At this point in history, few would attempt to credibly argue that fossil fuel use is not driving climate change. G7 leaders have targeted the year 2100 for fossil fuel phase-out, 177 countries have signed the Paris Agreement, and the world economy is making strides towards low-carbon. This means existing models will change, including the nature of jobs here in our province.
What infrastructure should we be investing in? Which industries will generate the permanent, high-paid jobs of the future? British Columbia should be on the leading edge of the economic and cultural shift towards renewables and de-carbonization, and thus reap the benefits for society, workers and investors.
It is time to have a conversation about what the shift to a low-carbon economy will look like for BC workers.
We all know that it is far easier to stick with what you know. Progress and innovation require a little discomfort sometimes, and Canada’s economy and fossil fuel dependency is a reminder of this. While our economic wellbeing has undeniably relied on the oil and gas industry for decades, the evolution towards clean technology and a more diversified energy economy is underway. Change is brewing… and opportunity lies in the transition towards lower carbon.
Proponents of the fossil fuel industry have done well to convince Canadians that the movement away from investment and policy supports to oil and gas will cost jobs, send our national economy on a ruinous path, will take decades, and be expensive and highly complex.
Is this true? Will a commitment to energy transition have a negative impact on the BC economy and workers? CRED thinks that it is time to put that rhetoric to the test.
How Long Will It Take?
Many credible energy analysts are positing the concept of peak demand for oil within the next 15 years. This is being driven by nations weaning themselves off of oil, increased efficiency & diversification of fuel sources, and, of course, climate change.
Several recent studies examine the costs, benefits and timelines of pivoting away from a fossil fuels-based economy, and all come to the conclusion that the economy will not suffer through investments in renewable infrastructure. In fact, the commitment to a low carbon economy presents an opportunity to diversify and grow. Let’s explore the results of some of this research and what it means for BC.
A recent University of Sussex Study analyzed the speed of energy transitions over history. The study cited that Brazil transitioned 90% of their passenger vehicles to sugar ethanol within only 6 years of implementing the program. Closer to home, the study reminded us that the province of Ontario completely divested itself from the use of coal in less than 11 years – even though coal once powered well over 25% of the province’s energy needs.
The study also notes that there are factors unique to this moment in time that could accelerate a transition towards renewable energy; these include the scarcity of resources, the threat of climate change and technological advances. Of course these factors alone aren’t enough for a swift transition. A common feature of energy transitions that are quick and effective, include strong government intervention matched by consumer interest and uptake.
Based on historical analysis, experts are predicting that the transition to an entirely clean-energy driven society could take less than a decade.
Yes. You read that right.
Ten years is hardly the blink of an eye, of course. We do need to challenge the notion, however, that the transition to a de-carbonized society should somehow be postponed indefinitely because it is going to take too long.
In order to really begin this transition in earnest, we need policy leadership – federally, provincially and municipally. As an example, this will mean looking at how we make our provincial carbon tax more effective by regularly increasing the tax as was originally intended, and in doing so, incentivizing businesses and consumers to make the shift.
What Will It Cost?
It is argued that the movement away from fossil fuels entails exorbitant costs and risks. We need to remind ourselves of the costs of inaction. In western Canada, one of the principal and obvious impacts of climate change will be increasingly dry temperatures and higher-intensity wildfires earlier and later in the year than we have known historically. The struggles being faced across Northern BC, Alberta and Saskatchewan right now – in early May – are exemplary of what we may expect moving forward. The high financial costs to society are acutely being borne at the moment by the residents of Fort McMurray and the surrounding communities. While all Canadians stand in support of these families in their struggle, we cannot overlook that what they are going through in fleeing ‘The Beast’ fire may become a new reality for the west, rather than a one-off disaster.
We also cannot ignore the costs of society doubling down on infrastructure to support a product such as bitumen, where we exert little control over global pricing. The past two years have shown Canadians the risks of being the highest cost producers of arguably the most carbon intensive fuel source available to society. The current budget deficit in Alberta highlights where the real economic risks lie: continuing to base the economic and social wellbeing of a province on royalties and tax revenue from an industry where demand and pricing is out of our hands.
