Environmental Challenges and Opportunities in 2010

Happy New Year! Many thanks to our readers, followers and guest post authors who continue to support and read Enviro Boys. Many more posts to come in 2011!

A blog post from the NY Times' Green Blog highlights the many environmental challenges and opportunities of 2010. Most of the examples are from the United States but there is discussion of Russia's summer heat wave and the US senate's postponed decision on whether to approve a controversial 2,000-mile, $7 billion pipeline project to deliver crude oil from Canadian oil sands to refineries on the Gulf Coast of Texas.

Here is a highlight that caught my interest and is more promising than it is depressing:

Tigers and Bears: With major reports on biodiversity all showing an accelerating loss of species on land and in the oceans, attention was focused most closely on polar bears, whose sea ice habitat is melting for longer periods almost every year. A team of climate scientists and biologists is promoting the idea of setting aside a “sea ice refuge” — a swath of the Arctic from northwest Greenland west through northern Canada where the ice remains thickest. Another study predicted that polar bears would breed with grizzlies, creating hybrids that are less resilient. Meanwhile, fears of the extinction of the wild tiger prompted a summit of sorts in Moscow, at which officials agreed to a goal of doubling the number of wild tigers — now about 3,200 — by 2022.

Read the blog post here.

Key message: We have a long way to go on the environmental front. While it is still pretty common to dismiss the ominous nature of climate change -- especially in a time when people are more concerned about finding a job -- the reality of our environmental challenges are significant and require meaningful action. Heat waves in Russia, water droughts in the US Southwest and renewable energy opportunities may seem distant from you but everything is interconnected and closer than you think. Always think about your impact on the environment and ask yourself how you can conserve and lower your ecological footprint.

Progress on Solar Power in Hong Kong

The largest solar power system in Hong Kong has been unveiled at Lamma power station, which can maintain adequate power output under high temperatures or on cloudy days. It is being operated by Hongkong Electric. The thin film used in the system uses less silicon and is more environmentally friendly. The panels can generate a total of 550 kilowatts, or 1% of the overall capacity of the 3,700-megawatt plant, which uses coal as its main fuel source.

The HK$23 million project ($3 million Canadian) will reduce HK's carbon dioxide emissions by 520 tonnes a year. Hong Kong's annual carbon dioxide emission output is about 39,000 tonnes (as measured in 2007). So this project will decrease annual CO2 output by 1.3% - a number that will increase over time with more renewable energy projects such as this one. It is expected to generate enough power to supply the needs of 150 families (with four household members).

Giant weeds, eco-fascists and a solar powered plane...

Remember that scene from Honey I Shrunk the Kids where the shrunken kids end up in the yard, completely engrossed in towering blades of grass and weeds? Well, such a reality -- minus the shrinking -- could be on us at any moment. According to officials in eastern Ontario's Renfrew County, a giant and dangerous weed is now present in Ontario.

Known as Giant Hogweed, it can stand as tall as six metres and its sap can cause blindness and skin damage similar that of a fire or chemical burn. Apparently it has also been spotted in southern Ontario. You can read a lot more about it here. Interestingly, it is already present in Newfoundland, New Brunswick, Quebec, Alberta and British Columbia. Of course, when it finally hits Ontario -- ever closer to the Centre of the Universe -- it becomes big news.

The spread of big dangerous plants reminds me of the film The Happening, which I just watched a few days ago. SPOILER ALERT. In the movie, people start killing themselves -- in ever so creative ways -- when an airborne toxin gets into their system. What's causing the toxin? Pissed off plants, of course. We better keep Mark Wahlberg and M. Night Shyamalan on speed dial, just in case this Hogweed starts going after us. They'll know what to do.

On a movie-related note, I recently watched Daybreakers, where vampires have taken over the world in 2019 and are running low on human blood. You'd think eventually someone, somewhere, even vampires, would learn from the collapse of the cod fishery in Atlantic Canada.

