Under the Paris Agreement, a Just Transition is deemed a necessary industrial transformation to ensure a transition to a zero-carbon economy while leaving no one behind. While the Government of Canada undergoes its own consultations on just what a ‘Just Transition’ means, two new reports released this August layout progressive perspectives for a decarbonized economy.
A new report from Unifor entitled Navigating the Road Ahead: Rebuilding Canada’s Powerhouse Auto Sector was launched this August, with the election of the union’s new National President Lana Payne, that lays out recommendations on a way forward for industrial transformation out of production of internal combustion engine vehicles to electric cars.
Decarbonizing the transportation sector is crucial for climate action to cut emissions, reduce our dependence on fossil fuels, and ensure that the working-class aren’t taken for a ride every time the oil and gas industry decides on increasing profit margins. While building public transit infrastructure and building new communities around people instead of cars are better pathways to decarbonize transport, for much of Canada that is already built around the automobile, electric cars cannot be ignored.
Unifor shows us what policies and plans are needed for a Just Transition in the automotive industry that secure and create jobs while replacing gas-guzzlers with plug-in electric vehicles. This includes active labour market policies that support skills development and funding for union-run social welfare institutions, re-orienting international ‘fair trade’ policies, and the creation of a new ‘Ministry of Automotive Supply Chain Development’ to oversee this transformation. While a whole government department dedicated to the auto industry may be too narrow in scope to be viable, an auto industry ‘sector’ within a full Ministry of Just Transition should be created for a more comprehensive policy around this economic transformation.
In this Just Transition, however, new emphasis is being placed on resource extraction of so-called ‘critical minerals’ which are identified as necessary raw materials for this industrial shift. Unifor’s report highlights the need to plan around Canada’s endowment of materials such as lithium, cobalt, nickel and graphite and domestically produce the semiconductors and batteries needed to get more electric cars on the road. The report itself acknowledges that, “it is imperative that government strategists and policymakers understand the perils of this plan without a full and proper acknowledgment of Canada’s repressive colonial past and its obligations to Indigeous Peoples and their land.” Unifor calls for alignment of resource extraction projects with Article 10 of the United Nations Declaration on the Rights of Indigenous Peoples requiring “free, prior, and informed consent” (FPIC) before permitting any mining project.
The Yellowhead Institute's new report Redwashing Extraction: Indigenous Relations at Canada’s Big Five Banks highlights what performative and superficial acknowledgement of FPIC looks like among the extractive investments made by financial institutions.
“Redwashing,” not unlike “greenwashing” is described as the general corporate response to social and legal issues that stem from resource extraction projects that infringe on Indigenous lands and rights by co-opting Reconciliation language and symbolic gestures without substantial changes in the approach to these projects. While employee training in the Truth and Reconciliation Commission’s Calls to Action may be offered at the Big Five Banks, checklist certifications are bought signing off on Corporate Social Responsibility, and diversity hirings are attempted, these actions do not truly address the needs of FPIC when it comes to investments in extractive industries.
While this report looks primarily at investments made in the oil and gas industry, there are strong implications with respect to how FPIC is advanced in current mining projects for critical mineral supply chains. In order for banks, and extractive industries in mining, to fully adhere to FPIC and the UN Declaration, they must fully incorporate these principles throughout their organizations. For an industrial transformation to decarbonize based on principles of justice is to be realized, within the critical minerals supply chain governments and corporations need meaningful engagement on Free, Prior, and Informed Consent.
While droughts and high temperatures grab headlines, truly implementing FPIC should not be seen as a roadblock to climate action, but instead be seen as an integral part to build trust and smooth relations to reduce transaction costs for a Just Transition. A federal Ministry of Just Transition would be well situated to build relations, convene industry and communities, and ensure that building a green economy also means a fair economy.
As greenhouse gas emissions ramp up, housing prices reach astronomical heights, and we all stay stuck in traffic, Paris Marx’s new book Road to Nowhere: What Silicon Valley Gets Wrong about the Future of Transportation looks at how the quest for market share got us to this point and why visions of the future from California tech billionaires cannot solve these problems.
To understand where Silicon Valley’s ideas for the future of passenger transport are coming from, Marx looks to the origins of the automobile, where class dynamics, industrial interests, and state collusion built capitalist economies around the personal combustion engine vehicle. The Ford Model T and early cars were put on streets with a “move fast and break things” ethos that flaunted any laws, regulations, or community consultations. Despite increasing injuries and deaths to pedestrians and passengers caused by increasing speeds and instead of regulating speeds, governments chose to induce demand and build infrastructure and cities around the promise that higher speeds would make life better and that car ownership promoted individual freedom. With strong subsidies, cars were able to overtake public transit in market share despite initial unprofitability. Meanwhile, the working-class who lived on these streets lost previous access to a public good as pedestrians, became isolated on sidewalks, and faced more danger with ever-increasing automotive speeds.
