Economists broadly agree that carbon pricing is the preferred method for reducing emissions with the lowest economic cost, but resistance to the idea at the federal level has led to the territory being seceded to the governing Liberal party. As Republicans learned repeatedly during the Obama era, while failing to engage constructively on controversial issues can be a political winner it often leads to “worse” policy outcomes (from a conservative perspective).

This has not been the case at the provincial level, where former B.C. premier Gordon Campbell’s 2008 revenue-neutral carbon tax has been widely viewed as a success story. The Progressive Conservative premier of Manitoba, Brian Pallister, is in the midst of designing a carbon pricing system that will likely be revenue neutral, and Ontario Progressive Conservative opposition leader Patrick Brown has made similar pledges.

Conservative MP Michael Chong, known as a more independent-minded politician than most, is bucking his federal counterparts by making his “revenue negative” carbon tax plan the centrepiece of his leadership campaign. The Wellington-Halton Hills MP has outlined a detailed plan to introduce a national carbon price that would reach $130 a tonne by 2030, and which includes a restructuring of the tax code to ensure the plan acts as an overall tax cut. Corporate Knights recently caught up with Chong to discuss the proposal in greater detail:

CK: You’ve been busy making the conservative case for carbon pricing across the country.

Chong: The most economically efficient way to reduce emissions, the cheapest way to reduce emissions and the most conservative way to reduce emissions is through a revenue-neutral carbon tax. This allows government to harness the power of free markets to reduce emissions, while at the same time shrinking the size of government by phasing out various green regulations, programs and subsidies as the carbon price rises.

The second point is that my plan for a revenue-neutral carbon tax is one of the largest income-tax cuts in Canadian history, an $18 billion cut that we would deliver in our first budget of spring 2020 that would actually leave more money in the pockets of Canadian consumers and Canadian companies. It’s an income and corporate tax cut that is worth almost 1 per cent of GDP. It’ll be one of the largest income tax cuts in Canadian history.

CK: There’s a shifting landscape for conservatives regarding carbon pricing across the country when it comes to provincial leadership – embodied by Brian Pallister in Manitoba and to a lesser extent Patrick Brown in Ontario. How do we turn this into a debate over the best way to institute carbon pricing, not whether or not to have it?

Chong: Well I think the debate as to whether we should have a price on carbon is over. Carbon pricing is here to stay; it’s been in place in Quebec and B.C. for almost a decade. I believe my plan is the right way to proceed. The wrong way is a cap-and-trade system, where the government spends a portion of the revenue on government programs. So that’s, I think, a very important point.

To your earlier question, I would also add that increasingly, conservatives are starting to understand that a revenue-neutral carbon tax is the way to go. Gordon Campbell had a piece in the Calgary Herald recently endorsing this and pointing to the successful policy he implemented in B.C. about 10 years ago. Even the Fraser Institute now supports the B.C. carbon tax. In fact, if you google it, on the Fraser Institute’s website there’s an article titled “Cheap: The B.C. carbon tax, but only if it’s revenue neutral,” showing that it’s managed to grab a broad spectrum of support.

So this revenue neutrality is not only economically important, but it’s also politically important. We need to have broad public support to reduce emissions, so delivering rebates and tax cuts to offset the price of carbon is incredibly important.

CK: Why did you release such a detailed plan? Leadership races are often littered with vague ideas and concepts.

Chong: Leadership races are the time to have big debates on policy, not the third week of a federal election campaign. If you’re going to have a debate on party policy and on taking the party down a new path, you introduce a policy far in advance in a leadership race, where the merits of the policy can be debated.

I think that this is a political winner for conservatives, one of the critical elements that we need to have in place to win the 2019 election. If you look back at history, the Conservative party was the party of anti-free trade from John A. Macdonald onwards. In the 1983 leadership race, one of the debates centred on free trade. And one of the candidates, John Crosbie, proposed to change party policy and adopt a pro-free trade stance, and four years later it became party policy. Brian Mulroney campaigned in the 1988 election on free trade, won the election on that issue and the rest is history.

For me, this is a similar landscape. We are confronted with one of the biggest challenges that this country faces, which is how to reduce emissions without harming our economy. I don’t think the current federal government or Ontario’s government is taking the right approach on this. I think British Columbia’s $30 a tonne revenue-neutral carbon tax is the right approach, and what I’d like to see is the B.C. model applied across the country.

We need to be part of this debate and helping to shape it. Conservatives have the most to contribute because it’s conservatives that believe in the power of free markets, and by coming forward with a credible policy to reduce emissions that’s based on conservative principles, free markets and smaller government, we can provide a path forward that will allow us to reduce our emissions and grow the economy at the same time.

CK: Let’s get into the specifics of your plan.

Chong: Justin Trudeau’s government has put in place a $10 per tonne price on carbon starting in 2018, and increasing at $10 per year until it reaches $50 per tonne by 2022. My plan mirrors that approach, but where my plan differs is in three aspects: First, my plan continues out until 2030, when it will hit $130 a tonne, because that’s the number we need to achieve in order to meet our Paris commitment to reduce greenhouse gases by 30 per cent. I think that only planning until 2022 is a fault in their plan, because companies need time to prepare. It’s a big shift in our economy, and the longer time horizon we can give companies to plan for the shift, the better. The current government wants to stop at 2022, and it’s unclear what is going to happen after that.

Secondly, my plan has a federal component and a provincial one as well. Trudeau’s plan is entirely provincial, with all revenues from the $50 per tonne collected by the federal government returned to each province. My plan splits the economy into two. On the consumer side of the economy, the provinces would get the first $30 per tonne, and the federal government would get the next $100 per tonne. That’s why, on the consumer side of the economy, it’s a combined $130 per tonne.

On the other side of the economy are the large emitters – the oil and gas sector, export-oriented and trade-exposed industries and other large emitters in the country. Here, the provinces are expected to collect all of the revenue. These targets are intensity-based, so while they too will be at $130 a tonne by 2030, that price will be applied on a sliding scale of increasing intensity targets. So the reason why that’s done is because they’re trade exposed, and they need time to adapt to these new prices in order to ensure that we don’t negatively impact their ability to export.

CK: Output-based subsidies for large emitters play a key role in the Alberta carbon pricing plan that went into effect in January, and seems to have been an important reason why Suncor and other oil sands players have been supportive thus far.

Chong: My plan syncs with provincial plans with respect to the oil and gas sector, other major emitters, and other trade-exposed, export-oriented industries.

Now there’s also a third difference and this is possibly the most important one: My plan mandates revenue neutrality for the $100 per tonne federal carbon tax, and it incentivizes provinces to make their carbon pricing schemes – whether it’s a cap-and-trade system or a carbon tax – revenue neutral as well. It does this through a revenue-neutral carbon incentive, a new federal transfer that would be given annually to provinces that have used their carbon revenues to cut income taxes or provide direct rebates to consumers and to companies. It would be the equivalent of 10 per cent of the provincial income taxes for rebates provided, and would be a permanent transfer.

So, for example, if a province has $1 billion in carbon revenue, and they’ve used all that revenue to cut provincial income taxes, we will transfer, on a permanent basis, $100 million a year. And this will serve as an unrestricted transfer – they can spend the money on whatever they wish. On the federal side, the carbon tax is strictly revenue neutral and all the money will be used to cut income taxes, and on provincial pricing schemes it provides a significant incentive for provinces to move towards revenue neutrality.