Well, those people that might be translating such learnings into the protection of natural lands are now being branded as fascists. Bill Bennett, the Liberal Minister of Mining in British Columbia, lampooned proponents of the Keystone Valley receiving National Park status as eco-fascists. Bennett already has a history of lashing out, so Mr. Campbell, I suggest you get rid of this guy before he further derails your already wimpering 'green' provincial mantra. And Mr. Bennett, if you're going to compare environmentalists to the likes of Mussolini and Hitler, I suggest you at least spell the term fascist correctly.

And finally, I am impressed but feel oddly unsettled with the news of a solar powered airplane completing a 26 hour test flight. I'm all for renewable energy and air travel is a major source of carbon emissions, but knowing that solar energy is the only source fueling the plane would not inspire great confidence. I know, I know, give it time so it can prove itself and soon the world will be a better place, but at least I know that top-notch airplane fuel is fairly trustworthy. Then again, just over one hundred years ago, they thought the Wright Brothers were crazy. Maybe it just takes time to normalize to the situation.

Carbon pricing vs. feed-in-tariffs: How should we really be spurring development of renewables in Canada?

Much praise has been given for Ontario’s Feed-in-Tariff program and its potential to develop renewable power generation to levels comparable in countries like Germany and Denmark, where FITs have also been used. But some have commented that a carbon pricing system (either through a carbon tax or cap-and-trade system) would be far more effective. They are only half right.

They are right because a FIT is very expensive. Indeed, Ontario’s Green Energy Act has allocated $5B over the next five years, much of which will be put towards its FIT program. A carbon pricing system, on the other hand, is relatively cheap to maintain and (if done properly) a revenue generator. These people are also right because it effects traditional energy production, specifically fossil fuel generation like gas, oil and coal. The price of generation of these technologies increases and makes renewables more economically attractive. Moreover, for those with a particular appetite for freedom of choice, it doesn’t let governments pick and choose the technologies it wants. Indeed, the market decides.

In his book, Heat, George Monbiot struggles to find out how renewables alone could supply our current demand for energy. In short, they can’t. A carbon-pricing scheme would make energy conservation more attractive because we’d have to pay extra for wasting energy. Furthermore, even if we can’t get to the energy demand levels required for purely renewable power generation, a carbon-pricing system could make carbon capture and storage technologies economically viable without massive public subsidies.

But they are wrong because a carbon-pricing scheme alone won’t solve the problem of developing renewables. First, if the market has its way, only the cheapest renewables would get built, most likely hydro and on-shore wind power. But several other technologies would get left out in the dust. Solar PV, wave, tidal, offshore wind and even some biofuels wouldn’t be able to compete. This is not to say these technologies are not beneficial, but rather that they are immature. Considering that many in the renewable energy field believe we need a diverse mix of all technologies to properly reap the rewards of renewable energy, a carbon-pricing scheme might leave us with only a few options.

This would be fine if there were moving water and windy areas everywhere. But some places are very sunny and dry, some have massive tidal flows and other places really, really hate wind turbines. Specific technologies need to be brought up to par and sometimes a direct and exclusive financial incentive (ex. A technology-specific FIT) is necessary. And if you’re smart about it, like Ontario is trying to be, you can invest in the technology now and export it to the rest of the world for a nice chunk of change. Look at Vestas in Denmark, for example.

Now, it wouldn’t really matter what technology you picked if the carbon price was high enough. As long as a technology can make some money, it will be put into use. The problem is that we would need some very high carbon prices.

According to a New Energy Finance study mentioned in The Economist, onshore wind requires a carbon price of US$38/tonne to become economically viable without subsidy. This is not an outlandish price. Carbon taxes in some European countries are over US$100/tonne, so it isn’t politically impossible. But before you get too excited, let’s remember that Stephane Dion’s Green Shift platform ran alongside a $10/tonne tax on carbon and it was demolished. Even the relative success story of British Columbia’s carbon tax is fraught with political opposition, and it’s only hovering around the $15/tonne mark these days. The only large-scale attempt at setting a carbon price is the European Union’s Emissions-Trading-Scheme, which has the price set at US$22/tonne. These prices might eventually get around the $40/tonne mark, but that won’t do it for the more expensive technologies. Offshore wind requires a price of US$136/tonne and solar PV US$196/tonne. You want to set a carbon price to make that economically viable? Good luck.