Early dreams of a high-speed future are encapsulated in Marx’s description of General Motors’ Futurama exhibit at the 1939 World’s Fair in New York. This envisioned future illustrated speed, limitless interstate expressways, driverless cars, and elevated walkways that would preserve access to the public sphere of the streets without impeding faster speeds. The full promise of this industrial imagination has obviously not played out, but this vision, dreamt up by the wealthy, was sold to policymakers in capitalist countries in the post-war boom. This would lead to the decades-long financial undertaking of constructing mega highways between and across cities, transforming communities and locking-in car dependence. While stuck in gridlock created by a prior industrial dream, Silicon Valley billionaires continue to believe in this ethos to sell technological fantasy as a means of escaping traffic–an ethos that benefits the rich while leaving everyone else behind in the exhaust fumes.
This early coordinated capitalist mode of production rings familiar with the recent news of Uber’s aggressive efforts to dodge regulations and force advantageous policy concessions in cities around the world. To Marx, this news would be familiar to the whole Uber story. Road to Nowhere traces the transformative vision Uber sold on how its technology would change the future of transportation. It certainly has influenced cities today, in the increased gridlock it has produced, the dissolution of unionized taxi industry everywhere, and changes to labour policies that put workers in more precarious positions. Irrationally, Uber’s strategy in its transportation “revolution” has been to kill any alternative to transit with business practices that keep it unprofitable, propped up by cheap liquidity and share prices, with the vision that long-term sustainability comes from consumers left with no choice but to use their apps. Uber’s road to nowhere leaves behind a scorched earth.
Marx also highlights how tech companies aiming to “revolutionize” the future of transport with novelties like driverless or flying cars, tunnels for cars, or sci-fi hyperloops. These are technological roads to nowhere that are a distraction from real alternatives to car dependency. Public relations carpet bombing promising fictional hyperloop technology coming soon, for instance, helped to break any resolve in California to build high-speed rail across the state. These technological visions of the future of transportation, again, come from the perspective of the wealthiest who believe these novelties to be solutions without considering the consequences.
As economies locked in their emissions around car dependency, electric cars today are touted as a new way to maintain the status quo in mobility while cutting greenhouse gasses. But electric cars are not novel–they’ve been around for more than a century. The technological limitation of speed that combustion promised, as well as the state’s organized effort to back fossil fuels, killed the first electric cars by the 1920s. Today, however, Marx argues they are not quite the climate solution promised by people like Elon Musk. Despite billionaire visions of solving the climate crisis through electric cars, they do not see the excesses in resource extraction and production emissions necessary to build the batteries that power them.
Without fully transforming economic and social relations around car dependency, the same inefficiencies will persist and emissions will not be drastically reduced. The proliferation of this old technology, subsidized by governments and still relying on capitalist modes of production will keep cities gridlocked. While countries in Europe and Asia continue to build public transit and choose to rebuild their cities for sustainability at a comparatively feverish pace, North America’s solution to the emissions made by cars is to build more cars. This is not to downplay the need to cut the reliance on the combustion engine, but the literal vehicle to depend on should not be the personal automobile.
These revolutionary dreams offered by Silicon Valley tech execs don’t change the status quo at all, and are primarily innovations that satisfy the rich while the working-class pay more for gas, wait for the bus, and get stuck in traffic. These tech solutions won’t save us. In an ulterior way, these are technological distractions that continue the car-centered economy while delaying or canceling badly needed public goods, such as transit, housing, and environmental protections. “Technology should be built to serve the public, not to shape how they live to increase the power and profits of major corporations,” Marx concludes. As demonstrated with real world technological innovations centered as public goods like mRNA vaccines or the internet, technology built to serve the public has more potential for revolutionizing our socioeconomic relations than apps that eat up market share.
Paris Marx is a Canadian technology writer whose work has been published by NBC News, CBC News, Jacobin, Tribune, Passage, and Canadian Dimension among many others. Paris is also a PhD candidate at the University of Auckland and the host of the critical technology podcast Tech Won’t Save Us.
Road to Nowhere: What Silicon Valley Gets Wrong about the Future of Transportation by Paris Marx is now available from Verso Books.
Watch our full conversation with Paris Marx about Road to Nowhere and the future of climate action and tech, held on August 16, 2022.
