It’s possible that I shall make an ass of myself. But in that case one can always get out of it with a little dialectic. I have, of course, so worded my proposition as to be right either way (K.Marx, Letter to F.Engels on the Indian Mutiny)
Wednesday, November 10, 2021
Sask. environmental group pushes for change as premier pans federal oil, gas emissions cap plan
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Falling short of doing 'fair share' to help meet emissions
reduction obligations: Sask. Environmental Society
Saskatchewan Premier Scott Moe said the province wants more autonomy on many issues, including climate policy. (Liam Richards/The Canadian Press)
A Saskatchewan environmental group is calling on the provincial government to think bigger when it comes to cutting emissions, as the United Nations COP26 climate change summit continues for its second week.
"If Saskatchewan were a country, we would have the highest per capita greenhouse gas emissions in the world," a report from the Saskatchewan Environmental Society says.
The province now has higher annual greenhouse gas emissions than northern European countries with much larger populations such as Finland, Sweden and Norway, the report says.
Meanwhile, Premier Scott Moe blasted Prime Minister Justin Trudeau's performance and proposals at COP26, a sign that the two are still at odds over climate policy and the way forward.
In a video posted to Twitter on Sunday, he criticized Trudeau and other government officials of hypocrisy for flying to the conference in Scotland "to lecture the rest of us about how we should change our behaviour."
At the climate conference last week, Trudeau announced that Canada will impose a hard cap on emissions from the oil and gas sector — a plan Moe told reporters Tuesday his government was not consulted on.
"It's going to increase the price of of gasoline for all Canadians for a long time, and it's going to increase emissions worldwide," Moe said.
Steven Guilbeault, the federal environment minister, "did not so much as give a phone call to our environment ministers to say, 'We're thinking about this policy. We know it will have an impact on 30,000 families in Saskatchewan. What are your thoughts on it?'" Moe said.
"That call was never made. That is not a way to run a nation."
No new natural gas power stations: SES
In a news release announcing its 25 recommendations, the Saskatchewan Environmental Society said provincial action is needed to curb emissions, and "it can't be left to Ottawa alone to provide leadership."
Saskatchewan's 2017 Prairie Resilience climate change plan included measures that "were a step forward, but they are insufficient in the face of the climate emergency the world faces," the group's report says.
"Today they fall far short of what is needed for Saskatchewan to do its 'fair share' in helping Canada meet its emission reduction obligations to the United Nations."
Peter Prebble, a board member with the Saskatchewan Environmental Society, said among many things, the province should not build any new natural gas power stations.
"If we want carbon neutrality in Saskatchewan by 2050, we need to have a carbon-neutral grid by 2035 to 2040," he said during a news conference Tuesday.
Investing in more solar power, reopening talks with Manitoba about importing hydro power and working with the federal government to ship more goods by rail are all things the society said could help.
Prebble did say that oil and gas emissions have gone down in recent years, but said that was largely due to federal government policies.
Are Bike Brands Greenwashing? We Asked An Expert Nov 10, 2021 by Seb Stott Follow A lot of companies claim to care about the environment, but when I asked over forty bike brands if they have plans to measure and reduce their CO2 emissions, their responses were a mixed bag. I was glad to see some companies had put serious thought into this subject, though, and a few made big claims about cutting carbon and even going "carbon neutral" in the near future. But climate change is a complex topic and it's tough to distinguish genuine improvements from greenwashing.
Fortunately, Pinkbike's comments section can be an illuminating place. The top comment on that article was from professional sustainability consultant Mike Bascombe. He called out some brands for only discussing their direct emissions and ignoring their supply chains, where the vast majority of the CO2 is released. I messaged him directly to find out more and he agreed to answer some follow-up questions to help me see the wood from the carbon-offsetting trees - which brands have a credible plan to reduce their environmental impact, and which claims aren't as impressive as they sound?
This moral reasoning doesn't need to exist at this stage. There is more than enough business-based justification. It's adapt or die for companies now.—Mike Bascombe
First off can you tell us a bit about your background and your credentials? I work for a specialist sustainability consultancy called Avieco where my role focuses on strategies to reduce carbon emissions and helping clients adopt sustainable practices in the tech, culture, sport and media sectors. Bikes have always been a huge part of my life and my heart is firmly in the off-road community. To me, cycling holds answers for some of the biggest sustainability questions, but the industry needs an introspection that is emerging now. I am first and foremost an environmentalist and want cycling to be a force for preserving wilderness and appreciating it rather than contributing to its decline.
