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Are we spending enough on climate?

Shift Storm newsletter—March 2024 edition

April 24, 2024

9-minute read

The following is a re-print of the March 2024 edition of Shift Storm, the CCPA's monthly newsletter which focuses on the intersection of work and climate change. Click here to subscribe to Shift Storm and get the latest updates straight to your inbox as soon as they come out.


The federal government spent almost $16 billion on climate action in the past year—about 0.5 per cent of GDP—and it is on track to spend $22 billion per year by 2028. Is that enough?

There are different ways to break it down (how much responsibility does the private sector have? what about the provinces?) but the short answer is no. Decarbonizing the Canadian economy by 2050 will require as much as $140 billion per year in climate spending and the longer we wait to make necessary investments, the more costly the transition will be in the long run.

These numbers come from a new brief I put together with the good folks at Climate Action Network – Réseau action climat (CAN-Rac). We find that the federal government, despite having a clear sense of the problem, is chronically underinvesting in climate solutions and is counting, instead, on the private sector to come up with the money—even though there is little evidence the market is interested in meaningful decarbonization.

One solution we recommend in the paper is the extension of the windfall profits tax, which currently applies only to financial firms, to the oil and gas industry. In 2022 alone, the sector made $63 billion in profits and even a modest 15 per cent tax on net revenues above $1 billion would free up $4.2 billion for new climate action. If we followed the UK’s lead, with its 35 per cent levy on oil industry profits, we could raise significantly more.

A windfall tax won’t solve all our problems, but it’s a simple and practical step the federal government could take in its forthcoming budget. It also happens to be politically popular, with majority support across most of the country. Making polluters pay and reinvesting that money into more sustainable communities is a win-win policy.

There are other steps the government can, and should, take in next month’s budget, as we’ll see below. We’ve got a ton of new research to get through this month, so let’s dive right into it.

Storm surge: this month’s key reads

Canada needs a major transit rethink to improve liveability and hit climate goals

A new report from Environmental Defence and Équiterre, Putting Wheels on the Bus, is a clarion call for rethinking the role of public transit in our society.

We face a number of converging challenges on the transportation front, including the need to reduce emissions from private passenger vehicles while increasing transportation options in our increasingly dense cities. Public transit is an obvious solution. Buses and trains are far more efficient, both environmentally and economically, than cars. Yet transit service has actually declined in Canada over the past decade. Incredibly, in this moment of need, there are more than 1,700 buses sitting idle across the country instead of serving communities.

A core issue, as report authors Nate Wallace and Anne-Catherine Pilon point out, is that governments love to invest in capital projects but offer little to no support for operations. Politicians would much rather cut the ribbon on a bus station than pay to hire bus drivers. Transit systems must increase fees or cut services to compensate, which drives down ridership and, thus, fees must be raised further. Many urban regions across the country are stuck in this downward spiral of declining service and ridership. Ottawa, where I live, is an unfortunate poster child for this trend.

It doesn’t help that higher levels of government appear disinterested in shifting people out of their cars. The feds and most of the provinces have no targets for transit use or strategies for increasing ridership. We seem content for public transit to be a mediocre secondary option, rather than a desirable universal service.

Putting Wheels on the Bus has solutions for all of these problems, and it starts with steady operational funding. Make transit cheaper and more convenient and people will use it more. The report recommends tying housing development to transit infrastructure, so that we don’t lock in more car dependency down the road. The authors also argue for making it an explicit goal to reduce kilometres driven and increase transit use. Without a clear and coherent vision at all levels of government, we will never unlock the true potential of public transit systems.

Newfoundland and Labrador releases industrial policy framework

Newfoundland and Labrador is the second province (after British Columbia, which we discussed back in July) to publish a collaborative framework for building a low-carbon economy. It is the outcome of the province’s regional energy and resource table, which was convened by the federal government back in 2022 to bring various stakeholders together to chart out an economic path forward for every region in Canada.

The B.C. framework was a mixed bag that included both positives, such as strong Indigenous leadership, and negatives, such as pathways for perpetuating fossil fuel production. The N&L version has its ups and downs, too. Critical minerals, wind power and electrification are strong opportunity areas for the province, which has the potential to be a renewable energy powerhouse, but the framework’s emphasis on hydrogen and carbon capture are both worth flagging.

The province is entertaining the use of clean hydro and wind energy to produce green hydrogen for export. That’s a direction I might have once supported, but I’m increasingly skeptical. Turning clean electricity into hydrogen is both costly and inefficient, even if it is low emission. By the time you’ve transported the hydrogen to its destination and converted it back into a usable form of energy—i.e., electricity—it’s lost well over 50% of the initial energy input. You know what else you could do with that initial clean electricity? Just use it as low-cost electricity.

Carbon capture is more obviously problematic. Newfoundland and Labrador produces the most oil of any province outside Alberta and Saskatchewan and there are strong political pressures to defend the industry. As in Western Canada, CCUS is being presented as a way to reduce fossil fuel emissions while continuing to produce oil for export. That’s ultimately climate-defeating and shouldn’t be on the table.

The framework concludes with a brief discussion of opportunities for sustainable jobs in the province. There is good language here, but we’ll need to wait for a promised labour market plan to get a sense of the numbers.

Research radar: the latest developments in work and climate

New report creates space for Indigenous climate leadership. A first-of-its-kind report led by First Nations, Inuit and Métis researchers and published by Natural Resources Canada, For Our Future, provides an essential overview of the opportunities for greater Indigenous leadership in Canadian climate action. There are many important messages here, but a key through-line is the need for Indigenous communities to conduct their own research and develop their own climate solutions moving forward.