Now this issue of tackling climate change by reducing emissions is more and more an economic issue, and how we do this is turning into more of an economic question than an environmental one. We are a 750-megatonne economy, roughly. On the current government’s plan, by 2022 we are looking at approximately $37.5 billion in carbon revenues, whether through a cap-and-trade system or carbon tax. This amounts to almost 2 per cent of our GDP, a huge chunk of change, and if even a portion of this revenue is spent on government programs, we are going to put a huge burden on Canadian consumers and companies.

But if they are used instead to introduce deep income-tax cuts, we could actually grow our economy while reducing our emissions. Because if we take the latter approach, we are in fact achieving an economic outcome that governments have long tried to achieve: to shift taxation away from income taxes towards other forms of revenue such as consumption taxes.

CK: The biggest argument put forth against revenue neutrality – or, in your case, an overall reduction in revenues – is that carbon pricing, while an important pillar of tackling climate change, needs to be combined with an additional suite of policies, regulatory reforms and investments to transform sectors like transportation.

Chong: Well, I think they’re wrong. History proves that government is terrible at picking winners and losers, and we just need to look to Ontario’s Green Energy Act as evidence. It’s not an efficient way for resources and capital to be deployed when governments are making decisions. I think the free market is very efficient at supplying capital in the most efficient and productive way possible, and that’s why I think the arguments against a revenue-neutral model don’t hold up. It also has the added benefit of offsetting some of the increased costs associated with burning fossil fuels through deep income-tax relief.

This conversation has been lightly edited for length and clarity.

The post Dissent in the ranks appeared first on Corporate Knights.

Economists and politicians from across the political spectrum had begun to warm to the idea in the 1960s as a poverty reduction measure – from Nobel laureate and free-market evangelist Milton Friedman to left-leaning economists like John Kenneth Galbraith. A petition in the spring of 1968 calling for its adoption was signed by over 1,000 economists, bolstering similar conclusions from multiple presidential and state commissions.

A Nixon-backed bill to adopt a modest form of GMI passed the House of Representatives by a wide margin in 1970 and 1971, and looked poised to sail through the Democratic-controlled Senate.

In Canada, similar momentum appeared to be building. The Special Senate Committee on Poverty concluded in 1971 that a GMI would be the most effective tool for lifting people out of poverty, as did the Castonguay-Nepveu Commission of Quebec. Even Robert Stanfield, leader of the official opposition Progressive Conservative Party, was supportive of the concept.

Then it all fell apart.

Simple plan

GMIs are appealing for reasons that span the political spectrum. At various times the notion has been referred to as a universal basic income, basic income guarantee or negative income tax, but has always maintained one core element: that every member of society receives unconditional cash transfers that guarantee them a minimum income.

This differs significantly from the current methods of establishing a social safety net, one that is conditional. Work requirements for welfare recipients are the most prominent example of this, while old age pension plans are age-restrictive. Other aspects of the social safety net involve the government providing specific services like health care.

But poverty, at its most basic level, is about a lack of money. It makes intuitive sense to solve this by simply giving poor people more of it.

Friedman made the conservative case for a GMI in his book Capitalism and Freedom, published in 1962. It centred on three points: it would supplant a bloated and inefficient welfare system, transfer spending decisions away from the government into the hands of private citizens and allow people to get out of poverty gradually by not cutting off their benefits when they began to earn more money – escaping the “welfare trap.”

For people on the political left, it offered a simple approach to an intractable problem. “I am now convinced that … the solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income,” Martin Luther King wrote in 1967. The egalitarian promise of equal treatment was also salient as second-wave feminism and the civil rights era dominated the political landscape.

This brief moment of opportunity quickly disintegrated. The Nixon bill died in the Senate due to a mix of senators that either found it too weak or too extreme. Nixon’s Democratic opponent in the 1972 race, George McGovern, adopted a stronger GMI into his platform but lost badly. The Watergate scandal soon engulfed all legislative action and put the issue on the backburner.

Four pilot projects launched by the Nixon administration were carried out throughout the 1970s, but by then political support had largely dissipated.

In Canada, the federal government under Pierre Trudeau joined with Manitoba in 1974 to undertake what would become the most extensive study of GMIs conducted to this day called Mincome. But a change of government at the provincial and federal levels meant the project was mothballed in 1979 without much analysis.

Experimentation

The most relevant part of the Mincome experiment encompassed the city of Dauphin, Manitoba, with about 10,000 residents. It’s the only GMI experiment in North America that involved everyone in the town being eligible for benefits. About one-third of the town qualified for a GMI because their family income fell below the poverty line, but there were no other conditions attached.

The findings from Mincome would have stayed buried if not for the dogged determination of a community health economist at the University of Manitoba named Evelyn Forget. She dug through 1,200 unopened boxes 30 years later, and began to analyze the data.

She found that hospital and family doctor visits plummeted 8.5 per cent compared to a nearby town being used as a control group – largely due to improved mental health outcomes. Using 2011 estimates, Forget calculated that such a reduction in hospital visits alone across the entire country would account for $4 billion in annual savings.

Forget also discovered that Mincome resulted in a slight reduction in the number of hours worked, but for reasons that would pay social dividends later. Mothers took the opportunity to extend their maternity leave, while the high-school graduation rate among teenage boys increased significantly.

In the U.S., the findings were not as conclusive. The studies were smaller and monitored fewer indicators, but also identified some evidence of improved health outcomes. A 13 per cent reduction in work hours was found overall, but the cause was not sufficiently explored.

Back on track

Forty years later, the idea has resurged in the world among policy circles as a viable solution to poverty. Various Latin American countries have adopted a version of Mexico’s cash transfer program for poor households, first instituted in 2002. These programs don’t technically qualify as GMIs because they are conditional, but they’ve
stayed away from work requirements and instead insisted that children remain in school and visit health clinics. As with Mincome, programs like the Bolsa Família in Brazil have shown strong evidence of better education and health outcomes as a result of poverty alleviation.

The idea has also taken on new import in western countries following the financial crisis, galvanized by a growing focus on wage stagnation, income inequality and stubborn poverty levels.

Finland’s national social insurance provider is drawing up plans for a GMI experiment in 2017, and the Dutch city of Utrecht began a GMI pilot project in January. Swiss voters will go to the polls in June to vote on a proposal to adopt a generous GMI that would allocate 2,500 Swiss francs (C$3,350) a month to every citizen.

A similar revival in the U.S. does not appear on the horizon right now. Even Democratic presidential hopeful Bernie Sanders’ platform detailing the ambitious expansion of the social safety net does not include a GMI.

But in Canada, it appears as if the stars are aligning once again.

Ontario’s 2016 budget includes funding for a basic income pilot project, and Quebec’s employment minister recently announced a study on the issue as well. Jean-Yves Duclos, federal minister of families, children and social development, has also expressed interest, as have the mayors of Calgary and Edmonton. Federal conservative finance critic Lisa Raitt wants the House of Commons finance committee to study the issue.

There will no doubt be rigorous disagreement about whether GMIs provide a disincentive for working and how significantly social services would need to be restructured.

