Monday, April 17, 2006

New Canadian Government Slashes Green Programs, Takes Ambivalent Stance on Fighting Climate Change

The Globe and Mail reports that the new Conservative government in Canada plan large cuts to spending on a variety of environmental programs, including those designed to combat global climate change. The Conservatives want to slash Environment Canada programs designed to fight global climate change by 80%, and want cuts of 40% in the budgets devoted to climate change at other ministries, according to cabinet documents obtained by The Globe and Mail.

The documents also say that the Conservatives' campaign promise of tax breaks for transit passes would cost up to $2-billion over five years, but would result in an insignificant cut in greenhouse-gas emissions because the incentives are expected to spur only a small increase in the number of people willing to trade using cars for buses and subways, the Globe and Mail reports.

The section of the cabinet documents on the budget cuts, written by an unidentified government official after a cabinet meeting in late March that approved the reductions, also said the Tories want to try to claw back $260-million (Canadian) the Liberals had pledged to the United Nations to fund its international climate-change programs.

The document also reportedly said that federal funding for wind power, "is also uncertain."

The Globe and Mail article continues:

Ryan Sparrow, a spokesman for Environment Minister Rona Ambrose, refused to confirm or deny the details in the leak, and said the government hasn't finalized its decisions on climate change. "Once there is an announcement to be made, we'll make one," Mr. Sparrow said.

The documents were obtained by the opposition Liberals and bolster previous reports that large-scale cuts have been under way in climate-change programs, such as the highly visible One Tonne Challenge, which had much of its funding abruptly axed without public announcement in late March.

The Tories have indicated that they are ambivalent about the Kyoto Protocol to fight climate change, planning to neither pull out of the treaty nor meet its emission-reduction targets. According to the documents, the Tories have yet to develop their unique Canadian-based set of actions. "No process has been put in place to determine next steps on climate change or to develop the new 'made in Canada' climate plan," the documents said.

The documents said that while the Tories are trying to save money by cutting the programs designed to reduce greenhouse-gas emissions, they won't cut government staff positions, so most of the money earmarked for climate change will be going to salaries for bureaucrats.

"Only $375-million was approved for climate spending, with most of the dollars covering staff salaries until the new government determines next steps. ... What is clear is that staff will have little to do and that they will have no budgets to spend over the next year and that more cuts are coming."

According to the documents, the programs are being eliminated to help fund tax cuts, including the GST reduction the Tories pledged during the election, and to fund the transit-pass scheme.

The global-warming programs are being eliminated even though a Treasury Board review of government spending found that the vast majority of 166 such programs run by Ottawa were considered cost effective.

The review, which was begun by the Liberals and completed last fall, found only 22 programs were ineffective. The Treasury Board information was supposed to be used to reallocate funding from programs that weren't working to those that were achieving better results. The Liberals did not deal with the review before the election, and many federal initiatives didn't have budget allocations after March 31, the end of the government's fiscal year.

Environmentalists reacted angrily to the cuts. John Bennett, a spokesman for the Sierra Club of Canada, accused the Tories of having a "slash and burn campaign."

The documents also show that senior officials in the Environment Ministry have told the government that its proposed tax credit for transit users will have virtually no impact on greenhouse-gas emissions and only a small effect on riders. "A wide range of data suggests that people are not very responsive to changes in transit fares," said a memo prepared for Ms. Ambrose last week by officials in the office of her deputy minister. ". . . while the ridership impacts of the tax incentives are not known with precision, analysis suggests they will be low."

The six-page memo outlines five transit tax-incentive options, ranging from a 16-per-cent tax credit for all fares, at a projected cost of $2-billion over five years, to a credit for monthly pass holders only, at $1-billion, to the same credit for high-school students only, at a cost of $90-million.

The memo makes clear that the second option is the one the government prefers. But its benefits to transit users may be nullified, the memo states, because "it could be quite easy for the transit authorities to raise their fares to absorb the benefit of the tax credit."

The Canadian Urban Transit Association has estimated that the proposed tax break would increase transit use by up to 30 per cent by 2016. But in another Environment Minister memo drafted for Ms. Ambrose, ministry officials say that, based on a 1997 Canadian study, as well as a U.S. Department of Labour survey in 2004, use can be expected to increase between 2 per cent and 4 per cent. That means the effect on emissions will be negligible, the documents show.


Well, this is cheery news. It looks like our neighbor to the north is following in the footsetps of our stellar national leadership on climate change. The new Torie government seems to to be keen on adopting the 'do nothing' school of though on combatting climate change pioneered so well by President Bush.

This is truly a shame to see Canada's efforts towards fulfilling their Kyoto Protocal targets halted by a change in government. As far as I am aware, climate change mitigation policies are also quite popular in Canada so it seems like this is hardly a popular move by the new government.

Oh well. Canada can join the United States in firmly planting our heads in the sand and hoping that the continued signs [two links] of impending climate change simply go away... Bravo Canada!

