Dr. John Hollins,  past Chair CACOR Board of Directors with advice from Robert Hoffman past Chair CACOR Board of Directors [1]

This opinion is based on a study by the  anadian Association for the Club of Rome [2]

Summary

Canada’s public policy to reduce its emissions of greenhouse gases has not delivered. Canada failed by a wide margin to meet the commitment that it made in Kyoto in 1997. The likelihood that it will meet the commitment that it made in Paris in 2015 is vanishingly small.  Yet this is an issue that must be dealt with competently within the next decade.

The analytical foundation for Canada’s policy has been substantially inadequate. Targets were set without any understanding of whether or not there was a way to hit them in practice, despite the fact that effective analytical tools were available.

This paper draws on the results of a study that found pathways that are physically feasible. It identifies the boundaries of the possible and opens the way to policies that would actually work. There is a way for Canada to hit its 2030 Paris target — but only if all the feasible actions are taken in a timely manner, starting yesterday.

Global warming is indeed everyone’s business, but effective and timely action requires that attention be paid first to the big emitters.  By way of example, this paper identifies one policy that on its own would enable Canada to take a substantial step towards its Paris target, although not likely by the target year.

We need to keep our eye on the ball and not get distracted by asparagus and green peppers.

Gidon Eshel,
Bard College, NY
(referring to the substitution of  vegetables for meat in diet to reduce the emission of greenhouse gases).

Issue

French mathematician Joseph Fourier discovered in 1824 that the Earth’s atmosphere functions as a blanket.  In 1896, Swedish scientist Svante Arrhenius explained how.

The need to reduce the emission of carbon dioxide and other greenhouse gases in order to avoid catastrophic global warming was understood and accepted by the Government of Canada in 1988. In 1992, Canada’s prime minister was the first to sign the United Nations Framework Convention on Climate Change.

Yet Canada has made no progress during the following 27 years, in fact, it has lost ground. There has been a substantial failure of public policy.  This failure raises the question of the adequacy of the process informing public policy on this issue.  The fact of the matter is that the analytical approach and the tools used by the Government of Canada — limited to economic methods — have not been up to the job. More effective approaches and tools have been available throughout this period. This paper provides a broader approach to policy decisions.

Nature of the problem

Policy intended to reduce emissions requires attention to the structure of the entire economic system, not just the energy sector.  Transition from the existing structure, based heavily on fossil fuels, to one that is carbon free requires a time horizon of at least 50 years. The system is composed of stocks that take decades to turn over; for example, 10 to 20 years for items such as vehicles and 30 and more years for facilities such as generation and distribution of electricity, buildings and infrastructure. The time horizon of any meaningful analysis must be long enough to encompass more than one stock rollover and it must focus on pathways or trajectories rather than end points.

Sound Policy

Dealing with complex, long-term issues in a democratic society depends on the formulation by governments of sound policies and programs, informed by evidence and understanding, and accepted by a majority of the electorate.

Sound policy to deal with the emission of greenhouse gases must satisfy three criteria.  It must:

1. be physically competent:

o  able to satisfy aspirations in practice;

2. make a big difference in a timely manner:

o  start with the big emitters;

3. be politically doable:

o  able to secure collaboration and be open to adaptation as lessons are learned.

Forecasting

Almost all governmental policy is informed by economics and often not much else. Economics routinely leads to forecasts: this is where we are; this is where we reckon we’re going.  Economic forecasts usually address only the short term; they are not an adequate basis on their own for formulating policy for a complex, long-term issue.

Backcasting

In the real world, there are more factors in play than economic considerations, including environmental, legal, and social matters, all embedded in the values of society.  These factors routinely play out during decades rather than a few years. For any issue that needs to be addressed over a long period of time, a sounder approach is backcasting: to establish first where one wants to be and when. The questions then become can we get there from here and, if so, how? And are we prepared to adapt as we travel the long path?

After these questions have been answered, policy to follow the path selected needs to be adopted and adapted as experience is gained, and that requires, inter alia, economic analysis.

Effective tool

An effective tool is needed. During the past four decades, the substantial increase in the power of computation has created tools that provide the insights needed to develop sound policy options, informed by what would be possible in practice — to backcast. The scientific method from the time of Galileo had two methods of iteratively developing and testing theory: observation of nature and experiments. Our toolbox now contains a third method: computational calculation. There is, in fact, no other way to comprehend complex systems.

