Sure, all newspapers are guilty of this to an extent. But the sheer mass of this week’s issue, delivered unsolicited to my doorstop, makes me want to scream. And I meant thud — I had to get up and look out the window to comprehend what had just happened. I’m sure there are some people out there who like to look through the flyers for bargains or coupons, but I’m betting almost everyone puts them straight into the recycling bin, regardless of whether they go on the read any of the actual paper or not.

Intrigued by the two pounds or so of waste inserts, I began to scan the paper, not for additional stories of interest but for just how much news was in this thing. My tally: about 16 and a half pages of content in a paper of 48 pages (and I’m including the cover, table of content, “KidzBeat” back-to-school section and horoscopes, so the actual news content is much thinner). In a world without the Internet perhaps this glut of advertising would be the price to pay for good local news, but I scan more online content than this each morning before I leave the house.

The Courier is a free paper, so advertising must cover 100% of the costs of paper, printing, delivery and profit for the owners. At some perverse level, this venture makes economic sense, but in any real sense it is an astonishing waste of resources that makes no environmental sense whatsoever. And while the Courier generally has good coverage of local issues and Vancouver City Hall, I’m guessing we’ll never see any critical stories from them on London Drugs, Shoppers’ Drug Mart, Safeway or any of the other ten insert providers.

Now, we can recycle newspapers but the tragedy only worsens when we look deeper. In spite of the abundance of pulp and paper mills of BC, most of the municipal newspaper recycling gets sent to Asia for processing. And the fact that municipalities are on the hook for handling this waste is a cost to taxpayers not borne by the publisher. Minimally, newspaper waste ought to be fully recycled in BC and paid for by the producers. Until we do these papers should be banned.

Don’t even get me started on the Yellow Pages …

The report …  concluded 2000 to 2009 was the warmest decade ever, and the Earth has been growing warmer for 50 years. Each of the past three decades – 1980s, 1990s and 2000s – was the hottest on record … Of the 10 measurements, the report said seven are rising – air temperature over land, sea-surface temperature, air temperature over oceans, sea level, ocean heat, humidity and the temperature of the troposphere, which is the atmosphere closest to the Earth’s surface. Three indicators are declining – Arctic sea ice, glaciers and spring snow cover in the Northern Hemisphere. All of which point to a warming trend.

Also making news is the latest cap-and-trade planning from the Western Climate Initiative, which made the front page of the Vancouver Sun yesterday. I’m hesitant to reprint anything from that story as it gets some of the basics wrong, and makes some big assumptions about how the regional cap-and-trade system will play out in BC. While BC has legislative authority to enter a WCI system in 2012, there are still many details to be worked out about how permits will be allocated, what penalties would be applied, etc. BC was supposed to release some new regulations on how the system would play out today, but then pulled it at the last minute.

The WCI announcement comes on the heels of the demise of an American cap-and-trade program in the US Senate, an outcome that puts all of the onus for US greenhouse gas reductions on states and the Environmental Protection Agency (which, fortunately, has been found to have jurisdiction to regulate GHGs as a pollutant but has not moved due to developments in Congress). A good synopsis of these developments and possible short-term outcomes is here.

Like the poisonous politics of Congress, however, the reality is that the WCI has been creamed at the level of state legislatures. It is one thing for the WCI to state some parameters of a plan; another to win the political support to make a real cap-and-trade system a reality. Officially, there are seven US states and four Canadian provinces that are party to the WCI, plus a longer list of “observers”. But Washington and Oregon, in particular, have faced huge opposition in their state legislatures, and I suspect the others are also having misgivings. The Globe’s coverage of the WCI comments that Ontario and Quebec are uncertain about WCI, so it is anyone’s guess who’ll really be there when 2012 hits.

So on the surface this new announcement may be a step forward, but as always the Devil is in the details. And the details we have suggest that the current form of the WCI is pretty leaky in terms of actual emission reductions. Ian Bruce from the David Suzuki Foundation flags a few very important concerns:

First, the WCI partners shouldn’t weaken the shrinking yearly quota for industrial emitters by allowing companies to buy pollution permits for promised action in the future versus reducing their current emissions. (It wouldn’t be responsible to pass on a financial debt to future generations, and the principle is the same) Second, industry’s target or cap for reducing emissions should be in line with what leading scientists say is necessary to avoid catastrophic consequences of global warming, a reduction of about half over the next decade. Last, these provinces and states can ensure the environmental integrity of the cap-and-trade system by limiting the use of carbon offsets in the system, as this weakens the incentive for industry to take responsible action to reduce its own emissions.

The region-wide target is 15% below 2005 levels, not 50%; carbon offsets can be used for up to 49% of emission reductions; and other provisions allow more “flexibility” in meeting targets (see Figure 4 on page 13 for a list). When I see some meaningful commitments to stop the expansion of fossil fuels with a plan for real reductions, I’ll be the first to do a jig.

The tricky part is that changing these elements would render the program that is already getting a rough political ride virtually impossible. As Bill Rees says, “the ecologically necessary is politically infeasible but the politically feasible is ecologically irrelevant.”

