OPINION | NDP climate plan tries (and fails) to carve out middle ground
The plan is riddled with inconsistencies and short on details
Editor's note: This is the third in a series of articles from energy and environmental economist Andrew Leach about the federal political parties' climate plans. Read his previous articles here:
- OPINION | Greens' climate plan adds up to Mission: Improbable
- OPINION | Conservative climate plan is cloaked in mystery, choked with irony
- OPINION | Liberals' climate balancing act: The world is watching
Let's be honest: who among us would not like to commute to work in a canoe?
NDP Leader Jagmeet Singh looks like he's doing just that on the cover of the NDP's Power to Change website.
The website and the accompanying, more detailed climate plan both contain multiple, veiled references to the Green New Deal plan put forward by New York congressional Rep. Alexandria Ocasio-Cortez, and are meant to evoke the same types of emotion and symbolism.
It's even in the web address: climate and jobs. But will it deliver?
The NDP plan carves out a middle ground between commitments to policies that might meet Canada's 2030 target from the Liberals, and the wildly ambitious platform of the Green Party.
Singh's plan, though, is riddled with inconsistencies and short on details and, where details are given, the policies simply aren't stringent enough to meet the goals.
The NDP Plan highlights nine areas for action, of which six are related to reducing emissions.
In addition to setting new emissions targets, the NDP proposes a program of job creation through clean energy adoption, eliminating fossil fuel subsidies, energy efficiency retrofits for buildings, cleaner transit, subsidies for zero-emissions vehicles and more involvement of Indigenous peoples in climate action.
There are also commitments related to single-use plastics, climate adaptation and the adoption of the UN Declaration on the Rights of Indigenous Peoples (UNDRIP).
Let's start with their targets.
With all of the policies proposed to date by the governing Liberals, and notwithstanding potential reductions in the stringency of policies in Alberta and Ontario, we're on track for emissions of about 592 megatonnes (Mt) by 2030, well above our Paris target of 513 Mt.
The NDP plan sets a much deeper target.
They claim, with little evidence, that their policies will reduce our emissions to 450 Mt by 2030, and then add a statement that they plan to do more.
The monumental task of reducing national emissions by 38 per cent in 10 years is described as "an important first step," and they plan to add more measures to drive emissions down by a further 50 to 80 Mt, according to my calculations based on statements in the plan. We're just not told what those measures might be.
How, exactly? That's not clear
How is the NDP going to take this monumental first step? We're not told much about that either.
The plan states that the NDP will "continue carbon pricing, including rebates to households that fall under the federal backstop plan, while making it fairer and rolling back the breaks the Liberals have given to big polluters."
We're not told what the carbon price will be, just that there will continue to be one.
Interestingly, later in the plan, the NDP has its own breaks for big polluters, although they call them a "Low Carbon Industrial Strategy" which will include "a fund that industrial operators like manufacturers can apply to in order to access support for investments in lowering emissions and keeping jobs here in Canada." This will also be complemented with a $3-billion "Climate Bank" that would provide loans to spur investment in green technology.
The plan tells us that "workers most impacted by the changes in our economy will not pay the price of action on climate change."
Here, they draw on the work of the Task Force on Just Transition for Canadian Coal Power Workers and Communities, but managing a broad economic transition on the scale proposed by the NDP is an entirely different proposition than managing the impact of closing 14 coal power stations over 15 years. If you're not going to protect some of Canada's emissions-intensive sectors from competitiveness impacts, as the existing output-based-pricing system applied to industrial emissions does, you're talking about much more significant worker displacement still.
What about oil and gas?
Smoke and mirrors
First, the plan states that, "where oil and gas will continue to form a part of Canada's energy mix in the immediate future, we will continue to prioritize domestic upgrading and refining instead of shipping our raw resources and jobs to other countries."
Does that mean new upgraders and refineries? Keeping the ones we have? Reducing production and export at the same time? If so, how? We're left to wonder.
I was shocked that the plan doesn't even mention the oilsands, Canada's fastest-growing source of emissions, although it does mention bitumen once.
The plan also commits to eliminating oil and gas subsidies, claiming that "Canada spends $3.3 billion per year on oil and gas subsidies," and that "[the federal government] purchased the [Trans Mountain] oil pipeline for a staggering $4.5 billion," and that the government "gave another $1.6 billion in handouts to the oil patch."
These claims are worth unpacking because they're mostly smoke and mirrors.
The $3.3 billion number comes from a 2015 version of this IISD study, which is pretty dated when you consider how much has happened in oil and gas since then.
