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Canada stumbles toward a fossil-free future

Shift Storm newsletter—July 2023 edition

September 1, 2023

10-minute read

The following is a re-print of the July 2023 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.

In fits and starts, we might just be making progress on addressing fossil fuel supply in Canada.

That’s important, because Canada’s contribution to the climate crisis is not limited to the emissions we produce domestically. We can’t claim to be doing our part on climate if the coal, oil and gas that we extract is still getting burned somewhere else.

One of my favourite more recent policy papers is Correcting Canada’s ‘one eye shut’ climate policy, by Angela Carter and Truzaar Dordi, which was published in 2021. It is a concise and incisive piece that lays bare the hypocrisy of much Canadian climate policy.

Two years later, the fundamental issues remain. Canada is still committed to producing oil and gas for export and is doubling down on fossil fuel lifelines like carbon capture and hydrogen.

And yet, as this month’s key reads illustrate, Canada is—tentatively, reluctantly—beginning to lay the groundwork for a new relationship to oil and gas production. The latest report from the Canada Energy Regulator makes clear that oil will, at best, play a declining role in the economy in the years to come. Meanwhile, the federal government is moving ahead with the much-delayed phase-out of fossil fuel subsidies and, in the coming months, a contentious cap on oil and gas sector emissions.

There is still a long way to go to get our energy policies fully in line with our climate commitments, but these developments, delayed as they may be, strike me as turning points that open the door to much more aggressive supply-side policies in the future. Let’s not miss the opportunity.

We’ve got lots more to cover this month, so let’s get into it!

Storm surge: this month’s key reads

The picture of a fossil fuel-free future is getting clearer for Canada

A series of recent government reports and policies is shedding light on the future of the oil and gas industry in Canada.

First up, the Canada Energy Regulator released its latest Canada's Energy Future report, which offers projections for energy supply and demand over the coming decades. It’s an extremely important document because the CER figures underpin a wide range of government and corporate decision-making. Notably, this is the first time the CER has modeled a net-zero economy by 2050. In that scenario, oil and gas production crater from current levels while hydrogen, biofuels and nuclear power see significant expansion. That may not be the version of a net-zero economy that we’re pushing for, but it’s a helpful reality check for defenders of indefinite fossil fuel production.

To that end, the federal government has finally published its formal definitions of “inefficient” fossil fuel subsidies—the kinds of financial support for coal, oil and gas that the government first promised to eliminate more than a decade ago. The new definitions are rife with loopholes. For example, they exclude financing through agencies like Export Development Canada and they leave room for abatement technologies like carbon capture and storage. But the definitions do preclude direct government support for new coal, oil and gas extraction, which makes Canada the first G20 country to do so.

Some parts of Canada aren’t leaving the phase-out up to either federal regulation or market forces. Back in April, Quebec became the first jurisdiction in the world to entirely ban oil and gas exploration. A new investigation from The Breach tells the fascinating story of the social movements behind the policy. It’s a lesson in the limits of technocratic political compromise and the need for a vocal, organized climate movement. Other provinces would do well to follow Quebec’s example.

The writing has been on the wall for Canada’s oil and gas sector for some time, but only very recently has the idea of a fossil fuel phase-out started to make its way into policy. While Canada’s approach may not be perfect, it reflects a growing recognition that there is no “business as usual” future for the fossil fuel industry.

So if the oil and gas industry is winding down, one way or another, what do we do with the mess that it leaves behind? The latest report from Environmental Defence’s Julia Levin, Past Due, finds that the cost of cleaning up old wells, tailing ponds and the like will be more than $123 billion. It’s a staggering sum that will be borne by the public unless regulators force the oil and gas industry to pick up the bill. To cover that liability, oil and gas companies would need to set aside at least a third of their profits moving forward.

All of these developments speak to the need for a managed transition away from fossil fuels. Allowing oil and gas projects to run rampant until they suddenly become uneconomical will be devastating for the workers and communities that depend on them while leaving behind the biggest possible mess. Regulators can’t be afraid to proactively require the oil and gas industry to make wind-down plans that account for cleanup costs and the need to transition their workers to new industries.

