Who (and what) is the Ecofiscal Commission? Part II

A closer look at one of the commissioners’ claims

As noted in “Part One” of this series, the Ecofiscal Commission’s Chair, Chris Ragan, was interviewed on the Agenda by Steve Paikin in respect to the push for a carbon tax. The program title was “Losing Ground on Carbon Pricing” which, according to Ragan, shouldn’t happen, so he sprinkled his parsimonious answers with selected information that omitted facts.

The following highlights a few questions posed and Ragan’s answers. Please note for brevity’s sake I have only included the main thrust of the question and the pertinent part of the response.

  1. Are you losing ground in the battle for public opinion?
  2. I think on one side of the debate there is not very good information, maybe even misinformation in some cases. I think the other side really doesn’t want to debate or explain.

It appears Commissioner Ragan is satisfied the science is settled despite some “good information” from the “other side” such as, “There are several claims that large numbers of scientists do not agree with the theory of climate change, the best known of which is a petition organized by the Oregon Institute of Science and Medicine (the OISM petition). This petition now appears to be signed by over 32,000 people with a BSc or higher qualification.” Is it Mr. Ragan who suffers from “misinformation”?

  1. Is carbon pricing really a necessary tool to fight climate change?
  2. A. I would argue carbon pricing does work. I think the evidence, whether its from British Columbia or the UK or other countries that have introduced these, including, and the State of California, carbon pricing does reduce emissions.

Let’s examine Mr. Ragan’s claims:

British Columbia:                                                                                                                                                       Mr. Ragan’s arguments in respect to British Columbia are a big stretch.

B.C.’s Carbon Footprint Grows as a very recent article suggests: “The carbon footprint of British Columbia is growing and has been growing for the last eight years despite a strong environmentalist lobby, the latest provincial government data suggests.” The article goes on to state: “British Columbia had a target of cutting carbon emissions by 33 percent from 2007 levels to 2020. However, the new figures reveal the province has only succeeded in cutting emissions by 2.2 percent from 2007 levels, which means the 2020 target will be pretty much unattainable unless a radical change in driving habits takes place.” Transportation is a major emitter in BC and a recent announcement by the NDP/Green government recently stated: “By 2040, all new light-duty car and truck sales in British Columbia will be zero-emission vehicles (ZEV).” B.C. has the highest per capita rate of EV in the county with 12,000 registered, representing a penetration rate of less than 1/2 % according to Statcan.

California:                                                                                                                                                                     The foregoing is not much different if one looks at the State of California where an article from six months ago suggested: “Emissions from cars and other light-duty vehicles in 2016 hovered near the 2008 level of 118 million metric tons of carbon dioxide or its equivalent. Truck emissions continued to decline at a rate insufficient to make up for the added tailpipe pollution.”

If one goes further and examines other events in California one notes from an article in the SF Chronicle: “solar electricity generation, both from rooftop arrays and large power plants, grew 33 percent in 2016, according to the air board. Imports of hydroelectric power jumped 39 percent as rains returned to the West following years of drought.” So, importing hydro power allows California to claim they are reducing emissions while transportation emissions have remained at or near 2008 levels. In California’s case if one also looks at electricity prices it is interesting to compare electricity prices and note: San Francisco residential electricity prices were 27.95 cents/kwh versus 7.13 cents/kwh in Quebec.

Another important fact; California imports about a quarter of its electricity on average and much of that is emissions-free hydro. This is not information Economist/Commissioner Ragan brandishes as it flies in the face of his claims. The Chronicle article notes: “And while California has aggressively supported electric cars, only about 200,000 are registered in the state. “We have not made progress on transportation,” Borenstein said. “We’ve made negative progress.” In contrast, efforts to slash emissions from power plants have been far more successful, and are running well ahead of schedule.” As of December 31, 2017 there were 25,467,663 automobiles registered in California so EV represented less than 1% of all automobiles registered in the state.

UK:                                                                                                                                                                                          If one quickly glances at the UK statistics on emission reduction it appears they have been successful at leading the way amongst most European countries.  On closer examination however much of their achievements can be attributed to either reducing coal generation, adding gas plants or converting some coal plants to biomass. The Drax Power Station is one large example of the latter.  “Drax Power Station is the biggest renewable generator in the UK and the largest decarbonization project in Europe.” “It has a capacity of 3,906 megawatts (MW) and produces around 20 terawatt-hours (TWh) of power a year, 65% or more using compressed wood pellets, a form of sustainably sourced biomass. The remainder is produced using coal, a fossil fuel being phased out by 2025.” And “Drax Power Station supplies 6% of the country’s electricity needs, including 11% of its renewable power. Four of its six power generation units have been upgraded from burning coal to use biomass.” An article from 2014 by the writer examined the conversion process to biomass and the eventual consumption of wood pellets (7 million tons annually) produced in the southern US and elsewhere and shipped to a port in the UK for destination to the DRAX Power Station. The energy created will generate emissions 150% of a coal plant and 300% of a gas plant but are classified as “renewable” energy. That means each megawatt hour created will generate a “carbon credit” to be sold via the ETS (European Emission Trading Scheme). It’s a “double whammy” counted towards reducing emissions.

The electricity generating sector has been a driver in reducing UK emissions. In a report for 2017 year-end from the UK government they note: “Reductions in carbon dioxide emissions in the energy supply sector down 7.6 per cent (8.7 MtCO2e) driven by a decrease in power station emissions. The main reason for this fall is the switch in the fuel mix for electricity generation from coal and gas to renewables.“

It appears the “evidence” offered by Mr. Ragan is not factually related to carbon pricing — unless he views the UK’s biomass generation as representing an event caused by “carbon pricing” and not from “carbon credits” for a plant now generating 50% more emissions than when operating as a coal plant!

 

  1. If you’re are taking with this hand and giving back with this hand and it’s a wash, why would I change my behaviour?
  2. Because it’s not a wash at the end of the day in terms of what you do. It’s a wash in terms of your purchasing power. The whole logic is to maintain your purchasing power but because gasoline and other carbon-intensive things are now more expensive you do things differently. [Ragan goes on to say] It’s their choice and that flexibility is the key for why carbon price is the lowest cost way.

What economist/commissioner Ragan doesn’t say is the obvious. Ragan suggests the plan should be to return all of the “carbon tax” so we can change our purchasing habits. The plan announced by the federal government suggests 80% of households will receive rebates in excess of their cost.  The question becomes: will they use the slight excess to trade in their automobile for an EV or change their gas furnace to one consuming wood pellets?  Unlikely on both counts, as the excess received, as an example, in Ontario in 2022 when the carbon tax is $50/tonne the excess per household will be $133.00 for the full year.  Most of that excess will be paid back to the government via the sales taxes applied to both the gasoline we use for our cars and the natural gas we use to heat our homes*.  Households will see the cost of all consumption rise as food, services, toiletries, etc. etc. will increase based on carbon taxes charged to the raw material/assemblers/transporters of those products/services.   By 2022, when the $50/tonne is in place the cost to Ontario’s households and businesses will be in excess of $8 billion based on 2016 provincial emissions of 161 MT but the amount returned to households will be about half that amount.

  1. What about subsidizing fossil fuels, what we do to the tune of $1 billion per year?
  2. We as a country do not have explicit fossil fuel subsidies.

Finally, Ragan provides one honest answer!

PARKER GALLANT

Coming tomorrow: Part 3 will look at the influence the Ecofiscal Commission had in the creation of the Carbon Tax.

*Over 6 million Canadian (43%) households heat their homes with natural gas.

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