The Environmental Protection Agency announced that it wants to stop requiring 8,000 facilities, including refineries, oil wells, power plants and landfills, to report their greenhouse gas emissions. EPA administrator Lee Zeldin calls the reporting program “nothing more than bureaucratic red tape that does nothing to improve air quality.” He is dead wrong on two counts.

First, the focus on air quality is a red herring. While they do not directly affect the air we breathe, the EPA had previously rightly considered greenhouse gas emissions to be an endangerment to human health, a stance that the U.S. Supreme Court supported. This should be obvious to anyone who has experienced smoky summer days in North America or Southern Europe due to more intense wildfires, whose frequency has increased because of climate change.

The World Meteorological Organization has estimated that between 1970 and 2021 climate-related weather events such as floods, fires and storms caused more than two million deaths and US$4.3 trillion in economic losses. The losses from these disasters will only accelerate as the planet warms up. Researchers at the Institute for Sustainable Finance, at Queen’s University, have calculated that the total capital output lost to climate-related disasters in Canada could range from $2.8 trillion by the end of the century under a 2°C warming scenario to almost double that amount at $5.5 trillion under a 5°C scenario.

Which brings us to the second point. Far from useless “red tape,” collecting GHG emissions data is the backbone of environmental and economic accountability. Data are essential for financial markets and capital allocation. If we do not measure, we cannot manage. Without reporting, the public, investors and even companies themselves will fly blind. We cannot make any progress transitioning to a more sustainable economy if we do not have accurate emissions information.

The Climate Policy Initiative reports that global climate finance is increasing despite the headwinds against ESG (environmental, social, governance) issues. Climate finance exceeded US$2 trillion in 2024, up from $812 billion in 2018. While the United States goes all in hindering the adoption of renewable energy, capital will increasingly flow to countries that are creating sustainable innovations.

The United States’ self-imposed roadblock on climate innovations will have negative consequences for the planet and prosperity. Friday’s announcement is part of a broader pattern. The Trump administration has previously moved to repeal the “endangerment finding” that allowed greenhouse gas regulations such as the EPA’s emissions reporting requirement. It plans to pull out of the Paris climate agreement. It even has plans to get rid of NASA’s GHG-monitoring satellites. Now it wants to turn off the data pipeline, which is the lifeblood for decision-making in business and government.

Ignoring emissions does not erase them. The physical reality remains the same. Eventually, we all pay the price – with lost homes, damaged supply chains and rising health risks. In the worst case, the economic and human costs of climate change will be enormous.

Even industry leaders see the danger of the EPA’s proposal. The Carbon Capture Coalition warned, “This announcement from EPA will not advance carbon storage . . . This proposed rule endangers millions of dollars in investments from American businesses.” Killing transparency does not help innovation. It undermines it.

What is at stake? The Greenhouse Gas Reporting Program covers the United States’ heaviest emitters. Ending it will be like driving without a dashboard. We would not accept shutting financial reporting because accounting standards are “burdensome.” Why should we accept shutting down the emissions data that helps to guide our economic future?

The EPA’s job is to protect public health and the environment. The data it collects plays a crucial role in producing accurate information for investors. With this announcement it is failing in that responsibility. Transparency is not a burden. It’s the first step toward accountability, innovation and eventually a more sustainable and prosperous economy.

Yrjö Koskinen is director of research at the Institute for Sustainable Finance at Smith School of Business, Queen’s University, and BMO Professor of Sustainable and Transition Finance at the Haskayne School of Business, University of Calgary.

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Methane may have a lower profile than carbon dioxide, but the notoriously underreported greenhouse gas is a key driver of climate change. According to the International Energy Agency (IEA), it is responsible for 30% of the rise in global temperatures since the Industrial Revolution. This makes blunting its impact crucial for global climate action.

And yet, as the IEA notes in the latest Global Methane Tracker, key opportunities to curb the potent gas – which has 28 times more heat-trapping power than carbon dioxide – are being squandered. In its annual report, the international agency providing advice and research on the energy transition notes that some 30% of methane emissions from the fossil fuel sector could have been avoided at no net cost because the gas can be captured and sold. And by using existing technology, processes as simple as plugging leaky equipment, fossil fuel methane emissions could be slashed by 70%.

Targeted methane-abatement procedures in the fossil fuel sector alone would prevent roughly a 0.1°C rise in global temperatures by 2050, the IEA says, which is akin to eliminating all the carbon dioxide emissions from heavy industry worldwide. “Methane abatement is a crucial opportunity to reduce near-term global warming at a time when temperatures worldwide have set record highs for two years in a row,” the agency says. 

The amount of methane in the atmosphere is now more than two-and-a-half times greater than pre-industrial levels, the report states. In relative terms, methane levels have been rising more quickly than all other major greenhouse gases. The growth is mainly due to human activities – in particular oil, gas and coal production and agriculture and waste sectors – but evidence also suggests that natural habitats such as wetlands are contributing to atmospheric methane as the warming climate speeds up the breakdown of organic matter.