Let’s just hope the findings don’t get abandoned in a basement again.

The post The simplest way to tackle poverty appeared first on Corporate Knights.

Corporate Knights releases the Global 100 Most Sustainable Corporations in the World list in Davos for a reason. We want to make sure the world’s business elite are on hand to witness which of the largest companies around the globe are becoming more resource-efficient and socially responsible, and making meaningful improvements to their governance structures.

It’s both an acknowledgement that some firms have been taking bold and encouraging steps in the right direction, as well as an opportunity to point out that no company is doing enough.

The association with the Davos Man does have its drawbacks. This less than flattering term, originally coined by political scientist Samuel Huntington, connotes insular yet globe-trotting male elites who hold themselves in high esteem – hardly a group that needs another round of backslapping and self-congratulation.\

Many of these same elites played integral parts in bringing about the conditions that led to the financial crisis of 2008, a catastrophic event that few have taken ownership of. It seems a little soon to be looking to them for global leadership on such a crucial issue as climate change.

There’s also the indispensable role that the private sector has played in getting us to the precipice of climate mayhem. One oft-cited 2013 study demonstrated that just 90 companies were responsible for 63 per cent of global carbon dioxide and methane emissions between 1751 and 2010.

The banners held aloft by activists at the Paris climate talks and elsewhere point the finger squarely at Big Corporation. Surely these same companies can’t be viewed as part of the solution?

It doesn’t help matters when many of these same companies have either directly lobbied, donated to or empowered trade groups to muddy the waters and spread climate change denial over the past few decades.

But where does this leave us?

Some leading climate voices like Naomi Klein believe climate change can only be tackled by dismantling our current form of capitalism and ushering in a new age of “managed degrowth,” rendering the modern corporation all but obsolete.

Instead of extinction, we at Corporate Knights are advocating for the reinvention of capitalism in a cleaner form. It entails using the power of markets to grow an economy grounded in a golden rule: Business and society must succeed together.

Crafting this economic system is going to require heavy lifting from citizens, elected officials and corporations alike, particularly when confronting the threat of rising global temperatures. Each of them will need to hold the others to account and pressure one another to do more.

Some impetus will continue to come from mass mobilization, what environmentalist Paul Hawken describes as “the largest movement the world has ever seen.” Other pressure needs to come from economic and political leaders. Each camp has a corresponding role to play.

One poignant example of this is the threat of stranded assets and unburnable carbon. The fossil fuel divestment movement has successfully forced the issue onto the table across much of the western world, beginning with university campuses and spreading out from there.

At the same time, the idea that combating climate change will entail leaving fossil fuels in the ground has begun to gain credence in the financial community thanks to members of the “club” speaking out in favour of it. Economic elites such as IMF managing director Christine Lagarde and Bank of England governor Mark Carney (see here for an in-depth profile) have sent signals to global markets in a way that the popular divestment movement isn’t quite able to.

This is why we’re going to need some Davos Men, and Women, at the solutions table.

The post Editor’s Note: Getting the “Davos Man” onboard for the fight against climate change appeared first on Corporate Knights.

In B.C., Premier Gordon Campbell’s province-wide carbon tax, introduced earlier that year, was polling poorly going into a Spring 2009 election against an NDP party that had vowed to “axe the tax.” Presented with these developments, the Globe and Mail’s Gary Mason opined that “it may be some time before we again see a political leader in Canada brave enough to build a campaign platform around saving the environment.”

A month later, Vancouver Mayor Gregor Robertson was elected on a platform dedicated to doing just that.

The beginning

From rancher to farmer to entrepreneur, Robertson’s life before politics was anything but conventional. Born in North Vancouver, he was accepted into the University of British Columbia but ended up transferring to Colorado College, a private liberal arts school in Colorado Springs. On a pre-med track, Robertson studied English and biology alongside ambulance training. But a change of heart led to him backpacking across Asia with his future wife, Amy.

After several months spent ranching in the interior of B.C., he began painstakingly restoring a 1957 sailboat named Shoeless Joe. Once complete, the newlyweds took off on an 18-month trip across the Pacific.

On returning to Canada – and in order to satisfy a growing passion for farming and sustainability – the couple sold off their sailboat and purchased an old dairy farm in B.C.’s Glen Valley. They began growing organic produce and livestock just as the organic local food movement was finding its legs. In 1994, Robertson teamed up with former schoolmate Randal Ius to form Happy Planet, a fresh juice company. By the end of the decade the company had grown so rapidly that it was sold in Starbucks outlets across the country.

“I’ve always been an entrepreneur,” explained Robertson in an interview with Corporate Knights. “Currently, I consider myself a political entrepreneur, but whatever I’ve done in life I have always approached it grounded in sustainability, trying to make positive change on environmental and economic and community levels simultaneously.”

Over the years he grew more interested in policy and activism, serving as a director at the Tides Canada Foundation from 2002 to 2004. In 2005, he was persuaded to run for a seat with the provincial NDP, which he won in a competitive downtown riding. But frustrated by the slow rate of change and limitations imposed by strict party discipline at the provincial level, he resigned his seat and ran for mayor of Vancouver.

On November 15, 2008, Robertson won 54 per cent of the vote.

What was so surprising about Robertson’s victory wasn’t so much the scale as much as its unabashedly green message. After Robertson won the nomination for the left-of-centre municipal party Vision Vancouver, he managed in 2008 to form a temporary alliance with rival parties the Coalition of Progressive Electors (COPE) and the Green Party. His mission, as head of that alliance, was to take on the incumbent Non-Partisan Association, which had held the mayor’s seat since 2005.

Robertson’s campaign was built around two particularly ambitious goals: to eliminate street homelessness in the city by 2015 and become “the greenest city in the world.” The environment and sustainability commitments occupied nearly a third of the real estate in the party platform. One Green Party candidate for the park board boasted “Gregor Robertson could be a Green Party member.” Voters were impressed, sending Robertson to city hall with a strong majority of councillors.

The Greenest City Initiative

Robertson formed the Greenest City Action Team within months of assuming office, comprised of local sustainability experts across a range of disciplines. This 19-strong group included environmentalist David Suzuki, former mayor and premier Mike Harcourt and Tamara Vrooman, chief executive of Vancouver City Savings Credit Union.

These findings were turned over to city staff, which then undertook a lengthy public consultation with business groups and members of the public. In 2011, The Greenest City 2020 Action Plan (GCAP) was approved by council, establishing a series of goals and benchmarks for turning Vancouver into the most sustainable city in the world by the end of the decade.

While Vancouver had been making strides in some areas, including walking and biking, prior to 2008, the GCAP required a wholesale reinvention of the city itself. The 15 goals for 2020 included a doubling of the number of green jobs, a 33 per cent reduction in greenhouse gas emissions, exposure to the healthiest air and water quality of any municipality around the world, and having more than 50 per cent of trips in the city occurring by foot, bicycle, and public transit.

After seven years in office, GCAP’s impact on the city is hard to miss. While Vancouver’s “Ecodensity” plans began under Robertson’s predecessor, recent densification efforts in the downtown core, along transit corridors and major corridors have transformed significant portions of the city into more walkable neighbourhoods. “Another million people are expected to move into Metro Vancouver by 2040 and densification is the only responsible way to address that growth, while maintaining quality of life and mitigating the environmental impact,” explains Robertson.