How do you see the role of companies, as opposed to individuals or governments, in tackling climate change? Companies play a vital role in mitigating climate change but the three groups are really interlinked. Businesses are reliant on an economy and market forces driven by customers (individuals) and regulation governments) so they can't be considered in isolation. There is clearly a move towards sustainability. Whilst there are some well-established brands that are known in this space (Patagonia for example) there is still room for pioneering brands to take a lead, especially within cycling.
Companies will soon be forced to adapt, the writing is on the wall. As the financial buying power moves to millennials and on to Gen Z sustainability becomes even more of a market force. These groups consider climate-related credentials as a key influence in which brands they are willing to spend and companies that don’t engage in sustainability will lose any connection with their customers. As disclosure projects like CDP are forced on companies by investors it becomes easier for anyone to rate a company on its climate credentials. Consumers won't buy a less sustainable option if there's a choice of equal value.
Sustainability is good business. Aligning your company to sustainable values makes you more attractive to both customers and investors at the same time as mitigating risks in your business model by addressing the threats to supply chains. Being aware of climate-related threats is in essence just awareness of resource availability. Awareness of the risks posed by climate change and mitigating them needs to be a core activity for any manufacturing business. The current supply issues the bike industry is experiencing due to COVID are small in comparison to the disruption that regular climate emergencies will cause.
Government regulation is backing up market forces by codifying the need to disclose through mechanisms like TCFD (Taskforce for Climate Related Disclosure) which forces companies to treat climate change as a financial threat and significant risk to business. Here in the UK, you cannot win a government contract over a certain size without having a Net Zero plan in place now, so business development is tied into sustainable practice. Companies that can't react to these evolving requirements simply won't get invested in, won’t win any work or will lose their customer base.
Look at Larry Fink at Blackrock, one of the biggest funds in the world, completely divesting from fossil fuel related investments purely from a risk perspective. Whilst I personally believe there is a moral imperative to do what you can to limit climate change on an individual and company level, this moral reasoning doesn't need to exist at this stage. There is more than enough business-based justification. It's adapt or die for companies now.
Which brand(s) do you think gave the best response on their emissions targets or reporting? Looking at the responses in the article I have to applaud Trek here for producing a full sustainability report that included all 3 scopes (see below for more detail on these). Disclosing a footprint can be a painful process at the start. It shines a light on things that don't necessarily support sales or brand strength. Revealing that carbon frames are significantly worse from an emissions perspective than alloy versions is not something Trek's marketing team would want to highlight but the numbers are out in the open now. They have first-mover status and deserve the kudos for this.
What we will hopefully see now is the rest of the industry matching this ambition. Companies that don't report fully will soon be the outliers and the associated negative perception will kill the brands involved. The bar has been raised.
I think Cotic should be included too in their honesty and for clearly understanding the need for improvement. Decarbonising is not an easy thing. Companies will have to undergo massive transformation to reach the necessary levels but that all starts with an appreciation of the real status quo.
Ibis choosing to avoid air freight inbound is a huge deal and they have studied their supply chain in detail from a carbon perspective. They also have a healthy scepticism of offsets which is important.
Canyon are doing good work too. Aligning with the Science Based Targets initiative is really the best standard. It will be interesting to see which particular pathway they signed up for, however. So far there is just a commitment. I don't doubt their intentions but there is still a long process for them to get a real decarbonisation target approved and a pathway designed.
Both Endura and Pole have a focus on local manufacturing. This is a significant move and will greatly reduce the emissions overall because shipping is always such a large proportion. It also of course supports local industry and craftsmen.
Were there any misleading claims, in particular, you'd like to call out? Programs like GoGreen from DHL offer offsets equal to the carbon value of the shipping route. There are usually a number of issues with projects like these in the accuracy of carbon calculations and the quality of projects associated with them. Tree planting schemes don’t factor in several key issues which I discuss below. Even if the best projects are supported it doesn’t change the fact that offsetting without the company making any real decarbonisation themselves isn’t helping. Schemes like these can give companies a false sense of achievement in mitigating climate change, or can be manipulated to give the impression more is being done than reality would suggest. Offsetting has its place but only as a small part of a bigger change.
Any of the companies who report on only scope 1 and 2 whilst not mentioning 3 are choosing a very limited range of their operations to report on publicly. This won't include the majority of their footprint (more detail below) and could be considered misleading.
Similarly, any of the companies without a defined time frame are behind the curve. Without an endpoint, they can't have defined a yearly target to reduce emissions, which means they don't have a concrete reduction strategy. Lots of commitments and even "internal audit" but these ultimately mean very little.