All told, the fossil fuel sector is responsible for nearly one-third of methane emissions from human activity. Record production means that emissions have remained at around 120 million tonnes annually. Abandoned oil and gas wells and coal mines that were improperly sealed also produce emissions. The planet is littered with as many as eight million abandoned onshore oil and gas wells, half of them in the United States, which also has an estimated 250,000 abandoned coal mines. A recent study in Canada found that methane leaks from decommissioned oil and gas wells is seven times greater than government reports. An even greater source of methane emissions – nearly 18 million tonnes – comes from the incomplete combustion of biomass such as charcoal, wood, agricultural waste and animal dung for cooking and heating in developing economies.

But we can’t know what we don’t measure. And in the case of methane, this is alarmingly clear. “Little or no measurement-based data is used to report methane emissions in most parts of the world,” the IEA says.

The picture is now becoming clearer, however, thanks to more than 25 methane-tracking satellites orbiting the earth. Using this data alongside scientific studies and measurement campaigns, the IEA has been able to piece together estimates of methane emissions that are 80% higher than global reports. The satellites were able to detect a sharp increase in very large methane leaks in oil and gas facilities in 2024.

The gap between reality and disclosure is narrowest in Europe, the IEA says, because countries regularly submit inventories and some producers publish reports. Countries and companies in other regions are moving to improve findings, and Canada was singled out recently for updated methodology that has led to an increase of more than 35% in the volume of “fugitive emissions” identified from oil and gas operations.

Still, significant gaps remain. That’s especially the case in parts of the world where satellites have trouble gathering data, such as Venezuela, which has extensive cloud cover, or Russia, where snow and ice obscure clear views of methane leaks.

“Oil and gas methane emissions can be reduced by around 75% through well-known measures such as LDAR [leak detection and repair] programmes, upgrading leaky and high-emitting equipment or plugging leaky wells,” the IEA notes. “In the coal sector, methane emissions could be halved through effective coal mine methane utilisation in mines, or by deploying flaring or oxidation technologies when energy recovery is not viable. Achieving universal access to clean cooking and modern heating would eliminate the vast majority of emissions from the incomplete combustion of bioenergy.”

The report also touches on the controversial question of natural gas as a transition fuel. Specifically, when compared to coal, natural gas results in 35% fewer greenhouse gas emissions than coal. “Nonetheless, ‘beating’ coal on environmental grounds sets a low bar for natural gas, especially since there are lower-emissions – and often lower-cost – alternatives to both fuels,” it notes. Wind and solar are already cheaper options in many markets.

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Its success gave birth to a new era of cooking fats. Americans today consume a long, golden stream of vegetable oils: soybean, palm, safflower, sunflower, peanut, avocado, coconut, canola, olive. The plants cultivated to make these oils now cover nearly a quarter of the planet’s cropland, and demand for them is still growing. That’s not good news for the Earth. To grow oil crops, particularly palm and soybeans, farming corporations are cutting down carbon-rich forests, threatening climate goals and biodiversity.

But what if there was a cooking oil that didn’t drive deforestation? A California startup called Zero Acre Farms claims to have created just that. Zero Acre hopes its product, called Cultured Oil because it’s made by fermenting sugarcane, will shift American diets like Crisco did, but to a different end. The company says its oil requires 90% less land and accounts for 86% fewer greenhouse gas emissions than soybean oil, the most widely consumed vegetable oil in the United States.

“If we’re going to continue to satisfy our insatiable desire for oils and fats,” said Stephen del Cardayre, Zero Acre’s co-founder and chief technical officer, “we have to do it more efficiently.”

The startup’s new cooking oil is starting to gain attention. Zero Acre has raised millions of dollars from venture capital funds linked to Chipotle Mexican Grill, Richard Branson’s Virgin Group, and the actor Robert Downey Jr. In September, Shake Shack announced it would test Cultured Oil on its fries at two of its New York City restaurants. Grocery stores aren’t selling sleek stainless steel bottles of the oil yet, but you can buy one on Zero Acre’s website for $26.99.

Cultured Oil, which has a soft yellow hue like other oils, is made by microorganisms. Add sugarcane to a vat filled with algae, and the microscopic beings convert the sugar into oil. The result, according to Zero Acre, is a liquid that’s healthier than its counterparts because it’s low in saturated and polyunsaturated fats, the sort that have given seed oils a bad (if possibly undeserved) rap for contributing to chronic inflammation and heart disease.

This probably isn’t the first time you’ve encountered a lab creation that’s advertised with a list of impressive stats about how it will save the planet. Climate-conscious eaters have been under a barrage of new choices stemming from the proliferation of products aimed at replacing cow milk, beef, and other carbon-intensive meats. Whether it’s oat milk, plant-based burgers, or lab-grown chicken, the food sector is awash with claims of sustainability, some of which don’t hold up under scrutiny. Maybe you’ve made up your mind to eat a Beyond Burger instead of a beef one, and now you’re wondering whether to sear the novel meat in novel oil.

Grist spoke with three independent experts about how to assess green claims about new food products like Zero Acre’s oil. Each stressed that the only way is to look at something called a life cycle assessment, nicknamed LCA — the analysis that a company uses to determine the land, energy, and water use associated with its product and to compare it to other products.

If we’re going to continue to satisfy our insatiable desire for oils and fats, we have to do it more efficiently.