The Canadian Club of Rome has used the well-established Canadian simulation tool, CanESS[3].  It enables the user to explore potential futures, typically looking out 50 years, to establish whether or not a desired future is in fact physically possible.

If it is not, all the economic devices in the country will not be able to achieve it. This is the current situation, for example, with the preoccupation of some governments with a levy on motor fuels for consumers which is most unlikely to work. It diverts attention from options that are up to the task.

If a simulation does find a coherent pathway to the desired future, the next task becomes detailed examination of the technical requirements of the pathway and the design of policy instruments to travel that pathway, which is where economic analysis comes in.  Canada currently has the cart in front of the horse.

The simulation tool used by CACOR enabled those who participated to develop a new way to reason, to ask new questions — repeatedly — and thereby gain new understanding and insights into what policies would provide a coherent approach to a long-term, complex issue.  Identifying the boundaries of the possible opens the way to policies that would actually work.

Initial findings

The blue line at the top of the graph on the next page is the reference case: business as planned, incorporating all the existing plans known to the analyst.

The red line below the blue line shows the result of adding to the actions in the reference case the electrification of all the demands for energy in the residential sector.  All the lines on the graph are the total emissions for that action plus the actions higher on the graph:  moving down the graph, the actions are cumulative.  The order of the actions is arbitrary, not prescriptive.

The electrification of transportation is for the transport by road, passenger and freight, which each represent roughly 50% of the total.  This analysis does not yet include transportation by air, road, or water.

Our first observation is that this analysis reveals the enormity of the task of making substantial reductions in Canada’s emissions.

2030 Paris target

This analysis[4] conducted for CACOR demonstrates that there does exist a technically feasible pathway for Canada to hit its 2030 Paris target — but only if all the actions in the graph are executed in a full and timely manner. But:

1. Canada’s policy is not yet informed by sound analysis of feasible pathways — does not satisfy criterion 1;
2. Canada’s governments are fiddling on the margins — does not satisfy criterion 2; and
3. Some of Canada’s governments are at loggerheads over one proposed economic instrument — does not satisfy criterion 3.

So the likelihood of Canada actually following this pathway to 2030 is currently vanishingly small.

A feasible starting point

Canada and most other countries have been fiddling on the margins of reducing emissions. The overwhelming priority should be taking big steps to reduce the use of fossil fuels.

There is one approach that would enable Canada to start to approach its 2030 Paris target, satisfying all three of the criteria set out above,  although not by that year since Canada is very late in taking substantial and effective action.

Ontario, New Brunswick, and Nova Scotia have already shown the way by closing coal-fired power stations at their own initiative. New Brunswick deliberately closed two coal-fired power stations a decade ago. The result is that the province has already hit the 2030 target accepted by Canada in Paris in 2015.  (How ironic that the residents of a province that has already met this target are being charged a regressive carbon tax on consumer motor fuels!)

So let’s start by building on this example and plan to phase out all coal-fired power stations in Canada (red line in the graph in the graph).  The reference case again incorporates all the existing plans for this action known to the analyst.

A policy to phase out all power stations fired by coal — and then by natural gas — as rapidly as possible would on its own be a big step towards Canada’s Paris target. Intergovernmental cooperation would be a prerequisite, of course, but governments should be able to abandon their political bun fights and work constructively on this policy.  The governments would be:

o   those directly involved in closing coal-fired stations, Nova Scotia, New Brunswick, Saskatchewan, and Alberta;

o   the federal government; plus

o   Manitoba and British Columbia as potential sources of hydro.

This policy would require detailed technical and economic analysis to establish the best options — amongst, say, main line grids to existing and new hydro, renewables in microgrids and larger grids, nuclear, storage — to put it into practice in an effective and timely manner. This one policy on its own offers a large initial step.  A range of other technically feasible options, developed in the same way, would then be required to complete the job.

Commentary

The origins of global warming began two centuries ago with the emission of carbon dioxide from the combustion of coal, followed by oil and natural gas.  The other greenhouse gases added subsequently by the paths of economic developments are significant, but the primary task in 2019 is to reduce substantially and rapidly the combustion of fossil fuels.  Veggie burgers may be fine for drawing attention to the issue, but they are not going to make a significant difference in short order.

The potential actions examined in this study involve citizens directly in two domains: residential demands and personal transportation.  On its own, managing the residential sector only stabilises emissions in the long run.  The displacement of hydrocarbons for transportation by green electricity or hydrogen would make a bigger difference.

