#7: Energy trilemma



George Heyman, minister of environment and climate strategy, British Columbia, Canada

Sergey Paltsev, MIT Energy Initiative senior researcher and deputy director of the MIT Joint Program on the Science and Policy of Global Change



Emily Dahl: From the Energy Initiative at MIT, welcome to the podcast. I’m Emily Dahl and I’m here at the UN Climate Change Conference, COP24, with George Heyman, minister of environment and climate strategy for the province of British Columbia, Canada. I’m also joined by MIT Energy Initiative senior researcher Sergey Paltsev, who’s also deputy director for the MIT Joint Program on the Science and Policy of Global Change. They’ve both just spoken at a side event organized by the World Energy Council and MIT here at the Climate Conference. Thank you both for being here. At the COP24 session just now, Sir Philip Lowe of the World Energy Council spoke about the energy trilemma—the complex, urgent need to achieve global energy security, energy equity, and environmental sustainability. In British Columbia, how are you approaching these interrelated issues?

George Heyman: In British Columbia, we’re fortunate to have 98% of our electricity generated from clean renewable sources. We still use a significant amount of fossil fuels so a lot of our attention will be focused on reducing fossil fuel use in buildings for heating and cooling, and transportation, obviously, and in industry. We have enough electricity on the grid and in construction to take us to 2030 and beyond. But when we look at our future electrification needs going all the way out to 2050, we expect we will need more. We think we have the capacity through wind and solar to generate that electricity.

ED: Sergey, in the research you’ve just released, you have case studies from Latin American countries and member nations of ASEAN, the Association of Southeast Asian Nations, on how they’re progressing toward Paris Agreement carbon reduction targets and what kinds of policies and technologies could help them meet their commitments and further accelerate their climate action. How can the findings from these reports be useful for governments, not just in developing nations, but also developed nations like Canada? At the provincial level or even in the United States at the state level in the absence of federal leadership.

Sergey Paltsev: Yes. That’s a very interesting question because what is important is to learn from the best examples. Some countries in these nations are providing very good examples. Some countries in Latin America are progressing very well in terms of decarbonizing their economy. In the ASEAN countries, countries like Singapore, who is also following the lead of British Columbia and imposing their own carbon tax beginning next year. What the countries can learn and what the states can learn is how to support low-carbon options. Latin America is providing very good examples of the policies which are questionable, which were not successful, and also the policies which provided much better outcomes. One example which we have looked at in our study is the RenovAr policy in Argentina. They provided auctioning for wind projects in a certain way that also ensured delivery and ensured that the penalties are in place. Which also can be applicable to any particular state in the United States or in provinces to look at how to support the development of low-carbon energy in the way that is actually beneficial for the economy, rather than spending a lot of public money on projects which are more expensive that could be done otherwise.

ED: Speaking of policies that are receiving recognition, I understand that British Columbia has received an award from the UNFCCC for your innovative policies. I’m wondering if you could tell us a little bit about the new provincial climate action plan that’s been launched and a few of the key messages on how BC is approaching the transition to a low-carbon future.