 

– Stephen del Cardayre, Zero Acre’s co-founder

“Without the LCA, I can’t make anything of it,” said Sarah Collier, an assistant professor and food sustainability researcher at the University of Washington.

The mere fact that a life cycle assessment has been done, even by a third party (as in the case of Zero Acre), isn’t enough to inspire confidence, experts said. That’s because these analyses can be built in a way that makes a company’s product look better than its competitors’. There are a variety of ways to grow oil crops, and different growing systems use different amounts of land and emit different amounts of greenhouse gases. In the case of Cultured Oil, the kinds of soybean farms or palm plantations that you compare against the sugarcane operations that feed Zero Acre’s microbes could lead to different conclusions.

“If you choose baselines that aren’t really equivalent, you can end up making your practice look really, really good, and you can also end up making a competitor’s practice or a legacy practice very bad,” said Mark Bomford, director of the Yale Sustainable Food Program. “If I wanted to make soy-based land look really bad, I would include the largest estimates around the worst kinds of deforestation.”

Like many companies, Zero Acre has not made its assessment public, so it’s not possible to verify independently how the boundaries of the analysis were drawn. But a spokesperson for the company did say that its comparison with soybean oil relies on data from soybean production in South America, the same region where the sugarcane used to make Zero Acre oil is grown. Del Cardayre told Grist that Zero Acre plans to publicly release its results once the company is bigger and more stable but is keeping the assessment private for now because it contains proprietary information.

“We try to be as transparent as we can,” del Cardayre said. “Our whole goal, the reason we were founded, was to make better oils and fats that were better for the planet, for the body, and for food. It’s what drives us. It’s our North Star. We have no interest in doing something that’s not doing that.”

A lot of academics are going to be skeptical because we’ve heard it before.

 

– Julie Guthman, University of California, Santa Cruz

Independent experts agreed that Zero Acre’s oil holds promise. Joseph Poore, a food sustainability researcher at the University of Oxford, said in an email that the company’s goal to minimize environmental damage and improve human health is “excellent and critical.” Vegetable oil production is a major source of greenhouse gas emissions, and rising demand for oil crops like palm has been linked to habitat destruction and biodiversity loss. But Poore and other academics also said that it’s too early to know how much better for the environment Cultured Oil will be.

“A lot of academics are going to be skeptical because we’ve heard it before,” said Julie Guthman, a professor of social sciences who studies food systems at the University of California, Santa Cruz.

Two years ago, Guthman co-authored a paper that investigated claims of “dematerialization” in the alternative proteins industry — referring to the idea, pushed by Silicon Valley startups, that edible protein can be made “from (nearly) nothing, drawing on abundant or mundane resources” that presumably have no environmental drawbacks.

In the paper, Guthman and her colleague Charlotte Biltekoff found that the details of how these foods get produced “are largely black-boxed, making any claims to dematerialization appear as magic.” Food-tech companies aren’t necessarily trying to keep consumers in the dark, but they feel pressure, in their quests to woo investors and reshape the world, not to divulge trade secrets. The way they represent their products, Guthman and Biltekoff wrote, obfuscates more than it reveals and makes it “difficult, if not impossible, for the public — or anyone really — to meaningfully assess the promises and their potential consequences.”

This article originally appeared in Grist at https://grist.org/food/cooking-oil-deforestation-startup-sugarcane-solution/.

Grist is a nonprofit, independent media organization dedicated to telling stories of climate solutions and a just future. Learn more at Grist.org

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Cut back on meat

The International Energy Agency (IEA) reports that agriculture is responsible for 40% of global emissions. Most of that comes from livestock. The IEA says that if wealthier households ate less meat, we could save one billion tonnes of methane by 2050.

Plug fuel leaks

Fossil fuels (oil/gas/coal) account for 38% of global methane emissions – (the IEA says methane leaks from the energy sector are about 70% higher than official figures). “If all countries adopted abatement policies, we could cut oil and gas methane leaks by half.”

Shut down coal

While burning coal creates 46% of CO2 emissions, coal mines are responsible for major methane leaks. China’s coal mines make the country the world’s largest emitter of methane.

The bridge is over

The EU is now rethinking its dependence not just on Russian gas after the invasion of Ukraine but on natural gas altogether as a “bridge” fuel. The European Commission has announced plans to speed up its transition away from fossil fuels by accelerating renewable projects.

Waste not

Rotting food and other organic waste created 20% of methane emissions in 2021. Minimizing food waste throughout the supply chain, as well as composting and using captured methane leaks from landfill to heat homes, can help curb emissions.

Goodbye, gas stove

Gas stoves in the United States emit 2.6 million tons of methane (the equivalent of 500,000 cars). We need more government incentives for homeowners who install electric appliances and bans on gas hookups in new developments (like those in New York City and San Fransisco).

Source: IEA (2022), Global Methane Tracker 2022, IEA, Paris

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Alberta Innovates – a Crown agency – says the biggest opportunity lies in the production of carbon fibre, a high-strength material that can be used in wind turbines, automotive applications and the aerospace industry. The agency has launched a $15-million “Grand Challenge” in which 20 laboratories around the world are participating in research to commercialize the production of carbon fibre from the heavy asphaltenes contained in bitumen, in the so-called bottom of the barrel.