This has been accompanied by a rapid expansion of separated bike lines and car-sharing programs. Vancouver’s bike lanes experienced record traffic last summer, a point the city punctuated by displaying live data collected by an automatic bike counter on a screen mounted to the Burrard Bridge, which connects downtown Vancouver to Kitsilano.

The city has also adopted the greenest building code in North America, and is aiming for a carbon-neutral standard for all new construction after 2020. A new single-family home in Vancouver already has a 53 per cent smaller carbon footprint than one built in 2007, boasts Robertson.

Progress has also been made on less obvious fronts, including water use. “We’ve been water hogs traditionally because it rains so much in Vancouver and people didn’t think that it (conservation) was necessary,” said Robertson. But robust conservation measures have reduced water consumption 20 per cent, surprising many residents.

Although Robertson will become the longest-serving mayor in Vancouver’s history by the end of his third term in 2018, he’s pushing just as forcefully for change as he did when first elected. This includes constantly looking to other cities around the world for inspiration and best practices. He helped, for example, to found the Carbon Neutral Cities Alliance earlier this year. In March, Vancouver’s city council voted unanimously to shift the city towards 100 per cent renewable energy by 2050 – an ambitious goal that will put pressure on other Canadian cities.

Keeping voters engaged

So far, the electorate has been broadly supportive of Robertson’s sustainability transition strategy. “On the one hand, Vision Vancouver has the support of people who want to see Vancouver as a centre for sustainability, for the high-tech industry,” said Maxwell Cameron, director of UBC’s Centre for the Study of Democratic Institutions. “But at the same time they’re close with developers, and are very interested in promoting the kind of development that allows us to build a denser and thus lower carbon-footprint city.” This potent combination means that Vision Vancouver remains well financed, while still attracting a substantial electorate that prefers them to the alternative.

Another reason for ongoing support of Robertson is the size of the city itself. The municipality of Vancouver has about 600,000 residents. This cuts more suburban voters from the Vancouver metropolitan area, unlike cities such as Toronto or Montreal.

Robertson and Vision Vancouver did face significant pushback during last year’s re-election regarding a perceived lack of public consultation by city hall. This culminated with an apology from the mayor himself in the waning days of the campaign, and a promise to do better going forward. “A substantial portion of the electorate can get behind Robertson’s goals,” Cameron said. “The question is how he does it, and that’s really what city hall needs to work on.”

No doubt, Vancouver’s municipal boundaries have produced a favourable electorate for Robertson, but they’ve also limited his ability to expand public transit throughout the region. Despite the regions’ mayors endorsing a proposal to redirect revenues generated by the B.C. carbon tax toward regional transit projects, Premier Christie Clark insisted instead on a transit referendum that would institute a 0.5 per cent sales tax across Metro Vancouver. Voting on this will end in late May, but results are not expected until sometime in July. The transit plan would, in part, allocate substantial funds toward construction of a subway along the city’s crowded Broadway Corridor.

The prospects don’t look good for the Yes vote. “It’s never popular to increase taxes and that imperils the referendum outcome, as there’s a knee jerk anti-tax movement coming from the suburbs,” said Robertson. “But certainly in Vancouver, the majority recognizes how crucial this investment is for mobility.” While walking, biking or transit currently makes up 49.7 per cent of trips in the city – one of the best records in North America – some form of large-scale transit investment will be needed in order to push Vancouver well past its 2020 goal of 50 per cent.

After seven years at the helm, Robertson has developed an international reputation for his greenest city initiatives. In May, he was invited to address the National Assembly in France about Vancouver’s Action Plan, while the city continues to rank highly on liveability and sustainability rankings.

Even with these achievements, Robertson doesn’t sound like someone who’s ready to slow down anytime soon. “In city politics we’re able to enact change in a more direct and hands-on manner that enables our city and people to craft a brighter future for all,” he explains.

“That’s a lot more fulfilling than past careers.”

The post Canada’s greenest mayor appeared first on Corporate Knights.

One of his most interesting legislative efforts occurred near the end of his career when he co-authored the bipartisan Cardin-Lugar Amendment to the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. It requires all extractive industry companies listed on an American stock exchange to publicly disclose all payments made to governments around the world on a project-by-project basis. Companies that refuse to disclose risk being delisted from individual exchanges.

Despite having been passed into law in 2010, Cardin-Lugar has yet to come into force. The D.C. District Court struck down the U.S. Securities and Exchange Commission’s (SEC) regulations in 2013, requiring the SEC to either write a new rule or provide a better justification for the first one. With three new Obama appointments to that court, however, the results are likely to change next time around.

Corporate Knights recently caught up with Senator Lugar to discuss the inception of this bill, its impact on American soft power around the world and why transparency shouldn’t be a partisan issue.

CK: How did this amendment ultimately end up in the Dodd-Frank bill?

Lugar: I had introduced a stand-alone bill called the Energy Security through Transparency Act in 2009. My interest in this came largely from hearings for the Senate Committee on Foreign Relations during the times that I served as chairman, but I also had the benefit of a remarkable staff member named Neil Brown, who was a Rhodes Scholar. He became an extraordinary person with regards to the research and background for this bill.

We were also influenced by visits from luminaries, such as Bono, and people from Oxfam and others who kept stressing the same thing: that huge sums of money were being expended by the extractive industry not only from the United States, but from all over the world. Often the rulers of those countries who were receiving this money were corrupt, not just individuals but large groups of people at the top. At the same time, the average incomes for the people that lived in the countries remained abysmally low, despite all of our foreign aid assistance and other international interventions. The idea of transparency abroad was not a new one, but one that I felt was very important.

The Energy Security through Transparency Act did not pass the Senate in 2009, but was still alive when the Dodd-Frank Act came up for debate the following year. Fortunately, Democratic Senators Ben Cardin and Patrick Lahey were both deeply interested in the idea. As a result, Section 1504 of the Dodd Frank act was adopted without having a floor vote and with the assistance of Senator Lahey who added it during a conference by unanimous consent.

CK: Why hasn’t the SEC implemented the amendment’s requirements yet?

Lugar: Unfortunately, the SEC had its hands full with the numerous regulatory reforms required by Dodd-Frank. Much to our consternation, it took the SEC several years to issue the Cardin-Lugar rules, which they eventually did in 2012. These rules were immediately challenged by the American Petroleum Institute, backed by the United States Chamber of Commerce, and were overturned by the D.C. District Court in 2013. Unfortunately, the SEC has not issued a revised rule, but has said that it will start the renewed process by March 2015. To put greater pressure on the SEC, a few weeks ago Oxfam sued the SEC for not having acted expeditiously. Interestingly enough, Oxfam is a significant shareholder of Chevron, which gave it grounds to sue.

Meanwhile, other countries influenced by the debate we were having in the United States have decided to pursue similar legislation. The European Union accounting and transparency directives were passed by the E.U. parliament in 2013, and the United Kingdom has released a strong draft law that is expected to pass. Norway’s parliament in 2013 adopted legislation requiring public level reporting of extractive and forestry sectors. The Mining Association of Canada, representing over 1,200 companies, has called on the Canadian government to require all mining companies listed on Canadian stock exchanges to disclose in a similar manner. So, there has been clear movement on this, even though our own SEC has not come forward with a rule – which they are still mandated to do.