What do you think about bike companies buying offsets to reduce or neutralise their carbon emissions? Is that cheating, or a step in the right direction? Neutralisation of some emissions is inevitable. No company will realistically be able to completely decarbonise as that would negate manufacturing on any scale and make it unrealistic for companies to engage in change. The real question is at what point should offsetting, compensating or neutralisation happen.
The recent evolution of the Net Zero standard is a good example of considering this in real terms. Previously we had "carbon neutral". This is pretty meaningless in terms of actually reducing emissions or mitigating the climate crisis in a material way as a company could simply work out its emissions and buy offsets equal to that. No change in behaviour, no guarantee of offset quality or efficacy. Net Zero is far more stringent and forces companies to actually decarbonise to certain levels at certain time frames before neutralising or compensating.
The Science Based Target initiative has just released their definition for Net Zero which is great news as it standardized the process for companies and provides a roadmap. The other factor is the quality of the offset. There are good standards out there, The Gold Standard and VERRA for example, but many companies buy products that have little if no real benefit. Something people forget to include in many discussions are the time lags involved. Planting trees is an easy example as trees take time to mature to reach a certain level of CO2 absorption that is assumed by the offset calculation. The tree planting example also demonstrates how looking at an offset in isolation is rarely beneficial for the planet.
Old-growth forests are vital for biodiversity, soil health and are essentially irreplaceable, in any timeframe we're now working to, relating to global warming. Creating acres of fast-growing pines and claiming a similar positive effect purely looking at decarbonisation potential simply doesn't represent reality. If companies want to use neutralisation it needs to be thought out very thoroughly, ideally creating a bespoke project that the company can take ownership of throughout their decarbonisation journey.
There is unfortunately scope for offsetting to be abused. Some projects promise carbon sequestration based on misinterpreted or false data. The market is still not fully regulated so it is left to companies to find projects of real value and legitimacy. There are many people working in offsetting with a genuine desire to do good and there are projects offering real climate and social benefits but it is still too easy for some to take advantage.
As to whether offsetting can be a negative force in itself, that is certainly possible. If companies see it as purely a marketing tool, or if it in any way replaces actual decarbonisation then it is not part of the solution.
That being said there needs to be a recognition that companies are on a journey. Whole business models are needing to be reworked and global business realigned. Rapid decarbonisation is the priority and whilst this is underway there is a genuine case for compensating current operating emissions with good quality programs.
Similarly, once a company reaches the maximum decarbonisation it can (the current SBTi Net Zero standard puts this at a 90% reduction versus the baseline carbon emissions) the remaining operating emission should be neutralised. Offsets can not only serve to reduce carbon emissions but also support the United Nations Sustainable Development Goals (SDGs). These are aimed at supporting global social development and any company that claims to be based on any sort of social value should be using these as a framework. Good offsetting projects should support these goals at the same time, so it's not a straightforward carbon question. None of this is really. Climate change is inherently linked to global inequality, debt and racism. Companies who are leading in this space combine their environmental efforts with social ones too.
If a company is serious about reducing their emissions, where should they start? A deeply integrated footprint that covers all 3 scopes as defined by the Greenhouse Gas Reporting Protocol that is made publicly available. Many companies, especially in the manufacturing sector, only report on scopes 1 and 2. Scope 1 is direct emissions; company facilities and company cars. Scope 2 is electricity usage. Looking at these two only leaves out the vast majority of a company's emissions profile. Scope 3 has 15 categories and makes up the largest part of a carbon footprint for most companies. Scope 3 includes travel, purchased goods and services and critically for the bike industry transport and shipping among others. [According to Trek's sustainability report, shipping made up about 6% of their total emissions while bicycle manufacturing made up about 83%. Much of this could be counted under Scope 3 emissions.]
If any company is serious about making a positive change they will have to know where their hotspots are, where are the worst areas for emissions. Only a proper footprint can provide this. From there the company can strategise how best to change what they can within their own operations, and influence their value chain to reduce emissions. We are past the time for commitments now. Action is needed. You can't change what you don't know.
Bikes took a back seat at COP26. Advocates
urge Canada to make them a priority in its
climate plan
Cycling groups say focus on electric cars short-sighted in
A cyclist rides on one of Toronto's permanent bike lanes on Monday. Cycling and climate advocates are decrying the lack of discussion at the COP26 summit about bicycles as a cheap and effective tool for reducing carbon emissions and fighting climate change. (Evan Mitsui/CBC)
When Gabriel Rivett-Carnac and Lyn Elliott decided 18 months ago to buy out the remainder of their lease and sell their car, they calculated their annual cost of owning it was about $12,000 — especially with the commercial liability insurance for Rivett-Carnac's work as a freelance photographer in Ottawa.
