BC won a COP26 climate award—for doling out yet more fossil fuel handouts
AMONG THE BIGGEST SURPRISES at the November 2021 meeting of COP 26 in Glasgow was BC’s award for its handling of the climate crisis. Coming just months following Premier John Horgan’s deny-everything approach to the June heat dome disaster and only days after his government revealed provincial emissions continue to grow, a climate award to the province comes across as something from Alice in Wonderland.
The carbon leakage problem
The award was for the “most creative climate solution” and for going “above and beyond” to implement change, to use the words from the award’s organizer.
To be sure, the Clean BC Program for Industry (CPI)—the winning program—is a smart, sophisticated way of dealing with a nagging problem in a world where trade is relatively free. If a jurisdiction such as BC institutes a carbon pricing system, many of our industries will be competing with those in countries with a lower carbon price, or even no price at all. Consequently, our industries will suffer for the misfortune of operating here. This means that BC’s early leadership in taxing carbon could inadvertently help producers in those other jurisdictions, at the expense of our own.
Worse still, it could mean that global emissions end up higher than they would without our policies. This is known as the problem of carbon leakage, and CPI is aimed at mitigating the problem. However, there is an unfortunate consequence of the way CPI has been implemented.
Rewarding fossil fuel companies
The BC government was quick to broadcast the achievement. “It’s an honour to receive the award recognizing the success of this program is (sic) about strong collaboration supporting innovation,” Environment and Climate Change Strategy Minister George Heyman beamed in a November 7 statement. “The award is another indication that we are on the right path through the new Clean BC Roadmap to 2030.”
Not exactly. For one thing, the Clean BC Program for Industry—meant to encourage investment in reducing emissions—hands out public funds to fossil fuel firms, as well as to other industries. In the first two years of the program, fossil companies ConocoPhillips, Canadian Natural Resources, Fortis BC, Petronas and Shell were among those picking up a little pocket change under one part of CPI, called the Clean BC Industry Fund. In 2019 and 2020, the fund shovelled a total of $43 million out the door.
Petronas and Shell, of course, are already recipients of government largesse as members of the foreign consortium comprising LNG Canada, now under construction in Kitimat. (On January 20, 2022, LNG Canada CEO Peter Zebedee claimed the project was more than half-built.) It is helped along by federal and BC government taxpayers, in the form of cancelled taxes, reduced hydro rates, tax credits and related considerations totalling approximately $7.275 billion.
And there is still more for LNG Canada in the offing, since it qualifies for rebates under part of CPI. A November 7, 2019 cabinet order brought liquefied natural gas (LNG) into the Clean BC Industrial Incentive Program. It ensures that LNG producers will likely never pay more than $30 per tonne in carbon tax: qualifying projects, like LNG Canada, will benefit for as long as they are operating. Or till the end of the planet, whichever comes first.
Shell CEO Ben van Beurden
Petronas is wholly owned by the Malaysian Government, meaning that BC taxpayers are essentially sending money to a foreign power under the guise of fighting global overheating. And Shell hardly needs any handouts, having brought in revenue exceeding $60 billion US in the third quarter of 2021 alone. Shell CEO Ben van Beurden was paid $6.9 million US in 2020, despite a collapse in profits that the company blamed on COVID-19. As for its attitude towards the environment, Shell recently fought South African environmental, indigenous and fisheries groups for the right to conduct seismic surveys in the breeding grounds of southern right whales and humpbacks. (On December 28, 2021 a South African high court ordered a temporary halt to Shell’s plans.)
Wholesale change needed
Even the government’s Climate Solutions Council advised against letting LNG double-dip. An industry like LNG already receiving targeted taxation and/or policy relief “should not be eligible” for additional money through the incentive program, the council told Heyman in a January 13, 2021 letter, which was signed by council co-chairs, Merran Smith of Clean Energy Canada and Colleen Giroux-Schmidt of Hydro-Quebec subsidiary Innergex.
The 2019 cabinet order infuriated BC Green Party leader Sonia Furstenau. In a Focus interview soon afterwards, she called the order an abuse of the industrial incentive program. “It was never intended to provide incentives to new fossil fuel industries,” she said. “It’s Orwellian to apply it in this way.”
