition is a highly imperfect comparison to the COVID-19 response. On climate, there are powerful and wealthy vested interests blocking meaningful change, and low fossil fuel prices slowing the transition to renewables.
Planning for deep emission reductions
So how can we get on a pathway to our 2050 target of net zero emissions, and lock in carbon emission reductions as we emerge out of the shutdown?
- Shift investment patterns away from fossil fuels and into clean, green, public investments that build the world we want. This is the essence of the Green New Deal. When it comes to jobs, the best defense is a good offense: a well-designed transition plan should have a net positive impact on employment, because green investments tend to be more labour-intensive—anywhere from 3 to 30 times more direct jobs than equivalent investments in fossil fuel infrastructure.
- Plan a managed wind down of fossil fuel industries. A meaningful climate plan will need to cap production of fossil fuels, and say no to new fossil fuel infrastructure, including coal export ports, bitumen pipelines and LNG terminals. We can also undertake royalty reform that is aimed at wind down, not at stimulating and subsidizing extraction. This means no new leases to drill and explore, while using the current opportunity for buybacks of existing leases to retire them. Engagement with Indigenous people must be central to this exercise.
- Lean into carbon emissions through much higher carbon taxes on currently super-low fuel prices. After our lockdown many will be clamoring for a return to the status quo of hyper-mobility. The proceeds of higher carbon prices should be used to invest in the clean economy we want (point 1 above) and boost credits for low- to moderate-income households to avert regressive tax impacts.
- Accelerate the transition to 100% clean electricity. Build on efforts in Ontario and the Atlantic provinces to phase out coal-fired generation, with a major focus on energy transition in Alberta and Saskatchewan (Canada’s two most GHG-intensive provinces). District heat/energy systems in urban areas (centralized production of thermal energy for heating and hot water) are also well poised to do the heavy lifting of emission reduction.
- Build out public transit in urban areas and high-speed rail to connect cities. With decent, dedicated funding for transit expansion, more efficient and higher-capacity transit networks could be built throughout Canada within a decade. Well-designed transportation investments have potential to improve quality of life in a variety of ways—ameliorating air and noise pollution, time lost due to congestion, accidents leading to injury and death, other environmental costs of extracting and processing fuel, and costs of parking spaces—while also reducing carbon emissions. If anything, COVID-19 tells us we need more capacity to mitigate against overcrowding.
- Progressive taxation of air travel. People are not going to give up air travel, but a lot of in-person meetings can be done virtually and low-carbon substitutes for shorter trips could be developed. The distribution of air travel miles is highly unequal. One recommendation out of the UK is a flight tax that would increase substantially with each trip taken by the same passenger. For example, the first trip might pay a $50 tax, the second $200, the third $500.
- Use the development of new affordable housing and social infrastructure (libraries, child care, and community health centres) to anchor complete communities. A community is complete when it emphasizes walking, biking and transit, supplemented by car-sharing; this means greater proximity of homes to work, shops, entertainment, parks and public services. The need for new (non-market, rental) housing for a growing and aging population provides an opportunity for redevelopment plans that include residential care units close to community health centres. We also need to re-allocate existing road and parking space to pedestrians, bikes and transit.
- Accelerate the targets for zero-emission vehicles and housing. If you need to drive, it should be hybrid or electric. Fleets (taxis, ride-hailing, car-share) should also face accelerated requirements to be zero emission. New buildings should be banned from tying in to natural gas pipelines and existing buildings should have a transition plan to get off of fossil fuels for space and water heating.
- Build more local capacity and supply chains. For decades our economy has emphasized efficiency through bigger, globalized supply chains and trade. COVID-19 tells us we need to prioritize resiliency and redundancy, and thus points to a more localized economy for food and other critical goods and services like medical supplies.
- Develop a zero waste and circular economy strategy. This is key to reducing emissions from large industrial emitters. Well-designed re-use policies can support local economic development and the creation of new green jobs by increasing domestic capacity to manage materials. Sustainable forestry and agriculture, and adding more value domestically, can also create more good jobs in rural areas.
- Invest in people and implement well-resourced just transition plans for workers in affected industries, allowing for attrition over time through retirements and early retirements, plus advanced retraining programs, community redevelopment funds and alternative jobs in remediation, infrastructure and renewables. The costs of adjustment must not be disproportionately shouldered by resource industry workers. In addition, COVID-19 has highlighted the importance of investing in caring work (seniors’ care, child care, health care) typically done by women, and often underpaid and undervalued.
- Build in accountability in the form of carbon budgets and a more robust democratic process. Promises of emission reduction targets on far-off timelines have been a complete failure. We need short-term plans for emission reductions similar to the fiscal budgets tabled by federal and provincial governments, with independent oversight and more timely reporting on results. Moreover, Canadians need to be engaged in developing climate solutions, and what particular answers will look like in their own communities. Our experience is that Canadians are thirsty to have this kind of meaningful conversation about our collective future.
Forged out of pandemic-induced shutdown is a renewed spirit of optimism about making deep and rapid changes to our economy to end our reliance on fossil fuels. All of this will require that we keep the renewed sense of compassion and togetherness prompted by COVID-19. The climate fight is the ultimate long game and a tough political battle, but our collective experience through COVID-19 tells us another future is possible.
Author: Marc Lee
Marc Lee is a Senior Economist at the CCPA’s BC Office and a co-investigator with the Corporate Mapping Project (CMP).
In addition to tracking federal and provincial budgets and economic trends, Marc has published on a range of topics from poverty and inequality to globalization and international trade to public services and regulation. Marc is Co-Director of the Climate Justice Project, a research partnership with UBC’s School of Community and Regional Planning that examines the links between climate change policies and social justice.