The Story of Stuff by Annie Leonard

I watched the video along time ago, and even saw a live performance of it at the Oregon Country Fair a couple years ago. Now the book, which puts some much needed meat on the bones of those stick people. Which makes it a compelling popular primer on ecological economics, except while the latter tends to the abstract, Leonard tells the story of everyday Stuff, walking you through the processes of Extraction, Production, Distribution, Consumption and Disposal. She also makes a compelling case that our ecological woes – of which climate change is just one – are systemically rooted in a little thang we call capitalism. But she does not stick to environmental problems, either; she reveals the injustices for workers at all stages in wages, hours and unsafe working conditions so that we can buy a toxic bauble for a dollar.

The Geography of Hope by Chris Turner

I saw Chris Turner speak at a conference last year at Harrison Hot Springs, and even got to chat with him in the hot tub. He was a pretty funny speaker and I committed to picking up his book. But then I assumed I would see it on the shelves in my occasional bookstore browsing, but never saw it anywhere. Which is a shame because this type of book is what we need to shake ourselves out of our fossil fuel addiction. Turner is a fantastic writer, and as a journalist he is able to tell compelling stories from a round-the-world journey in search of real examples of a zero-carbon economy that represents a plausible future – if we can just break the addiction. Working on climate change takes you to some pretty dark places, and this type of book shines some of the light I need to keep going.

The Spirit Level: Why More Equal Societies Almost Always Do Better, by Richard Wilkinson and Kate Pickett

When I first heard the name The Spirit Level, it met with a roll of my eyes, kind of like when someone says Mother Earth during an environmental debate. But the book kept coming up from some sources I highly trust, and after picking it up I found it has little to do with the last known residence of Carlos Casteneda. In fact, it is the type of synthesis that is so rare these days, covering a wide range of empirical evidence, and weaving it together so nicely that at the end it just seems obvious. The sub-title gives it away: using cross-sectional international comparisons and states within the US (plus the occasional time series), the book makes its way through an undeniable link between higher inequality and adverse social and health outcomes. As someone who has spent a bit of time researching inequality, and advocating for policies to reduce it, I’ve noticed a tendency for researchers to sometimes fall into “statistical pornography”, or displaying data for its shock value (“just look at that growing gap”). What the Spirit Level does is provide the deep context for why that growing gap matters, linking it to real outcomes rather than ethical ideals, filling in the canvas with research on social determinants of health and life satisfaction. I’m pleased to say I got this one out of the library.

In Defense of Food: An Eater’s Manifesto by Michael Pollan

Pollan’s follow up to The Omnivore’s Dilemma revisits some of the critique of the industrialized food system covered in that book, but focuses on our evolving understanding of nutrition. Pollan is a wry writer, and he deftly and humourously argues that the science of “nutritionism” has led us astray because of its reductionist tendencies that miss the big picture of healthy eating in practice, thus leading societies down one food fad after another, plus a lexicon of food-speak that few can relate to. The major lessons seem to be about avoiding the products of the industrial food system, fast foods but also most of the processed foods, especially ones that have health claims emblazoned on the package. Simply put, eat your fruits and veggies, ideally as locally produced as possible, and not too much meat. And slow down, dammit, and enjoy that meal with friends and family.

British Columbia’s government spent $325 million more on the 2010 Winter Olympics and Paralympics than originally promised. The $925.2 million bill to taxpayers was disclosed in an unaudited Friday report and included a $50 million bailout for the recession-rocked Vancouver Olympic Organizing Committee. … The $925.2 million figure does not include costs borne by Crown corporations or government agencies that were VANOC sponsors or service providers.

… While the federal and B.C. governments contributed $580 million for venue construction, VANOC was supposed to fund its $1.76 billion operations budget primarily from private sources via broadcasting, ticket sales, merchandising and sponsorship. When the recession happened, all four revenue sources shrunk. Two sponsors — General Motors and Nortel — went into bankruptcy protection. VANOC was stuck with $12 million in unsold billboards that it gave to the province for a tourism advertising campaign.

VANOC’s final, audited report is expected in late fall. It stopped issuing quarterly reports last December, despite the 2002 Multi-Party Agreement with governments that said it must.

The Finance Minister, Colin Hansen, repeatedly claimed that the total bill to taxpayers would be $600 million. And it is worth noting that VANOC voted themselves bonuses on the order of $30 million last fall.

Back to the “we told you so” file, and I will quote myself back in 2006:

I should also point out, because the media have completely failed to, that the only cost-benefit analysis of the 2010 games was done by the CCPA. In a February 2003 report by Marvin Shaffer, Alan Greer and Celine Mauboules, the analysis used the 2010 Bid Book and some crafty calculations to estimate the net financial cost to British Columbians at $1.2 billion, and $2 billion if the new transit line to Richmond and the airport was included. The report stands the test of time quite nicely, I would say. And the authors at the time cautioned that “costs could be substantially higher, and are subject to numerous risks. The Province of British Columbia, as the sole guarantor of the Games, is assuming all the financial burden of what is, clearly, a risky business venture.”