CK: How does greater transparency regarding American oil, gas and mining companies affect American soft power around the world?

Lugar: Bolstering American soft power is tremendously important. For example, the United States is deeply interested in African countries. A great deal of emphasis last year went into humanitarian work on Ebola and so forth. This serves our own interests, in a way, but it also represents an extraordinary outreach by Americans on humanitarian grounds. In other words, the United States’ influence in so-called underdeveloped countries around the world, many of which have authoritarian rulers, has been profound.

Even so, this impact could be greater if we were more often perceived as working for the interests of the population at large. Many governments, particularly in Africa and the Middle East are somewhat supportive of the U.S., and we’re often engaged with these governments in regards to terrorism or political upheaval at home and in the region. As a result, we’re extremely interested in how they wield their own power and financial clout within the country itself. Much of their own financial reserves come from the sale of the extractive industry’s materials, many of which are generated by American companies. Allowing for greater transparency of government finances gives the United States more information about what actions these governments are taking.

It’s a similar case regarding foreign humanitarian or development aid. The United States is spending this money, as I said, to wield a certain amount of influence, but also to improve the lives of people in developing countries. More transparency regarding resource payments leads to less corruption in a society at large, and U.S. aid money is more efficiently distributed as a result. The population’s views of the U.S. will itself improve, because American corporations and foreign aid money are no longer seen as largely benefiting a corrupt ruling class, but society at large.

This doesn’t necessarily mean that democracy flourishes or that greater accountability springs up overnight. But it’s a beginning at least. Perhaps it’s identified that the ruler has been paid millions of dollars, maybe even banked it away in other countries or pursued various other schemes. This is the reason why I mentioned Bono and Oxfam and people that used to come to see me, because they kept making this point that the actions of the American extractive industry have a direct impact on the perception of the United States in the world.

CK: What about the arguments being made by the oil and gas industry: that they will lose their competitive advantage or be overwhelmed by too many disclosure requirements? Is there any weight to those claims?

Lugar: There’s no doubt that we could overload corporations with too many disclosure requirements if we’re not careful. But the extractives industry is such an important focal point, with the monies involved there and the influence this money has played. In my mind, there is no question that this should be very high on the priority list.

I certainly saw delegations of officials from large oil companies in the U.S. when drafting the original legislation, and they kept trying to make the point that I was going to undercut American competitive advantage abroad. In other words, other countries would not be so forthcoming in terms of transparency and, as a result, would have special advantages with the rulers of the various countries that were involved. Other countries would be able to leverage these advantages, in terms of foreign policy or even security policy, to gain an upper hand. I responded that somebody had to be the leader, somebody really had to be the one to kick off the whole process and that in my judgment this was the role of the United States.

CK: It’s fair to describe you as being solidly conservative on economic issues in general. What sort of advice do you have for legislators and civil society actors that are trying to pitch this disclosure argument to a more business friendly audience?

Lugar: Well I believe that conservative businessmen – I was the owner of a business manufacturing food machinery in Indianapolis prior to coming over to public life – would say transparency is paramount. It’s important with regards to not only the trust that your customers have, but competitors also understand that you’re not taking advantage of them and the public as a whole. The civic union surrounding you in the city, or the state or so forth relies on your stewardship abilities.

When it becomes a worldwide objective, the stakes are obviously much higher when the freedom of people is infringed upon and where potential economic development regarding the lives of millions of people is impinged upon. Transparency really does influence behavior on the ground, and this, I think, has been apparent to humanitarians for a long time. For business interests, this creates a more attractive place to conduct business.

Transparency doesn’t have to be a partisan issue. When I was drafting the initial legislation, I attended several Aspen Institute conferences abroad with Senator Cardin, who was a regular at these things. Likewise, I worked with Democratic Senator Chris Dodd for many years, and he became a good friend. I mentioned Democratic Senator Patrick Lahey earlier; we were very dear friends from the time we were junior members of the agriculture committee, he on the Democratic side, and me on the Republican far end of the table.

So putting aside trust in the language of the bill itself, there was a bipartisan trust in the integrity of the purpose and an understanding of the idealism from which it came. It had come from our own experiences either travelling abroad together or having discussions in the course of very comprehensive hearings.

The post The Republican case for transparency in the oil, gas and mining industries appeared first on Corporate Knights.

Media and pundits were confused by the lack of cohesive demands or centralized leadership coming out of these protests, but Saul saw something more important: The protests were part of a broader re-emergence of aboriginal Canadians into a position of power and influence.

As with much of his work, Saul locates Idle No More within 400 years or so of Canadian history. In his 2008 book, A Fair Country, Saul wrote about the egalitarian relationship and strong influence that First Nations people enjoyed with the European settlers for hundreds of years. But this began to change in the middle of the 19th century, as European colonial views about white racial superiority were combined with a precipitous decline in the aboriginal population. Governments began to betray treaty obligations and pass racist laws and policies to assist with this assimilation. But Canada’s First Nations did not disappear, and have worked hard to recover from this terrifyingly low point. Unfortunately, the views of the “pink people,” as Saul describes the 96 per cent of non-aboriginal Canadians, remain stuck in the past.

Saul decided to write The Comeback as a clarion call to his fellow pink people to be supportive and part of a new narrative around Canada’s First Nations people. It’s not that aboriginal people haven’t been saying this for a hundred years, he explains repeatedly in the book. It’s that we haven’t been listening. Corporate Knights recently sat down with Saul to discuss the book’s history of Canadian protest movements, the concept of the Honour of the Crown, and lessons for the extractive industry.

CK: How would you summarize the average Canadians’ views of First Nations people?

Saul: The dominant viewpoint in Canada regarding First Nations people has remained largely the same for the past 100 years, which is built around a negative paternalistic narrative. They’re irrelevant, tragic people that need our help to modernize. Sure, we’ve done some nice things like apologize and trying to offer help, but let’s take a look at some of our most recent efforts on education and financial transparency. First Nations people aren’t wards of the state, but the Department of Indian Affairs and the federal government in general sure act like they are.

Yet even as this narrative has persisted, the Canadian aboriginal population has been engaged in a remarkable comeback. The population continues to bounce back, presenting a true civilizational triumph. Graduates are pouring out of universities and colleges at a greater rate than ever before with more than 30,000 indigenous youth currently enrolled. It’s producing a new indigenous elite that is hungry for change and optimistic about the future. That was what most people, who focused on the immediate deliverables, missed about the Idle No More movement: it was a moment where this underground aboriginal comeback broke surface for a brief time, and it is going to continue apace, whether we support it or not.

Jeremy: You describe Idle No More as fitting within a rich Canadian tradition of public mobilization.

Saul: It’s a very interesting thing because, unlike in most other countries, a great deal of the direction of Canada has actually been set through public debate and protest movements. Go through the history of Canada – from women’s rights leaders like Nelly McLung to the end of capital punishment – or public campaigns to let in larger groups of refugees. All of these movements developed outside of the formal corridors of power in Canada. So something like Idle No More is very much in this tradition of noisy, uncomfortable public movements. Now it comes at a time when people are used to what I call managerialism, the “let’s not talk about it, these are the people who know how to do it” way of approaching governance that has proliferated in recent decades. It also buts up against an atmosphere in Ottawa that is very secretive, very loathe to be part of public debate.