“We are finding new ways to use bitumen not as transportation fuel but as value-added non-combustion materials that are worth more than transportation fuel but with a low GHG emissions – products like carbon fibre,” said John Zhou, vice-president of clean resources at Alberta Innovates.

Zhou participated Wednesday in a virtual roundtable hosted by Corporate Knights and the German embassy in Canada, part of a series on rebuilding a cleaner, more sustainable economy as we recover from the COVID-19 pandemic.

He said that while technological challenges remain “very, very significant” to a commercializing bitumen-derived carbon fibre industry, progress is being made.

There are skeptics, however. Wolfgang Seeliger heads up Leichtbau BW, a German consortium of companies developing and deploying lightweight materials that reduce costs and greenhouse gas emissions in transportation and industrial processes. He said that carbon fibre production cannot compete with other lightweight materials on either cost or environmental footprint, noting that it takes more energy to produce auto parts from carbon fibre, for example, than is saved by the use of the lighter material.

Alberta Innovates estimates that diverting 30% of oil-sands production to industrial uses would reduce GHG emissions by 126 megatonnes (Mt) a year. That’s because the carbon from the thick, asphalt-like component of the bitumen would be locked in the industrial material, rather than combusted as transportation fuel or petroleum coke.

It also estimates the industry could earn $84 billion by 2030 from those industrial markets – including $44 billion from carbon fibres – while reaping $27 billion from the sale of the remaining crude.

However, the “bitumen beyond combustion” strategy would not lower emissions from oil-sands extraction and processing in Alberta. The sector currently produces more than three million barrels per day. It accounted for 77 Mt of GHG emissions in 2018, or 10.5% of the country’s total.

Canada has pledged to reduce GHGs by 30% from 2005 levels by 2030, and the federal Liberal government now says it will introduce an even-tougher 2030 goal along with its commitment to get to net-zero emissions by 2050.

Seeliger said carbon fibre will be relegated to a niche market for some time because carbon fibre is expensive and its introduction into markets like automotive, construction and aerospace will require complicated changes to certification standards. However, Zhou said the opportunities will expand dramatically if the province succeeds in driving down the cost and the environmental footprint of producing it. Alberta Innovates believes industry can reduce the cost of producing carbon fibre by more than 50% below that of current methods and reduce the carbon intensity of production by up to 90%. It estimates that a 50% cost reduction in carbon fibres would boost demand tenfold.

Suncor’s Carrie Fanai said Wednesday that Canada’s largest oil and gas producer is focused on the “need to transition to a greener economy.” Suncor has pledged to reduce the emissions intensity of its oil and petroleum products by 30% by 2030, while other companies, notably Cenovus Energy and Canadian Natural Resources Ltd., have set “aspirational” goals to have net-zero emissions at their oil-sands plants.

“For us at Suncor, that has meant not only focusing on improving the GHG intensity of our existing production but looking at new products, energy sources and related lines of business,” said Fanai, who is the company’s lead on bitumen value-chain optimization.

She noted that it is still early days in the journey to commercialization and that producers will have to work with chemical companies and manufacturers to ensure they maintain focus on potential customers.

Marcelo Lu, president of BASF Canada, said the opportunities for carbon fibre “are very large if we can crack the innovation to take the impurities out of the bitumen stream,” which is heavy in sulphur and metals. He said the massive bitumen resource represents a high concentration of low-cost feedstock for carbon fibre that could drive market developments in a way not seen before.

Alberta Innovates hopes to see a commercial-scale demonstration plant for producing carbon fibre from bitumen by the end of 2024.

If it succeeds in reducing the cost of production, the province could produce 326,000 tonnes per year of carbon fibres from the asphaltenes contained in one million barrels per day of bitumen, which would be worth an estimated $44 billion annually in today’s prices, the agency estimates. It says there is also potential to produce activated carbon and asphalt binder from the asphaltenes in another two million barrels per day of production.

The total value of the “non-combustion” products would be $84 billion. At the same time, industry would sell higher-quality crude, “de-asphalted” oil for $27 billion. Total value: $111 billion a year, compared to the $27 billion a year the sector expects to earn by selling three million barrels a day at $25 per barrel.

As part of its Build Back Better series last spring, Corporate Knights recommended that the federal government provide $1.4 billion in funding over five years to help the industry commercialize carbon-fibre production. Environmental groups have called for an end to subsidies for the fossil fuel industry, arguing that government efforts should be focused on the transition off oil.

Shawn McCarthy writes on sustainable finance and climate for Corporate Knights. He is also senior counsel for Sussex Strategy Group.

With the support of the Embassy of the Federal Republic of Germany in Canada.

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The IEA’s Fatih Birol addressed the first Clean Energy Transitions Summit, a virtual meeting that drew energy ministers from 40 countries, leaders from business and non-government organizations, and 500,000 viewers worldwide.

Birol said the pandemic and the resulting global economic shutdown precipitated a sharp drop in energy demand this year, as well as in GHGs, though he did not offer a figure.

“Whether this decline will rebound or not is something you ministers will decide with the policies you put in place,” he told the online conference.