And so it was. The 2003 report expressed its amounts in 2002 dollars, so add a bit of inflation and we were pretty close. In addition, the City of Vancouver has estimated that its costs of hosting the Games (additional to the BC government contribution) was $524 million in capital costs and another $30 million in operating costs, although some of this was for non-competition infrastructure that might have been done anyway. Similarly, provincial dollars do not include infrastructure investments like the Canada Line transit expansion and the Sea-to-Sky Highway expansion, both of which were pushed to the top of the queue by the Olympics but arguably might have happened at some point anyway. Nor does the provincial amount include the BC portion of federal government costs (BC has 13% of Canada’s population, so part of the party was financed by the rest of the country).

So were the Olympics worth it? It certainly was fun party, and Canada’s hockey gold medal may prove to many Canadians that costs were justified. If we call it $2 billion in net expenditures, that amounts to about 1% of provincial GDP. A fuller examination of the numbers is warranted, but whether you think the cost was worth it or not, you should be troubled by a government that is not honest with the public about the provincial finances.

… B.C.’s public accounts for the fiscal year 2009/2010 conclusively prove that the pre-election fiscal plan foisted on British Columbians by Premier Gordon Campbell and his BC Liberals on Feb 17, 2009 was the worst — the most egregious, the most deceptive — “Fudge-it Budget” in provincial history.

The public accounts show that the Campbell Liberals inflated revenues in Victoria’s main operating account, the Consolidated Revenue Fund (CRF), by a stunning $2.558 billion — yes, Billion — with taxation receipts alone overstated by $2.1 billion.

Even under the broader GAAP (generally accepted accounting principles) presentation, the Campbell government exaggerated last year’s expected revenues by a whopping $1.3 billion.

The result: a gargantuan shortfall of $1.779 billion for fiscal 2009/10 — nearly four-times higher than Campbell’s oft-repeated, pre-election pledge of a deficit no bigger than $495 million.

Back in early 2009 before the Budget was released, we crunched some scenarios of the fiscal outlook, noting many concerns about the state of the provincial economy moving forward. We started with the rosy estimates of the Ministry of Finance, which bases its projections on the average private sector forecast coming from the MoF’s Economic Forecast Council (a long time ago, we used to be part of this autere group but got cut after the Liberals came to power in 2001).

Noting that the EFC figures were too rosy, we then modeled the impact of two recession scenarios. Preliminary GDP data for 2009 are still not available, but we used different estimates of GDP to project revenues, and in our pessimistic scenario, this resulted an estimated deficit of $1.6 billion.

So we were off a bit but not by much – and since the economics department over here is Iglika, unlike the army of number-crunchers over at the MoF, I think we did alarmingly well. In contrast, the 2009 Budget projected a deficit of only $495 million. At the time we commented:

… those deficits may be much larger before this is all over. Spending pressures for social assistance could rise much more than currently forecast. A challenge is in interpreting the government’s revenue forecasts. In years past, tax revenues have been grossly understated leading to large “surprise” surpluses at the end of the fiscal year compared to budget time. This year those revenue projections look to be more reasonable, although it will be interesting to see what the final tallies for 2008/09 will be to get a more accurate baseline (we will not know until summer). That said, given the recession, the budget projects an increase in some tax revenues predicated on growing personal income of 1.7% and growing consumer expenditures of 1.9% in 2009. This seems unlikely, and so we could easily see bigger deficits before this is all over. Added to this is the fact that there are no forecast allowances in this year’s budget, because that would make the deficits look larger (it was only OK to make surpluses look smaller).

This is an astonishingly large price difference, and has something to do with the fact that British Columbians consume 25% less gas per capita than the Northwest states, according to a new report from the Sightline institute (295 gallons per capita last year for BC compared to 392 for the NW states). Price is not the whole story here: urban planning and public transit in Vancouver are more conducive to reduced fuel consumption.

The bad news is that in spite of these high prices, BC gas consumption per capita increased by 10% in 2009 over a year earlier. This is cherry picking somewhat because at 270 gallons per capita in 2008 this was the lowest consumption had been since the 1990s (see the Sightline report’s appendix). The price spike of 2008 figures large in that swing, as gas prices in Vancouver peaked in July 2008 at over $1.50 per litre. The state of the economy another factor, plus one-time events like the Olympics (helicoptering in snow, for example). The full data series going back in time is not available in the report but that 295 gallons per capita in 2009 was higher than any year going back to the 1980s.

The difference in prices between BC and NW states is essentially due to taxes. Interestingly BC’s carbon tax, which was 2.3 cents per litre for the first half of 2009, and 3.4 cents for the second half is but a small contributor. Other taxes figure in as well, with BC fuel taxes of 17.83 cents per litre (including the carbon tax) plus a regional tax of another 9 cents per litre. There is a federal excise tax on gasoline of 10 cents per litre, plus GST on the whole thing. Some of these taxes go toward supporting transit in the region, through the gas tax rebate to municipalities federally and a portion of provincial and regional taxes, too.

So as one might guess, higher prices reduce consumption. It makes sense for those tax revenues to fund transit infrastructure and services (and bike infrastructure, too). But even though many low-income people do not drive, there is a regressive impact at the bottom that should be resolved with larger income transfers to those families. There is interesting Statscan table that shows that households with incomes under $20,000 emit only one-third of greenhouse gases per person for driving compared to households with incomes over $20,000. Emissions/consumption is relatively flat after that but the highest income group in the table, over $100,000 per year, emit more – about 12% more.