CK: Many Canadians were confused by aboriginal leaders’ demands to involve the governor general in Idle No More talks. Why was this request so significant?

Saul: It comes down to the difference between power and legitimacy. The prime minister represents power through parliament, while the governor general represents legitimacy. Legitimacy is a much broader concept, enveloping written and unwritten rules, understandings and traditions in a way that outlasts power in Canada. Idle No More leaders wanted the governor general there because she represents the state, the crown, and the people.

The presence of the crown invokes the concept of the Honour of the Crown. The court essentially ruled that the crown, through its administration of the country on behalf of the people, has an obligation to act with respect for the citizen. It’s not about the letter of the law, but rather the spirit of the law. First Nations leaders insisted on the governor general’s presence because they wanted to move the conversation away from strict legal commitments towards the ethical and moral underpinnings of the state’s commitments through the treaties, represented through the Honour of the Crown. The treaties were signed by the crown, after all, not the government of the day. We are all treaty signatories.

It’s obvious where the courts are going on this – we’re already there and we’re just going to keep going there. Governments have repeatedly used their power over the past 150 years to betray the Honour of the Crown on everything from residential schools to basic clean water provision. So at a certain point, how massively can the Canadian government be in contravention of the law? If I were to phrase this question from the point of view of legitimacy, at what point does the Canadian government lose its legitimacy, because it’s so in contravention of the law?

CK: One of the main sources of tension between the federal government and First Nations people involves resource extraction. How should the extractive industry engage with Canadian aboriginal peoples regarding resources on their land?

Saul: First Nations groups are used to being presented with the unappealing option to either accept jobs on someone else’s conditions or be viewed as an irrelevant nuisance on the sidelines of the decision-making process. If the extractive industry wants to have a productive relationship with Canada’s aboriginals, they should focus on three key points. The first involves actual jobs training. Aboriginal groups want on-site jobs, sure, but it’s even more important that they involve longer-term managerial positions. For this, you need sustained consultation with the community to set up robust apprenticeship programs of the sort that used to be more prevalent in the Western world.

But having on-site and managerial positions only gets you so far. This still sets up an uneven, rather colonial relationship. First Nations groups need to be granted a certain amount of equity in these projects to level out the playing field. This, in turn opens the door to a number of alternative business models. Look at what was agreed to in Haida Gwaii, a development plan with a greater long-term perspective.

CK: How does the concept of the Honour of the Crown fit into this?

Saul: Interestingly, and it hasn’t really been covered in the press yet, but there was a decision made in early December by the Yukon Supreme Court regarding the Peel River Basin. In the Northern Yukon, there is an enormous watershed that feeds into the MacKenzie River. There was a conservation consultation process that involved all the stakeholders that resulted in an agreement. But then new leadership came into power in the province and decided to change course. So the Na-Cho Nyak Dun and others went to court. Of course, it wasn’t an agreement like a treaty or even a contract, but the courts still agreed that it needed to be respected. The court ruled that the government had to go back to the consultation stage, as the proposed changes did not advance the goal of reconciliation with first nations and were “inconsistent with the honour and integrity of the crown.” This may not have been big news in Toronto, but this is a vast area of pristine land. Legally, and constitutionally, this is of huge importance.

CK: So what is the Canadian public’s role in the aboriginal renaissance?

Saul: If you look around, you see all of these different elements of progress. I gave that example of land management Haida Gwaii. Look at the Government of Yukon. It’s just wasted three years of its life for nothing. It’s not in the First Nations best interest, it’s not in the private sector’s interests, it’s just a waste of time for everyone. Is there no lesson in that?

The only role that I have as a writer and as a thinker is to go out and say to people that you have a responsibility in this. People need to pressure every politician to deal with the aboriginal question in an open and responsible manner. It’s an argument that needs to be made, and even if one got it partially up the slope, it would change the public debate in Canada.

The post The (dis)honour of the crown appeared first on Corporate Knights.

He launched the Boardroom Accountability Project last week in conjunction with a number of other large public pension plans, such as calPERS. The goal is to pressure individual companies to allow shareholders that control three per cent or more of the company to nominate their own candidates to sit on the board of directors. Corporate Knights sat down with Stringer last week to discuss the project:

CK: How did the Boardroom Accountability Project (BAP) come about?

STRINGER: The BAP is a national movement that aims to give shareholders a voice in how corporate boards are elected. We’ve all seen how insular and unaccountable corporate boards are and how unsuccessful they’ve been at reigning in abuses. The fact is that friends of friends are still placed on boards and then often make decisions that are not in the long-term interests of shareowners. I think this project promises to transform the dynamic between shareowners and corporate boards by giving investors real power to nominate corporate directors. It does so by using the company ballot, also known as proxy access. Everyone knows that the buck stops with the board, so what we did was target 75 companies across an array of industries – companies like Ebay and Exxon-Mobile. We want to bring systemic reform to the boardroom, make companies more responsible to shareowners and, thus, improve corporate performance over the long haul.

CK: Was it difficult to corral disparate institutional support into a coalition?

STRINGER: This is why this campaign is different from other campaigns that have come before it. Insisting that we work and coordinate together has successfully turned this into a very impressive coalition. Now, was it hard to do? No, almost all of these groups had been working in their own space to bring proxy access to the forefront, as well as other initiatives that speak to long-term investors that worry about the well-being of millions of pensioners across the country. No one needed to be convinced, but the real challenge was figuring out how to move on this together.

While everybody knows that directors are supposed to act as representatives of the shareowners, in practice, these elections serve as little more than coronations. It’s like the old saying about Boss Tweed from Tammany Hall back in the day: he never had it so good. The bottom line is that we don’t want boards to prioritize short-term gains over long-term sustainable value creation. That is where we’re aligned. The evidence also bolsters our position. A recent report found that proxy access would increase the value of U.S. public companies by one per cent, which amounts to about $140 billion in increased market capitalization value.

CK: How did you determine which companies to target?

STRINGER: We picked companies based on their records on executive compensation and climate change. We’re focusing on excessive CEO pay because we think that when you see a pattern like that, it means that the board is working for the CEO and not shareowners. A lack of diversity on the board is also a red flag for us that outside perspectives are not being adequately considered. We’re obviously concerned about fossil fuel companies because we see the trend lines moving away from a carbon-oriented economy.

CK: You mentioned the impacts of climate change. Have you been exposed to growing pressure from New York City pensioners to begin decarbonizing the portfolio, similar to what the Rockefeller Brothers Fund did earlier this year?

STRINGER: Absolutely, it’s been a wake-up call for us. Companies that depend on extracting resources from the earth need new business strategies and changes in capital allocation to ensure their long-term survival. That is why we looked at companies like Exxon-Mobile – to see how we can improve their standing because we hold significant investments in them.

CK: You have been vocal about the potential benefits of green bonds in New York City.

STRINGER: We are working very hard on a green bond initiative, which aims to make us the first major city in the nation to offer the products. New York’s market size and presence means that any bond action that we take sets a precedent for the municipal marketplace. We’re fielding strong investor interest in a green bond program for NYC, so we’re currently working with the mayor’s office to come up with a plan.

The post Taking “comptrol” appeared first on Corporate Knights.