The Clean Air and a Strong Economy section of the federal government’s 2022 budget sinks over $12 billion on climate action measures spread out over four years, while illustrating in the same chapter that a gap of more than $100 billion in annual investment is required to reach net-zero emissions in Canada by 2050.
The government hopes to make up the gap through private investment, and most of the measures tabled in the budget are geared towards incentivizing just that. There is little in the way of investment in public ownership or support for workers.
There is no doubt that decarbonizing Canada’s transportation sector is necessary in the fight against climate change. Right next to the oil and gas industry, the transport sector is the second largest contributor of emissions in Canada and has seen emissions climb without abatement, releasing 185.8 Megatonnes of CO2 in 2019. There is also a major opportunity to induce a shift to decarbonize this sector as petroleum prices reach record highs due to geopolitical trends and major public investments in the infrastructure for electrification.
How do you solve a problem like ZEVs
The federal government has chosen to focus its decarbonization of the transport sector on incentivizing a switch from combustion engine cars to “zero-emission vehicles” (ZEVs). Supply-side and demand-side measures to incentivize this shift are touted at the top of Budget 2022’s climate action measures. Relying on incentives for private sector and consumer investment in ZEVs, however, come with costs and implications that are not always considered.
Large corporate subsidies are being offered to build charging station infrastructure, consumer subsidies are continued to encourage uptake of ZEVs that only wealthier families can afford, and an extensive “critical minerals strategy” is outlined in Budget 2022 to secure energy storage material supply chains. This strategy will have implications for the mining industry, the environment, Reconciliation, and Canada’s foreign policy. Focusing on electric cars as a way to decarbonize fails to take into account far-reaching economic externalities and ignores the higher proportional costs of making the switch for lower-income families.
In particular, the $1.7 billion investment in the Incentives for Zero-Emission Vehicles (iZEV) program demonstrates the short-sightedness of betting on electric cars for climate action. Under this program, only new ZEVs are eligible for the subsidy—it is difficult to re-sell used electric cars due to battery resilience. One of the cheapest new electric cars on the Canadian market, the 2022 Chevy Bolt, is priced at around $38,000 CAD without the $5000 iZEV program. Even when accounting for high prices at the pumps, it is challenging for lower income families to afford a new ZEV, even with the iZEV program, when the comparable 2022 Chevy Spark is priced at $12,000 CAD. Despite this program existing since 2019, only 3.5 percent of new vehicles registered in Canada were ZEVs as of Q3 2020.
A much more efficient use of public money would be to invest in public transit. However, the attention paid to ZEVs in Budget 2022 is gigantic in comparison to what’s available for mass public transit, which completely ignores the latter. Transit systems have been hard hit by the pandemic but have been largely ignored in pandemic recovery and climate action plans, though governments willing to invest in them can produce immediate economic and emissions impacts more affordably. Without building reliable public transit infrastructure, a behavioural switch to more economically and environmentally sustainable commutes cannot be expected.
In Budget 2022, the federal government is investing just $42.8 million over four years on VIA Rail maintenance centres and will withhold $750 million in transit system pandemic relief money unless cash-strapped provinces and municipalities build new housing. Instead of expanding VIA through public investment, the government has instead proposed private sector partnerships to build high-speed rail after decades of studying its economic benefits and feasibility. Budget 2021, curiously, did announce a “Permanent Public Transit Fund” of nearly $6 billion which was a great start towards a stable source of cash for publicly-owned transit. However, with a federal election between budget announcements, this measure was not included in Budget 2022’s Clean Air and a Strong Economy chapter’s key ongoing actions, despite the size and profile of the previously-announced funding.
A subsidy wolf in climate action clothing
In addition to incentives and subsidies for ZEVs, the federal budget’s climate actions also include big-ticket measures to induce investment in Carbon Capture, Utilization, and Storage (CCUS) and Small Modular Reactor (SMR) technology. Like ZEVs, the promise of these technologies are being prominently presented instead of “off-the-shelf” solutions or alternative technologies such as expanding public transit, ending fossil fuel subsidies, continuing to drop the cost of wind and solar energy, or advancing research on renewable electricity generation such as geothermal.
While CCUS and SMRs are touted by some as necessary for climate action, they are by no means off-the-shelf solutions and could in fact harm climate action efforts. CCUS development has been used as cover for continued fossil fuel subsidies, without substantial change in the number of operating CCUS projects globally, despite decades of investment in the technology. SMR technology has yet to be fully tested and developed, with high upfront capital costs and major concerns regarding the nuclear waste material produced and the proximity of Indigenous communities near proposed projects. Despite these concerns, new investment in these untested technologies has displaced any new or accelerated investments in established renewable energy systems, or in building out electrical grid systems to replace fossil fuel generation with established hydroelectricity.