But this entire post has offered us a false choice. What we really need is both a carbon price and subsidy programs. A price on carbon is absolutely necessary, even if it is as small as $10/tonne. It will at least give some indication to industry and consumers so they can include the carbon costs in their accounts. And any revenues taken from it can go towards subsidies. What’s really needed is the political will and more importantly, public recognition and understanding of why a price on carbon is needed and the necessity of renewable energy technologies.

Finally, I’ll end with a piece of advice frequently used by George Monbiot. No matter what we do to help out renewables or fight climate change, it’s all worthless if we keep feeding the fossil fuel industry with tax breaks and subsidies. Monbiot equates it to filling yourself up on fatty, unhealthy foods, but adding a salad and not expecting to gain any weight. But right now, we’re getting pretty fat.

Domestic content requirements might be a pain, but Ontario needs them...

Ontario’s Feed-in-Tariff (FIT) program is one of the world’s most ambitious clean energy subsidy programs. Indeed, some of the rates it will pay for renewable electricity can hardly be found anywhere else in the world.

Of course, Ontario is not a pioneer in this regard. Unsurprisingly, the Europeans – who seem to do everything better than us in North America, at least when it comes to energy – have been expanding their renewable industries using FITs for a few decades. Wind and solar have seen significant expansion in Germany & Denmark using this economic tool, despite the relative lack of the necessary energy inputs (i.e. they are not the windiest or sunniest places on Earth).

Spain also toyed with a FIT to expand its solar photovoltaic industry in 2007. It offered 44 euro cents per kWh produced (~ CDN$0.66) and expected a growth of installed capacity around the 400 MW mark by 2010. The FIT was intended for projects of less than 100 kW, but developers quickly found a loophole and built several modules of 100 kW installations. Before the Spanish government knew what hit them, approximately 3 GW had been built and a lot more money needed to be doled out than had been allotted. The program fell apart shortly thereafter as the government lowered the FIT price significantly and ultimately made any new solar PV development uneconomical.

But it wasn’t economics alone that killed the program. Politically, it was a less than stellar subsidy. The FIT had no limits on where the solar PV panels had to come from and as a result the FIT unintentionally provided a boon to the German and Chinese manufacturers of solar panels, which lead the world in solar PV construction. While it also aided the domestic manufacturers in Spain, the Spanish government found itself footing the bill for a program that was helping its competing manufacturers in Germany & China, whose governments got to benefit free of charge.

That is the thing with subsidies. Since the taxpayers of a country ultimately pay for subsidies, they should be the ones who benefit. And politically, they are nice and easy. It is much easier to hand money out than take it away. So sometimes the policies guiding the subsidy are not completely thought out.

Ontario is aiming not to make this mistake. First, it is not guaranteeing FITs for every renewable producer. You first have to sign a contract with the government, thus allowing them to keep track of installed capacity. But what is more, it has placed stringent domestic content requirements on its subsidized solar PV projects. Currently, 50% of a project has to be from Ontario – this can include everything from the actual panels themselves, the installers, the feasibility analyses or even the bolts tying the panels down. According to some solar PV installers I’ve spoken with in Ontario, projects can barely meet the requirements, almost exclusively because there are no major PV panel manufacturers in Ontario. The idea with the requirement is to attract a manufacturer to set up shop in Ontario knowing the market will be there to sell. What will really provide the incentive is that in 2011, 60% of a project will need to be domestically sourced, which without a major domestic manufacturer will be impossible.

One company, Canadian Solar – which, despite its name and Canadian ownership does nothing in Canada -- has already answered the call and will be building a multimillion dollar plant capable of producing 200 MW of panels annually. But like Rome, these plants don’t get built in a day.

For now, it is a pain in the ass for solar PV developers in Ontario, but it is absolutely necessary if Ontario is to get the biggest bang for its buck and kick any free riders off its subsidy train.

Happy Holidays.