Hydraulic fracturing, or fracking, is a process wherein rock is fractured by a pressurized liquid. Popularized by the discovery of horizontal drilling in the late 1990s, it has led to the natural gas and tight oil boom currently powering the ongoing energy revolution in North America. Thirty-one states now contain potentially viable shale gas plays, including Michigan.

Few issues cause as much political heartburn as the expansion of fracking in the United States. The International Energy Agency estimates that U.S. gas output will continue to increase for the next five years, on top of the sixfold increase that has occurred since 2007. Proponents such as John Griffin, a spokesman for the American Petroleum Institute in Michigan, believe that the continued expansion of natural gas is a necessity. “It’s strengthening America’s energy security, and creating jobs at home,” says Griffin, “all while reducing overall emissions.”

Opponents of fracking are convinced that industry is glossing over the environmental consequences. From fears about fresh water depletion, methane emissions and earthquakes, community opposition to new wells has been fierce. But the greatest concern remains groundwater contamination. To dislodge oil and gas from within rock formations, a mixture of sand and chemicals is added to water during the fracking process. Local residents are apprehensive about these chemicals infiltrating local water supplies. Further complications arise during the treatment process, as wastewater needs to be stored before being treated or reused.

There has been some evidence of groundwater being affected around drill sites, including a recently published study by researchers at the University of Texas that found higher levels of heavy metals, including arsenic, in groundwater around fracking sites in the Barnett Shale deposit. Another study released this year found elevated radium levels in wastewater discharged from a Pennsylvania treatment plant. Other research, however, has found no such link. An ongoing U.S. Department of Energy study in Pennsylvania tagged tracers with unique markers. Described as the first independent look at the movement of toxic chemicals during drilling operations, a year in it has showed no evidence of chemical contamination of drinking water.

Little federal regulation currently exists on fracking, largely due to the original passage of the Energy Policy Act of 2005. Language within the bill, known as the “Halliburton loophole,” exempted drilling companies from complying with the Clean Water Act. Subsequent bills in Congress aimed at defining hydraulic fracturing as a federally regulated activity under the Safe Drinking Water Act have gone nowhere, which has forced individual states to establish their own guidelines.

Wyoming was the first state to require disclosure of fracking fluids to the public in September 2010, followed by Arkansas, Pennsylvania and Michigan. Fifteen states now have laws on the books, with legislation pending in an additional seven states. Some regulatory structures only require confidential disclosure of fluids to regulators, none of which are released to the public. Even in states that require public disclosure, according to Jennifer McKay, a policy specialist for the Michigan-based Tip of the Mitt Watershed Council, a “trade secret” exemption allows companies to omit information to protect intellectual property.

At a recent State Senate hearing in Texas, Marc Edwards, Halliburton’s senior vice-president of completion and production, defended the necessity of trade secrets. “Halliburton has the only frack fluid that is sourced entirely from the food industry,” he told committee members. “Without proprietary protection, it would not have invested in its development.” Lawsuits are underway in several states challenging the use of trade secret exemptions, including one suit currently pending before the Wyoming Supreme Court.

Twelve states have made the submission of chemicals to the website clearinghouse FracFocus a disclosure requirement. The online registry for chemicals, with 45,000 records from more than 400 companies, is managed jointly by the Groundwater Protection Council and the Interstate Oil and Gas Compact Commission. Amy Mall, a senior policy analyst at the Natural Resources Defense Council, testified at the same hearing as Halliburton about the problems with the system. “The problem with FracFocus is that it’s not a government website with specific requirements and a legitimate process to determine what actually is a trade secret,” she explained. A Harvard Law School study in April showed some companies claiming a chemical as proprietary in one state while disclosing it in another.

Some companies, like Canadian natural gas giant Encana, have developed their own internal rules for screening chemicals with the potential to impact human health. The Calgary, Alberta-based company, which has extensive shale gas plays across the U.S., launched the Responsible Products Program in conjunction with a third-party toxicologist. “To give you a scope of the program,” says Spencer Forgo, a communications advisor for the company, “over the course of 2012 we assessed in excess of 350 fluid system products across our operations.” Fluids containing arsenic, cadmium, chromium and other metals have been banned by Encana already, and the company is pushing to adopt the practice across the industry in North America.

Fracking remains in its infancy in Michigan, with only 19 new wells having been drilled since 2010. That pales in comparison to the 13,540 wells drilled in Texas alone in 2012. It’s for this reason that proactive regulations should be put in place to ensure the growth of a well-regulated industry, says McKay. “Our top priorities remain the full disclosure of chemicals, paired with baseline testing,” she said. Companies are not required to release information on fracking cocktails until 60 days after fracking occurs, making testing for specific fracking fluids all the more difficult. Some companies, such as Encana, offer free tests to homeowners who live near wells, but homeowners are often wary to accept these offers. “Some residents just don’t trust companies to remain objective,” says Emily Whittaker, a policy specialist at Freshwater Future. In August, the environmental NGO began offering its own testing program for any Michigan citizen with concerns.

With many fracking cocktails proprietary and likely to remain so in the future, those conducting tests often don’t know what they’re looking for. Scientists have been looking for alternative ways around this, including the idea of putting tracers in the fracking fluid. Using a similar method as the Department of Energy study, competing companies that began at Rice University and Duke University are racing to bring trace fracking fluids to market. A field test is currently underway at a well site in Texas. The appeal of this technology is that it would allow companies to continue to guard trade secrets, while adding definitive traceability into the process.

Lawmakers have already put forth bills in the Texas legislature to mandate the use of tracers, but industry remains non-committal on the subject. “If companies want to adopt this on a voluntary basis they should go right ahead, but in my opinion adding another layer of regulation for companies is not necessary,” says Barclay Nicholson, an energy and commercial litigation attorney at Norton Rose Fulbright’s Houston office.

For some, hydraulic fracturing will never be safe enough to accept. Activists are currently circulating a petition to place a Michigan fracking ban on the 2014 state-wide ballot. LuAnne Kozma, the spokesperson for Ban Michigan Fracking, explained her reasoning when announcing the creation of the group. “We know enough now to demand a ban,” she declared in a press release.

This article was made possible with the generous support of the Institutes for Journalism and Natural Resources.

The post Testing the waters appeared first on Corporate Knights.

Vale Canada, a subsidiary of the giant Brazilian mining firm, broke ground in April on a $2-billion retrofit of its Copper Cliff nickel smelter in Sudbury. Its Clean AER project, on schedule to be completed in 2015, will rank as one of the largest environmental investments in the province’s history. After receiving an extension from Ontario’s Ministry of the Environment back in 2010, the company will be reducing its sulphur dioxide emissions by 70 per cent, placing the company one-third below the provincial emissions limits of 66 kilotonnes a year. It will also target dust and metal emissions, aiming to reduce those by 35 to 40 per cent.

“It is the right thing to do as a company and the right thing to do for our employees and the local community to ensure the long-term sustainability of our operations,” said John Pollesel, chief operating officer at Vale Canada. The announcement is part of a $10-billion investment in Canada over the next few years. The company unveiled it after a string of setbacks that included a 10-month labour strike in 2010 and an explosion last year at the smelter, which it acquired from Inco in 2006.