Backed by the International Monetary Fund, the IEA is urging governments to pursue large spending programs to spur economic recovery while speeding up investment in and adoption of zero-emission energy systems. The Paris-based agency recommends allocating funds to energy efficiency, renewable power generation, innovative nuclear technology, electrification of transportation and home heating, and both natural and technological means of capturing and storing carbon dioxide.

Canada’s Natural Resources Minister Seamus O’Regan told the conference that the Liberal government is determined to put the country on a path that will result in net-zero emissions by 2050 but must also ensure the transition doesn’t impose an undue burden on families that depend on the fossil fuel sector.

“As we lower our emissions, we want to resolve that those working in high-emitting, non-renewable energy sectors are not left behind,” said O’Regan, whose own home province, Newfoundland and Labrador, relies heavily on the offshore oil industry.

“Those who feel they have been left behind are going to cling to the familiar. They will choose governments and policies rooted in the status quo, resisting the urgency of climate change and resisting the change that is vital to confront it.”

O’Regan chaired a session on “inclusive and equitable recovery” in which he addressed the need for regions and workers who rely on the fossil fuel sector to be included in the clean-energy transition.

Christiana Figueres, a former United Nations climate chief, had a different take on diversity and inclusion. She said failure to confront global warming would “condemn those in poverty now to deeper poverty and pull millions more into that hole.”

A series of energy ministers from the 40 countries, which together represent 80% of global energy demand, proclaimed their intent to accelerate investments in clean energy systems, though many of those countries – especially in Asia and Africa – continue to build new coal-fired power plants. Few have taken the steps necessary to meet the Paris Agreement commitment of limiting global warming to 2 degrees Celsius, let alone the 1.5 degree limit that the Intergovernmental Panel on Climate Change says is necessary to avert more catastrophic impacts.

Birol said investment in developing and deploying clean energy technology must increase by fourfold to meet that goal.

China’s energy minister, Zhang Jianhua, said his country is ramping up investment in renewable power, electric vehicles and infrastructure, and battery storage, though critics have noted that Beijing is allowing some regions to approve new coal-fired power plants as part of its recovery program. The country – which is the world’s largest emitter of GHGs – is preparing its next five-year economic plan, covering 2021 to 2026, and, said Zhang, “stay focused on clean, low carbon energy.”

India’s minister of power, Raj Kumar Singh, said his country now has the fastest growing market for renewable electricity. He said renewable sources will grow from supplying 38.% of the country’s power currently to supplying 60% by 2030. But coal-fired power is also growing as the government seeks to provide electricity to all the country’s 1.4 billion citizens.

American Energy Secretary Dan Brouillette said the U.S. remains the world’s largest funder of clean energy research and development, noting his department has major programs for new nuclear technology, renewables and battery storage. He acknowledged, however, that spending has not increased in recent years.

Brouillette said the Trump administration opposes a carbon tax, regulations and mandatory rules for disclosing climate-related financial risk. The IEA has touted those policies as necessary to accelerate the adoption of clean technology and transition off fossil fuels.

A government-driven “top down” approach “vetoes the democratic choices of the marketplace,” Brouillette said. He said the Trump administration favours an “all fuels, all technology” strategy.

However, Joe Biden, the presumptive Democratic nominee for the November presidential election, is pledging a far more ambitious approach, including rejoining the Paris Agreement from which the Trump administration has withdrawn. Democrats in Congress have been touting a Green New Deal that aims to move the country off coal, oil and natural gas while ensuring that workers and poorer Americans receive support and training to participate in the transition.

Birol urged governments to work collaboratively on strategies to bring down the cost of leading-edge clean energy technologies so they can be adopted more rapidly. “We need to build back better, together,” he said.

Shawn McCarthy writes on sustainable finance and climate for Corporate Knights. He is also senior counsel for Sussex Strategy Group.

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The good news is that humility brought massive changes in behaviour to limit the risk and unlocked enormous public and private resources to resolve it. Social distancing buys time. A vaccine puts the boundary back in place. Our collective response is a moral one: we took on staggering costs in the blink of an eye to protect ourselves. A united public sector is arbiter of that moral dimension. It defines the framework by which we act, and only it can provide the foundation upon which the economy recovers.
That unlocks a once-in-a-lifetime opportunity: as the global corporate world leans – once again – on the public purse for recovery, we might demand in return a renewed “climate capitalism,” a sustainable economy built for the 21st century.

Climate risk looks a bit like COVID-19, if you squint. Climate risk is the mother of systemic risks. We’re changing the planetary-scale boundary conditions under which civilization evolved: the patterns of weather and water that dictate how we get our food and where we build our cities. Inaction on climate risks our security, civic infrastructure and institutions. The response to climate risk is thus also a moral one: we act to keep ourselves safe. The public sector is director of the show, the private sector its actors.

COVID’s threat feels closer than climate, though – right? That’s why we called a political truce and acted with urgency. We want to protect our aunts, dads and friends – today. And climate’s still way over the horizon. Well . . . did COVID feel so immediate a few months ago? The risk of a pandemic was always there; we just ignored it. And the climate threat feels less distant with each new firestorm, flood or drought. Ask an Australian how up-close and personal climate risk feels, or someone whose home burned in Fort McMurray or California. A new generation, led by Greta Thunberg, certainly feels an immediate sense of insecurity.

