Monday, 6 February 2017

CLIMATE LEADERSHIP OR WEALTH REDISTRIBUTION?

Written by: Tim de Freitas PHD, Bob Quartero PGEO, MSC
Published: Oilfield Pulse Volume 5, Issue: 1 - 2017



ALBERTA NDP'S NEW CARBON EMISSIONS POLICY

       The Alberta government sponsored commercials proclaiming a "new future" aim to incentivize us to reduce carbon dioxide (CO2) and methane gas emissions from fossil fuels (oil, natural gas, and coal). The upshot is a proposed new tax.
       According to recent studies, we now spend less on food, shelter, and clothing combined than we do on taxes. Despite the NDP's claim there is broad public support for the "new future" tax, a recent Yale University study found the NDP has only 28% support for this plan.
       The tax makes us less competitive; moreover, it will be ineffective at changing atmospheric CO2 concentration, since growth of emissions from other nations will overwhelm our savings. Consider that Canada's CO2 emissions from fossil fuel use amounts to 1.7% of the global total and 3-6% of total natural and manmade global emissions. To put it another way, an extremely costly 10% reduction of CO2 emissions in Canada (the price tag is measured in billions of dollars in Ontario alone, even before the intended new cap and trade program) would amount to a miniscule 0.005% - 0.01% reduction in global CO2 emissions.
       Closer to home, we have seen Ontario's attempt to phase-down fossil fuel energy use. The province has unintentionally popularized a new term "energy poverty," when greater than 10% of family income is used on energy. Unfortunately for many Ontarians, the 10% level has been surpassed, as our PM discovered at a recent press conference in Peterborough, Ontario.
       Studies have shown Ontario has the most expensive electricity in North America, which is a result of subsidized, expensive wind power they don't require. Ontario's Auditor General estimates that from 2006 to 2014, consumers had already paid $37 billion in global adjustment (GA) fees and are expected to pay an additional $133 billion in GA fees between 2015 and 2032. Predictions boasting reduced smog in Ontario would save $4.4 billion in health costs are simply untrue. More recently, pollution data indicates projected air quality improvements due to coal plant closure could have been achieved through much more economical pollution control enhancements to existing plants.
       As for job creation, the government promised hundreds of thousands of new jobs. It now only provides 42,000 positions, and most of these appear to be mostly short-term subsidized jobs for workers installing wind turbines and/or solar panels. France, Germany, Spain, Australia, and the UK have also experienced rapidly increasing energy costs due to subsidized clean energy, but they have made little or no gains on reducing CO2 emissions.
       It is clear now in our haste to reduce fossil fuel dependence, some of the wealthiest nations on the globe have incurred massive economic costs. Developed nations under the Paris Agreement intend to give half a trillion dollars between 2020 and 2025 to developing nations to deal with the impacts of putative human-caused climate change. Nothing is earmarked to address the basic needs of some developing nations. For example, there are approximately 1.6 billion people without access to electricity and 2.7 billion people without clean cooking facilities. In Liberia, just 2% of the population has access to electricity. About 3.5 million people, mainly women and children, die each year from respiratory illness due to harmful indoor air pollution from wood and biomass cook stoves. When power is available in these developing countries, it tends to be expensive due t o economies of scale. It would be cold-hearted to impose expensive green energy policies on these countries. Access to energy is fundamental in the struggle against poverty.
       The problem with policies, such as those directed by our NDP, is they sidestep market forces. Uneconomic mandates are forced down the throats of rate payers and energy providers. Government subsidies are an ugly requirement, and some nations bare economic scars from such policies. In some cases, despite attempts to reverse fossil fuel use and spending many trillions of dollars, CO2 continues to climb.
       In Alberta, the climate leadership policy is very unpopular for economic reasons. Perhaps, this is because it is viewed as an extra tax and a destroyer of jobs. But, there are other reasons for the unsupportive view, in particular the scientific basis for such a policy.
       Most people could agree the Earth is warming.
It has been doing so naturally since the start of the Little Ice Age about 1600 A.D. So, the climate change debate is about what has caused temperatures to fluctuate (mostly warm, with minor cooling) during the last 80 years.
      According to the Intergovernmental Panel on Climate Change (IPCC), there is some scientific agreement that most of the Earth's recent warming is manmade, and we need to act now. Proponents claim if we don't reduce our CO2 emissions, sea level will rise, glaciers will melt, and we will have severe weather events that will be disastrous for humans. It is not hard to find doom and gloom when it comes to discussions about climate change, particularly in the mass media.
      Extreme weather events are often the first in a long narrative on why we should reduce CO2. The problem is the number of extreme weather events has not been on the rise of late. The number of dangerous Atlantic hurricanes has not increased, and some argue they may have decreased.
     Tornadoes of the conterminous USA have said to be on the rise, but this has been disclaimed and attributed to observational bias. Sea level has said to be inundating some coastal areas. Proponents point to Pacific atolls as most vulnerable, but all atolls, by nature, are vestiges of sea level rise and subsiding oceanic features created largely by thermal anomalies that cool and subside once inactive. There are many scientific papers that show seal level rise generally has not accelerated in recent times.
      Canada and a large number of nations have set a global warming threshold of 1.5C Canada has pledged to cut its emissions by 30 percent from 2005 levels by 2030. Our NDP government certainly had this in mind when they devised their climate leadership program.
      The 1.5 C degree goal is arbitrary. If past climate variability can impact average global temperatures beyond 10 C, natural variability can certainly overshadow anything we presume is manmade. What part of the target is manmade and what is natural?
       As has been demonstrated elsewhere, green policies are most often economically damaging and do not produce the intended results. It burdens hard working people. Furthermore, encouraging similar climate leadership policies upon impoverished countries would be inhumane and economically devastating.
       It appears the role of the Alberta NDP carbon tax is to redistribute the collected tax then handout rebates to the people who couldn't afford the tax in the first place. It amounts to wealth redistribution.
       No matter what way you look at it, the NDP's climate leadership policy will be expensive and have no impact on global climate. It is nothing short of a punitive fee. The added revenue will likely be wasted on additional government programs and regulations we simply do not need, particularly during the current economic downturn.