On the costs of fighting climate change and the Site C dam

The other day I was invited to present some information about the Site C Dam for a local news broadcast on Global BC. After a telephone pre-interview, I met a reporter for an interview on tape. After asking all the questions on his list the reporter asked me a very telling follow-up question. He asked if Site C was likely to result in an increase in hydro rates for British Columbians? I think he was expecting me to say no, as that would be the political thing to do, but instead I think I surprised him by telling what I believe to be true: that, in all likelihood the completion of the Site C dam will result in an increase in our hydro rates. To further compound my blasphemy I pointed out that this was not bug of the system but rather a necessary feature. Over the rest of this post I will explain why this is the case and what it means for our fight against climate change.

In the last month, I have spent a disproportionate amount of time talking and tweeting about the Site C Dam project. I have written a lot about the dam and my conclusion from researching the project is that even with all its flaws it still represent a net positive for BC and a necessary project from an environmental perspective.Why you ask? Well, I have strong concerns about climate change and believe that we, as a nation, have to reduce our dependence on fossil fuels. In this I agree with a very well-know local climate scientist named Dr. Andrew Weaver who once said:

The only solution, to be perfectly blunt, is to go carbon neutral.” And the only way to do that, he said, is for BC Hydro to get back in the business of mega-projects. “They should be carving out their niche with the Site C dam,” he said.

That option has been on the drawing board for years and now comes with a price tag in excess of $6-billion. It would be built on the Peace River, just southwest of Fort St. John, and would produce enough electricity to provide power for nearly half a million homes.

“I cannot see what is stopping Site C,” Prof. Weaver said. “There are environmental consequences, yes, but there are environmental consequences for everything we do and we have to stop using the atmosphere as an unregulated dumping ground.”

Since Dr. Weaver made that statement much of the rest of the world has agreed with this proposition and showed their support by signing the Paris Agreement.

So how do we fight climate change? We need to electrify everything and then make sure that the electricity we move over to is of the low-carbon variety (like Site C). Now comes the part you don’t normally hear, because I am here to tell you that if we are going to fight climate change we are going to need to see our energy prices increase. Prematurely retiring exiting infrastructure, building new infrastructure and re-tooling our economy cannot be done at little or no cost to the public. We are asking our society to abandon existing energy facilities that were built with the intention to be used for decades to come. The costs for building those facilities were to be amortized over decades and will come due far sooner than planned. This will cost money. If you want a concrete local example consider the Burrard Thermal Plant.

The Burrard Thermal Plant represents a cheap and inexpensive source of 900 megawatts of conventional natural gas-fired generating capacity. The problem is that even during its historically low 2006 output it still represented Metro-Vancouver’s fourth-largest source of GHGs. If we keep using Burrard Thermal we can produce cheap energy, but we do so by emitting a lot of carbon dioxide. Closing Burrard Thermal makes little economic sense because after recent upgrades it is a highly efficient producer and yet closing it make eminent sense from a climate perspective. By closing Burrard Thermal we guarantee higher hydro rates and yet we have chosen to do so for climate reasons not economic ones.

Earlier in this post I pointed out that raising rates was a feature and not a bug of the system. Why is this you ask? One of the critical means of eliciting a response in our economic system is to provide an incentive/disincentive. Higher energy prices are one of the major ways in which we can drive down demand. Make energy more expensive and people, and industry, will find ways to save energy. Make it cheap and it will be wasted; thus in order to drive down demand we need to make energy more expensive.

Now, from an economic perspective making energy more expensive may be the necessary thing to do but we live in a system of where not all have the same resources. There are people who can easily afford higher energy prices and others who cannot. In order to make this work, from a societal perspective, we need to shelter the poorest by subsidizing their energy costs. This is where the carbon tax comes in. It provides a large source of funds that can be used to protect the poorest from the effects of our fight against climate change. Now the logical reality of this is that if that money is being spent on the poor it will not be available for the middle class. What this means is that middle class energy users will necessarily be the hardest hit by the price increases.

This is the dirty little secret that the activists in the environmental movement don’t want to admit and why my interviewer probably expected me to deny the price increase. Read the 100% Wind, Water and Sunlight articles and they all talk about how their program will add jobs and bring brightness and light but what they never admit is that it will be done at a cost: increased energy prices and increased hardship on the middle class. Alberta can’t mothball their entire coal fleet while building solar and wind facilities at no additional cost. If 100% Wind , Water and Sunlight is going to generate millions of jobs we will need the money to pay all those salaries since all that cost is in energy. It is going to mean higher energy costs and much of that burden necessarily will fall on the middle class.

The same logic applies to Site C, it is not the cheapest energy out there (that would be Burrard Thermal), but it represents one of the cheapest of the clean alternatives. The activists keep arguing that other alternatives like wind, solar and geothermal represent cheaper alternatives but they have yet to demonstrate their case. BC Hydro has estimated the costs for alternative energy sources and all of them come in as equal to or higher in price to the Site C power once you factor storage and transmission costs into the equations and of the low-carbon options Site C is the cheapest base-load energy source. The activists present any number of hypothetical projects but once you include storage and transmission into the equations none can provide the reliable power of Site C at anywhere near its cost. Now comes the important part, because if we are actually going to beat climate change we need to build Site C AND many of the other renewable projects being put out there.

