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Climate Plan Bets on Price of Oil

BC's model built on complex variables.

By Tom Barrett, 14 Jul 2008, TheTyee.ca

Gordon Campbell

Premier Campbell: Will he hit targets?

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The B.C. government says its current policies will take it almost three-quarters of the way to achieving its climate change targets.

But that's based on the assumption that those policies --some of which are still pretty sketchy --will get the tricky bits right once the sketchy bits are all filled in.

Take cap and trade for instance. B.C. is part of the Western Climate Initiative. The group, made up of three Canadian provinces and seven U.S. states, plans to create an emissions-trading system that will set limits on the amount of greenhouse gases polluters can spew. Details on what it might look like will come out this fall.

Problem is, such schemes are very complicated. A lot can go wrong.

Design the system well and history suggests emissions will go down substantially. Design it poorly and they won't go down so much.

Which brings us to the claim that the government's announced policies, including cap and trade, will cut 73 per cent of the emissions required to meet the provincial targets.

The government's Climate Action Plan contains the results of some independent computer modelling done by a firm headed by Simon Fraser University environmental economist Mark Jaccard. The model assumes that cap and trade will drive up the cost of emitting carbon dioxide (and equivalent greenhouse gases) to $50 by 2016 and $150 by 2026.

If cap and trade produces those costs for carbon and the government's other climate change policies work according to plan, B.C. will be 73 per cent of the way toward hitting its climate change goals, the model predicts.

'A number of assumptions'

"The modelling makes a number of assumptions about what policies will look like," said Matt Horne of the Pembina Institute. "They have a functioning cap-and-trade system in there for example.

"You need to do that to do this exercise, no question about it, but... there's a whole bunch of questions about what that system will look like."

The key, Horne said, is "making sure the actual system design lives up to the assumptions of the model."

That's not a critique of the model, he stresses. Horne, a former student of Jaccard's who helped write a Pembina Institute analysis of government emissions policies, said he agrees with the 73 per cent figure --as long as the real-world policies live up to the numbers that went into the model.

The action plan estimates that, to reach its legislated target, B.C. has to get its annual emissions down to 46 million tonnes by 2020. The policies announced so far, including cap-and-trade, the carbon tax and energy efficiency incentives, are forecast to get us to 55 million tonnes.

That leaves a gap of nine million tonnes.

But that might change, depending on... well, depending on a whole bunch of things. As the action plan says:

"The assumptions we make about energy prices, population growth, and economic activity influence what kinds of cars and homes people are likely to buy and what technologies will be developed. This in turn has a significant impact on levels of greenhouse gas emissions."

Oil: up, up and away?

Jaccard's model assumes an oil price of US$85 a barrel -- considerably lower than the current price of about $144.

The $85 figure is based on various long-term forecasts. If they turn out to be wrong and the price of oil stays around $120 for the next decade, hitting B.C.'s emissions targets becomes a lot easier -- higher oil prices will force emissions down so that the nine-million-tonne gap will drop to five million tonnes, according to the computer model.

The Pembina Institute's Horne said the action plan could underline what a wide array of policies and actions are required to cut emissions.

"Given where the debate's at today, it's a fairly positive piece in that it brings a bit of a richer context to what has been a very carbon-tax-focused debate," he said.

Figuring out how to plug the nine-million-tonne gap will be up to the government's climate action team, which is expected to report at the end of July on further ways to cut emissions.

Suzuki expert: 'Bold' but more to do

Ian Bruce, of the David Suzuki Foundation, agreed that well-designed policies are crucial. Among other things, that means designing an effective cap-and-trade scheme, he said.

"We recognize that B.C. has taken a bold step forward but the plan's not perfect and there are some significant areas that need more work," Bruce said.

Bruce said the plan is a model that Ottawa and the other provinces could well follow. But some B.C. government policies work against the climate goals, he said.

Carbon Sources

B.C.'s greenhouse gas emissions come from all sectors of the economy and from everyone who drives a car or heats a home.

Cutting those emissions, therefore, is going to mean cutting all over.

Some figures on B.C.'s carbon sources in 2006:

  • Transportation - 36% of all emissions
  • Fossil fuel production - 21%
  • Other industry - 14%
  • Residential and commercial - 12%
  • Net deforestation - 6%
  • Waste - 5%
  • Agriculture - 4%
  • Electricity - 2%
Source: Climate Action Plan, government of B.C.