We have to invent a vaccine for the climate crisis – it’s called climate capitalism

There’s one crucial difference no amount of squinting can reconcile. Worst case on COVID is we screw up on social distancing but still resurface in a year or so when a vaccine comes along. We can fail on COVID and recover. Failure on climate is forever. There’s no putting planetary boundaries back once they shift to more energetic and dangerous states. It’s a one-way trip. There’s no equivalent of social distancing to buy time, marshal resources and plan a counter-attack. So we have to invent a vaccine in advance. That’s climate capitalism: a vaccine to anticipate climate risk.

Left and right united under COVID – Trudeau and Ford working together! – because people won’t tolerate leadership that can’t protect them, whatever their political stripes. You don’t have to be a lefty to appreciate a strong public sector today. Neither must you be a Wall Street titan to understand market forces; big corporations and private capital are powerful tools to solve wicked problems – if given focus. We see that with COVID: the private sector scales up needed tech – tests, vaccines, treatments – when coordinated and incented by the public sector. Climate capitalism is no different: the private sector can and will act decisively on climate but only when incented and directed by an empowered and united public sector.

But on climate the political divide grows wider. Many on the far left – led by Naomi Klein – blame capitalism itself for climate risk and would have us throw it out. This is misguided in three ways. First, we can’t possibly rebuild energy systems without private capital, innovation and all the complex activity only markets can organize.

Greenhouse gases aren’t DDT – you can’t just ban them. Second, radicalizing the politics of climate hinders the work of building the large tent needed for decisive action in a democracy. Third, it sets arbitrary limits on what capitalism can look like. If Klein’s target were limited to American-style free-market fundamentalism, she’d have many allies, including me.

On the other side of this cultural divide sit reasonable people, civic and business leaders who understand that climate risk is real but prefer an incremental approach. They fear radical intervention in the economy. Instead, it’s proposed we nibble around the edges. That too is misguided – a bit like lifting COVID’s social distancing restrictions too soon because you fear short-term pain. The reduction in risk is illusory. It’s the long game that matters. It’s too late to nibble around the edges; only deep, radical cuts in emissions will do. Incrementalism feeds into Klein’s radical narrative: “See? Capitalists won’t do what’s necessary. Let’s bring it all down!

Nothing can redeem COVID. But it offers us a once-in-a lifetime window to fund that vaccine.

Capitalism isn’t monolithic. It means different things to different people. For an ordinary person, it might mean owning your own bakery, working for options in a tech start-up or watching your RRSP grow so you can retire in comfort. It can mean Russia’s anarcho-capitalism, Indonesia’s crony capitalism or China’s state capitalism. Sweden is as much a capitalist country, on this view, as America. There’s no preordained role for the public sector. Roosevelt’s New Deal didn’t make the U.S. any less capitalist. Nor is private capital sacred – it moves under a legal framework that citizens endorse. There’s no predetermined moral dimension: it’s neither good nor bad, but reflects human complexity.

Climate capitalism is a rewiring of the economy using whatever works to put a cork in emissions – whether they come from the left, right or anywhere else. Economic radicalism is not the same thing as political radicalism. We harness as many existing institutions as possible for the sake of expediency. We don’t throw out the machinery of capitalism; we replace the fuel.

Twenty years ago, the story would start and end here: price carbon – start low, ratchet it up slowly, keep it revenue-neutral so it’s not a government cash grab. Sit back and watch the market work its magic. Optimally efficient, it’s the incrementalist’s dream! Unfortunately, it’s too late for that soft landing. If your house is on fire, you don’t care if the hose leaks; you just want lots of water. Speed matters more than efficiency.

We need shortcuts – even if they’re less efficient. Here are some ideas.

Has anyone fought an election over efficiency regulations? Car mileage standards or the carbon content of fuel? Sustainable energy professor Mark Jaccard points out that the heavy lifting on emissions reductions thus far, whether in Canada or California, was borne by regulations. Many define an outcome – say, energy use in buildings – without defining how to get there. Jaccard calls them “flex-regs.” Fast, effective, often under the political radar.
Remember “Own the Podium” back in the Vancouver Olympics? We picked athletes who competed at an international level and gave them resources to train. Do the same for cleantech. Back companies with demonstrated traction in global markets with loan guarantees for production and project finance. Today, old stuff gets cheap capital, new tech doesn’t. Let’s flip that around. This isn’t the government picking winners; it’s the government backing winners – a big difference.

Teach young CFOs that energy costs are of strategic importance. Why? Because capital budgets are reserved for core investments – more T-shirt machines for a T-shirt company, bigger holes in the ground if you’re a miner. Energy retrofits are stuck begging from operating budgets, which means they need paybacks in a year or so. Most efficiency fruit remains unpicked, across the economy. Yet rare is the CFO who gets more than 15 to 20% on core capital, and efficiency pays twice that! No policy required, just fresh thinking.