Ultimately fighting climate change means making a number of challenging political decisions. It means admitting that we need to raise hydro rates. It means admitting that we can’t protect everyone from the cost increases which means that the middle class are going to take a bigger hit than would be preferable in a perfect world. It means telling the public the truth and not pretending that this can be done easily. The most important things in the world don’t come easily they take effort and you only build support for these causes by being honest. Lie to the public and watch how the support fades when the truth comes out later.

 

This entry was posted in Canadian Politics, Climate Change, General Politics, Site C, Uncategorized. Bookmark the permalink.

7 Responses to On the costs of fighting climate change and the Site C dam

  1. Morley Sutter says:

    Blair, please tell me what is the evidence that lowering CO2 will lessen global warming? Please provide evidence, not opinions of Dr. Weaver, a mathematician; nor of politicians; nor of scientists whose livelihoods depend on saying the right thing; nor of crowd-followers.

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  2. Reality Check says:

    BC could run Burrard Thermal 24x7x365 and the amount of GhGs produced would be an non measurable rounding error compared to the amount of new GhGs China and India plan to produce. To say nothing of their current GhG production

    This idea that BC residents must make noble but worthless sacrifices simply does not pass the sanity test. Right up there with Canada paying $Billions in Green Guilt money as a result of signing Paris/COP21 so some politicians can prance around the world attending Green Vanity meetings, taking Selfies, showing of their socks and demanding people look at them, honor them for being so generous and compassionate with Canadian’s wealth

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  3. Chester Draws says:

    all talk about how their program will add jobs

    Extra jobs don’t come free — if there are extra jobs (which actually I doubt, based on previous green projects that promise heaps and deliver little) then that just raises the cost even more.

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  4. Martin Kral says:

    I am not in agreement with general attitudes that building new dams, more nuclear power plants or building large solar and wind farms is going to stop the momentum of climate change or the continued use of fossil fuels. Therefore, I firmly agree with the US Military about building a new infrastructure based on climate change. I justified my position based on only two locations. One is New Orleans for private business (commerce) and the other is Norfolk for national defense (military). It is no longer a question of will the sea levels raise because they have already risen and storm swells are causing more damage then in the past. What is needed is climate infrastructure planning and execution. What has to actually be done and where is completely geographical. Ninety percent (90%) of the world population is along the coastal regions.

    I agree that we need to neutralize climate change but we also have to prepare for what is already happening. Here is my latest letter to the editor for my local paper:

    Dear Editor,

    Title: Changing Climate Infrastructure? (optional)

    Most recently, The President withdrew from the Paris Climate Accord not because he is against the notion of ‘climate change’ but because he understands that change is going to happen and the non-binding Accord would not move the needle one way or the other. The president doesn’t want to distribute the American tax payer’s money to foreign lands to change their climate conditions but rather wants to invest those climate dollars in American infrastructure. That is the best way to have any impact on how the American people will live their lives the next 30+ years with the changing climate.

    What does the American infrastructure have to do with a changing climate? Everything! I am asking you to put your critical thinking caps on for just a moment. Expand your minds and think about the climate as part of the infrastructure of our society. It doesn’t mean to get rid of anything. It means to improve what we got with more efficient innovative ideas so that there is a more compatible environment between nature (climate) and mankind.

    For example: An often-repeated truth about Hurricane Katrina is that the events of August 29, 2005 were not a natural/climate disaster – it was a man-made disaster caused by the failure of levee and pump systems designed to protect a city in a floodplain.

    Hurricane Katrina was considered a 400-year storm but the levee/pump system in place could barely handle normal storm surges. What the Army Corps of Engineers should have done was designed a levee/pump system for 2050, not just a Category 3 storm surge. After $14.5 billion spent, there are still documented flaws in the new system. There should have been some climate infrastructure planning and that does cost a lot of extra dollars. President Trump needs to complete this project in his 2018 infrastructure bill.

    Another example of climate infrastructure planning is for national defense. The US Military has always been concerned about climate and has tried to plan for the worst scenarios and then determined the risk and budget for them.

    Norfolk Naval Base and Shipyard is one of the largest in the world set at the mouth of the Chesapeake Bay. Like New Orleans, the majority of Norfolk Naval Base, if not all of it, is at risk of flooding because it’s so low and flat (floodplain).

    President Trump has substantially increased the Department of Defense budget for 2018 without defining line items to be allocated. He has left that decision to the DOD which will invest a portion in climate infrastructure for all their hardware and personnel. If Norfolk needs a levee around the base or the docks elevated, then that has to be a line item in their budget. Norfolk isn’t going anywhere except up.

    If you impede the floodplains the water has to go somewhere else. That someplace is also up or out. It is amazing how we blame climate changes for outdated infrastructure implementations.

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  5. Pingback: No, efficiency and conservation cannot replace the electricity supplied by the Site C Dam | A Chemist in Langley

  6. Pingback: Why BC should not plan to rely on cheap electricity imports in a post-Paris Agreement world | A Chemist in Langley

  7. Pingback: Why a rushed BCUC review of Site C will be bad for our pocketbooks and our fight against climate change | A Chemist in Langley

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