A More Resilient Alberta

Since January 2014, we can observe some major changes in Alberta: 

• 50,000+ job losses
• 17 oil and gas projects worth $50 billion mothballed or cancelled
• A change of government at the Provincial and Federal level
• A new focus on climate change and environmental responsibility 

Which has lead our Premier to really focus on strengthening key industries and diversifying the economy.

Things don't look good. We need $60 - $65 dollar oil to stabilize (not grow) the oil and gas sector, clear access to markets through pipelines which in turn require us to act on climate change and environmental responsibility and new rules for direct foreign capital investment to enable strengthened investment in oil, gas, agriculture and forestry. We also need a sales tax to strengthen the long-term revenue base for Government services and a strong renewed focus on effective and efficient management of public services.

But what about diversification or, more accurately, broadening the economic base. Alberta needs to recognize five things:

1. Most Alberta firms (95%) are small firms with less than ten employees. This makes diversification difficult – supporting these firms produces small gains in employment and GDP growth.
2. We have strong agriculture, forestry, ICT, health, education and design / creative industry sectors that should be better understood as engines of economic growth and harbingers of spin-off’s and spill-overs.
3. The biggest single asset we have is land. Alberta needs to see increasing the value secured from land use (especially Crown land) as a primary economic development strategy. New approaches to eco-system services using market-based instruments could see significant growth of land reclamation, land services and agribusiness.
4. Innovation depends as much on creativity, design and imagination as it does on science, technology, engineering, maths and problem solving: problem finding starts the innovation process. Our schools, colleges and universities need to ensure that every graduate has the critical thinking, problem finding and design skills to become innovators and change agents in their workplaces and community.
5. Community resilience is as important to our future as building successful firms. The closure of coal mining in Grande Cache with the loss of a total of 470 jobs in a town with a population of 4,319 (2011 census) shows us what global economic change and shifts in core commodity prices can do for a community. Strengthening resilience and the adaptive capacity of towns and regions is a key task for government, non-government organizations and firms.

Governments play a key role in innovation. Just look at your smartphone. There is not a  component of that phone (touch screen, GPS, internet access, SIRI) that was not funded by Government. Investments in science, design, learning and technology are key to our future products and services. Adding funds to university, college and school budgets which our Government has done and which it looks like the Federal government will do makes sense.

But we can not be all things to all people: focusing is better than letting a thousand blossoms bloom. We need to focus a great deal of our energy on three to five big bets that will build jurisdictional advantage. As Churchill said, “we have run out of money, so now we have to use our brains!”.

• What is it that we can do with our oil and gas technology to dramatically change the cost structure of the oil and gas industry?
• How can we leverage our expertise in ICT and big data to build new opportunities?
• What can we do with our investments is nanotechnology, genomics, ICT and design to focus our energies on new developments in areas like environmental management and monitoring, diagnostics or new value added products and services?
• How can we leverage the strengths and expertise of our health care professionals to both improve the performance and lower the costs of health care and create new products and services?
• How can we take our world-leading geomatics technologies and geological analysis technologies and create next-generation uses for these?
• How can we reimagine SAGD technologies as water treatment technologies and export these to areas of the world that need them?
• How can we leverage our skills in online and distance learning to create new approaches to skills development that we can export to the world?

It is time to really push some creative thinking about broadening our economic base, strengthening our core industries and becoming really focused on creating resilient and focused communities.

Paris in the Winter..

It is an interesting fact that the models used to predict climate in 2100 are running very hot.

That is, they do not do well when compared to either observed measurements from land based instruments or satellites collecting temperature data. Compared to the actual temperature rises since 1980, the average of 32 top climate models (the so-called CIMP5) overestimates these rises by 71-159%. A new Nature Climate Change study shows that the prevailing climate models produced estimates that overshot the temperature rise of the last 15 years by more than 300%. Given that temperature rises are very minute (we are talking 100^th of a degree centigrade), these error ranges are significant. Don't get this wrong – the climate is changing. It is just that our models for anticipating these changes are not at all working well. The graph below shows the difference between model predictions, surface temperature measures and satellite measures. It is pretty dramatic.

This is important, since it is these models which give rise to at least some of the policy and adaptive concerns which will be the focus of COP21 in Paris in just a few days time.

To make matters worse, there is little agreements between the surface temperature measures taken from weather stations around the globe and adjusted in largely appropriate (but sometimes problematic) ways and the measures taken by satellite. That is, if we take the satellite data as the most accurate then the difference between the models and the actual data is substantial – 159%.