GH: Certainly. I think BC recognized the need to take significant action to reduce carbon pollution and fight climate change a decade ago. Introduced North America’s first broad-based carbon tax, which is in place still and which is now once again being incrementally raised. As well as passing legislation to legislate that not just the direct government operations but crown agencies, universities, hospitals, schools, would all be carbon-neutral. By reducing emissions as much as they could, and then purchasing verifiable carbon offsets for the balance, carbon offsets that happen to be produced in British Columbia by preserving some of the last temperate old-growth rainforest in the world, but a significant carbon sink. And introducing ecosystem-based management practices to that. But it’s not a matter of taking one or two initiatives and being static. We all know we have much more to do. We noticed when my government took office a year and a half ago that emissions have been rising for the past five years. The carbon tax had not been raised in five years. So we put together a climate solutions and clean growth advisory council with representatives from labor, from business, from academia, from local communities, from first nations, and young people. Asked them not to be experts but to give us advice on what they saw as the opportunities, as well as what they thought of potential impacts that could hurt business, jobs, ordinary families, and design measures that would not have negative impacts and would have positive ones. At the same time, we consulted broadly with industry about what would the impact on a carbon tax be on their competitiveness in an open economy, if they’re competing with jurisdictions with no tax. As a result of that, without going into incredible detail, because some of it is still being worked out and much of it can be found online, we have a number of measures detailed in our recently released Clean BC program, which is both a climate strategy and an economic diversification and stability strategy to achieve measurable modeled reductions that will add up to our legislated targets for 2030. It will be iterative. We’ll keep working on it year after year to both improve our approach to 2030 and to 2040 and to 2050. We are concentrating on reducing emissions in buildings. We’re mandating zero-energy ready for all new buildings by 2032. We’re spending $400 million over the next ten years to do energy retrofits on 51,000 units of social housing in British Columbia. This is housing where the renters would not be able to afford to do that themselves. Simultaneously reducing emissions and making life more affordable. We’re mandating 100% clean energy vehicle and new car and truck sales by 2040, and we have a rebate program to provide incentives until we reach the point where the dropping price of clean energy vehicles matches what’s available in internal combustion. And we’re not just focusing on electric vehicles. We’re offering hybrid. Because BC is a large province in the north and the interior spread out populations, until renewable technology and clean energy vehicles get more efficient, we’re also including plug-in hybrids. So for the long haul, people still have an option. It encourages them to take a new technology and discover just how good it is. We’re also working with industry to reduce their emissions in mining and the gas fields and in the wood industries. We’re promoting our clean tech sector, which is already thriving and very positive, by providing part of the rebate of the carbon tax in the form of rebates for reaching world reading benchmarks and incentives to invest in new and existing technologies to reduce emissions to get there. That’s certainly not all of the program and we have more initiatives that we haven’t yet modeled, although we know that we can achieve the reductions we need from them. If people look at our Clean BC plan on the government of BC website, they’ll see a lot of specifics. Expected quantified megatons of greenhouse gas emissions as well as how we are going to do skills, needs, assessments, and provide training for young people to fill those jobs in the future.

ED: It certainly sounds very comprehensive. Canada’s presence here at the COP has also been what I would consider very comprehensive. I feel like everywhere I look, I’m seeing a lot of Canadian presence and perhaps especially British Columbia. I was wondering if you could talk a little bit about what your priorities here at the conference are and if you’re having an opportunity to have a lot of dialogue with the other ministers, if you’re finding things that you can share from your experience, and maybe some things to take back.

GH: The panel discussions I’ve been on have been interesting. The bilateral meetings I’ve had have been informative. I’ve had one with the vice major of Oslo talking about their very aggressive zero-emission transportation strategy. A piece of information that was particularly useful for me to take back to our transportation minister is how they are retrofitting existing ferries to be electric as well as mandating new builds. These are important proven measures that other jurisdictions are taking and we can adopt, we can show British Columbians that we’re providing modeling of the kind of new zero-carbon economy we have the build in the future but that we’re not the only ones doing it. Others have good ideas and good practices that we can follow. I think it’s important for nations to encourage each other. I think it’s important for subnational governments like provinces and cities to learn from each other, to inspire each other, and frankly to push our colleagues and push our national governments to take action. I think for anybody who knows Canada or the United States for that matter, people will know that not all federal governments are ambitious and not all state or provincial governments are ambitious. That’s why we wanted to sign a plan where we demonstrate to people that frankly low-carbon economy and to simply say that it’s a choice between jobs and climate is not only irresponsible, it’s frankly wrong.

ED: Sergey, for the data that you’ve been sharing, the analysis that you’ve been sharing here at the conference, a lot of the purpose of that, as I understand it, is to help inspire other nations to accelerate their action and to help them meet their climate targets with some of these pathways. I’m wondering what do you see as the next steps in helping governments use these new data sets, perhaps especially governments that are having a difficult time meeting their Paris Agreement targets, or those that are close to achieving their targets but could actually be a little bit more ambitious.

