Discussions about how countries will reduce greenhouse gas emissions rarely address the potentially significant distributional effects on different regions and income groups. In Canada three distributional issues have often been central to the political debate.
Almost half of Canada’s GHG emissions arise from economic activity in Alberta and Saskatchewan. The petroleum industry, largely centered in those provinces, provided $500 billion in revenues to federal, provincial and municipal governments over the period 2000-2018, with the provincial governments being the principal beneficiaries.1 This does not include the incomes and taxes paid by people employed in the petroleum industry. According to some estimates, the “deadweight loss” of halting forever production from the oil sands industry would be about $9 trillion. The loss of the petroleum industry would undeniably deal a devastating blow to the western Canadian and Newfoundland economies and create conditions in which it would be increasingly difficult to attract investment for newer industries. The loss of emissions-intensive and trade-exposed firms across Canada would similarly have seriously negative effects, especially in rural areas where there are many one-industry towns.2
The costs to individual households would also be very high. Prohibiting the sale of internal combustion engine vehicles would raise the cost of vehicle ownership by at least $10,000 per unit, not counting the cost of purchasing and installing home rechargers. It would also make it very difficult for many people living in multi-unit buildings to have access to a recharger. Full electrification of the light duty vehicle fleet would require the addition of up to 10,000 megawatts of additional electricity generation capacity (probably impossible) and thus sharply raise the cost of electricity to fuel vehicles.3 Much increased reliance on wind and solar generation sources without thermal generation backup would require much increased use of battery storage at rates up to ten times those experienced today, and with much reduced security and reliability of supply. The implementation of a mandatory net zero building code by 2030 could add up to $100,000 to the cost of constructing a new house, and the effects of such a code would be worsened if governments attempt to impose it through retrofits to existing buildings. If governments seek to force the electrification of all transportation modes, the elevated costs of freight movement (at least double current levels) would make food and other goods far more expensive. Through requiring airlines to purchase offset credits and to use scarce biofuels, governments will drive the costs of air freight and passenger flights to unprecedented levels, and make it prohibitively expensive for many to travel internationally. The list of products and services whose cost will increase is endless.
The World Cannot Produce the Materials Needed for Such a Transition in the Timeframes Proposed
Mark Mills of the Manhattan Institute has written a series of brilliant articles in which he has examined the physics of fueling society, including the potential for wind, solar and biomass energy sources to meet the energy requirements now met by conventional energy sources. One of his best articles4 elaborated in considerable detail on the material realities of green energy:
“Building wind turbines and solar panels to generate electricity, as well as batteries to fuel electric vehicles requires, on average, more than 10 times the quantity of materials, compared with building machines using hydrocarbons to deliver the same amount of energy to society.
A single electric car contains more cobalt than 1,000 smartphone batteries; the blades on a single wind turbine have more plastic than 5 million smartphones; and a solar array that can power one data center uses more glass than 50 million phones.
Replacing hydrocarbons with green machines under current plans – never mind aspirations for greater expansion – will vastly increase the mining of various critical minerals around the world. For example, a single electric car battery weighing 1,000 pounds requires extracting and processing some 500,000 pounds of materials. Averaged over a battery’s life, each mile of driving an electric car ‘consumes’ five pounds of earth. Using an internal combustion engine consumes about 0.2 pounds of liquids per mile.
Oil, natural gas and coal are needed to produce the concrete, steel, plastic and purified minerals used to build green machines. The energy equivalent of 100 barrels of oil is used in the processes to fabricate a single battery that can store the equivalent of one barrel of oil.”
In May 2021 the International Energy Agency (IEA) issued a report on “The Role of Critical Minerals in Clean Energy Transitions”.5 While offering a somewhat optimistic account of the long-term availability of minerals to accommodate the “transition”, it provided evidence of how extremely difficult and problematic it will be to attain the needed materials in the timeframes envisaged by advocates of net zero.
The IEA projected that the demand for key minerals such as lithium, graphite, nickel and rare-earth minerals would explode, rising by 4200 percent, 2,500 percent, 1,900 percent and 700 percent respectively, by 2040. The world does not have the capacity to meet such demand and there are no plans to fund and build the necessary mines and refineries. In addition, sharp increases in demand for these metals will raise commodity prices, which in turn with raise the prices of many other goods and accelerate inflation. It takes over 16 years for mining projects to go from discovery to first production (assuming environmental assessment processes and environmentalists’ legal challenges do not halt them along the way). If countries started tomorrow, new production for these materials might begin after 2035. This places into context the claims by the governments that they will have carbon-dioxide-free electricity by 2035. In fact, unless there are major increases in the discovery and development of new mineral resources, it appears highly unlikely that the materials requirement associated with currently-identified alternatives to fossil fuel use, can be met in the foreseeable future.
The Institute for Energy Research, in commenting on the IEA report, noted that the production of “green” energy materials is energy intensive and that trend is increasing.
“In recent years, ore quality has fallen across a range of commodities. For example, the average copper ore grade in Chile declined by 30 percent over the past 15 years. Extracting metal content from lower-grade ores requires more energy, high production costs, and more greenhouse gas emissions and waste volumes. The IEA data show that, depending on the location and nature of future mines, the emissions from obtaining these materials could wipe out much or most of the emissions saved by driving electric cars.6
Canada is truly committing economic suicide. Let’s try and stop the US from following suit. We will still be standing upright in November of 2022 when the Republicans will seize control of the purse strinsgs which in the US are owned by the House of Representatives. Part three of this series on Canada willl scribe the final nails they wish to hammer into their coffin.
4 Mark Mills, Mines, Mineral, and “Green” Energy: A Reality Check, July 9, 2020