"I've absolutely loved not having to deal with all of the ... mental space that having a car can take up in your brain," said Rivett-Carnac, 37, whose two-and-a-half-year-old son, Ren, loves riding in both the front cargo basket and the cycling stroller attached to the back of the family's Dutch-made Babboe Mini cargo bike.
"There's a lot of conceptions out there that, like, if you don't own a car, it's because you're rich. My wife and I live in a one-bedroom apartment in a big apartment building. We're not rich, but we've made specific choices that have allowed for this."
One thing he says he hopes will improve soon is the amount of room for bikes on the road.
"You realize very, very quickly that there's no space out there, and navigating the space that is there is very challenging," Rivett-Carnac said. "It's frustrating. And you know, sometimes it's scary."
Have questions about COP26 or climate science, policy or politics? Email us: ask@cbc.caor join us live in the comments now. Your input helps inform our coverage.
Electric cars promoted at COP26
As more Canadians take to the road on two or three wheels instead of four, cycling advocates say COP26, the United Nations climate change conference taking place in Glasgow, has ignored bicycles as one of the cheapest and most efficient tools to reduce carbon emissions and fight climate change by focusing almost entirely on promoting a global shift to electric cars.
The summit's focus on Wednesday turns to transport, with a schedule that the COP26 president's program says "will bring together leaders from across the sector to accelerate the transition to 100 per cent zero emissions vehicles" and "galvanize action to decarbonize the harder-to-abate forms of transport: aviation and shipping."
Many advocates say the summit has failed to seize upon an unprecedented opportunity created by the COVID-19 pandemic, which forced cities around the world to reduce capacity on public transit to limit transmission of the coronavirus and rapidly repurpose streets and other public spaces previously dominated by cars for pedestrians and cyclists to use.
While some panel discussions at the summit have talked about the need to bolster active transportation — walking, cycling and non-mechanized wheelchairing — a quick scan of the COP26 program for any mention of "bikes" or "cycling" brings zero results.
"Everyone's talking about doing all of these other things, like phasing out the combustion engine, but all of those things take time," Nelson told CBC News in an interview from Calgary.
While global leaders barely mention bicycles, Nelson said she's encouraged by "quick wins" in cities such as Paris, Montreal, Berlin and Toronto that are doubling down on their own actions by increasing cycling infrastructure because they've already seen returns on the investments they've made.
"We learned during the pandemic that building bike infrastructure can take a week, in some cases. It's just a matter of shifting where your priorities are," she said. "But it seems with COP26 that these lessons have been lost."
Cycling "represents one of humanity's greatest hopes for a shift towards a zero-carbon future," the organizations write in the letter. They call on countries to invest in building safe and high-quality cycling infrastructure, as well as providing direct incentives for people and businesses to switch from automobiles to bicycles for more of their daily trips.
Jill Warren, CEO of the European Cyclists' Federation, which represents member organizations in 40 countries and is one of the lead signatories of the joint letter, said she views COP26 as "very much a missed opportunity."
"It's not surprising that so much attention is given to the electrification of vehicles because the entrenched interests of the automotive industry continue to be strong," Warren told CBC News in an interview from Brussels before she travelled to the conference.
Advocates argue that getting more people to ride a bike instead of driving is the best hope and fastest way to reach net-zero emissions globally by 2050, which is a key goal of COP26. A recent Oxford University study that collected travel activity data in seven European cities found that cyclists had 84 per cent lower life-cycle CO2 emissions than non-cyclists.
According to the Public Health Agency of Canada, active transportation improves our health, economy, transport systems and the environment by providing an opportunity to be physically active on a regular basis, increasing social exchanges, reducing road congestion, contributing to reduced greenhouse gas emissions and saving money on gas and parking.
"It's always important to recognize that the climate crisis is going to have to be tackled from a range of actions," Bike Calgary president Molli Bennett said. "But if you're not considering active transportation, you're missing an affordable tool that's easy to utilize and comes with so many additional benefits."
This year, the federal government announced a $400 million Active Transportation Fund over five years to help build new and expanded networks of pathways, bike lanes, trails and pedestrian bridges, as well as to support active transportation planning and stakeholder engagement in communities.
Liberal MP Andy Fillmore, parliamentary secretary to the infrastructure and communities minister, has been tapped by the Trudeau government to develop and implement the fund. He told CBC News this week that the government will soon start accepting applications for funding.