8 comments:

Simon Donner said...

Good to see someone (else) outside Canada talk about this! Both internal and international pressue may help encourage the Conservative government to take climate change and emissions reductions seriously.

People in Canada may not realize how important the country's participation in international climate policy is to the rest of the world. Our participation is important to Europe and Japan. Canada is seen as link to the reluctant US. The rest of the Kyoto parties would likely be forgiving if Canada failed to meet the commitments BUT made a concerted effort, because they know Canada is in a difficult position due to the reluctance of the large neighbour and trading partner.

WattHead said...

Thanks for the comment Simon. I'm happy to keep tabs on events 'up north' and I agree that this news should recieve attention outside Canada, indeed, throughout the world, as one nation's climate change policy effects the whole world community.

News has not been looking good for the Kyoto Protocol this year with many nations realizing they will have to do a lot more to meet their targets than they may have hoped and other countries - like the UK and Canada - backing off their commitments (although to be fair, the UK will still meet their Kyoto commitments, just not the stricter targets they had set internally).

Until lately, Canada has always been an inspiring example of what the US ought to be up to. That is why I am saddened by this news, both for citizens of Canada, as well as for the loss of Canada's example to the United States.

If you are a Canadian citizen or resident and you feel strongly about the Torie's plans to slash Canada's climate change commitments and policies, I strongly suggest that you speak out. Make sure the government in Ottowa knows that their policies are unpopular! And make them pay for it in the next election. Good luck...

Heiko said...

It's not surprising that a supposed leak like this wouldn't garner much attention.

Even assuming the claimed policy measures are going to be actual government policy, it seems to me there's heavy spin there.

The liberals in government had a worse increase in greenhouse gases than the US. And that isn't all due too Alberta and oil sands, the provincial breakdown I remember had Ontario with a similar increase on an absolute basis as Alberta (I don't remember the percentage increases, Ontario might have had a higher baseline).

So, assuming the programme cuts are real, how much do they actually amount too, in Dollars and in CO2 savings? Any better than the $2 billion for transit passes?

Me seems the article is heavy on conservative bashing while the actual policy differences will be marginal in terms of the effect on emissions.

As you know, I have no problem with the scientific consensus on climate change and simultaneously believe that expensive measures to cut CO2 now are not worth it.

I also think that that is the practical consensus in actual policy.

And you also know that my preferred energy policy mix (France = nuclear + gasoline taxes) would significantly lower US or Canadian emissions. US emissions per capita are about three times French per capita emissions. And Germany in spite of its wind turbines is 50% higher than France. For electricity generation alone it's even worse (Germany being about six times higher than France I think, though I am not entirely sure on this figure). Denmark has even more wind energy in the mix than Germany and nevertheless higher CO2 emissions per kWh of electricity produced (because most of the rest is coal).

Without a switch to nuclear, or a willingness to significantly raise gasoline prices or to invest hundreds of billions into wind turbines and transmission lines (to allow wind from remote areas to supply industrial centres, while also evening out the supply variability of wind by drawing on wind turbines located thousandas of miles from each other),

and I don't see any of that on the drawing board in North America,

I just don't see how the differences that there are between the "right" and the "left" in North America will make more than a marginal difference in either Canada or the US in terms of actual emissions.

WattHead said...

I've been expecting you to weigh in on this post, Heiko, as you often due on my posts on climate change. I always welcome your comments as differing opinions are appreciated here at WattHead.

As you know, while we seem to agree on the scientific consensus regarding climate change, we seem to disagree on the appropriate response. While I of course favor the most effective responses, I am not opposed to implementing serious mitigation measures, even if they are more expensive than your proposed cost of mitigation (i.e. $0.00!).

Yes, this article has a clear bias in it, and I am not familiar enough on Candian politics to weigh in on who was better, the Liberals or the Tories. You write, "I just don't see how the differences that there are between the "right" and the "left" in North America will make more than a marginal difference in either Canada or the US in terms of actual emissions." However, I don't think that that is too relevent. You often bring up a similar point when I criticize the current (Republican) leadership in the United States, arguing that the Dems haven't done much better.

I don't particularly care much for these comparisons and would rather focus on what our leaders should be doing - whoever they are or whatever their political leanings - rather than what they are doing relative to their political opponents. In regards to energy and climate change policy, I strongly believe that the leaders of developed countries across the world (and developing ones as much as they are able), including Canada and the United States, should be trying their darndest to:

-transition towards a sustainable, low/zero-carbon energy future;
-proactively attempt to mitigate the severity of global climate change;
-transition towards domestically supplied energy for national security and economic reasons;

Implementing these general goals could take a number of policy forms, including but not limited to:

-rapidly developing renewable energy sources; 'electrifying' the transport fleet (EVs and PHEVs);
-developing biofuels (cellulosic ethanol and FT diesel from biomass);
-exploring nuclear (maybe) or IGCC coal with sequestration for new baseload demand (phasing out pulverized coal plants);
-implementing a carbon tax or carbon cap and trade policy to limit GHG emissions across the energy, transport and industrial sectors;
-set (and achieve) national targets for GHG emission reductions;
-raise gas taxes to encourage alternative fuels and fuel efficiency;
-set aggressive fuel economy standards across the transport fleet (which would mean closing loopholes and seriously reforming CAFE in the US);
-etc.