Most fossil fuels—and all of the oil sands—must stay in the ground… A new analysis published in the journal Nature Communications, “The atlas of unburnable oil for supply-side climate policies,” finds that 81% of conventional oil resources can never be burned if the world is to meet its climate targets. A surprisingly small share of Canadian conventional oil meets the paper’s “unburnable” criteria, but our unconventional oil resources (i.e., the oil sands) are so emissions intensive that they weren’t even worth studying and should unequivocally “remain unburned.”

…but Canada keeps pouring money into them. Environmental Defence published its latest estimates for federal fossil fuel subsidies. The damage? At least $18.6 billion in 2023. That’s way too much money dedicated to perpetuating an industry that we should be moving away from.

LNG is a dead end for B.C. A new report from Clean Energy Canada, An Uncertain Future, lays out pretty clearly why building new liquified natural gas facilities in British Columbia doesn’t make sense from an economic or climate perspective. The enormous amount of investment and electricity those projects require would be better allocated to green infrastructure.

Alexandria Ocasio-Cortez and Bernie Sanders present US$234 billion climate and housing plan. The Green New Deal for Public Housing Act is a radical and ambitious piece of legislation that would, its backers claim, help house 2 million people, cut 5.7 megatonnes of emissions per year and create 280,000 unionized jobs in the process. Whether or not it passes, this is the kind of ambitious, inspiring alternative we need progressives to be offering in Canada, too.

Canadian experts present… a climate and housing plan. The independent Task Force for Housing & Climate was convened last year and recently presented its Blueprint for More and Better Housing. It’s a thoughtful and thorough report that breaks down the challenge of building 5.8 million new, low-emission homes in Canada by 2030, which the Canadian Mortgage and Housing Corporation says is necessary to restore housing affordability. The report includes recommendations for all levels of government, from enabling density to overhauling building codes, but shies away from dollar figures. It also depends much more on profit-driven, private sector leadership than the AOC-Sanders plan.

Which workers are vulnerable to the energy transition? It’s an important question—and one I’ve taken a stab at answering—but there’s no consensus view. A new paper in the journal PNAS offers a new approach using an “employment carbon footprint” model. The authors find that many U.S. workers who are vulnerable to transition by this metric do not fall under the U.S. government’s current definition of transition communities, which puts them at risk of falling through the cracks. I would love to see work at this level of granularity in the Canadian context.

Climate policies without a just transition focus will hurt the poorest. A UK-based research team has published Our journey to net zero, which reaches the troubling conclusion that the UK’s current climate policies could push a large share of households into “transition poverty.” The solution, the authors argue, is not to backtrack on climate policies, but, rather, to refocus efforts on a just transition. In addition to financial support, more meaningful participation for affected communities in policy development would lead to more place-sensitive transition plans.

Many U.S. communities are preventing their own clean energy transitions. A report from the U.S.-based Center for Progressive Reform, Communities Left Behind, finds that a quarter of U.S. counties have rules in place that block renewables development. To make matters worse, many of these counties are rural communities with both the geographic capacity for renewable energy and the economic need for new investment. The report recommends advocates and governments be proactive about addressing community concerns. Community benefit agreements and decommissioning plans, for example, can help win support for local rule changes.

Groups offer transition plans for Cleveland and Virginia. I always like highlighting efforts to work through and plan out clean energy transitions at the local level. The Atlantic Council, a think tank, has published a report exploring next steps for Cleveland, Ohio. Appalachian Voices, a community advocacy group, has published a report discussing transition options for the coalfields in the state of Virginia. Both reports offer thoughtful paths toward more sustainable and inclusive local economies. On a related note, a recent NPR report, “This is what happens when a wind farm comes to a coal town,” provides a worker-focused window into Virginia’s ongoing energy transition.

The livestock sector is a ticking climate bomb. A new paper from academics at Harvard Law School, Options for a Paris-compliant livestock sector, points out that global livestock production is on track to consume 50% of the world’s carbon budget by 2030. The report recommends countries set specific emissions targets for the livestock sector and that high-income countries, in particular, make a concerted effort to shift diets toward meat alternatives. It’s an issue that’s mostly stayed off the radar in Canada so far, but I suspect it will become increasingly salient in the coming years.

The world is using too much (new) stuff. The latest Global Resources Outlook from the UN Environment Programme, Bend the Trend, is a stark reminder that we cannot extract our way out of the climate and biodiversity crises. It is possible to improve global wellbeing while using fewer material resources, UNEP argues, but it will require more careful resource management, better recycling and changing consumption patterns. Unfortunately, as the latest Circularity Gap Report from the Circle Economy Foundation finds, the share of recycled materials in the global economy has actually declined by 21% over the past five years.

Lithium mining no panacea for Congolese communities. Your monthly reminder that mining for critical minerals—an essential input for the green transition—can lead to serious human and environmental costs comes from the Democratic Republic of the Congo. A feature in the U.S. magazine New Lines exposes how foreign corporations and governments are rushing into the Congolese community of Manono to extract lithium, with little concern for local development.

Semiconductor manufacturing driving new fossil fuel investment. The re-shoring of computer component manufacturing in the U.S. should be an opportunity to transition the sector to renewable energy, as many tech giants have promised. However, a new report from Stand.earth, Clean Clicks or Dirty Chips?, finds that several state governments are using this manufacturing boom to justify new gas power plants.

A history of European green industrial policy. History buffs may enjoy the article “Green Industrial Policy in Europe: Past, Present, and Prospects” from the Journal of Industry, Competition and Trade, which looks at how the EU arrived at its latest green industrial policy push.

A new global guide to fighting oil industry power. The Transnational Institute has published a new book, Energy, Power and Transition, with wonderful contributions from activists around the world. There’s too much here to sum up, but the variety of case studies of jurisdictions struggling against the oil industry will be useful references moving forward.

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