Fillmore also admitted he was shocked that COP26 organizers weren't showcasing bikes and active transportation more prominently.
British Prime Minister Boris Johnson, left, stands next to an electric concept race car on display at the UN Climate Change Conference, COP26, in Glasgow on Nov. 2. (Evan Vucci/Pool/AFP/Getty Images)
"We've got to keep our eye on the ball, that the modal shift we need is to get people out of vehicles — unless they're trains or buses — and into active transportation," he said.
NDP transportation critic Taylor Bachrach said that while the $400 million commitment represents "more on the table than we've ever had before as a country," both Transport Canada and Infrastructure Canada need to offer more incentives for people to take up cycling in smaller communities, as well as cities.
"The reality is that we haven't come up with a more efficient way to move humans through space than the humble bicycle," said Bachrach, who recently had his cargo bike customized with a portable desk for his constituency work in his northern B.C. riding of Skeena—Bulkley Valley.
Bike paths are filled with cyclists during rush hour in downtown Vancouver in 2019, before the COVID-19 pandemic changed commuting habits and forced cities to repurpose streets for more pedestrian and cycling use. (Maggie MacPherson/CBC)
"Not many people can afford to go out and buy a $60,000 electric vehicle," she said. "But they could, with incentives, be able to afford and replace their family car with a cargo bike or an electric bike."
In a statement to CBC News on Tuesday, Infrastructure Canada said the federal government welcomes the "growing availability" of e-bikes, but that its mandate is to support public infrastructure "primarily owned and operated by provinces, territories, municipalities, and Indigenous communities, rather than programs providing supports or incentives to individuals."
The inevitable "what about the cold?" question makes Bennett, of Bike Calgary, laugh.
"I think people would be surprised how easy it is, and how much warmer it is," she said. "If we built up proper infrastructure and services like snow-clearing and lights and connections to public transit, you'd be shocked how many people would grab their bikes, especially for short trips."
A cyclist rides on a snow-covered pathway in Calgary. Bike Calgary president Molli Bennett says proper infrastructure and improving services such as snow-clearing, lighting and connections to public transit would help entice Canadians who are reluctant to ride bikes in winter over safety concerns. (Mike Symington/CBC)
Doug Ford's hopes for Ontario's electric vehicle industry hinge on mining its Ring of Fire
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Mining project will be 'massive win' for First Nations, says
'We're going to be the number one manufacturer of electric battery operated cars in North America,' said Ontario Premier Doug Ford during a news conference Monday. Opening up mining in the province's north is a key part of that plan. (Mike Crawley/CBC)
Premier Doug Ford's government is touting Ontario as a future electric vehicle manufacturing hub, and linking that to a fresh push for a huge mining development in the northern part of the province.
Ford's Progressive Conservatives want to lure the big automakers to produce electric vehicles in southern Ontario. A key part of that strategy involves opening up the so-called Ring of Fire mineral deposit, located more than 500 kilometres north of Thunder Bay in an area home to Indigenous people.
The Ring of Fire was originally promoted as a source of chromite, an important component in steel. Now the hype centres on its supply of minerals used in EV batteries and energy storage systems, including cobalt, lithium, manganese, nickel, graphite and copper.
Ontario's mini-budget — known as the fall economic statement — featured the Ring of Fire prominently when it was presented last week, and explicitly linked the mining project to EV battery production.
Ford spoke enthusiastically about both electric vehicles and the Ring of Fire on Monday.
"We're doing it," Ford said, when CBC News asked about the government's plans for the mining project, during an unrelated news conference in Bradford, Ont., just north of Toronto.
"We're going to be the number one manufacturer of electric battery operated cars in North America," Ford said. "We're not only going to manufacture the batteries here, but also manufacture the cars."
Ford said First Nations are being consulted about the Ring of Fire.
"We do nothing up there without making sure there's a buy-in from the vast majority of the communities," Ford said.
"This is going to benefit so many people from First Nations communities up there. They're going to have good-paying jobs. They're going to be part of the investments. They're going to be able to build roads, not not just to get up to the mines, but also be to get goods up there a lot quicker as well. This is just a massive win for the First Nations community."
However, Ford's enthusiasm is not universally matched among Indigenous leaders in northern Ontario.
"There is going to be opposition, if this continues the way it is and the Ford government or any future government doesn't recognize the rights of our people, it's going to be a strong stance," said Chief Wayne Moonias of the Neskantaga First Nation in an interview Monday.
