B.C. Business Matters:
Denise Mullen >>
Climate Progress in BC
If you read the recently released 2014 Progress Report on Climate Action in BC and some of the related commentary, one would think BC is doing really well on meeting its climate objectives. It’s not surprising to see the government pat itself on the back, but the self-congratulation is overdone in the context of the 2020 33% legislated reduction target that was put in place in 2007. We have only run 2.4 km of a 40 km marathon race. It was clear in 2007 that the government of the day was too ambitious in adopting the 33% goal, and the latest data confirm this.
Let’s be honest. BC will not achieve the 2020 goal with or without LNG. It was and remains an unrealistic target given the province’s 2007 starting position, industrial structure, and energy supply mix. We talk about our uniqueness often in this province but in this case it is quite true. BC is different from most other jurisdictions in its patterns of energy production and consumption – a point that seems largely overlooked, and that means we have little room to manoeuvre.
To begin with, it must be recognized that BC does not have coal fired power generation and never will since it is a legislated non-option. Nor do we rely in any real sense on other sources of thermal power. We also don’t have a lot of heavy industrial manufacturing. Around the world, the experiences of advanced country jurisdictions show that significant medium-term progress in cutting GHG emissions has largely come from fuel-switching in electricity production, structural changes in the industrial sector (i.e., emissions-intensive industries shut down or shrink), or outsourcing of manufacturing to lower wage economies (e.g., China and India), which naturally have seen an increase in their emissions as a result. Number one is not an option for BC; number two holds little promise, given the small size of our heavy industrial sector (apart from the fact that we wouldn’t want to lose the GDP and jobs generated by these industries anyway), and number three is neither desirable on its merits nor an effective means to lower global GHG emissions.
The one area where there may be some opportunities for BC is transportation, which is the biggest consumer of energy and produces two-fifths of the province’s total emissions. For the most part we have failed to tackle this source of emissions because they are non-point and involve complicated questions around human settlement and public expectations about freedom of mobility. Witness recent debates about how to fund or not fund public transportation in the Lower Mainland. It is easier to propose solutions and ideas than to gain public acceptance and then implement them.
Overall, fundamental change in energy use will only occur over long time horizons – not in 10 or 15 years – no matter how some people may wish it to be otherwise. After all, as scholars like Canada’s own Vaclav Smil have long pointed out, our very economic prosperity as it has developed since the 1880s depends on having a reliable and cost-effective energy system. Even the current computer-based information economy would quickly cease to exist without an ample supply of energy available on demand to firms and households.
So while the transition to a less carbon-intensive economy and energy system will happen, it is sure to be a long and bumpy road – regardless of the stories spun by various politicians and environmental groups.
 Scotiabank Economics, Global Views, July 11, 2014