Fixing things for auto-dependent households (who may need to live in the suburbs in order to afford a decent home) is more than an electric car away – it is a long-term challenge related to creating more affordable housing in central cities, and more compact communities where there are currently suburbs. With longer-term structural changes, the need to own a car would be greatly diminished, but this will take both time and money. So on balance, though, gas prices should continue to rise, and as we do so we need to divert a reasonable share (I argued for half the carbon tax, so perhaps as much as half of all fuel taxes) to low- to medium-income households.

What the carbon tax shares with the HST is a bigger hit to the bottom of the income distribution. When it was introduced back in 2008, the carbon tax dedicated about one-third of revenues to a low-income credit (the remainder going to personal and corporate income tax cuts). This was a big positive with  households in the bottom 40% of the distribution slightly better off on average, with credits exceeding taxes paid.

Alas, last year’s increase to $15 a tonne wiped out that gain because the low income credit barely increase in value (from $100 per adult to $105), while the carbon tax grew by 50%.

The new 2010 increment to the carbon tax will make the whole regime regressive – meaning a bigger hit to low-income families relative to their income; they will be absolutely worse off even after considering the credits. For the bottom 40%, the numbers are not huge – about a $30 per year loss, but pile that on top of the HST and you get the picture. That said, it could have been worse: the 2010 budget increased the credit another ten bucks to $115.50 per adult.

One might argue that the whole point is to get all households to change their behaviour in response to the carbon tax. But it is the lowest income families that have the hardest time making the capital investments needed to get ahead of the curve, and who are most locked into carbon necessities (like heat) that are difficult to reduce easily. High income families have a much easier time reducing their consumption and upgrading their homes for energy efficiency.

Like the HST, the carbon tax brings a windfall to business, with a large chunk of this year’s revenue going to corporate income tax cuts. Back in 2008, the projected recycling to business tax cuts in 2010/11 was estimated at $333 million. In the 2010/11 budget that amount has been souped up to $412 million – more than half of the anticipated $796 million in carbon tax revenues – to add onto savings coming from the HST.

Since all taxes are ultimately attributable to households, corporate tax cuts are essentially upper income tax cuts. On this basis, the top 20% of households (who own the vast majority of shares in businesses) are actually huge beneficiaries of the carbon tax regime. Not counting the corporate tax cuts, the top 20% of households would pay about $536 more on average in carbon taxes than they receive in personal income tax cuts, but if we include the corporate tax cuts they receive a net benefit (tax cuts less carbon taxes) of $291.

The remaining carbon tax revenues are recycled into personal income tax cuts. In 2008, this was supposed to be $410 million in personal income tax cuts. By the 2010/11 budget that number had been almost halved to $211 million (there is also $20 million in benefits to northern and rural households in addition to this).

Don’t get me wrong: carbon taxes are still an important policy tool in battle against global warming. In fact, at $20 per tonne we are only now just getting into the range of carbon prices that will start to change behaviour. Currently scheduled increases go to $30 per tonne in July 2012, but after that we do not know where the BC government will go with the tax. A study for the David Suzuki Foundation and Pembina Institute by Mark Jaccard and Associates concluded that carbon taxes needed to hit $200 per tonne by 2020 if we are going to achieve our GHG emission reduction targets.

That’s a steep price increase, and that is why we need to get the details right around how the proceeds of the tax are redistributed. Given the need of lower-income households to adapt, there is a compelling case to be made to significantly increase the share of revenues going to a refundable credit — like half of the carbon tax revenues, with more households in the middle-income range benefitting as well. (In fact, pooling the carbon tax credit with the HST/GST credits into a consolidated credit and greatly increasing their values would be a nice step towards a guaranteed income, but I digress.)

The other half of carbon tax revenues should not go into further personal and corporate income tax cuts, and instead should be used for major improvements in public transit, energy efficiency retrofits, and green jobs training programs. In 2010/11, the carbon tax is estimated to bring in almost $800 million in revenue, rising to $1 billion next year. That is some serious cash that would greatly accelerate climate action in BC.

*Note: Figures cited are based on my 2008 report with Toby Sanger, Is BC’s Carbon Tax Fair? Numbers have been updated based on information in Budget 2010.

It does not have to be this way: these trends are prominent for the Anglo countries (US, UK, Canada, Australia and New Zealand) but the trend towards a growing slice of the pie going to the very top has not proven to be the case in countries like Japan, France or Sweden. This corresponds to the shift in political economy of the Anglo countries away from the norms of the post-war decades that saw growing public services and income supports for the poor, with governments that more tightly regulated labour and goods markets, and towards a return to smaller government and more emphasis on markets as the arbiters of social and economic outcomes.

In a recent update of the Canadian data by Mike Veall of McMaster University, for the first time we have provincial data to show how dynamics have played out across in different parts of the country. In BC, for example, the top 1% received 7.8% of income in 1982, and this surged to 13.4% in 2007. After taxes and transfers, the situation is a bit better but not really that much, and the trend is the same: the top 1% received 6.6% of income in 1982, rising to 12.0% in 2007.