BC Green Party leader and MLA, Sonia Furstenau
Following the November 2021 award, Furstenau had more to say: “We have a government that talks about climate change but has made several decisions over the course of two terms now to exacerbate it,” she said in an email to Focus. “We need wholesale change in forestry practices, in energy production and we need to recognize that subsidizing the oil and gas industry can in no way be seen as climate leadership in 2021. This award is an indication to me that the judges are willing to reward incrementalism when what we need is transformation.”
One quick way of fixing this: Repeal the 2019 cabinet order granting LNG access to the program.
Don’t hold your breath.
The award givers
The Under2 Coalition is a group of cities, provinces and other sub-national jurisdictions, with the stated goal of keeping the global temperature rise to “well below 2 degrees C.” Before anyone gets too excited about this award—chosen by a six-person panel—it did have one slight catch: Only coalition members were eligible to apply. And the Canadian competition was hardly fierce. There are just four Canadian members. One is BC, which filed its two-page application September 9, 2021.
One other point about BC’s application for the Under2 Coalition award. “BC has had a broad-based carbon tax in place since 2008 when it was $10 [per tonne] with regular increases up to $30…in 2012,” the application proudly proclaims. What the application didn’t bother to mention is that it was Gordon Campbell’s Liberal government which introduced the carbon tax. And in the next election, in 2009, the NDP actively campaigned against it, with the slogan, “Axe the Tax.” That is arguably one of the more shamelessly populist planks ever to grace a political platform. In any event, the campaign failed; the election resulted in a third consecutive majority for the Liberals. New Democrats have apparently since seen the light. The tax, now at $45, is due to rise to $50 on April 1, 2022, and to $170 in 2030, under a federal government mandate.
A second climate award
November 2021 was an active time for climate awards. Also in that month, Efficiency Canada handed BC the top score for energy efficiency. Minster Heyman, in a November 18 statement celebrating the honour, said: “Our government understands that by focusing on energy efficiency, we can improve our homes and workplaces, reduce climate pollution and save money for people and businesses along the way....” And so on. Or, as Greta Thunberg would say: Blah, blah blah.
I wouldn’t get too carried away by this apparent success story. For while BC did score the most points in a total of five categories, it led the other provinces in just two of them, buildings and enabling policies.
Not only that, the score card included spending by two utilities, BC Hydro and Fortis BC. Including BC Hydro in the province’s scorecard makes sense: It is a Crown corporation, owned and controlled by the BC government. But Fortis BC? It’s a private company, not a Crown corporation. Its parent company, Fortis Inc., trades on the Toronto and New York stock exchanges. Yet its spending on energy efficiency is included in BC’s energy efficiency spending category. In fact, of the $130.9 million in the province’s purported 2020 energy efficiency spending, 51.6 percent came from Fortis. (BC Hydro’s contribution was 40.9 percent of the total, leaving a paltry 7.5 percent by the energy ministry.)
Fortis BC rates one other mention on Efficiency Canada’s website: It is one of the organization's top two donors, called “Game Changers.” The other is Calgary-based pipeline giant Enbridge—which prefers to call itself an “energy delivery company.” And guess what? Enbridge shows up in the energy efficiency scorecard for Ontario, via its subsidiary Enbridge Gas, the utility which distributes more natural gas than any other in North America.
How convenient. Both members of Efficiency Canada’s largest donor category just happen to make it into the respective provincial energy efficiency listings. In Quebec, 7.0 percent of that province’s energy efficiency spending was from Energir, a private company not listed as a donor. And for Newfoundland and Labrador, nearly two-thirds of the efficiency spending was listed under “Utilities,” without further detail.
As donors, Enbridge and Fortis BC are entitled to a series of other benefits, not available to outsiders. For instance: training in government relations, receiving embargoed copies of reports before their public release, and the right to call on Efficiency Canada's senior staff to “create a customized experience” for their teams or clients.
Like any other company, Enbridge and Fortis have one goal above all others: To make money. One has to wonder about their motivation in turning over some of their shareholders’ precious funds to Efficiency Canada. A little greenwashing, perhaps?
I am not suggesting that donations from the two fossil fuel companies in any way influenced Efficiency Canada’s decision to include their spending on efficiency under provincial totals. But their inclusion doesn’t pass the smell test. It stinks.