The focus on technology as an accelerator of economic growth is not unreasonable, however, private investment spurred by new tech that promises higher profit margins, like ZEVs, CCUS, and SMRs, appear to overshadow reliable tech with lower profit margins but higher overall economic and emissions benefits, like public transit and renewable energy. Private-sector incentives to decarbonize the economy could work, but it can feel like gambling on a net-zero scenario with untested tech using public money while the stakes are so high. If Canada is truly to meet its net-zero goals, it needs to depend on more than fledgling technologies and the private sector to make it happen, especially when there are other public policy levers available to be pulled.
There is little doubt that rising prices are of serious concern to many working Canadian families, especially those in insecure and low-paid jobs. Inflation was running at 5.1% year over year in February, double the increase in average weekly wages over the same period.
War in Ukraine is now adding fuel to the fire of rising energy and food prices, which risks sparking a popular revolt.
The Right-Wing Response
Populist right-wingers like Conservative leadership hopeful Pierre Poilievre and Alberta Premier Jason Kenney are seeking to turn the issue of rising prices to their political advantage. They are supporting an expansion of oil and gas production and new pipelines to counter rapidly rising prices and calling for the suspension of pending increases in the federal carbon tax, a clean fuel standard, and other clean energy regulations.
The right-wing are claiming that environmental measures to deal with the climate crisis are a major cause of inflation. But we do not face an unpalatable choice between saving the planet and lower living standards. Progressives must come up with a serious alternative.
Policy to reconcile our economic and environmental goals must work to rapidly reduce demand for fossil fuels rather than increase supply through new energy mega-projects which will only accelerate planetary collapse, as highlighted by the most recent IPCC report.
Moreover, it would take years for new fossil fuel projects and infrastructure to have an impact upon global supply and to lower prices.
Shifting Our Reliance
The war in Ukraine has further highlighted the vulnerability to peace and human security posed by over-dependence on fossil fuels controlled by non-democratic states like Russia and Saudi Arabia.
An alternative response must be to dramatically reduce our national and global economy's reliance on carbon-emitting fuels through massive investments in energy conservation and renewables.
From this perspective, rising fossil fuel prices are actually a good thing, at least to a degree. They function like an increase in carbon taxes to reduce demand and increase investment in energy efficiency and alternatives. This transition can create many new jobs.
Further, high oil and gas prices are massively boosting the profits of the oil and gas industry. These can be drawn upon to fund non-polluting technologies and to meet mandated reductions in emissions which companies have hitherto claimed are not affordable without subsidies.
Soaring corporate profits can also be taxed to fund public investments in the energy transition and to cushion the impacts of higher prices on lower-income working families through tax credits like the GST credit, the Canada child credit and the Canada workers benefit. These benefits should be increased and made available to more families. Just as the proceeds of carbon taxes are recycled to households in most provinces, so should excessive corporate profits.
Paying for the Transition
Many right-wingers, notably Pierre Poilievre, claim that we cannot afford major new public investments or larger tax credits since interest rates have to rise to combat inflation. This will increase the cost of government deficits and public debt. The Liberals, too, are saying the cupboard is bare.
But the Bank of Canada recognizes that rising prices are not so much the product of excess demand in the economy as of specific sectoral impacts of the pandemic which will fade over time. They are unlikely to increase interest rates too far, too fast.
Further, the federal government should and can ensure that financing costs for the needed energy transition as well as affordable housing are cushioned from higher interest rates. We should expand public investment banks like the Export Development Corporation to extend low-cost credit and/or equity to desired investments. These banks could be financed in part by the Bank of Canada subject to agreements between the Bank and the federal government.
Effectively there would be two interest rates - a general one, and a preferred one. Only the former would be manipulated to maintain a reasonably low inflation rate, while essential investments would be protected. Alternatively, commercial and private and investment bank lending could be more closely regulated, for example, by limiting mortgage credit for market housing or by setting different reserve requirements for different kinds of financial assets.
Inflation and rising energy prices are clearly a problem, but they should not be allowed to derail the needed transition away from fossil fuels.
Andrew Jackson is senior policy adviser at the Broadbent Institute.