SP: That’s a very good question. The approach which we have taken with these two reports is that we had a discussion with the ministries of energy, the ministries of environments, from these regions. A year ago when we started the process of preparing these reports, we told them that our goal is to base our analysis on publicly available data. We have told them, this is how the outside world understands you. This is how the researchers see you. So it’s important to be open and it’s important to make sure the data is available to the public, that they understand what is going on, they understand the plans, and they understand the real situation which is currently there and how we can progress to the stated goals. We have done exactly that. All of our developed models, which we have developed for this project, are in the public domain. They can use and check what we have used as the data. They can make their own assumptions and see where the differences are. Why sometimes we see how countries perform different from what is perceived from some other organization and entities. I have to admit that I sneaked at the plan of British Columbia, Clean BC, and I was really happy to see that you actually quantified: these are the measures and these are the expected reductions from these particular measures. You have even had a very clear statement that you shouldn’t take those numbers for granted and you shouldn’t just add up in a very simple manner because the reality is much more complicated. But these types of transparencies, where you really show, these are our priorities, this is what we are going to do, and this is how we are quantifying our efforts, are very important. Again, I’m really happy that you are setting the very good standard for other countries to follow.

GH: We definitely want to be credible and to be credible you have to show some verifiable analysis. We’ve modeled and quantified 75% of the reductions that we said we would make by 2030 but we have said, here are the six or seven areas where we can get the other 25% we’re confident. Over the next 18-24 months, we’ll quantify those as well, and every year we’ll be accountable for what we’ve done in the previous year and talk about what we’re planning to do going forward. We’re going to mandate our climate council to provide independent comment on how we’re doing in meeting our targets as well as seizing opportunities and mitigating any negative economic or social or other impacts. I think the public gets cynical if they just hear people saying we’ve set a target so therefore we’re doing our job. People want to know how are you actually going to do what you say you’re going to do and how are you going to show us that you’re doing it in a way that makes life better for us and that actually will achieve the stated goal.

ED: That brings up a really important topic that we’ve been hearing about a lot at the conference, which is about effectively communicating climate policies, including carbon pricing. The carbon pricing leadership coalition just put out a guide on this topic. It cites strong support for BC’s price on carbon across party lines. How have you been able to achieve that public buy-in for carbon pricing?

GH: I won’t say it’s universal. If you just tell people you’re going to tax them or you’re going to make gasoline more expensive, they’re likely to have an immediate negative reaction and that’s understandable. People are struggling all around the world, just affordability. British Columbia in particular, I will say that the price of housing is very high. Everybody is struggling in virtually every income level except the very highest. We need to show people how we’re taking the revenue from that price on carbon. On the one hand, we’re ensuring that the right thing is happening to fight climate change. On the other hand, we’re recycling that money back to them, both directly, for low- and moderate-income people, and to business to help them reduce emissions and not have to close their doors and windows and put people out of work. And also to make life more affordable by, for instance, making it easier for people to get into a clean energy vehicle, then in the future spend no or little money on gasoline, less money on repairs, less money on energy for their homes by retrofitting. There’s a variety of ways we can do that. I’m particularly excited about the possibilities of lessening energy use in buildings and homes. There are ways to finance that in a constantly recyclable pool of money that’s paid for by the emissions savings themselves. What people are left with at the end is better value, more comfort, and more affordability. It’s hard for people to say no to that, but we have to talk about it. We have to talk about the economic advantages, the jobs, the affordability, the comfort, and just keep stressing it over and over. It’s not something in the future. It’s something that we’re delivering this year and next year and the year after that.

ED: I couldn’t agree more about that importance. Thank you both very much for being here today.

GH: Thank you.

SP: Thank you very much.

ED: If you have any questions, comments, or feedback on this podcast, please tweet us @mitenergy. And of course, feel free to subscribe and review us where you get your podcasts. From MIT, I’m Emily Dahl, and thank you for listening.


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