First federal-provincial industrial policy table publishes recommendations

In June 2022, the federal government announced it would convene “regional energy and resource tables” in each province and territory to collaboratively develop green industrial roadmaps. It’s an approach I was initially excited about. Canada absolutely needs regionally specific plans developed in partnership with a variety of stakeholders for managing the transition away from fossil fuels and toward cleaner industries. And it needs to do it while ensuring good jobs and community well-being at every stage of the process.

In practice, the regional tables have had a bumpy rollout. Some key provinces—namely, Alberta and Saskatchewan—have refused to come to the table. And workers and community groups haven’t had the opportunities for meaningful participation that they were promised. Can these tables put Canada on a path to a more inclusive and sustainable economy without the buy-in and participation of all relevant stakeholders?

We have our preliminary answer in the newly published collaborative framework developed by British Columbia’s regional table—the first province to complete the process.

First, the good. The framework was developed by federal, provincial and Indigenous leaders and it both reflects and respects the priorities of all three partners. Indigenous concerns are integrated into every aspect of the report, which will hopefully serve as a model for the other regional tables.

Now, the less good. The framework focuses specifically on six “opportunity areas,” of which only a few are truly consistent with a zero-carbon economy. On the plus side, electrification is an obvious and welcome priority. And while forestry and critical minerals are not without their challenges, we will need both to achieve our climate objectives.

However, hydrogen is a red herring promoted mainly by fossil fuel interests. “Carbon management” is apparently the latest rebranding of carbon capture, but, despite the new name, it remains a worrying distraction from carbon mitigation. And “regulatory efficiency” is a code word for deregulation, as we well know from Canada’s efforts at “regulatory cooperation” through international trade agreements.

On the whole, it’s a mixed bag. And, to make matters worse, this framework is only a first step, with a “comprehensive strategy” yet to come. The longer plans are delayed, the longer it will take to make changes on the ground. As with all things climate-related, time is not a luxury that we have.

Finally, labour and community stakeholders, as well as industry and independent experts, were not involved in developing the framework beyond a consultative role. The lack of labour leadership in the process is evident in the short shrift given to workers in the final report. A narrow focus on upskilling to meet the needs of businesses is a far cry from a people-first transition agenda.

I’m not ready to give up on the regional tables and I’ll continue to reiterate how important this process is in principle. But if this first report is any indication, we need far greater ambition and urgency from our climate and industrial planners. I’ll be paying close attention as the rest of the regional tables’ reports roll out.

UK grapples with skills shortages exacerbated by non-committal energy policy

A report from 145-year-old charity City & Guilds, titled Bright Futures, documents the growing disparity between the number of job postings in low-carbon industries (growing) versus high-carbon industries (falling) in the UK. That’s a positive trend in general, but (re)training programs aren’t keeping up and a growing share of workers are finding themselves with the wrong skills for the emerging green economy. Polling of energy workers reveals that while a majority are ultimately feeling hopeful about the transition, many are fearful and confused about how to move forward in practice.

A second report, The Skills for a Jobs Transition, by a large coalition of British businesses, labour unions and academics, identifies a wide range of issues that are fuelling the UK’s green skills gap. Many of the issues facing the UK will be familiar to Canadian readers, including an aging workforce, lack of diversity in key professions, poor recruitment and retention rates for apprentices, and inflexible qualifications. The report’s 48 recommendations cover a lot of ground, but, in general, emphasize the importance of clear industrial policy roadmaps, proactive just transition plans for workers, public investment in education and training, and efforts to attract and retain more young people in key sectors.

One of the biggest barriers to a just transition in the UK, according to both reports, is something I’ve been hammering on about here in Canada, too: a lack of clarity about future economic policy. Energy workers in the UK are afraid to invest the time and money in retraining when the government has only half-committed to an industrial transition. Why risk it?

The same problem plagues fossil fuel workers in Canada. On the one hand, they are being told to retool for a clean economy. On the other hand, they are told that Canada will be the last oil and gas producer standing. Without our governments at all levels making an unequivocal commitment to a greener future, workers and businesses cannot make rational decisions.

