The political economy of climate funding: the case of the atom

How well is “The Climate” represented when it comes to government spending, organized lobbies, and media coverage? Since its inception in 2006, this blog has covered the issue of carbon pricing—through cap and trade or an outright tax. I have tracked carbon pricing policy development/implementation in Canadian governments at the municipal, provincial, and federal level. Based on this, it looks like The Climate is pretty well represented.

For example:

  • British Columbia on July 1 2008 implemented a $10-per-metric-ton carbon tax.
  • Alberta has a carbon levy of $15 per ton on large emitters (ones that emit more than 100,000 tons per year).
  • Quebec has one; that province levies a tax of roughly $3.30 per ton on transportation fuel, excluding air and marine transportation.

Moreover, Ontario, my home province, is the only government in North America to have legislated coal-fired power generation—the most CO2-intensive form of power generation—out of the energy mix. The provincial coal phase-out is being “facilitated” by government-mandated feed in tariffs for “renewable” energy—wind, solar, landfill gas, etc.—that cost, and are worth, billions of dollars (see “Ontario nuclear power subsidizes gas and renewables”).

Overseas, the European Emission Trading Scheme (ETS), a European Union-wide CO2 cap and trade system, came into effect in 2005. It covers electric power generation and other emitting industries.

As for The Climate’s representation in the media, I searched Factiva for articles published in the last month containing the term “climate change,” and got 14,925 results. Go to any mainstream vehicle’s website and type “carbon” in the Search field and watch what comes up. The New York Times, mightiest of the mighty, yields 20 results in the past week alone, 13 of which were squarely on the issue at hand: the political or policy implications of the conflation of energy and the environment. In the Toronto Star, Canada’s biggest aspirant to NYTimes status, 19 of the 26 pieces in the last week were on the same issue.

The Climate is doing just fine, when it comes to its status as a policy and political issue.

As itself, i.e., as the actual natural environment, a.k.a. the climate (lower case), it is not doing so well. Emissions of CO2 from fossil fuel use continue to rise, almost unabated. Though the EU saw emissions fall from 2007 to 2009, it was because of the recession and not because of the success of the ETS. Prior to the recession, emissions were rising in the EU.

When the economy picks up again, you can bet your bottom dollar that CO2 emissions in Germany, the biggest and most important economy in the EU, will go up. The German nuclear generating fleet remains barely on life support, a victim of hysterical scaremongering by “environmentalists” taking advantage of the Fukushima nuclear emergency. Though that situation has yet to produce its very first casualty, the German government has completely lost its bottle and caved in to loud “green” demands that this reliable and safe source of on-demand power remain offline in favour of coal and gas.

Happily, some politicians in Canada have a stronger backbone. I attended the Canadian Institute Nuclear Symposium in Toronto on April 28. Brad Duguid, Ontario’s energy minister, gave a very positive speech in support of the new Darlington nuclear construction project. He repeated a line he has been using since he began fielding media questions about his commitment to Darlington post-Fukushima: “My entire family lives near the Pickering nuclear station. This is a perfectly safe station, and a contributor to Ontario’s economy and a provider of emission-free baseload electricity.”

The reason why the climate (small c) isn’t doing so well is because there are too many politicians who pay too much attention to the loud “green” lobby, and too few who are like Duguid.

Canada will elect a new federal government tomorrow. It feels like Ontario did in 1990: a huge swell of support for the NDP, something that nobody, including I, predicted. If the dippers crash through federally, what will they do for “the environment”? Will they write and enact policy for the Big C Climate, or for the little c climate?

And most important, how will they deal with the atom? It’s tough to tell. Jack Layton told New Brunswickers he would have to “look at the documentation” on the Pt. Lepreau CANDU cost overrun before he could say definitively what kind of support, if any, an NDP government would offer.

Early in the campaign, Layton’s only Quebec member, Tom Mulcair, told CBC that all provinces in Canada should have access to federal loan guarantees similar to what the Conservative prime minister offered to Newfoundland-Labrador (see article). Well, that includes Darlington, a project that has been hung up in federal-provincial bickering since mid-2009.

I asked Duguid if he thought Ontario should get access to federal loan guarantees for Darlington. He said “Ontario has been all alone” in developing the low-carbon economy. Darlington would be a major infrastructure project, a major job creator, and a major source of zero carbon power. So “yes, the government should show as much support for nuclear as they do for the Alberta oil sands.”

The NDP platform includes a cap and trade proposal. I have said all along that cap and trade could only favour nuclear. But the German example proves that one does not naturally follow the other as the night does the day. Would the NDP allow a proud Canadian industry, which employs tens of thousands of high-skilled workers and produces tens of billions of CO2-free kilowatt-hours of high quality electricity, to wither on the vine?

I guess we’ll know after tomorrow.

2 comments for “The political economy of climate funding: the case of the atom

  1. seth
    May 2, 2011 at 4:37 pm

    The best case scenario for the country will be some sort of a NDP/Liberal coalition. The Liberal’s are strong proponents of nuclear power and should stick to their guns in a battle with the low information renewable wackers in the NDP.

  2. crf
    May 3, 2011 at 5:53 am

    You can wait 4 years for that, Seth.
    I think its going to be all oil sands all the time, over the next 4 years.
    Nuclear may be seen as an Ontario-based electorally-dangerous industrial distraction from the main pan-Canadian goal of exploiting oil.
    Expect the Conservatives to put the industry into an incredible shrinking box.

    Or maybe I’ll be wrong. That would be nice. Energy policy should not be so partisan. But I’m afraid it inevitably will be become more so.

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