The City of Greater Sudbury, which is home to about 30 per cent of the world’s nickel supply, has been a symbol of Canadian industrial pollution for decades. In the 1970s, sulphur dioxide emissions from the Copper Cliff smelter, then owned by Inco, peaked at two million kilotonnes annually. Faced with the widespread loss of biodiversity and poor air quality, an iconic 380-metre superstack was built, dispersing most sulfuric acid outside of the city. As conditions improved in Sudbury, Inco teamed up with the municipality, along with other commercial interests, to begin a comprehensive rehabilitation effort.

Lime was mixed into polluted soil by hand and aircraft. Millions of trees were planted. This effort was so successful that in 1992, Sudbury was given the Local Government Honours Award by the United Nations for its rehabilitation efforts. This was followed by a $600-million clean air investment by Inco, which reduced smelter sulfur dioxide emissions by 90 per cent from 1970 levels. The Clean AER project will expand these environmental restoration efforts, while setting a standard for emissions compliance in Ontario that goes well beyond required levels.

Zero: Northern Dynasty Minerals

Vancouver-based Northern Dynasty Minerals might want to take “broad public support” off its list of project strengths, as opposition continues to mount against its proposed Pebble mine in Southwest Alaska. The Pebble Partnership is composed of a 50-50 partnership with Anglo-American plc. The U.S. Geological Survey has described the area as the most substantial mineralized system in the world, one which would likely become the largest gold mine on the planet. The plan is to construct North America’s largest pit mine directly upslope from Iliamna Lake, home of the largest stock of sockeye salmon in the world. Locals are fearful that storing billions of tonnes of waste just upstream, along with power plants, port facilities and pipelines, would severely impact the $300-400 million local salmon industry by endangering the water supply, and ruin a way of life for rural Alaskans.

Opposition to the mine has culminated in a series of setbacks for the developers this past year. A local ballot initiative approved last October banned mining permits from being issued in the area. The Pacific Seafood Processors Association has come out against the mine, having previously never taken a position against any project. Fifty major jewellers from around the world, including Tiffany & Co., have pledged to refrain from buying Pebble gold. Tiffany’s CEO recently stated that “there are some special places where mining clearly does not represent the best long-term use of resources.” The Pebble mine development has become so controversial within Alaska that many pro-mining conservatives are split on the issue. Opponents have included Republican Senator Ted Stevens, who died tragically in a plane crash last year, and the late former Republican governor, Jay Hammond. Opposition has been funded largely by Bob Gillam, recently described by Alaska Magazine as a “reclusive conservative and arguably the richest man in Alaska.”

Instead of taking a conciliatory approach, the Pebble Partnership has decided to become more aggressive in its public relations campaign, attacking Gillam and other opponents of the mine as beholden to out-of-state special interests. The CEO of the Pebble Partnership, John Shively, recently spoke about mining at the Heritage Foundation, a conservative public policy think tank. The inflammatory speech was titled “USA: A Second World Country?”

The Pebble wars are sure to continue, but Northern Dynasty has been looking to sell its 50-per-cent stake for the past year, a clear vote of non-confidence in the viability of the project.

Click here to view our complete Heroes & Zeros series.

The post Heroes & zeros: vol. 4 appeared first on Corporate Knights.

According to Sohbet Karbuz, a military energy analyst and former International Energy Agency official, there are multiple factors pushing the Department of Defense (DoD) to go green, including “increasing fuel costs, logistics pains and the delicate fuel distribution network.” The DoD is the largest consumer of liquid fuels on the planet, burning about 375,000 barrels a day to fuel over 500,000 vehicles, ships and aircraft. “Energy security concerns also exist, due to the heavy reliance on imported fossil fuels,” added Karbuz. “Then there’s the fragile domestic energy grid which powers the hundreds of domestic military facilities in the United States.”

Oil intensity per war fighter has risen 2.6 per cent a year for the past 40 years. Cheap oil and infrequent supply disruptions lulled the military into complacency for decades. It is the experience in Afghanistan and Iraq that sparked an overhaul of the DoD’s approach to energy issues. More than 3,000 American soldiers and contractors have been killed in attacks involving fuel convoys over the past 10 years. P.W. Singer, a senior fellow and expert in 21st century warfare at the Brookings Institution, laments the army losses. “A mere 1 per cent improvement in defense energy efficiency would have meant 6,444 fewer convoy missions, one of the most dangerous roles in the Iraq and Afghanistan conflicts.”

In 2007, the Pentagon began to look at military energy reform in a more systemic manner. Until then, the value of fuel was measured by its wholesale price at the point of acquisition, neglecting the supply chain needed to deliver it to the destination. A policy change began to measure the fully burdened cost of fuel (FBCF, in dollars per gallon). In 2009 the National Defense Authorization Act institutionalized FBCF and added a series of new energy Key Performance Parameters. This altered the military acquisition process, changed the emphasis of research and uncovered the potential of alternative energy sources.

Military leadership has been central to this transition. David Petraeus, then U.S. commander in Afghanistan, wrote to troops last year citing how “high fuel use imposes risks to the mission and to each of us” and insisting “we can and will do better.” The creation of an office for Operational Energy Plans and Programs has helped institutionalize these changes, with one of its first acts incorporating supply lines into Pentagon war games. The DoD also moved to cut its energy intensity 30 per cent and reduce petroleum use 20 per cent, both by 2015, and to obtain a quarter of its energy from renewable resources by 2020. And it’s creating personnel codes for energy specialties around efficiency and renewables, which never existed before.

The most substantial targets involve individual branches of DoD, in particular the Air Force and Navy, which consume the majority of armed forces fuel. The Air Force is calling for half its domestic aviation needs to be satisfied with biofuels by 2016 (see “Green Shades of Jet Fuel” below). The Navy’s plans are similar, targeting a 50-per-cent alternative energy mix by 2020 – along with the creation of a fossil-fuel independent “Green Strike Carrier Group” by 2016. Last summer, the Navy unveiled a partnership with the federal departments of Energy and Agriculture that will work with the private sector to strengthen domestic biofuel refining capacity. The three departments have pledged to invest up to $510 million over three years to support the initiative.

According to Todd Harrison, a defense budget studies expert at the Center for Strategic and Budgetary Assessments, aviation fuel represents nearly 73 per cent of DoD energy use. They’re working hard on getting planes to be much more efficient, he said. “At the same time they want the supply to not come from oil, so they’re working on biofuels that could be made in the U.S., or could be opportunistically derived from materials that they find in or near a theater of war.”

The biofuel purchases are not without critics. After a contentious Senate Armed Services Committee hearing with Mabus, Republican Senator John McCain decried the purchases as a waste of money, and is now threatening to strip the Navy of the ability to purchase biofuels in the next defense bill.

Amory Lovins, chairman of the Rocky Mountain Institute and a long-time military energy advisor, believes these comments show limited understanding of the issues at hand; in particular, the role of energy efficiency and secure supplies of military energy as a force protector, a force multiplier, and a long-term source of tens of billions in budgetary savings a year.

“The naval leadership, both civilian and uniformed, is united on this issue, for reasons of strategic operational and tactical necessity,” said Lovins. “It’s a purely military argument of combat effectiveness, and has nothing to do with anyone’s political ideology.”

The post Military greens appeared first on Corporate Knights.