Fund low-carbon infrastructure with green bonds, with a twist. The government raises cheap capital with a Canada Savings Bond–like instrument. The private sector bids on the right to deploy it. A public mandate incents those private money managers with a single metric: maximize carbon reduction at minimum cost to Joe Public. A green bank, done right, combines the public cost of capital with the private sector’s nose for profit.
Finally, use the most powerful institutions we have. We gave up a degree of sovereignty to the World Trade Organization. It has real teeth that impinge upon national governments. Leverage those teeth. The WTO (and World Bank and IMF) reflects the priorities of those who negotiated it. If Trump can upend NATO, imagine how an empowered group of national leaders might reform the WTO to level the playing field between countries by forcing climate laggards to bear carbon tariffs.

Nothing can redeem COVID. It’s a nasty little thing. But maybe it’ll help us hear experts on climate risk and reconcile the priority of long-term stability over short-term cost. We might also use the strongest public hand we’ve had in a long time and write a new climate contract between citizens, our governments and the private sector. If so, we’ll emerge the stronger for COVID, however horrid its impacts.

Tom Rand is a cleantech investor and author of The Case for Climate Capitalism: Economic Solutions for a Planet in Crisis.

The post Can climate capitalism cure what ails us? Fighting climate change in the age of COVID appeared first on Corporate Knights.

Their experience shows that big problems like climate change cannot be solved in isolation—and sometimes, the most meaningful solutions come from the most unlikely alliances.

When it comes to climate change, methane gas does not get the same attention as carbon dioxide. Yet, pound-for-pound, it is 120 times more potent than carbon dioxide because of how effectively it absorbs heat, says the EDF website.

To map gas leaks from the pipes that run beneath streets and sidewalks, three Google Street View cars were equipped with new methane-sensing and analytical technology to measure concentration, GPS locations, and wind direction and speed as they drove through Boston, MA, Indianapolis, IN and Staten Island, NY.

The maps show how much these low-priority risks add up and how important it is to upgrade infrastructure.

In Boston, where more than half of the natural gas pipes are over 50 years old and are made of leak-prone materials, such as cast iron, there was an average of one leak for every mile driven. In Indianapolis, where pipes are newer and made from less leak-prone materials, such as plastic, there was an average of one leak for every 200 miles driven.

Come together

It may seem surprising to think of Google working with an environmental NGO and a utilities company to fix gas leaks, but Karin Tuxen-Bettman, a program coordinator for Google Earth Outreach, says it is the organization’s mission to use Google’s mapping tools to address our world’s most pressing problem.

Millie Chu Baird, managing director at EDF, says the partnership between EDF and Google Earth Outreach was an easy fit because both organizations went in with an open mind and shared the same philosophical backbone of bringing this information to the public.

National Grid jumped on board when the company realized that the project would show them something about their system that they had never considered before.

“The technology…helps us understand how much gas is leaking. We never looked at it that way—we looked at the proximity of the leak to people and buildings where it could potentially ignite and cause a problem. EDF wants to know what it does to the atmosphere. It’s a different perspective, even though we are looking at the same leak,” says Fleck.

National Grid realizes that their customers are becoming increasingly interested in this kind of information, but the partnership with EDF and Google Earth Outreach was key to presenting it in a useful way, says Fleck.

“We don’t have the kind of technology that Google has to link this stuff up…. It would have been really boring and inaccessible, and I don’t think it would have been very helpful at all,” says Fleck.

And in the end, bringing this information to the public is what is most important, says Baird. “It is uncommon that you have an environmental problem that has such a readily available solution, and in this case, it is about getting the public support to [update the infrastructure],” she says.

The post Google maps climate change appeared first on Corporate Knights.

Sheikh made national headlines in 2010, however, when he abruptly stepped down. His resignation took place in the context of the government’s decision to no longer require mandatory participation in Canada’s long-form census. The government misrepresented his views, stating publicly that he supported its decision. He told a House of Commons committee in July 2010: “The fact that in the media and in the public there is this perception that Statistics Canada is supporting a decision that no statistician would, it really casts doubt on the integrity of that agency.” He went on to add: “I, as head of that agency, cannot survive in that job.”

After his resignation, Sheikh publicly argued it was a mistake to cancel the long-form census because a voluntary survey would compromise the quality of census data. The truth did finally emerge that the cancellation of the long form census was wholly the government’s decision. Sheikh is now a distinguished fellow and adjunct professor at Queen’s University in Kingston, Ontario.

In recognition of his years of dedicated and principled public service, Sheikh was presented June 6 with the 2013 Corporate Knights Award of Distinction. In the exclusive commentary that follows, Sheikh weighs into discussions on the need for and impact of a carbon tax in Canada. His conclusion: If designed properly, taxing carbon makes sense for both the economy and the environment.

Arthur Cecil Pigou, a pioneer economist writing in 1920, argued that when the market system produces what he called “uncharged disservices” – which economists now call “externalities” – citizens are worse off and resources are misallocated. He also said an appropriate tax would improve a nation’s standard of living, or what he termed welfare. Pigou’s analysis of, and the policy solution for, externalities are now an integral and non-controversial part of the foundations of economic theory. These so-called uncharged disservices in the context of the current debate on the negative impacts of fossil-fuel use include, among others, climate change, higher ground-level ozone and acid rain.