BC’s results roughly track the national trend, and it is notable that the top market income share is larger in both Ontario and Alberta, and smaller in every other province. After taxes and transfers, however, Ontario’s top 1% only got a measly 10% of the total income pie, making BC number two in terms of inequality after Alberta. As the Table shows, other provinces do a much better job of keeping top incomes in check.

Note: More info available on Canadian and Anglo top income inequality is available here.

To put that number in perspective, this is almost double the world’s annual CO2 emissions. And I’m pretty sure that does not count additional reserves that could become available due to a massively environmentally damaging process called “fracking” (I kid you not, lovers of Battlestar Galactica).

Ironically, the Globe report categorizes these natural gas reserves under Green Natural Resource Opportunities. Which brings us back to CCS. If carbon capture and storage technologies can be successfully implemented over the lifecycle of this extracted natural gas, including where it is combusted, there might be a case to be made for their extraction.

But that seems like a big if, especially given all of the other bona fide green energy opportunities that could be tapped. Why invest so much in retrofitting coal plants for natural gas when we could be building out wind, water and solar technologies? Some work by Jacobson and Delucchi makes the case for renewables by 2030, and they have an extensive and rigorous analysis to back it up. They do not consider any combustion (CCS or biofuels) in their approach, which makes their technological, resource and economic assessment even more interesting. And they note that even with CCS, coal-fired electricity has way higher lifecycle emissions than any renewable (best in class is wind, in their estimation).

The only decent argument to be had for natural gas is that, as the “cleanest” of all fossil fuels, it could be a transition fuel en route to truly sustainable sources. But the counter-argument to that is the sheer urgency of getting over our addiction to fossil fuels necessitates much bolder action, so it is better to spearhead an aggressive switch directly to renewables.

When emissions are reported for BC or Canada, there is an accounting convention that restricts the total to emissions released within the borders of that jurisdiction. This means that BC’s major exports of coal and natural gas are counted only to the extent that fossil fuels are used in the extraction and processing, not the combustion of the final product in the US. Most of the greenhouse gas emissions associated with fossil fuels are due to their eventual combustion.

A recent study takes a consumption (or lifecycle) approach to GHG emissions to see how much has been “outsourced” to countries like China that make the stuff we consume:

Over a third of the carbon dioxide emissions linked to goods and services consumed in many European countries actually occurred elsewhere, the researchers found. In Switzerland and several other small countries, outsourced emissions exceeded the amount of carbon dioxide emitted within national borders.

The United States is both a major importer and a major exporter of emissions embodied in trade. The net result is that the U.S. outsources about 11% of total consumption-based emissions, primarily to the developing world.

The full study has to be purchased through the publisher (here), but a good (free) summary of the main findings is here.

This got me thinking about how much GHG emissions are embodied in our exports that are consumed elsewhere (a lifecycle analysis from the producer perspective). For a province like BC, with its spanky clean green image, there is already a contradiction between stated climate action objectives and the historical (and ongoing) industrial policy of resource extraction.

When it comes to law and order, we have learned not to crack down on the users of drugs, but focus our efforts on the dealers. So what if it turns out that beautiful BC is running the resource economics equivalent of a meth lab?

As a baseline, consider that BC’s official greenhouse gas emissions totaled just over 63 million tonnes of carbon dioxide equivalent (63.1 Mt CO2e, to be geeky about it) in 2007, the last year for which we have data. Emissions from extraction and processing of fossil fuels were almost 13 Mt of this total. I was able to get export volume data from Statscan for both coal and natural gas, and then multiplied these volumes by emission factors from BC’s GHG inventory report to estimate downstream emissions (data for natural gas go back to 1980, whereas a break in the coal dataset meant that I only got 2008 and 2009 data).

For natural gas combusted in the US, BC was the source for 53 Mt CO2e in 2008. Interestingly, that is down from an all-time high of 74 Mt in 1998, though I suspect that interprovincial exports to Alberta may make up some or all of the difference. Coal exports led to another 52 Mt of emissions elsewhere in 2008. So bottom line for BC fossil fuels is 105 Mt CO2e in 2008; exports of these two commodities alone led to emissions elsewhere that are 166% larger than BC’s overall emissions within our borders, and about eight times the BC emissions associated with getting those fossil fuels out of the ground and to market.

To put that in perspective, BC’s much-lauded carbon tax is only estimated to reduce emissions by 3 Mt per year after 2020 relative to business-as-usual emissions growth.

So what’s an ethically minded crack dealer to do? The standard industrial growth model of digging it out and shipping it to the US or Asia needs to be broken. For starters, the government should reverse its recent approval of a natural gas processing plant in the Northeast that will add more than 2 Mt to BC’s domestic inventory, and 16-18 Mt of downstream emissions.

The good news is that these resources are not going anywhere, and will only be worth more as time goes on. So there is no reason why we should not dramatically slow down coal mining and oil and gas extraction – until some point when we can sequester the emissions from their combustion. This technology (aka carbon capture and storage) is already out there and is poised to become widespread over the next couple decades. Until then, however, we should think the unthinkable and consider leaving those resources in the ground.