He called for a gradual end to subsidies to the oil and gas industry, saying that removing subsidies would give the industry a greater incentive to reduce the environmental costs of polluting.

The government should also require EnerGuide 80 energy efficiency standards on residential construction and renovations, Bruce said. And he said it needs to do a better job of protecting old-growth forests, peat-lands, grasslands, and wetlands, which absorb and store greenhouse gases.

Bruce also called on the province to ramp up investment in transit, so that communities around the province have a stable and reliable source of funding.

The current explosion in the price of crude "highlights how vulnerable our communities are to rising oil prices," Bruce said. "And one of the reasons why we're so vulnerable is because we haven't made investments in public transit or designed our communities to be more walkable and more transit friendly."

He said the government needs to move aggressively to expand bus service around the province, especially outside of metro areas. Transit figures show that the bus is the foundation of the system -- and investments in buses pay off quickly, compared to large capital schemes like SkyTrain, he said.

Related Tyee stories:

[Tyee]

Tom Barrett is a Tyee contributing editor with a focus on global warming policy and politics.

13 Comments:

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  • Grumpy

    3 years ago

    Garbage in...............

    ......... garbage out, that is the science of computer modelling.

    If one really wants to reduce pollution, auto congestion and their associated ills, one has to provide a transportation alternative. Our bureaucrats have not planned one, nor is their one on the drawing board and this is true for organizations such as David Suzuki Foundation or the WWF.

    What has happened is that we have an academic "tax the rube campaign", so favoured by politicians, university types, and bureaucrats (mostly made up of university types). "Tax the rube" is a simple strategy of taxing the poorest to cause personal pain, to make the "elite" classes feel good. The Liberals new gas tax (I know Carbon Tax) is typical "tax the rube", as it achieves nothing but burdening the poor with added new taxes, while the "elite" class gets tax breaks. No tax is revenue neutral, but you would never think it, with all the positive spin by the "elites" controlling the electronic and print press.

    Sadly, organizations such as the Suzuki Foundation and the WWF, have supported "tax the rube", and only offer the "more buses" cliché for improving transit. Buses have proven not to attract the motorist from the car. Even in Europe, buses have singularly failed, even with much higher gas prices, to attract the car user. Metro's fare little better and have a poor record in attracting new ridership.

    What has worked is light rail and the mode has a proven record in attracting the motorist to public transport. But we have (our politicians, academics and bureaucrats) thrown our lot in with SkyTrain and/or light metro - a mode with little evidence in attracting the motorist from the car, as ridership as a percentage of population has stagnated at 11% for almost two decades!

    The region needs at least 300 km. of 'rail' transit to provide the alternative to the motorist to make the modal shift from car to transit.

    With SkyTrain costing at least $100 million/km. to build, 300 km. would cost $30 billion. but modern LRT, with its inherent flexibility of operation can be built for as low as $7 million/km., with average costs between $15 million/km. to $25 million/km. Realistically 300 km. of LRT could be installed for about $3 billion to $5 billion.

    So when one hears of so-called experts, politicians, academics, and/or bureaucrats talking about buying more buses to solve our pollution/congestion problems, take care, they don't have a clue what they are talking about because buying more buses is just "tax the rube", with rubber tires.

  • freebear

    3 years ago

    Vision, what Vision?

    So far the Vision of our so-called leaders appears to be more of the same!

    "The current explosion in the price of crude "highlights how vulnerable our communities are to rising oil prices," Bruce said. "And one of the reasons why we're so vulnerable is because we haven't made investments in public transit or designed our communities to be more walkable and more transit friendly."

    I suppose because it isn't in their (BC Government) Vision of - More of the Same!

    It is the actual vulnerability to rising oil prices of our auto centric, ferry/highway auto centric, cheap energy designed communities that will require a design change.

  • KWD

    3 years ago

    agenda not science

    So the gov't claims that policy and cap and trade will cut 73 per cent of the emissions required to meet the provincial targets. So, what are the provincial targets?? Does anyone know?