To reach a more stringent target beyond 2030 will require that the use of fossil fuels be phased out.  Phasing out coal for the generation of electricity has already begun; it is technically and politically feasible and would make a worthwhile difference in the medium term.  Phasing out the oil sands is of course a political conundrum, but an initial reduction would be required even to hit the 2030 target, never mind going much further.

This study makes clear that, while global warming is indeed everyone’s business, effective and timely action requires that attention be paid first to the big emitters. The natural human tendency to go after low hanging fruit is simply inadequate for this existential issue.

2019 August 13

Addendum

Canadian Energy Systems Simulator

This addendum has been distilled from the website of whatIf? Technologies Inc. by John Hollins

Introduction

The Canadian Energy Systems Simulator (CanESS) developed by whatIf? is a computational model with a very large database that enables its users to examine options for the evolution of energy systems in a consistent and coherent manner. It is an integrated, multi-fuel, multi-sector, provincially disaggregated energy-systems model of Canada.  Emissions are taken into account from the beginning of an analysis.

CanESS enables bottom-up accounting for energy supply and demand, including energy feedstocks  (e.g. coal, oil, gas); energy consuming stocks (e.g. vehicles, appliances, dwellings) and all intermediate energy flows. It is calibrated with observed historical data from 1978 to the present, and it enables projection of scenarios forward to 2050 and beyond.

The conceptual view of the energy system that underlies the development of CanESS is shown in the figure below.

Comment

Conventional thinking about energy starts with sources of energy (e.g., coal, oil, natural gas, biomass) that flow one way to uses of those sources.  In CanESS, the role of energy currencies (e.g., electricity, gasoline, hydrogen) is — literally — central to the conceptual approach.  Requirements draw on energy currencies and sources provide the currencies.  This model works both ways.

Coherent

CanESS focuses on coherency — on creating scenarios that are consistent among the population, the level of economic activity, the services required by the population, the energy system, and the emissions of greenhouse gases. It assures coherency over time and within time periods through the use of stock-flow accounting rules, vintage stocks and life tables, supply/disposition balances for fuels and feedstocks, and the explicit representation of energy transformations. The major sub-models and high-level computational structure of CanESS are shown in the second figure. A detailed description of the sub-models is provided on the whatIf? website.

History and Sources

CanESS is calibrated over historical time from 1978 to the present in one-year steps. The result of the calibration is a complete historical database of all the variables in CanESS. This database is a synthesis of data from a wide variety of data sources including: Statistics Canada; the Office of Energy Efficiency, Natural Resources Canada; Transport Canada; Environment Canada; the National Energy Board; and technical data from various scientific and engineering studies.
Summary

At its core, CanESS is a stocks-and-flows accounting-framework model that represents the physical state of Canada’s energy system over time — for the observed past and for alternative future scenarios.

In order to project how energy flows may be changed in the long term, CanESS year-by-year:

o   traces the flows and transformations of energy from sources (e.g., crude oil, uranium, wind), through energy currencies (e.g., gasoline, electricity, hydrogen) to end uses (e.g. personal vehicle use, space heating).

o   finds an energy balance by accounting for efficiencies, conversion rates, trade and losses at each stage in the journey between end use, currencies, and sources.

o   creates a picture of energy flow for each and every year by including many factors, for example:

o   the population;

o   economic activity;

o   energy production and trade;

o   energy delivery technologies and technologies that transform energy sources to energy currencies.

o   The model makes an explicit mathematical relationship between these and many other factors.

The CanESS framework accepts and tests the effects of variables defined by users. Throughout the CanESS accounting framework, there are input variables for the assumptions that users wish to examine. This enables a user to create what if? scenarios as a foundation for creating sound policy proposals — that would actually work in practice.

For a fuller description of CanESS, please visit the whatIf? website:
http://www.whatiftechnologies.com/model-information

[1] John Hollins and Robert Hoffman are both past chairs of CACOR.  Robert is an economist by training and a systems analyst by avocation.  John is a biophysicist who became a generalist.

[2] CACOR, canadiancor.com

[3] See addendum.

[4] The analysis was done for CACOR by Bastiaan Straatman, whatIf? Technologies, Calgary and guided by a CACOR Pathways team: Art Hunter, Catherine Smith, David Dougherty, David Pollock, Gordon Kubanek, John Hollins, Robert Hoffman, and Ted Manning,