A footnote: The BC government gave Fortis BC $1.07 million in 2020 under the Clean BC Industry Fund. The size of Fortis BC’s Efficiency Canada donations is unknown. Fortis BC did not respond to a Focus request for comment by the time of publication. Efficiency Canada did not respond to a Focus emailed request for comment by the time of publication.
The accelerating climate emergency
During BC’s present relative calm between catastrophic floods and heat domes, one can be forgiven for forgetting about the seriousness of our present situation. A report by the United Nations Intergovernmental Panel on Climate Change (IPCC), due to be published in February, 2022, provides a stark reminder. Agence France-Presse obtained a draft copy of the report in June 2021. Even if we reduce GHG emissions, life will be very different in the next few decades, says the report. These consequences, the result of unrestricted carbon pollution, are unavoidable in the short term, it says. While the 2015 Paris Agreement aimed at keeping warming (beyond pre-industrial levels) well below 2 degrees Celsius—and preferably below 1.5 degrees—current trends indicate we will hit 3 degrees, and we will reach it long before the year 2100 previously predicted. Even 2 degrees would result in passing more point-of-no-return tipping points, leading to irreversible overheating. The melting of ice sheets in Greenland and the West Antarctic will raise the world’s oceans 13 meters, more than enough to flood Premier John Horgan’s office in the West Annex of the legislature. “The worst is yet to come,” the report says, “affecting our children’s and grandchildren’s lives much more than our own.”
Canada’s oil and gas production is projected to continue growing through 2040. EJ/yr is exajoules per year. (1 EJ = 1 x 1018 joules.) Mb/yr is million barrels per year. Bcm/yr is billion cubic meters per year. (The Production Gap, (2021), UN Environment Program)
Given this, what are BC and Canada doing subsidizing and promoting fossil fuels? Well, from 1990 to 2019, Canada’s emissions grew by 21 percent—more than any other G7 country. And there appears to be little prospect of an improvement. The United Nations Environment Program’s The Production Gap (2021) projects that both oil and gas production in Canada will continue to grow through 2040.
In the same 29-year period, BC’s emissions jumped 22 percent. When Clean BC was released in December 2018, the province’s emissions gap—between policies and the 2030 target—was 25 percent. But the 2021 Climate Accountability Report demonstrates that the gap is now between 32 percent and 48 percent. Hardly a sign of progress.
Isolate the fossil fuel industry
In light of the seriousness of the situation, one has to wonder how the fossil fuel industry has managed to so thoroughly permeate government climate advisory groups, news media outlets and quasi-academic non-profits. For instance, as well as the industry’s involvement with Efficiency Canada, the government’s own Climate Solutions Council includes a vice president of would-be tarsands developer Teck Resources, as well as a manager of policy and advocacy of LNG Canada principal partner Shell Canada. Moe Sihota is a former NDP cabinet minister, whose company Parhar Investments and Consulting is a successful developer. But Sihota is also a lobbyist, pushing Woodfibre LNG; in 2021, he lobbied various government officials 18 times, most recently in November 2021. So what is he doing on CBC Radio’s regular Vancouver Monday morning political panel, where he comments on Clean BC and other political issues?
On this topic, Greenpeace USA senior climate campaigner John Noel had this to say, as quoted in a December 2021 Mother Jones article.
“We need to have a political, financial and cultural full-court press to isolate the fossil fuel industry in all corners of life,” said Noel. “In policy circles they should not be allowed at the table. They should not be allowed to advertise. They shouldn’t be invited to any serious meeting.”
Russ Francis wonders why the fossil fuel companies—that have done so much to bring the planet dangerously close to unlivabililty—cannot clean up their own mess? Since the publication of the article, the government has announced an additional $70 million in handouts for 2021, under the Clean BC Industry Fund. The aim of the funding is commendable: To reduce GHG emissions. But as in 2019 and 2020, fossil fuel companies did well last year from the fund. Companies winning BC’s GHG lottery in 2021 include: Arc Resources, Canadian Natural Resources, ConocoPhillips, Crew Energy, NorthRiver Midstream, Petronas, Storm Resources (recently bought by Canadian Natural Resources), and Tourmaline Oil. Under the program, taxpayers have now donated $113 million to these worthies, along with those in other industries.