The world climate conference soon taking place in Glasgow (COP-26) has huge challenges on its agenda. Principal among them are, first, securing the global goal of reaching net zero carbon emissions, along with keeping global warming to no more than 1.5 degrees, by mid-century. Second, adapting to protect communities and natural habitats from increasingly devastating extreme weather events. And third, to reach these goals, mobilizing at least $100 billion per year in climate financing for developing countries.Read more
Every party’s platform slogan speaks to the future they want you to believe only they can bring you. Liberals say, “Forward. For Everyone”. The NDP are “Ready for Better”. The Greens call on us to “Be Daring”. Conservatives want to “Secure the Future”. Putting slogans aside, most of us are now deeply aware that securing our future is critically tied to the actions we take to reduce climate change over the next ten years. At the crux of it lies the fate of the oil and gas sector, and the Conservatives remain in dangerous denial of that fact.Read more
Seth Klein, former Director of the BC office of the Canadian Centre for Policy Alternatives, is not the first to draw an analogy between war and the needed response to the global climate crisis. But his just-published new book, A Good War: Mobilizing for the Climate Emergency (ECW Press, 2020) stands out as a sustained and closely argued attempt to show that we can and must act on an almost unprecedented scale, drawing on the lessons of Canada in World War Two.
Klein begins by attacking the new climate denialism, the view that half measures like putting a price on carbon are sufficient to avert a climate catastrophe. Indeed, we have made almost no progress to date in terms of reducing greenhouse gas emissions at a national or global level. While the oil and gas industry, the banks and vested economic interests generally have worked to block effective action, there has also been a major failure on the part of political and even civil society leadership to effectively galvanize the public.
The war analogy and a close analysis of the World War Two experience provide grounds for optimism that big things can be accomplished given political will and popular support. Canada, almost overnight, became a major industrial power providing ships, planes and trucks as well as troops to the allied war effort. We went quickly from the Great Depression to full employment. Despite the sacrifices, such as rationing, living standards for many workers improved considerably due to abundant jobs, the rise of mass industrial unions, and expanded social programs such as mothers’ allowances and unemployment insurance.
When it came to financing the war, what had to be done was indeed done. Federal government debt soared, financed by the sale of billions of dollars of Victory Bonds to the public, with the assistance of the Bank of Canada which also directly financed war spending. Excess corporate profits were taxed heavily, personal income taxes were made much more progressive, and an inheritance tax was levied on large fortunes. The shift of productive capacity back to civilian use after the war ensured that the war debt fell quickly.
Klein shows in great deal that the war economy was essentially a planned, democratic socialist economy. Indeed it was lauded as such by Tommy Douglas and the CCF. All production was subordinated to the war effort, with resources allocated by central planners, including the famous “dollar a year” men seconded to the government by business. There was a major expansion of public ownership as crown corporations were established to build capacity where none had existed. Klein argues that the usual constraints of a so-called free market economy were cast aside, though the private sector still continued to exist as a means to an end.
Advocates of a Green New Deal such as Klein have argued that dealing with the climate crisis also requires climate justice, a full-scale assault on inequality to build social solidarity. This was largely achieved in war time. Today, climate justice will further entail recognition of Indigenous rights and taking the goal of just transition from the oil and gas economy for workers and communities very seriously.
It is often argued that painting too dark a picture of the magnitude of the climate crisis and playing up the scale of the needed transition works against effective mobilization of the public. Klein disagrees, though he is very aware of the dilemma, and manages to convey a great sense of optimism that radical change is both feasible and desirable.
The book does raise some questions for needed further discussion. First, how much resistance can one expect from corporate Canada to a radical economic agenda? To the extent that some in the corporate elite such as Mark Carney understand and are prepared to mitigate the climate crisis, the test will be the need to frontally challenge private control of investment. However, there are rather few signs that corporate Canada is prepared to really break from the dominant model of extractivism and staples driven economic growth.
Lastly, how does the global political economy constrain policies for climate justice in Canada? Klein rightly notes the need to support transition in the global south, but he says little about the constraints of trade and investment agreements, the pressures of competition from countries, like the United States, which remain wedded to the production and use of carbon, and the lack of national control over international capital flows.
Seth Klein's book should be read by all those who recognize the daunting scale of the climate crisis, and want to help build a movement which will lead to real change.
Andrew Jackson is the former Chief Economist of the Canadian Labour Congress and the Senior Policy Advisor to the Broadbent Institute.
Trying to find a silver lining in the current COVID crisis is not easy, but there is a growing realization around the world that the place to look is in the transition to a greener economy.Read more
Media reports say climate change mitigation will play a prominent role in the COVID-19 economic recovery, with the federal government planning to invest in the environment as part of its stimulus spending. Stimulus is a concept associated with John Maynard Keynes, calling for public spending to kick-start the economy. Stimulus was used after the 2008 global financial crisis, but was quickly removed, and the global economy never fully recovered.Read more