Chief Wayne Moonias leads the Neskantaga First Nation in northern Ontario. He says Ford's plan will meet opposition from Indigenous communities. (CBC)
Neskantaga is one of three First Nations — along with Attawapiskat and Fort Albany — that declared a moratorium on Ring of Fire development earlier this year.
"People are making money, a lot of money, off of our land and there is no consent that has been given by our people, our First Nation," said Moonias. "Rightfully the First Nations people of Neskantaga should be the ones to determine how those things are going to be carried out, if in fact they're going to be carried out."
Ring of Fire mineral claims cover a territory around 100 kilometres in diameter, including the upper portion of the Attawapiskat River and its watershed.
"I don't think First Nations, whose land this has always been and still is solely, appreciate anybody else telling them what's good for them," said Kate Kempton, a partner with the law firm OKT. She represents Attawapiskat First Nation in a recent court challenge of the province granting mineral exploration permits in the Ring of Fire to the mining firm Juno Corp.
"This situation with the Ring of Fire is, in my view, explosive, and the public is probably going to see that in 2022," said Kempton.
The renewed push for opening up Ontario's Ring of Fire involves its supply of minerals that can be used to make electric vehicle batteries. (Ben Margot/The Associated Press)
One change would scrap a requirement that 225,000 square kilometres of northern Ontario have protected-area status. That's nearly double the size of New Brunswick and Nova Scotia combined.
The changes that the government itself describes as "the most significant" have to do with the First Nations membership of a joint advisory body on land-use planning in the Far North. The amendments would allow the government to create the advisory body with the participation of just seven of the 31 First Nations in the region.
The amendments to the Far North Act are part of the omnibus bill tabled last week by Finance Minister Peter Bethlenfalvy along with his fall economic statement.
The act "creates unnecessary barriers to economic development," said Curtis Lindsay, press secretary to Greg Rickford, Ontario's minister of Indigenous affairs, northern development and mines.
Ontario Premier Doug Ford shakes hands with Chief Cornelius Wabasse of Webequie First Nation, left, and Chief Bruce Achneepineskum, Marten Falls First Nation, centre, after signing a new deal on the Ring of Fire mining project in northern Ontario. The signing took place at the Prospectors and Developers Association of Canada's annual convention in Toronto on March 2, 2020. (Nathan Denette/The Canadian Press)
He said the revised act will focus on "enabling the development of all-season roads, electrical transmission projects and mineral development while maintaining community-based land-use planning and environmental protections."
Bethlenfalvy drew a direct link between electric vehicles and the Ring of Fire in an interview on Friday with Superior Morning, a CBC Radio program broadcasting from Thunder Bay.
"We want to build the Ring of Fire," Bethlenfalvy said. "There's critical minerals there [that] go into electric vehicles, and we want to be the leader in North America, in Ontario, building electric cars."
He described the government's new push for the Ring of Fire as responding to the community.
Noront Resources Esker Camp is located in Ontario's Ring of Fire. The company's share price has tripled in the past six months as two Australian mining giants offered increasingly larger takeover bids. (Jeff Walters/CBC)
"Prosperity should be in the north," said Bethlenfalvy. "We just want to open up the north for everyone, and we're going to do it with very sincere and open consultations."
The mining company that holds the vast majority of the claims in the Ring of Fire, Noront Resources, is currently the focus of a bidding war between two Australian mining firms, BHP Group and Wyloo Metals. Since the rival takeover bids began in May, Noront's share price has tripled, adding some $280 million to the company's value in just six months.
The two firms are now in talks about a joint takeover, with a deadline of Nov. 16 for NorOnt shareholders to accept the latest bid.
One of the biggest obstacles to getting minerals out of the Ring of Fire is that there are no all-season roads to its location.
Just last month the government launched two separate environmental assessments for sections of road that would link the Ring of Fire to the Webequie and Marten Falls First Nations and ultimately, to the provincial highway system.
The Ford government has budgeted roughly $1 billion for the road construction, but that commitment is not new for Ontario. Back in 2014, the then-Liberal government of Kathleen Wynne allocated $1 billion for the project as well.
Financial Markets May Kill Off Fossil Fuels Before Governments Do
As the cost of capital goes up, the prospects for fossil fuel projects go down.
There is an interesting email from Bloomberg Green today. It discusses how the cost of capital is going up for fossil fuel companies and down for renewables. The concluding sentence goes like this: “Markets may end up killing off fossil fuels before governments do.” Why is that? Let’s dig into the details behind that rather startling statement.