Instead, the budget better resembles the Olympic flame, whose massive size and burning cauldrons made a fitting monument to the oil and gas industry, a testament to our brazen capacity to burn fossil fuels. Subsidies to the oil and gas industry remained untouched in the budget, and in fact royalties from the sector are half of levels in previous years, in part due to royalty reductions from last August’s “oil and gas stimulus package” (like they really needed it). In addition, the budget’s transportation investment plan, 86% of provincial funds go to roads and bridges, including favoured projects like the Gateway highway expansion program and the “oil and gas rural road improvement program”.

There was some expectation that the government would announce a plan for the BC carbon tax, which hits $30 a tonne in July 2012, then hits a wall. If I was a business in BC, I would want to know the outlook post-2012 and what this meant for capital investments in the near term. But there was silence on that front, nor any expansion of the tax to cover major sectors not currently covered by the tax, including aluminum, cement, lime, and (you knew this was coming) much of the oil and gas industry.

From a climate justice perspective, more troubling is the failure to improve the low-income carbon tax credit, which more than offset the carbon tax for the bottom 40% of income earners in year one (starting July 1, 2008), and was roughly neutral in year two (July 1, 2009). The growth of the credit is not keeping up with the growth in the carbon tax, and will make the overall regime regressive as of July 1, 2010 – thus placing a greater burden on low-income folks who have done the least to contribute to the problem in the first place.

Since its inception, the carbon tax and revenue recycling regime was regressive at the top, meaning the top 20% of income earners get back more in tax cuts than they pay in carbon tax. The government’s unwavering commitment to use carbon tax revenues to fund personal and corporate tax cuts that are not needed and will have essentially no economic impact also deprives action on things that really would change behaviour, like improvements to service for public transit (the latter being a fascinating experiment and positive outcome of the Olympics). True, the government has put in funds for the Evergreen line, but hamstrung Translink’s ability to raise funds to actually get the project off the ground.

So overall, we need some regime change on the climate front if BC is to live up to its rhetoric and awards from environmental groups.

The budget does breath some new life into LiveSmart, a program for energy efficiency upgrades that ran out of money last year when it was oversubscribed. Too successful for its own good, the program withered. The budget provides new money of $35 million over three years, which is better than nothing but rather small. It is a lost opportunity given that unemployment rates are double what they were a year ago, and this work develops green jobs. There are some flaws in the program that still need to be fixed; for example, it encourages use of natural gas furnaces and hot water heaters that produce the greenhouse gas carbon dioxide when used.

In addition, the budget commits $100 million over three years to vaguely defined “climate action and clean energy”, which is linked to an upcoming Clean Energy Act to be tabled this sitting that has many concerned about the province running roughshod over local interests to ramp up private power production for export to the US (perhaps in conjunction with a new deal signed by Campbell and Schwartzenegger during the Olympics). The budget states that this money will be used to support investments (read: subsidize private sector) in biofuel production, new electricity generation and “infrastructure to support cleaner transportation choices”. While some of this may be a useful contribution, we will have to wait for more details when the new legislation is tabled.

This budget says “steady as she goes,” but it’s not clear where we’re going, and whether the budget does enough to respond to the challenges that may be ahead. The risks for the BC economy are serious: the US economy remains very weak, as does central Canada’s. The Winter Games are over, and in Olympics past this has meant a drop in economic activity. And even though many feel we are in recovery territory, rising GDP coming out of a recession is typically accompanied by rising unemployment for at least another year. There doesn’t seem to be a clear economic development plan to provide jobs for people who lost theirs during the global recession.

The budget’s priority is to show a reduced deficit for 2010/11, funded by a smattering of spending cuts that will not help the province’s overall economic situation. This drop in the deficit by $1.2 billion (from $2.65 billion in 2009/10 to $1.4 billion in 2010/11) is partially offset by increased capital spending. So, a check mark for accelerated capital projects that push the total envelope to $5.4 billion in 2010/11 for taxpayer-supported projects (up from $4 billion in 2009/10). There is a drop in other (self-sustaining capital projects), but an overall increase in total capital spending to $8.2 billion. Not all of this is well spent, such as $390 million this year for the BC Place roof upgrade.

The budget heralds a return to conservative budgeting practices, with numbers set out in a way that ensures the government will outperform the targets. Barring a major economic collapse, BC will rebalance the budget sooner than the stated 2013/14. For example, the budget estimates a deficit of $145 million in 2012/13, peanuts relative to more than $40 billion in revenues. But if resource royalties bounce back (as higher commodity prices seem to indicate) the shift back to surplus could happen even further ahead of schedule.

A number of ministries saw budget cuts, led by the Ministry of Forests and Range, with a one-year cut of 35% (a drop from just over $1 billion in 2009/10 to $641 million in 2010/11, and this is on top of previous cuts. This will hurt in smaller communities around the province. Other ministries received cuts that were small by comparison, typically in the tens of millions of dollars. Translated into public sector jobs, there is a continuation in the reduction in full-time equivalents (FTEs) from a peak of 36,277 workers to 32,000 by 2012/13.

