Ontario climate strategy

The Government of Ontario recently scrapped the provincial cap-and-trade initiative in favour of a new regulatory, command-and-control approach. Before presenting a new bill, the government is obligated to seek input. This is my contribution. It is far from a complete climate plan, but an attempt to speak the language of the business friendly government. It is a major problem that for 30 years, the environmental movement has failed to communicate the issue in a way that spurs significant action. Instead, we have allowed people and businesses with a vested interest in the status quo to poison the debate with a pernicious lie: that climate is too expensive; a job killer we can’t afford. No more. We urgently need to turn the debate around: climate action is not only imperative, it is a crucial opportunity to create a modern, efficient economy that works for everyone, not just a few.

Here is my submission:

Ontario’s climate change strategy needs to position the province to become a world-class manufacturer and producer of the needs of tomorrow’s economy. The global economy is changing fast, not just because the rest of the world is readying to decarbonize their economies, but because many low-carbon technologies and approaches have become less expensive than their carbon-intensive alternatives. The market is increasingly driving change. Yet the imperative of decarbonization also offers the chance to unlock enormous economic opportunity, which Ontario is well positioned to take advantage of, as a global manufacturing and technology hub with a highly educated workforce. Ontario’s should aim to be a top competitor in the decarbonization ‘arms race’. It has no choice but to keep up with the pace of the revolution or it risks becoming economically uncompetitive—its products obsolete, its processes inefficient, its costs unsustainable, its pollution socially unacceptable.

To do that, businesses and industrial facility needs a government that takes global warming seriously and that can implement the right policies to help drive the transition as smoothly, efficiently and quickly as possible. This proposal focuses on how Ontario can accomplish three crucial, interrelated goals: facilitate decarbonization, enhance competitiveness and increase mobility.

Proposed measures:

  1. Facilitate decarbonization
    1. Ensure the business and industrial sectors are ahead of global emission curves based on output
    2. Support electrification of industrial processes and all fossil primary energy use
      1. Ontario imports $11 billion worth of fossil fuel every year, with part of the bill footed by business and industry (Environmental Commissioner)
      2. Renewable energy options would not only keep more money available to the provincial economy and to businesses
      3. Help or mandate businesses switch from fossil fuels to electricity or renewable natural gas
      4. Low-carbon fuels protect businesses from oil and price shocks
      5. Reducing fossil fuel use will further lead to a significant reduction in public health expenditure (Environmental Commissioner)
    3. Help and or mandate businesses to conserve electricity and reduce peak consumption
      1. Increasing energy efficiency can create more than 50,000 jobs and save more than $12 billion dollars in the economy every year (Environmental Commissioner).
      2. Offer subsidies or tax-breaks for energy conservation programs or successful energy conservation, both peak and total.
      3. Mandate energy conservation measures and targets; set aggressive targets for net-zero buildings, both new construction and retrofitting.
    4. Reward businesses that reduce emissions
      1. Offer tax credits and subsidized loans for capital investments in low-carbon technology
      2. Degree of support can depend on emissions reduced or saved
    5. Establish a new investment bank that can offer finance low-carbon solutions.
    6. Invest in development and deployment of renewable natural gas production.
    7. Invest in low-carbon electricity production in Ontario to meet future demand
    8. Cancel all fossil fuel subsidies
      1. Fossil fuels subsidies in Ontario amount to $625 million a year (Environmental Commissioner)
      2. Such subsidies not only handicap Ontario’s low-carbon transition, but they are extremely expensive for the government and represent a significant burden for tax-payers with a negative deferred return in the form of a worse future climate.
  2. Enhance competitiveness
    1. Invest directly in developing cutting-edge research and manufacturing
      1. It is critical that Ontario increases its pace of innovation and adaptation to the future low-carbon economy.
      2. Ontario’s ‘cleantech’ sector already generates $20 billion in annual revenue and employees 130,000 people across 5,000 companies (Environmental Commissioner).
    2. Establish a new investment bank that can offer finance low-carbon technological development and deployment.
    3. Use government procurement to support Ontario technology and manufacturing companies dedicated to decarbonization.
    4. The auto and truck sectors require urgent attention.
      1. Ontario can ill afford to lose its auto manufacturing, but ‘legacy’ producers (e.g. GM, Chrysler, Ford, Toyota, Honda) active in the province are extremely poorly positioned to participate in the battery-electric revolution. Currently only one electrified vehicle is produced in the province; the Chrysler Pacifica hybrid. There are no guarantees that foreign auto companies will invest in plant retooling in Ontario or that they will even survive the transition. Several measures will be necessary:
      2. Ensure these companies invest in electromobilization manufacturing and R&D in the province, through a judicious mixture of e.g. mandates, tax credits, subsidies, direct investment and government procurement.
      3. Create programs for new skills training for auto workers and if necessary, for transitioning to new occupations
      4. It is also necessary to support the rich ecosystem of auto part suppliers in the transition.
      5. Help new companies establish electric auto and truck manufacturing in the province
    5. Invest in low-carbon skills development and training
      1. This is especially important for the building sector, which will become vitally important in the low-carbon transition.
      2. An amount on the order of $4 trillion will be requires across Canada over the next decades just to retrofit single-dwelling houses to low-carbon/high-efficiency standards; a solid portion of that will be billed to Ontario.
    6. Leverage private investment and use government procurement to support decarbonization
      1. Create demand for low carbon solutions and help build local capacity
      2. Reward businesses investing in decarbonization
  3. Increase mobility
    1. A well-functioning economy requires a smooth and efficient transit system
      1. Mobility is the lifeblood of the economy, allowing workers to get to and from their places of employment, and allowing businesses to move goods and supplies to where it is needed.
    2. Increasing ease and speed of mobility contributes directly to economic growth
      1. According to the American Public Transportation Association, ​every $1 invested in public transportation generates $4 in economic returns, while every $1 billion invested in public transportation supports and creates more than 50,000 jobs (https://www.apta.com/mediacenter/ptbenefits/Pages/default.aspx).
      2. By failing to invest in mass transit in the past 30 years, Ontario has left significant economic growth on the table.
    3. Focus should be on expansion of mass transit rather than roads
      1. Mass transit has the lowest cost to benefit ratio
      2. Effective, rapid and comfortable mass transit is further an important attraction for the talent that Ontario businesses needs to build its future economy
        1. In that regard, improving rapid mass transit in the London-Kitchener/Waterloo-Toronto corridor, which is fast becoming a global high-tech hub, would be especially important
    4. Develop and fund microtransport solutions
      1. Solve the ‘last mile’ problem that prevent people from using mass transit
      2. Develop alternatives that can get people closer to where they need to go, when they need to go
      3. Microtransport can be especially valuable for small cities and rural locations where frequent service by full-sized buses is often both expensive and unnecessarily polluting
    5. Push or entice the switch to battery-electric personal vehicles, trucks and buses
      1. Reintroduce subsidies, in the form of tax credits, elimination of PST portion of the HST on new zero-emission vehicles and refund the GST portion
      2. Increase diesel and gasoline excise taxes
      3. Introduce stringent emission limits for trucking sector, especially in cities
      4. Invest in charging infrastructure and mandate new construction of both homes and businesses have available charging option
    6. Focus on road maintenance rather than new construction
      1. Building new roads is very expensive both in absolute and relative terms, while also increasing the future maintenance burden
      2. The law of induced demand states accurately that road congestion cannot be solved by increasing supply, only by reducing demand, such as could be induced by congestion pricing or road tolls.
      3. Road efficiency can be severely reduced by poor maintenance and increase overall costs to the economy from increased vehicle maintenance.
      4. Deferred maintenance increases long-term costs.
    7. Focus on getting people over onto alternative modes of transport
      1. The cheapest way of increasing mobility is getting people to walk or use bikes/electric scooters.
    8. Encourage businesses to increase use of telecommuting.
    9. Reducing fossil fuel use and emphasizing alternative modes of transport will lead to a significant reduction in public health expenditure

All this has to be verified. The policies above must therefore be accompanied by strict science-based emission reduction targets that are in line with Canada’s international commitment to limit the global temperature increase to 2 degrees Celsius, with a view to keeping it below 1.5 degrees.

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