Research radar: the latest developments in work and climate

A bold proposal for a publicly owned energy transition. Sticking with the UK for a second, the Green Britain Foundation published Can the North West be a Green Energy Superpower?, which presents a compelling case for how England’s North West region can implement a people-focused just transition. I always like highlighting local and regional transition plans which, as I often argue, are the fundamental building blocks of successful national energy transitions. This plan for the North West is particularly valuable for its emphasis on community power. The co-op model, where infrastructure is owned by workers and communities, keeps the profits and spin-off benefits of investment in those communities while building social buy-in for necessary economic changes.

Agriculture needs a just transition, too. Last one from the UK! In Sowing Seeds, the Grantham Research Institute dives deep into a just transition of the agricultural sector. Like the energy sector, there is unlikely to be a net loss of jobs in agriculture in the coming decades, but the kinds of jobs will change as livestock farming is reduced and new emissions-reducing technologies and practices are adopted. The report’s recommendations are a little vague, but still shine a welcome spotlight on an under-discussed industry.

Europe’s coming construction boom demands aggressive recruitment. More than two million new construction workers will be needed in Europe by 2030, according to the International Trade Union Confederation’s Just Transition Centre, in its latest report, Skills and Quality Jobs in Construction. Several scenarios are considered in the study, but all of them point to the need for proactive efforts to attract new workers and to retrain current workers for new roles.

Oil and gas companies are not planning for a just transition. The World Benchmarking Alliance, which assesses the largest global corporations’ adherence to the UN Sustainable Development Goals, has published its latest Oil and Gas Benchmark Insights Report. Besides the unsurprising conclusion that none of the 2,000 companies in the study have committed to halting the exploration or expansion of fossil fuel projects—and that those companies are not investing their soaring profits in decarbonization—the report also finds that 93 per cent of oil and gas companies have no transition plans in place for workers. It is an unnecessary reminder that these companies are not putting the climate, or their workers, ahead of their profits, whatever they may say publicly.

Report highlights tensions between electric cars and auto unions. In a recent interview, researchers with the Rosa Luxemburg Foundation discussed their new report about unionization in the global electric vehicle industry. While the shift to zero-emitting vehicles is necessary, it risks coming at the expense of trade unions in the sector. The report itself is only available in German for now, but an English translation is apparently in the works.

U.S. cities are actively implementing a Green New Deal. The U.S.-based Labor Network for Sustainability has released the latest entry in its Green New Deal in the Cities series. In Los Angeles, Green New Deal-style policies were largely driven by the mayor. In Seattle, the municipal government responded to grassroots activism. In both cases, the cities have taken a holistic, coordinated approach to reducing emissions without leaving marginalized communities behind.

Asia Pacific region poised for massive green job growth. The consultancy Deloitte has published an interesting report, Work toward net zero in Asia Pacific, which lays out the challenges and opportunities for a just transition in that region. We don’t talk about east and southeast Asia very often in this context, but the region stands to create 180 million green jobs by 2050, given sufficient investment in decarbonization. Deloitte’s focus on green industrial policy and an adaptive skills pipeline is generally in line with just transition thinking elsewhere, though it downplays social dialogue and worker power.

Just transition offers a double dividend for South Africa. This month’s only academic contribution comes from researchers at the University of Pretoria in South Africa. In Just Energy Transition of South Africa in a Post-COVID Era, Heinrich R. Bohlmann et al. forecast the impacts on workers of the transition away from coal in the Mpumalanga region. As in Canada, the researchers find that South Africa’s coal economy will suffer, independent of domestic policy, as the global economy shifts away from coal. More hopeful, however, is the finding that a proactive just transition policy would not only help impacted workers, but would also ensure a healthier and more prosperous region over the long term.

IISD hiring oil and gas policy analysts. The International Institute for Sustainable Development is hiring a whole pile of people for its various energy transition programs, both in Canada and internationally, including an excellent entry-level opportunity for a recent grad.

Topics addressed in this article

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