    On another point; if Jaccard’s model is a reliable, robust predictor of changes to CO2 output, due to cap and trade, we should be able to plug in different values for the per barrel price of crude (in a range from say, $145 to $245), and then compare the output changes. If Jaccard’s model is robust the output should show that the carbon tax (cap and trade) is having a greater impact than the per barrel cost.

    Computer time is cheap. I’d be surprised if the model hasn’t been run with some change in the per barrel parameter. Why aren’t we seeing a range of output values? Perhaps this has been done but the results don’t coincide with the agenda.

  • jimmy_laroux

    3 years ago

    Quote:BC's model built on

    Quote:
    BC's model built on complex variables.

    Because so many of their figures are imaginary?

  • Tired of the Li...

    3 years ago

    Tax will not be the reason

    If BC meets the target for the reduction in the consumption of fuel it will not be because of the carbon tax. The reason will be because of the extortion rates the oil companies are charging. All the 2 cents or so does is give Gordo bragging rights that his plan worked. The Tax on its own will not be enough to shift people's thinking the oil companies have a "better" plan make people pay more for the fuel they use but raise the price enough that profits remain the same on a smaller volume sold.

  • sdgreen

    3 years ago

    expand bus service around the province

    It is ever so clear, that our politicians, so-called experts, and the environmentalist proponents really do not have a clue, other than to say we need more transit buses.

    What a crock! Every one knows we need to do one hell of a lot more, than transit (not withstanding than transit is not the answer!)!

    The carbon tax imposition on the skirt tail of human engineering is completely wrong. The problem is there are no affordable alternatives for the majority of British Columbians to turn towards. Transit Buses, how nice, just try to take your weekly family groceries for a family of six via bus; hell you have to take the whole tribe just to carry the bags.

    Vehicles, oh yes, the technology is not quite there yet, but what is most folks can't afford or, even worse, like the 'SmartCar', can't do the grocery shopping (small trailer excluded coz parking stalls do not work). Ok let's go for scooters and motorcycles ... not a bad plan, but again it takes forever to get a licence and costs a lot. Lights, oh give me a economical light fixture, LED and compact Flourencc lights cost a fortune.

    Yup lets do that 'greening' thing for housing, either retro or new, adds just a whole bunch for little return. Solar/Wind yup good idea, except for cost and intermittent effect.

    Then you have the Regional Districts and Local governments who make things so complex and costly, that the citizen effort is futile.

    If global warming is such a threat, then governments, corporations and every body must deal with the issue as such was a true war of survival. This would mean:

    1. Major infusion of R&D and manufacture of alternative solutions.
    2. Banning of sale for all vehicles that produce more than x amount of pollution.
    3. Solutions for commercial transport;
    4. Tax reduction or subsidy for the purchase/installation of friendly technologies.
    5. vision, action, determination.

    The plans put forward by the NDP, the Liberals both Federal/Provincial, and most of the other political entities quite frankly are useless, ill thought out and largely will not work. Increasing taxes at any level just does not solve the problem especially when affordable alternatives are not available. Taxation will not work anyway as the well to do could care less, and the middle/poor are hammered into the ground.

    The Liberal plan is awful, the NDP plan is no different and awful. The Suzuki plan would put us into the cave man days, and the Green plan just plumb does not make sense.

    What we need is the establishment of a 'War Cabinet' dedicated to this subject.

    Unfortunately such will not happen and anything we do will not really matter, given the International confusion on this entire subject.

    So, some British Columbians will freeze this winter, more will go hungry, some will die, while our collective politicians at all levels do jaw boning thus nothing to solve the issue.

  • Budd Campbell

    3 years ago

    EVERYONE'S AGREED, ... EXCELLENT!

    That's not a critique of the model, he stresses. Horne, a former student of Jaccard's who helped write a Pembina Institute analysis of government emissions policies, said he agrees with the 73 per cent figure --as long as the real-world policies live up to the numbers that went into the model.

    The article also quotes Ian Bruce of the David Suzuki Foundation. I thought Bruce was another SFU REM grad, but maybe I am wrong about that???

  • PeteL

    3 years ago

    Suzuki Brand

    I guess I'm old and miserable now. I haven't got a dime or the the time for the Suzuki Foundation anymore.

    Nope as far as I am concerned they and groups like the WWF and Sierra Club have all sold out lock stock and barrel to the right wing.

