The Paris Agreement on Climate got kicked into the tall weeds by the Obama Administration in 2015, when everybody else was jumping on the bandwagon in light of the irrefutable science. That science showed dire consequences for the planet if a radical transformation in world energy supply did not take place within the decade.
In August of last year, Elsevier’s Ecological Economics journal published a study, Long-Term Estimates of the Energy-Return-on-Investment (EROI), by two French economists, proving for the first time that the world has passed a point-of-no-return in its capacity to extract fossil fuel energy. This conclusion has massive implications for the long-term future of global economic growth, because this harvesting of carbon from the era of dinosaurs is unsustainable.
In other words, the latest scientific research is re-writing the fundamentals of economics, and it shows decisively that the age of endlessly growing industrial capitalism, premised on abundant fossil fuel supplies, is over. But clearly, Canadian leadership did not get the memo.
In spite of his youth and affability, Canada’s youngest-ever Prime Minister, Justin Trudeau, has failed to keep the promise Canada made—even as far back as the Kyoto Accord of 1997— to cut CO2 emissions, and meet the targets necessary to avoid a catastrophic 2 degree increase in global warming by 2030.
Instead, he has said recently, “The choice between pipelines and wind turbines is a false one. We need both to reach our goal.”
Just like the American President, the Canadian PM not only fails to understand that now is the time to completely redesign their economic structure, he does not even seem to recognize the inconsistency in his claims. Perhaps this is because they are both reading from cue-cards composed by others, in the fossil fuel lobby.
The truth is, there cannot be an increase in oil production and a simultaneous reduction in the harms of global warming and environmental contamination from those same fossil fuels. It is physically—and clearly, logically—impossible.
The contradiction in statements made by world leaders points to a loophole in the Paris Agreement, and Canada has turned this loophole into a noose.
The Paris Agreement committed countries to reduce CO2 emissions inside their own borders, but made no claims about the carbon that is extracted and then gets burned elsewhere. And in Canada, there is no federal policy that targets the gas and oil industry, largely because none of the oil is owned by Canadians, with the possible exception of a tiny per cent of Husky Oil in eastern Canada, and NAFTA prevents Canada from even having an energy policy.
In fact, since it signed the Kyoto Climate Accord in 1997, Canada has not only missed every target to cut emissions, according to Canada’s National Inventory Report, Stats Canada, and the Merchandise Trade database catalogue #2701-2, it has increased carbon production to 1,100 megatons per year. Domestic levels have been steady since 2000, at 600 megatons. But contaminants to the rest of the planet are on the rise.
The industry directly employs not more than 270,000 people, and accounts for a mere 7% of Canada’s GDP. And yet, this industry capture of the Canadian consciousness is sponsored and subsidized by Canadian government, on behalf of US and other transnational corporations.
Industry capture is nowhere more evident than in this new war over oil pipeline expansion, now between the western provinces of Alberta and B.C.
During her campaign for the premiership of Alberta, NDP Rachael Notley and her party were critics of the power the oil and gas industry has, and repeatedly stated that taxpayers were being shortchanged on royalties owed by oil companies to Albertans. She accused the Progressive Conservatives of “neglecting our opportunity to invest in value-added processing and refining – investment that would create more jobs in Alberta instead of exporting them to Texas.”
But since taking office, Notley has championed the oil industry pipeline expansion that will produce 40% more emissions over its current output and threaten all the landscapes it would cross. She has fought for pipelines connecting the Alberta tar sands to the ocean port in Vancouver’s Burrard Inlet, cheerleading Albertans by referring to “our oil” when, in fact, there is a moot distinction between Albertans owning their oil as a resource, and American and transnational companies owning all the rights to it.
Paris put no limits or sanctions on the supply of fossil fuels taken to market, and this is the noose Notley has slipped over her head. She is like a person who has decided to go on a diet, which she will start just as soon as she has eaten all the chocolates in a lovely gift box from a secret admirer. As the price of fossil fuels inexorably falls, there is a rush to extract as much as possible before the bottom falls out of the market.
In this worldwide dilemma, there is also an unequal natural transfer of wealth. The money made through the sale of tar sands bitumen in no way matches the decline in the welfare of Albertans—or the rest of the world—through the pollution of the environment. And we now know, from the most recent science, that the costs of extraction in dollars, has exceeded the monetary value of a barrel of oil by 50:1. There is a financial reason to leave it in the ground: it is not worth the trouble. In fact, according to the Alberta Institute of Agrologists, and many others, it has not been worth it to the Canadian economy since the 1960s.
The Canadian institutions captured by the fossil fuel industry necessarily reflect a skewed picture of economic benefit because they do not reflect what Professor of Political Economy at Wits University, Patrick Bond calls, adjusted net savings (ANS). Such a picture is an improvement over GDP reflections of economic wellbeing because the pollution that leads to costs in health and social welfare, and realistic hopes for the future—in other words, the costs in human capital—are not part of the calculation. These costs are on a rise parallel with the rise in global warming.
Ecological economics must be factored in when the snake oil salesman—in this case, Premier Rachael Notley— tells us, “We’re not making a choice between the environment and the economy. We are building the economy.”
Fresh analysis that shows just how wrong Notley and Trudeau are comes in an open letter (January 21, 2018) by US economist Robert Aliber, Professor Emeritus at the University of Chicago Booth School of Business, a renown authority in identifying the causal shocks behind more than 40 banking crises that have happened since the 1970s.
He warns that the global economy suffers from a catalogue of non-sustainable imbalances that have been held up on the basis of a massive expansion of credit, feeding a rising debt overhang that is now worse than pre-2008 crash levels.
He argues that the belief in a continuing global economic boom for 2018 relies on the delusional hopes that these imbalances will not unravel.
As Rachael Notley shoves fistfuls of chocolates down her throat, and Trudeau tilts at windmills, Aliber warns the US stock market is due for a 40 to 50% price crash, driven by a decline in demand for the US dollar-denominated securities.
This is the type of analysis for which Aliber is internationally renown. He knows of what he speaks. In predicting stock market crashes, Aliber is the man.
What we are looking at now is not a Group of Sven landscape, empty of people. In this adjusted picture of the lay of the land either side of the Rockies, Canada is not on the side of the angels.
Publishers Note: Judith Stapleton is a writer in the fields of science and medicine.