Many of these are quite cost effective. Others might cost us a bit, but in turn avoid serious costs later (costs due to: effects of climate change, national security risks due to dependence on foreign energy sources; economic shocks due to dependence on dwindling - and foreign cartel controlled - fossil energy sources; mitigation of health effects from vehicle and power plant emissions, etc) and I would argue are quite worth it.

I'll continue to call for those policies, or others that further the above general goals, to be implemented, regardless of which party is in power, in the United States, Canada, or elsewhere. Afterall, we are all in this together when it comes to climate change and resource depletion.

Ken said...

It might be very logical for any government of Canada to stop spending money on Kyoto initiatives since they simply are not working.

Since Kyoto, Canada's CO2 emissions have increased over 25% (compared to the Kyoto goal of a 10% decrease). This is about twice the US increase in the same time, despite the US taking no action and experiencing significantly greater economic gains.

The only hope for Canada to make progress is probably to continue with the plan to shut down a significant number of coal fired power plants and replace them with new nuclear units. I think the new government will back this and this will be much more important than whatever the money has been spent on to date.

AP said...

Re. raise gas taxes to encourage alternative fuels and fuel efficiency.

No, raise gas taxes to invest in a modern, sustainable, nation-wide public transportation system.

Having ridden the rails in the Netherlands, Switzerland, Germany, France and now England over the past couple of months, it's really quite depressing how backward the North American rail systems are. Car-dependent infrastructure with mediochore bus service just doesn't cut it.

Andrew.

WattHead said...

Andrew,

Why can't gas taxes do both? I would certainly like to see a network of high-speed rail lines linking major population centers. However, consider for a moment how much more spread out the population of the United States is compared to the population of Western Europe. Europe provides a useful model to look at for how to implement effective mass transit systems, but oftentimes figuring out how to apply that model to the sprawling suburbs and spread-out population of the United States is difficult, if not impossible.

However, I would certainly propose earmarking the revenues from gas taxes for research into alternative vehicle fuels and technologies as well as investment into transportation related infrastructure - i.e. research to speed-up the commercialization of light-weight carbon-fiber vehicle frames, advanced batteries and the like, reinforcing the grid to support the electrification of transport, construction of electrified high-speed rail lines, etc.

Of course, some of the gas tax will need to go towards reducing other taxes for low-income tax brakets as a gas tax is not a progressive tax and hits those with less disposable income the hardest. Some redistribution of the gas tax revenue would be necessary to counteract the regressive nature of the tax.

Heiko said...

You know I comment here because I appreciate the discussion and your insight. You always provide a fair and reasoned perspective.

I do think that without higher gasoline taxes it'll be very difficult to attack gasoline consumption. You may have commented on this before, but I'd be interested in your thoughts. Key barriers I see are:
1. Without high gasoline prices there is no incentive to use the highest fuel efficiency cars for the longest distances (eg to get taxi companies to use hybrids).
2. There is also little incentive to scrap old fuel hogs, and with CAFE making new fuel hogs more expensive, there is an incentive to keep especially polluting older fuel hogs on the road for longer.
3. There is no incentive to reduce miles driven.

I believe that a large fraction of miles driven could be done in new cars, say 75% of miles could be done in cars less than 4 years old, giving an extremely rapid response to increased fuel economy. BUT that's only going to happen, if there is a strong incentive to use these fuel efficient vehicles (say existing small cars like the Nissan Micra for which there is large production capacity already in place).

If instead CAFE gets doubled over a ten year period, I see a massively smaller effect (ie less than 2% impact within four years instead of a 35% cut, and maybe 20% over 20 years with many of the most efficient cars being third cars that don't get much use, or first cars for poorer consumers who wouldn't be driving at all, were it not for the subsidised prices necessary to flog the small cars car manufacturers need to sell to meet CAFE).

On climate change:

Let me talk about another hypothetical. Suppose we knew that 400 PPM would lead to Earth becoming Venus within a year, I think we could slash emissions by 90% within months to meet that goal and stay below 400 PPM and do all that without many people having to die. Hardly anybody needs to drive and heating can largely be done without by packing people more densely into existing housing, leaving lots of housing unheated, and a third of world electricity production is already emissions free (half of that being nuclear and the other half hydro).

But we do not face the Earth becoming Venus or anything like it. If we did, even if there was only a 10% chance that we did, I do firmly believe there'd be unparalleled co-operation to deal with the problem.