The government introduced a few new spending measures, and health care gets a 4.7% increase above 2009/10, but we remain low compared to other provinces in terms of health care per capita. For regional health services this means an extra $396 million on the heels of a $360 budget shortfall last year. The new budget does not leave health authorities much room for enhancing seniors’ services or revitalizing support for mental health and addictions programs and other preventive initiatives that would improve the health of British Columbians and reduce long-term health care costs.

That health care is the big winner on the spending side confirms how popular the program is, but also sets up a narrative that health care increases are eating up everyone else’s share of spending. To show this, the budget makes a commitment to put all HST revenues to health care, yet another budget gimmick that those in the lock-up saw straight through: this is nothing new for BC, as the old PST was properly named the Social Services tax, brought in to fund health care decades ago.

BC families hit hard by the recession will see little from this year’s budget. The new property tax deferral measure applies to homeowners only, leaving out a large number of families with children who are priced out of the housing market.

In addition, the tax deferral measure will just add to the already high levels of household debt in this province, a two-edged sword. Fundamentally, BC families do not need yet another source of credit. They need jobs that pay living wages, they need affordable housing, high quality accessible early childhood education and care programs for their young children, and enhanced opportunities for their school-aged kids to participate in arts and culture as well as sports programs.

There is nothing in this budget to address child poverty, which is currently the highest in the country and has been so for six years running. Clearly, existing initiatives to support families with children are inadequate, and the budget does not address this gap. Similarly lacking is money to house the homeless or build new social housing. In fact, the Estimates show cuts in the Ministry of Housing and Social Development’s employment and housing initiatives.

The increased funding for community sports and the arts, $60 million over three years, is more than welcome, but it falls far short of filling the enormous gap left by the cuts to discretionary grants in last year’s budgets, much of which went to funding similar activities.

Funding increases in education and social services are small, barely keeping up with inflation and the increased downloaded costs. There are some additional funds for full-day kindergarten, and an additional $26 million over three years on child care subsidies for low and middle income families, but no new operating funding to enhance the accessibility of child care spaces.

The budget announces additional ministry cuts to the tune of $320 million over the next three years. This comes on top of previous cuts announced last year – a total of $3.3 billion over three years in “administrative and other savings.” BC’s public service is already the leanest in the country as this recent CCPA brief shows and it is wishful thinking to assume that these cuts can be made without compromising much-needed public services.

Those contradictions were highlighted by the approval the other day of a new EnCana natural gas facility in BC’s Northeast that will add over 2 million tonnes of CO2 per year to BC’s inventory when fully built out. From the Tyee’s coverage:

The province’s effort to curb greenhouse gas emissions is on course to suffer a 2.17 megatonne-per-year setback, after an environmental assessment (EA) certificate was approved for the $800-million Cabin Gas Plant last Thursday (Jan. 28). The green light to the EnCana-led project signals the onset of a shale gas boom in the million-acre Horn River Basin north of Fort Nelson.

… The carbon dioxide implications get larger when considering the end uses of the gas. The initial volumes of gas produced daily at the plant would add up to 7.9 million tonnes of emissions each year when combusted. At full production, that downstream emissions rise to nearly 16 million tonnes — nearly 25 per cent of B.C. emissions, based on a 2007 baseline. Much of the gas will be exported to the United States.

Campbell’s retort is that natural gas is “actually a bridging technology that allows us to move to the new cleaner energies.” There is something to this argument, and it might even be true if we were able to guarantee that coal-fired power would be shut down in place of natural gas generated power. But no such guarantees are evident in this deal. All emissions will be additional to current emissions.

And not only that, the much-lauded carbon tax does not even apply to most of the emissions from oil and gas development, as it does not cover the flaring and venting of gas, or pipeline leaks.

This further goes to show that there is no political will in Canada to say no to the oil and gas industry. At some point we will have to confront the, er, inconvenient truth that the only bona fide sustainable path forward is to not get our energy out of the ground, or if we do to mandate that the emissions must be buried (sequestered) after combustion. That is, we need a moratorium on new oil and gas projects unless they implement carbon capture and storage (CCS).

So the question for my friends in the environmental movement: is now a good time to revoke that award to Premier Campbell, and replace it with one of the more notorious Copenhagen awards, the Fossil of the Day?

But having said that, my home province of BC and Canada as a whole have become a lot meaner in recent years. Sure, the good life is still attainable if you have a good job and bought real estate before prices took off, whether due to that good job or through an early inheritance from the folks (itself a growing source in inequality as the boomers hit retirement). But as the song (and a CCPA report) goes, it’s a bad time to be poor.

As we show our Olympic pride at having a crew of multi-million-dollar-a-year hockey players come to Vancouver to play for the home team, let it be known that BC has the lowest minimum wage in Canada at $8, and that has not changed since 2001. In case you were wondering, for a minimum wage earner to pull in what Sidney Crosby earns in just one year, they would have to work 40 hours a week for 541 years (and I’m not even counting Crosby’s signing bonus and endorsement contracts).

You know the rest of the story: social assistance rates that are preposterously low and a system that is punitive; a lack of supports for child care; the end of new social housing construction; an over-crowded public transit system; cutbacks at schools and libraries; and so on.