Then there is the elephant in the room problem. There has been very little (if any) rise in THE rate of global surface temperature warming in the last 19 years, despite substantial increases in levels of C02. Several studies show that the slowdown could be caused by a natural cycle in the Atlantic or Pacific that caused temperatures to rise more in the 1980’s and 1990’s but that has slowed or stopped global warming now. Even the UK Met Office accepts that this is the case. Global warming is real, but it has probably been exaggerated in the past by the poorly designed climate models.

Then there are other complications with the general theory of climate change on which COP21 policy analysts base their case:

1. The Antarctic ice expanse is growing not shrinking, according to NASA. Research, published in the Journal of Glaciology, found Antarctica gained 112 billion tons of ice per year from 1992 to 2001 and 82 billion tons of ice per year from 2003 and 2008. Eastern Antarctica gained 200 billion tons of ice per year from 1992 to 2008, according to the NASA study, outweighing ice losses from western Antarctica totalling 65 billion tons per year. This means the south pole is actually contributing to sea level declines, not sea level rises. A similar observation could be also be made about the Arctic – sea ice extent this year still has 2000 km3 more ice than the 2012 record breaking year.
2. We all are aware that sea level rises threaten small island states, such as Kirabati. But the situation is actually quite complex. Whie some of the islands are threatened, many are actually stable or growing. In a variety of studies some 80% of the “threatened” islands have either stayed the same or grown. Professor Paul Kench of Auckland University, who has studied these islands, makes clear that “the physical foundation of these countries will still be there in 100 years, so they perhaps do not need to flee their country”.
3. Sea level rises are occurring, but not as we may think. Like all aspects of climate, there are various regional variations – in some places the seas are rising quickly, in other places they are falling. Simple explanations do not work without taking into account a complex array of factors. For example, sea level along the west coast of the United States has actually fallen over the past 20 years because long-term natural cycles; yet in other parts of the world, seas have risen by 9” since 1992.

So the science is still unfolding. No serious scientists doubts that climate change is happening. But equally, few take the simple human caused climate change (more C02 = hotter climate) less seriously. Rather than being such a simple problem, climate scientists see understanding the science of climate change as a wicked problem.

So when we listen to those attending the Paris summit, including our Prime Minister Trudeau, we should be reminded that the basis of their deliberations and decisions is an emerging science which is still very problematic.

Richard Tol, an economist and statistician, is the Professor of the Economics of Climate Change at the Vrije Universiteit, Amsterdam and he is ranked among the “top 50 most-cited climate scholars”. He has well over 200 publications in academic journals and is a lead author for the International Panel on Climate Change (IPCC).  He thinks little of COP21 and the Paris process. In a recent speech he said that “the UN climate summit will “ultimately proven to be a futile effort” and achieve nothing more than “sending people to Paris for no apparent reason other than to keep these people well-travelled”.

We seem to have created a problematic process built on a theory which is still in development and not looking too healthy. Lets hope Tol is wrong. But you have to wonder..

Boycott the Paris Climate Change Talks

The final stages of preparation for the Paris climate change talks are still underway, but all is not well in the world of the national climate change management negotiators. Preliminary negotiations have made clear that there will be no legally binding agreement on CO2 emissions and it will be difficult to secure agreement on reparations for developing nations, who are seeking an annual fund of $100 billion to invest in energy projects to make affordable, low emissions technology available to them.

The EU will not support a deal that is not legally binding on all 200 nations participating in the talks. India and China will not accept a deal that inhibits their energy strategies, which depend largely on fossil fuels (especially coal in China). Most developing nations are focused on the creation of a global fund and, if this does not materialize at the funding level they expect, will object to other aspects of any climate change deal.  All of the offers of CO2 cuts made to date will also not “stop” climate change reaching more than 2C by 2100 – the arbitrary target chosen to guide these discussions. Things look bleak.

But then this is all a very silly idea. The idea that 10,000+ people who will gather in Paris in December can “stop climate change” is in itself a nonsense. The climate is a complex business with many different factors playing a role in shaping the way in which climate plays out in the regions of the world.  Yes, man-made CO2 is a part of the climate system, but it is a small part and many climate scientists remain unsure of the extent to which climate is sensitive to CO2 and what the contribution of this man-made proportion of CO2 (which also comes from other sources) plays in such a complex system. There is no simple correlation (i.e. increases in CO2 lead automatically to increases in global mean surface temperature) and a relentless focus on this one variable is now a part of the problem as well as part of the work that needs to be done.

It would be much better for these delegates to focus on the implications of inequality in the world and the way in which modern capitalism works – the issue that is really at the heart of these talks. What these talks are really all about is the right of all people to live a decent, secure life with access to affordable shelter, energy, food and economic security. These are all seen to be threatened by current modes of economic and social development as symbolized by CO2 emissions.