The Cost Of Capital
I am no economist, so some of you may find my comments naive, quaint, or even flat out wrong. In general, when a business like Exxon wants to go mucking about with the Earth, drilling test holes here and there in search of new oil deposits, it turns to financial markets to borrow the money it needs to finance those quests.
Investors want to be paid back with interest. How much interest is usually determined by how risky the investment is. The higher the risk, the greater the interest. Bloomberg executive editor Tim Quinson writes in today’s email that a decade ago, the cost of capital for for developing oil and gas projects and for renewable projects was pretty much the same — somewhere between 8% and 10%.
Not anymore, he writes. The threshold of projected return that can financially justify a new oil project is now at 20% for long cycle developments, while for renewables it has dropped to somewhere between 3% and 5%. That’s according to Michele Della Vigna, a Goldman Sachs analyst based in London.
“That’s an extraordinary divergence which is leading to an unprecedented shift in capital allocation,” Della Vigna says. “This year will mark the first time in history that renewable power will be the largest area of energy investment.”
Why The Change?
The first question most people will ask is, why the change? Will Hares, an analyst at Bloomberg Intelligence, explains that pressure from ESG investors is the best explanation for the widening difference between dirty and clean. “Oil companies are finding it increasingly difficult to raise financing amid rising ESG and sustainability concerns, while banks are under pressure from their own investors to reduce or eliminate fossil-fuel financing,” he says.
This is resulting in more expensive debt financing (in some cases double-digit coupons), which, when coupled with depressed equity valuations, leaves most oil companies facing higher costs for capital, Hares adds.
The Conversation At COP26
It this a sick joke? Apparently there were more fossil fuel lobbyists in Glasgow last week that the number of climate conference delegates from any one of the world’s nations. If that doesn’t make you want to puke, I don’t know what would. These smarmy, smirking sycophants get paid to sabotage climate talks so the companies they represent can continue to poison the environment with the waste products that come from burning fossil fuels. They should all be hauled before the International Criminal Court and charged with crimes against humanity.
Future Investments In Renewables
In Glasgow last week, Della Vigna estimated about $56 trillion, or roughly $2 trillion a year, will be invested in renewable energy, bio-energy, and other clean energy infrastructure projects between now and 2050. Spending is expected to peak between 2035 and 2040, driven largely by expenditures on power networks, charging networks, building upgrades, and a massive expansion of renewable power sources such as clean hydrogen.
“It’s significant that such a large share of the financial sector has recognized its role in driving the climate crisis and the need to wind down its financed emissions,” Ben Cushing, a campaign manager at the Sierra Club, tells Bloomberg. “But achieving net zero by 2050 and staying within 1.5 degrees Celsius of warming means stopping financing for fossil fuel expansion today. That’s the key test for whether these commitments are aligned with reality.”
Managing The Spread
“Given this backdrop, the spread between oil, gas and coal and renewable energy will continue to diverge as banks change their financing habits,” says Quinson. In other words, while the politicians are all huddled around the free shrimp cocktail table in Glasgow, the financial community is about to do what they will not or cannot.
Banks and investment firms are not elected by anyone and answer only to the almighty dollar. When lending (and insurance coverage) to fossil fuel companies dries up, it’s game over for them. They can lie to Congress, they can pour money into the campaign coffers of crooks like Joe Manchin, they can fund groups like the American Petroleum Institute to their hearts content, but without access to capital that’s affordable, they are done. Finished. Kaput.
Numbers don’t lie and the bottom line is the bottom line no matter what some politician or lobbyist says. The cost of capital is a significant factor when calculating the levelized cost of energy from any source. When that cost goes up, oil, coal, and dirty methane ventures look a whole lot less attractive. There is an excellent chance the financial sector will put fossil fuels out of business long before our political leaders find the courage to act.
Cost of Capital Spikes for Fossil-Fuel Producers
Ten years ago, developing oil and gas projects was about the same as renewable endeavors. Not anymore.
BLOOMBERG GREEN November 9, 2021 A worker guides a drilling pipe at the Gazprom Chayandinskoye oil, gas and condensate field near Lensk, Russia, on Oct. 13.
Photographer: Andrey Rudakov/Bloomberg
Ten years ago, the “cost of capital” for developing oil and gas as compared to renewable projects was pretty much the same, falling consistently between 8% and 10%. But not anymore.
The threshold of projected return that can financially justify a new oil project is now at 20% for long-cycle developments, while for renewables it’s dropped to somewhere between 3% and 5%, according to Michele Della Vigna, a London-based analyst at Goldman Sachs Group Inc.