In my work on climate action, it seems inevitable that the price of food, transportation and energy are going up if we are to be successful at reducing emissions. How we go about designing climate actions matters a lot, and this is the focus of my recent work. But most of the affluent people who go to policy meetings are not thinking about how higher prices affect low income people. Across all of these areas, the problem low income people face is, well, their low income, even though they have done the least to contribute to the climate crisis.

So in the absence of “first-best” solutions like raising the earning power of low income workers and setting a floor (basic or guaranteed) income for all, we are left with “second-best” solutions that try to fix regressive impacts on an issue by issue basis. A credit here, a subsidy there and an ugly patchwork everywhere. Which is already a huge problem: after about $20-25,000 per year low-income credits and subsidies phase out for the low-but-not-lowest-income workers, meaning they face marginal tax rates of 60-70% on new income earned. With the carbon tax and now the HST, the same dynamic has been exacerbated with low-income credits that phase out early and quickly.

Still, I think that a more coherent credit system could be the basis for a guaranteed income, but it would have to be designed more like the credits we give to the middle-class, like Old Age Security and the Canada Child Tax Benefit, which have a long tail phase out so that a very high proportion of families get something. A lot of economists agree on this type of redistribution. But they generally think only about redistributing after the fact. I also want to see the labour market do more of the heavy lifting, as it gives workers and taxpayers the sense that they have earned that income, and this makes for better social inclusion and better political sustainability. Doing that means expanding the scope and quality of public services, raising minimum wages and, perhaps more importantly, vastly expanding the unionization of the low-wage service sector.

So Canada, let’s take that generous spirit we discovered when Haiti got trampled by an earthquake and put it to work at home. A campaign of charitable giving is of course helpful and there are lots of great organizations doing the work that governments ought to be doing. But let’s also focus on electing governments that are going to make eradicating poverty a top priority, something no political party (including the NDP) has endorsed.

Most of my research these days has been on the big topic of what aggressive change looks like: where we need to get to and what the justice issues are in the transition. This is the essence of our SSHRC-funded Climate Justice Project. We did some early research on greenhouse gas targets for 2050, and found that BC needed a 94% reduction to get to an emissions level that was sustainable and equitable globally.

But these days I’m loving the logic of zero. The City of Vancouver’s Greenest City Action Team made such a recommendation of zero fossil fuels by 2040, and so I’ve tried to adopt that as a goal for projects. One could certainly argue it is not aggressive enough, but it is definitely realistic. Most of the capital stock of society turns over within a 30-year time span, which means a lot of action could be addressed with minimal impact by setting strict marketplace standards. Beyond this are some major structural issues that have to do with housing, neigbourhoods and transportation, but with good planning this too seems do-able.

For example, in the UK all new homes built after 2016 must be zero carbon. This means, according to a Q&A in the Guardian:

Three words are key in the zero-carbon world: insulation, insulation and insulation. And maybe “airtightness” too. Most of Britain’s housing stock is what’s called “leaky” in the sense that buildings lose heat through badly insulated walls and roofs as well as through draughty windows. In zero-carbon homes all that changes – walls are heavily insulated, floors and roofs keep heat in, and triple-glazed draught-proofed windows stop warmth flooding out. … Many have heat exchangers in the loft through which the warm, stale air from in the house is expelled while fresh air from the outside is drawn in, picking up the heat on the way to avoid wasting it. This means the building can pretty much heat itself from the body warmth of its inhabitants, cutting heating bills virtually to zero. This is all in winter, of course. If the house feels too warm in the summer, you just open the window.

For vehicles, I’d suggest something like banning the sale of new vehicles with internal combustion engines by 2025 (with some targets for hybrids and electric vehicles along the way), and banning them from the road entirely by 2040. In the interim, urban planning will need to be supercharged to reduce the need for cars in the first place by developing more compact communities where it makes more sense to walk or bike for the vast majority of trips, but also a more aggressive deployment of public transit.

As in vehicles, eliminating fossil fuels means finding sources of clean electricity to power what we do, in particular the heavy industry that makes stuff we like. There are massive efficiency gains to be had from our existing suite of appliances and gadgets that can get us some breathing room, but new sources will be needed, from the small home/neighbourhood scale up to the regional/provincial. This is all do-able — what is standing in the way are the vested interests of the fossil fuel industries.

Then again, perhaps zero is not completely attainable. There will inevitably be need for back-up supplies and some transportation services (airplanes and ships) that need energy dense fuel. Technically, there is small bit of greenhouse gas emissions that can be absorbed by the Earth, which might give us some wiggle room, but there is also evidence that those sinks are getting clogged, and if scientists like James Hansen are right we need those sinks to reduce the absolute level of GHGs in the atmosphere.

The best hope for flying and shipping is biofuels, but they will be competing with food supplies and other potential uses of land, so real reductions in air travel and shipping seem inevitable (goodbye, one-week golfing trip to Mexico). That dynamic may well happen sooner rather than later due to escalating prices from peaking oil supplies. While a lot of the changes need for climate action need not affect our quality of life, and may in fact improve it, reductions in air travel and shipping may be the hardest ones to swallow.