So what will it cost to bring in policies to support the shift to a de-carbonized society? The Labor Network for Sustainability has recently laid out an accelerated policy framework to reduce Greenhouse Gas (GHG) emissions 80% in the U.S. by 2050. The 2015 study includes cuts in coal power and targets cost reductions for electricity, heating and transportation. The framework is then compared to the ‘base’ model of existing policies, in order to see the impact on jobs, and the costs of implementation.
The report concludes that this Clean Energy Future plan could result in overall job growth – more than 500,000 jobs added per year over business-as-usual projections – mainly due to the rise of energy efficiency programs. These new jobs will be developed in producing, maintaining and installing equipment through renewable energy programs, electric vehicle industry expansion, and massive growth in manufacturing and construction employment.
The truly staggering news? The cumulative cost of this Clean Energy Future model is $78 billion less than the reference (base) case.
But Seriously… Won’t We Lose a Lot of Jobs?
The short answer is yes. And no.
In 2014, Energy and Environmental Economics, Inc. (E3) produced a report outlining multiple pathways to achieve 80% GHG below 1990 levels by 2050 in the United States. Building on that report, NextGen Climate America and ICF International used National Energy Modeling System (NEMS) data to determine how following a decarbonization plan would impact jobs and GDP.
The findings indicated that the transition to a low carbon economy would boost jobs in the U.S. including:
- More than 1 million additional jobs created by 2030 and up to 2 million jobs in 2050, including 1.2 million additional jobs in the construction sector;
- GDP increased by $145 billion (0.6%) in 2030 and by $290 billion (0.9%) in 2050 compared to business-as-usual;
- Household disposable income increased by $350-$400 in 2030 and by as much as $650 in 2050;
- Families will have saved $5.3 billion on energy bills by 2030 and $41 billion by 2050.
A truly chilling finding in the report was that inaction on climate change will reduce the United States’ GDP 36 percent by the end of the century.
The report also acknowledged that as jobs shift from coal to clean energy some workers and communities will be adversely affected. This is happening in Canada now, especially in Alberta and Saskatchewan, and it is essential that we assist those affected and incorporate employment transition into planning and policy frameworks.
As an example, it is inspiring to see how in Edmonton – truly the epicenter of oilsands country – a group of current and former oilsands workers are pushing governments and industry to invest in retraining programs so that 1,000 oil and gas electricians can become solar technicians, as part of a broader initiative to move towards renewable energy.
These workers themselves state that investing in renewable energy will “open up a huge amount of opportunity for us if we can start diversifying our energy grid and it would ensure that we are less vulnerable to price fluctuations”. The Minister of the Environment of Alberta seems to agree, stating that “we know that as we transition from coal to cleaner sources of power there will be new job opportunities in a more diversified economy.”
What Does It All Mean for BC?
Closer to home, a study by Clean Energy Canada (CEC) looks at BC specifically, and concludes that a larger carbon tax and stronger sector specific regulation on buildings, transportation, and energy supply will result in a healthier provincial economy.
The report states that the economy will continue growing at an average rate of 2% over the coming decades. A quarter million new jobs will be added to the economy in the next ten years, with total jobs growing by 900,000 between 2015 and 2050.
Much like the US findings, CEC foresees most job growth within the service sector. Job losses in petroleum refining and natural gas distribution are offset by new jobs in biofuel and renewable electricity production. One thing to note is that this report includes the assumption of growth in the LNG industry, but with the recommendation of an end of life date in 2050.
Each report uses varying scenarios and methodologies, but the findings are similar:
Thoughtful implementation of carbon-reducing policies will not harm the economy or availability of high-paying jobs.
The reports consistently found that jobs would relocate from fossil fuel industries to construction and service sectors. A prominent universal finding is that solutions and actions to reduce carbon will buoy our economy for the long term.
Change has to start somewhere, and if we can identify the goal, let’s all discuss strategies for how to get there.
One of the challenges of understanding the potential impact of investing in renewable energy is that traditional industry employment data does not specifically capture it… until now. As of 2015, there is a Clean Energy Jobs Map for British Columbia.
CRED feels it is time to move away from the unhelpful rhetoric surrounding the move to a de-carbonized society, and start talking about opportunities and how to forge the path forward.
The clock is ticking. Let’s do this.