    They get more financial bang for their bucks in the corporate boardroom than on my front porch.

    We know who your friends are. Leave me out of your plans. They have little to do with the environment and more to do with institutional survival.

    Remember why folks like Bob Hunter left Greenpeace when it went all corporate.

    David Suzuki we will be CBCing less of you on TV. And thats no CBS!

  • DPL

    3 years ago

    When the MLA's stop using

    When the MLA's stop using the helicopters to get from Victoria to the mainland, I'll start to think maybe Gordo has a idea. last cabinet Minister I ever saw on what used to be our ferries was aguy named andrew Petter. wonder how many footprints are being made as assorted Liberals cruise around the province trying to sell this latest vision of Gordo. And of course talk aboot the need for offshore oil and a port on Texada for natural gas tankers. Can't
    have ot both ways folks. Csts are rising as the price of fule gets higher and to add salt to the wounds, Gordo dreams up a new tax. Reveune neutral? Sure Gordo

  • David Lewis

    3 years ago

    Does it matter if Campbell hits his target?

    All this discussion of how Campbell can hit his target assumes that the target is credible. James Hansen's testimony to Congress on June 23 says he finds it "stunning" that he has had to revise his own ideas of what a reasonable target is. All the targets, Hansen says, like the talk in the EU about limiting global warming to 2 degrees, or the widely promoted target of 450 ppm CO2, are variations on a "recipe for global disaster". So can someone tell me what the point of debating the fine points of a strategy aimed at implementing a "recipe for global disaster" is?

  • ME2

    3 years ago

    We're only spinning our wheels now.

    I have yet to read anywhere an opinion, much less an unquestionable projection, that any current plans to reduce carbon emissions will result in a meaningful diminution of CO2 releases, let alone any reduction of present volumes in the atmosphere.

    Furthermore, none of the current plans will wean us off our addiction to oil and coal. This latter is because cheap energy lies at the base of our standard of living as well as facilitating the same standards developing nations are shooting for.

    I would further suggest that the appearance of our "doing something" about CO2 loading takes the heat off hydrocarbon producers and their products, since this shifts the focus away from the real pollution and on to the all too convenient CO2 decoy.

    IMO, we would be far better off to shut down our current efforts - which will yield very little if any improvement in CO2 loading anyway, and instead direct all our efforts toward getting alternative energy systems in place.

    If you think about it, it becomes obvious that this is the very last thing the oilcos want to see, and you can bet your boots they are doing all they can to deter such initiatives.

    So what if developing new energy sources will take 10 - 20 years to effect? When it is accomplished, the results will be dramatic, and we will have achieved what all of this is REALLY all about anyway, the eliminatio of our burning of hydrocarbons, which have many other even more serious pollution effects than CO2 loading. Who will give a damn of it's too hot when breathing the air makes us sick?

  • David Lewis

    3 years ago

    Models only project what you know

    One thing computer models can't tell you is what the political climate will be. If more people wake up to how serious the climate problem is, at some point the assumptions incorporated into the models about what people will demand and what they will do will change.

    What's happening on Greenland isn't what the models predicted.

    I hope Jaccard's model is equally wrong.

    People might wake up and decide they want civilization to survive. I like to dream that Campbell's carbon tax was running into political trouble because it underestimated how much people wanted to take this issue on.

  • North of Hope

    3 years ago

    Conversation on a plane

    Gorden Campbell was seated next to a little girl on the airplane when he turned to her and said, 'Let's talk. I've heard that flights go quicker if you strike up a conversation with your fellow passenger.'

    The little girl, who had just opened her book, closed it slowly and said to Campbell, 'What would you like to talk about?'

    'Oh, I don't know,' said Campbell. 'How about the environment?' and he smiles.

    'OK, she said. 'That could be an interesting topic. But let me ask you a question first. A horse, a cow, and a deer all eat the same stuff - grass. Yet a deer excretes little pellets, while a cow turns out a flat patty, and a horse produces clumps of dried grass. Why do you suppose that is?'

    Campbell, visibly surprised by the little girl's intelligence, thinks about it and says, 'Hmmmm, I have no idea.'

    To which the little girl replies, 'Do you really feel qualified to discuss the environment when you don't know s**t?'

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