“That's an extraordinary divergence, which is leading to an unprecedented shift in capital allocation,” Della Vigna said. “This year will mark the first time in history that renewable power will be the largest area of energy investment.”
Cost of Capital: Fossil Fuels vs. Renewable Energy Source: Goldman Sachs Note: Figures for 2020 are estimates.More from
Will Hares, an analyst at Bloomberg Intelligence, said pressure from ESG investors is the best explanation for the widening difference between dirty and clean.
“Oil companies are finding it increasingly difficult to raise financing amid rising ESG and sustainability concerns, while banks are under pressure from their own investors to reduce or eliminate fossil-fuel financing,” Hares said.
This is resulting in more expensive debt financing (in some cases double-digit coupons), which, when coupled with depressed equity valuations, leaves most oil companies facing higher costs for capital, Hares said
. Mark Carney at COP26 in Glasgow, Scotland Photographer: Stefan Rousseau/PA Images/Getty Images
Climate finance has been a hot topic at the COP26 meetings in Glasgow, Scotland. Government leaders from less-developed nations have at times expressed fury that rich countries repeatedly break promises to mobilize funds to help them decarbonize and adapt to a warming planet.
More such pledges were made last week—only this time they came from the financial industry.
Mark Carney, the former central banker turned climate envoy, said more than 450 financial firms representing $130 trillion of assets have pledged to bring their lending and investing activities in line with the goals of the 2015 Paris agreement. The announcement, however, didn’t mollify skeptics who are quick to point out that details on how the industry would actually meet this target were lacking—a hallmark of the greenwashing scourge.
Goldman Sachs estimates that about $56 trillion, or $1.5 trillion to $2 trillion a year, will be invested in renewable energy, bioenergy and other clean-energy infrastructure projects between now and 2050. Spending is expected to peak between 2035 and 2040, driven largely by expenditures on power networks, charging networks, building upgrades and a massive expansion of renewable power sources such as clean hydrogen, Della Vigna said.
“It's significant that such a large share of the financial sector has recognized its role in driving the climate crisis and the need to wind down its financed emissions,” said Ben Cushing, a campaign manager at the Sierra Club, an environmental pressure group. “But achieving net zero by 2050 and staying within 1.5 degrees Celsius of warming means stopping financing for fossil-fuel expansion today. That’s the key test for whether these commitments are aligned with reality.”
It’s likely that given this backdrop, the spread between oil, gas and coal and renewable energy will continue to diverge as banks change their financing habits. Indeed, markets may end up killing off fossil fuels before governments do.
Sustainable finance in brief Adam Smith, considered by many to be the “father of modern economics,” is having his signature work updated to allow for the climate crisis. A group of economists are reworking Smith’s “The Wealth of Nations” to reflect the modern challenge of a warming planet. Above, a marker leads to Smith’s grave in Edinburgh, Scotland. Photographer: Adam Berry Adam Smith’s “Wealth of Nations” gets an update to accommodate the climate crisis. Former U.S. Vice President Al Gore warns the world about a multitrillion-dollar “subprime carbon bubble.” Singapore aims to curb greenwashing by way of stress test technology. Lazard Chief Executive Officer Ken Jacobs says he seeks to plug the green knowledge gap. World Bank’s Climate Warehouse is looking to blockchain technology to solve carbon data issues.
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New U of C research finds negative overall impacts from coal mining in Rockies
The mine would displace ranching and tourism as well as damage water and wildlife
The Canadian Press ·
An aerial view of Tent Mountain in southwestern Alberta, which was the site of an open-pit coal mine that was active decades ago but has since been abandoned. (Montem Resources)
An analysis from the University of Calgary concludes that a coal mine on protected land on the eastern slopes of the Rocky Mountains wouldn't be an overall benefit to Alberta.
A paper from the university's School of Public Policy says the overall economic, social and environmental impacts of such a development would be negative.
Jennifer Winter, who teaches economics, says she and her colleagues went beyond the usual weighing of wages paid and taxes remitted.
She says her group's paper, released this morning, tries to bring non-monetary factors into cost-benefit assessments usually limited to dollars and cents.Winter says the latest information on coal markets suggests such a mine would be marginally profitable and that its job and tax benefits would be small in relation to Alberta's economy.
Meanwhile, a mine would displace ranching and tourism, damage water and wildlife, and create a risk that taxpayers would end up paying for cleanup.
The paper doesn't refer to any particular coal project, but draws heavily on information presented at the hearings into the Grassy Mountain proposal, which was recently turned down after hearings by provincial and federal regulators.
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