But leave aside the environment for a moment. When the economics profession argues that, in the presence of these uncharged disservices, resources in the economy are misallocated, does it not logically follow that a proper tax policy that imposes a price on these disservices would allocate resources better and thus improve the economy?

If you now take into account any environmental benefits of a carbon tax, why should there be a trade-off between the environmental and economic objectives so that we can only get one at the expense of the other?

With economic theory so clear that a properly-designed carbon tax would improve resource allocation in the economy, why is there so much hesitation in implementing it to avoid the harmful negative effects of the “disservices” that come with burning fossil fuels?

Failure to act

There are indeed some plausible reasons for the failure to act. The most important is that there is a continued general belief that such a tax would have a negative impact on the economy. Another is that some sectors of the economy are relatively more dependent on the use of energy. They would suffer more than others as the cost increases for them would be above-average.

A third reason, related to the second and fairly important for a country like Canada, is the potential diversity of the regional effects of a carbon tax. It is argued that energy-rich regions, such as Alberta, would suffer more than others. Finally, there’s much concern that a carbon tax would be regressive, hurting lower-income citizens the most as they may spend larger proportions of their incomes on necessities, energy being one of them.

Combining these challenges would seem to suggest that there would hardly be anyone left in the country who would not get hurt by a carbon tax.

So we have a dilemma: the contrast between the non-controversial economic theory result and the list of above-mentioned negative consequences. How do we resolve this?

The economics discipline does have a solution: Quite simply, care must be taken to make it an appropriately designed carbon tax. Most of the problems listed above can generally be dealt with effectively by a range of policy instruments, so that the theory-predicted result can be achieved.

Keep in mind that there are potentially two sources of the problems listed above.

First, while a carbon tax would improve resource allocation by reducing the disservices of the use of fossil fuels, an overall increase in the tax burden on its own (without considering the effects of using the revenue generated by the tax) has the effect of reducing living standards. There is considerable literature available to show the cost of higher taxes for the economy in terms of lost output.

It is the overall increase in the tax burden that is critical from the perspective of negative national economic impacts. We would need to deal with it if we are to achieve the predicted theoretical result of a carbon tax.

Second, any carbon tax would naturally impose a disproportionate burden on those who produce or use fossil fuels more than others. Hence, there could be distributional effects across regions, sectors and people.

A consensus on the distributional consequences is harder to achieve. The range of views may include some liking most of the outcomes while others disagreeing with all of them. This is a difficult choice to make.

A useful scenario to consider is whether we have a set of policy instruments to minimize the distributional consequences of a carbon tax within the constraint that the economy not suffer.

Evidence matters

This is where evidence-based policy development comes in. For this to happen we need models and data. We have both. With those, one can attempt to design a policy package that would accomplish the following set of objectives:

• Achieve the desired reduction in greenhouse gases using an appropriate level of a carbon tax;

• With the revenue generated from that carbon tax, set federal tax and spending levels such that there is no reduction in the overall level of economic output;

• Within this constraint, stabilize the existing income distribution, offsetting any negative consequences of a carbon tax, by using the mix of a range of taxes we now pay;

• Offset any distributional impact on economic sectors by reducing the taxes on the inputs they use; and

• Offset distributional impacts on the regions of the country.

I did some work along these lines using a set of economic, environmental and social policy models. This exercise yielded the following package that would mostly achieve these objectives: impose a federal carbon tax at the point of consumption; reduce personal income taxes tailored to offset the burden of a carbon tax by income class; reduce taxes on return on savings; and lower taxes on business inputs in a manner to try to offset sectoral distributional effects, which would also minimize any regional consequences.

I say mostly because there are those whose fossil fuel use is way beyond average and it is not possible or desirable from a policy perspective to micro manage policy beyond an appropriate aggregation level. As for the fossil-fuel sector, I assume that the difference between our production and lower demand would lead to a reduction in imports and an increase in our exports.

The economic variable used for such an exercise is the GDP, the most comprehensive aggregate economic output indicator currently available. It is well recognized that GDP excludes changes in natural capital and does not take into account the intergenerational economic effects of a policy change. With a more appropriate measure of production, it should be easier to get the result that economic theory predicts.

To be clear, such an exercise is only illustrative. There are at least four reasons for this observation. First, to develop a more precise package of policy action, one needs to capture in detail the latest structure of the Canadian economy, the tax system and income distribution. Second, in contrast to what is attempted above, policy makers may or may not want to offset all of the distributional effects across individuals, sectors and regions. Third, the constraint of revenue neutrality is imposed to demonstrate that a carbon tax need not reduce economic output. There may be uses of the carbon tax revenue that could strengthen the economy further or weaken it. Fourth, the package of policy change described above is not unique: there are likely to be other combinations of policy changes that may achieve similar or better outcomes.

In conclusion, the issue is not so much about a carbon tax per se, but the appropriate design of a carbon-tax-inclusive tax transfer system. This is an important topic that has been completely missing from the carbon tax debate. We need a more extensive discussion of the relevant issues using sorely needed analysis and the available evidence.

The post No need to fear carbon taxes appeared first on Corporate Knights.