The up-to-date estimates from the same study group are smaller, with only about $380 million worth of federal subsidies on their list. Most of the subsidies in the original and up-to-date studies are attributed to Alberta and B.C. government policies: resource royalties, taxes, research grants and the like.
If Singh thinks the federal government can affect these policies, Sections 92 and 92A of the Constitution might have something to say about it.
What about the $1.6 billion in "handouts"? That's where it gets interesting.
Handouts or hypocrisy?
These were funds announced last year to, among other things, support investments in green technology and environmental efficiency. In other words, the same types of investments envisioned by the NDP's own proposed multi-billion-dollar Climate Bank and Low Carbon Industrial Strategy.
Are we to understand that the NDP would not allocate any of these dollars to reduce emissions in the oil and gas sector? Or that similar investments made by the NDP would not count as subsidies or handouts for some reason?
As for Trans Mountain, the government did buy the pipeline for $4.5 billion, but this can't be seen as a direct subsidy, since the government also received a valuable asset in return.
Arguably, the pipeline expansion would not have been underwritten by any private sector company, but even so, the lion's share of the purchase price was not for the expansion but for the existing pipeline.
Interestingly, the plan doesn't say what an NDP government would do with the pipeline, although presumably divestiture or outright cancellation would be on the list.
It's not clear in the plan how much the NDP expects these reductions in so-called subsidies to reduce emissions. What's certainly clear is that there are not billions of dollars worth of new dollars available to the federal government if federal oil and gas tax expenditures and other programs are cancelled.
Buildings, transport and electricity
The rest of the NDP plan for emissions reduction centres on three key commitments to buildings, greening transit and personal transportation and emissions-free electricity.
The NDP sets a target of retrofitting all housing stock in Canada by 2050, with half of these retrofits completed by 2030.
Half the homes in the country getting some sort of improvement by 2030 is ambitious in and of itself, but we're only told that "homeowners would be able to access low-interest loans repayable through energy savings to cover upgrades like insulation, windows, heat pumps, and other renewable technologies."
Interest rates are already very low, so you're going to have to do a lot more than offer a low-interest loan (which would still likely have a higher rate than a mortgage or home-equity-secured line of credit) to get people to do a lot of things they would not already do to reduce emissions.
On electricity, the NDP will set "a target to power Canada with net carbon-free electricity by 2030, and move to 100 per cent non-emitting electricity by 2050."
As I wrote with the Green Party plan, this doesn't sound that ambitious at the national level, but regionally it's near-impossible.
We're not told much about the road from target to reality; there's talk of the new Canadian Climate Bank, but new investment isn't the issue. If you're talking about a near-complete phase out of fossil fuel power in 10 years, you're going to need a big regulatory hammer or a much higher carbon price.
And, supposing you were able to do that, you're going to need a massive increase in intertie capacity, storage and alternative, dispatchable electricity sources. Otherwise, it's going to be impossible to power many parts of the country when the sun isn't shining and the wind isn't blowing.
Heavy on ambition, light on detail
On vehicles, the plan is also quite ambitious in goals, but without a lot of detail on policies. Where there are details, there are also concerns.
The plan promises federal purchase incentives and federal sales tax exemptions "for working families" on zero-emission vehicle purchases. I'm not sure how that means testing is actually going to work. Do retired people not qualify?
These federal incentives will grow in value to $15,000 and be targeted to made-in-Canada vehicles only.
This is, of course, likely to run afoul of our free trade agreements, while also being a very regressive and costly policy.
We know that, historically, a significant share of electric or hybrid vehicle subsidies have been paid to those who a) would have purchased EVs anyway (see here for a review of research by Gulati and Antweiler) and b) are in the higher end of the income distribution.
If you walked into an NDP policy convention and pitched a policy that would hand out $15,000 cheques, predominantly to the most well-off households, and nothing to those who can't afford to buy a new car, how well do you think that policy would go over? Somehow, subsidies for electric vehicles always seem to escape that same type of scrutiny.
Transportation and transit is the biggest line item in the plan at $6.5 billion, but when you consider that we have more than 20-million light-duty vehicles on the roads in Canada, you're going to need a lot more than that to drive a large-scale conversion of Canada's fleet on subsidies alone, without additional regulations or, again, carbon prices.
I was deeply critical of the Green Plan for pitching outcomes that, in many cases, were technically infeasible and of the Conservative Plan for promising more reductions from demonstrably weakened and/or undefined policies. The NDP fits in the middle of those two.
They offer targets which are, for the most part, at least technically feasible, but they don't offer the policy horsepower to get there.
Many of the policies they do identify might be popular, but they simply won't generate the levels of emissions reductions promised.