The secret negotiations between governments and representatives of the richest people in the world for so-called “free trade deals) like the TTP and the EU-US deal (TTIP) will have an impact on what we eat, how we travel, how we live our lives and how nations live together (or not). These negotiations – which many do not connect with climate change or energy development – will have more impact on the environment, climate, oceans and energy strategy than the meetings in Paris. Yet the details of these talks are secret – only the negotiators, a strictly limited number of Government Ministers and a legion of lobbyists know them. Maybe we should cancel the Paris climate change talks, which will go nowhere, and instead refuse to meet until the full details of the TTP and TTIP are released and their environmental impacts assessed.

As I mentioned before in my previous blog, the real issue under discussion in Paris is the future of capitalism for all. That is, equity is the real issue.

Paris, Climate, Capitalism and the Future

According to an ongoing temperature analysis conducted by scientists at NASA’s Goddard Institute for Space Studies (GISS), the average global temperature on Earth has increased by about 0.8°Celsius (1.4°Fahrenheit) since 1880. Two-thirds of the warming has occurred since 1975, at a rate of roughly 0.15-0.20°C per decade.

The working assumption of those who will meet in Paris at the end of the year to agree a climate change treaty are that, as CO2 increases, so does the earths surface temperature. Indeed, the table below captures the key assumptions being made.

CO2 Parts Per Million (ppm) in the Atmosphere	Will Lead to This Increase in Surface Temperature	With This Degree of Certainty
450 ppm	2C	50:50 Chance
550ppm	4C	5-50% Chance
650ppm	6C	10%

Since the mid 1990’s there has been general political alignment around the idea that the people on the planet would find temperature rises above 2C difficult to cope with, due to their impact on sea levels, weather patterns and extreme weather events.

But these assumptions are problematic. The rate of surface warming has slowed in the past eighteen years and 9 months, despite CO2 increases.  August 2015 measures of CO2 in the atmosphere showed 398.82ppm – an increase consistent with many of the models of climate change in use today. But temperature has not risen anywhere near as fast as predicted. Indeed, most scientists would agree that the models have significantly overestimated temperature rise relate to CO2 increases. The sensitivity of the climate system to changes in CO2, sun spots, water vapour, shifts in the earths orbit and so on are much more complex than many of the models account for.

Yet the physical properties ofCO2 and other greenhouse gases have not changed. The same energy they were re-radiating back to Earth during previous decades is evident now, subject only to changes in the amount of energy arriving from the sun - and we know that has changed very little. But if that’s true, where is this heat going?

There is strong evidence that the oceans are absorbing far more heat that hitherto understood and that a larger forest and expanding vegetation are also helping to absorb CO2, only some of which is manmade. It is also the case that our understanding of climate is that, far from being a simple set of relationships (more CO2 = higher temperatures), the variables impacting the surface temperature and climate are in fact more complex.

So a focus on CO2 emissions as the sole policy issue (together with money) in Paris is a fraught problem. What the delegates are looking at is how far they should go to exercise the precautionary principle – changing their energy supply systems, ending the use of coal, changing emission standards for cars, reducing meat consumption (meat production emits more CO2 than transport systems) and so on because there is a 10% chance of something bad happening.

Setting aside whether the current CO2 emissions reduction targets to be discussed by UN member nations meeting in Paris will meet the 450ppm threshold for CO2 so as to keep temperature rises below 2C (they will not), just what is the problem these delegates are trying to solve?

There are four:

1.   .      How can we reduce our impact on the earths environment as population grows?
2.          How can we ensure reliable, affordable energy which generates less greenhouses gasses than our current energy mix but nonetheless supplies reliable energy to a greater population without creating energy poverty?
3.       How can we mitigate the impacts of extreme weather events, which may have little to do with climate change and much more to do with population expansion and infrastructure development in areas of high risk of flooding and storms?
4.       How can rich nations support emerging nations in their efforts to adapt to a different energy and environmental regime while still securing food, shelter, energy and employment for a vastly greater number of people? This is the transfer of wealth issues at the heart of a great many debates at these meetings.

All of these significant conversations are important for the future of mankind. But notice that they are as much about population growth, economic and social well being and the nature of capitalism as they are about the environment and climate. Indeed, some would go as far as to suggest that climate change focus is in fact a proxy for a wider conversations about the nature of capitalism, population and economic growth, food and shelter and equity. The real issue is not climate but the future of mankind.

It has to be. No rational government would seek to fundamentally change its entire economic paradigm and participate in one of the largest schemes for wealth transfer between rich and poor nations ($100 billion a year from 2020 onwards) on the basis of a problematic theory (CO2=+C) and a 10% probability of serious challenges to society as we now know it. What is under discussion in Paris is the future of capitalism. Be aware.