China’s SenseTime Postpones IPO After U.S. Blacklisting

The Chinese AI company said it would postpone its Hong Kong IPO days after it was added to an investment blacklist of companies that the U.S. government says are supporting Chinese military development.

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Climate Activists and Environmental Justice Advocates Join the Gerrymandering Fight in Ohio and North Carolina – Inside Climate News

Following years of setbacks for clean energy in Ohio, environmental activists in the state decided they needed to take on a bigger and more fundamental battle: democracy. The Ohio Environmental Council has joined other activist groups in seeking to overturn the state’s new political redistricting maps, as allegedly illegal gerrymandering that will extend a veto-proof […]
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Do You Know Where Your Sweater Came From?

Loro Piana makes some of the world’s most luxurious cashmere. Now you can trace every step of its journey from Mongolia to Madison Avenue.

Unusually warm, humid weather helped spark Arkansas tornadoes

Rising From the Antarctic, a Climate Alarm

Ice shelf holding back keystone Antarctic glacier within years of failure

$9.2 Billion in Federal Tax Breaks Deliver Boost to Canadian Fossils

Canada missed out on nearly C$9.2 billion in foregone revenue between 2015 and 2019 thanks to income tax breaks to oil, gas, and coal mining companies, according to a Parliamentary Budget Office analysis produced at the request of Sen. Rosa Galvez (ISG-QC).

The government also left behind $179 million in 2019 due to a carbon levy exemption for agriculture, the PBO reported Friday. That amount is expected to increase to more than $1.5 billion in 2030, when the federal floor price on carbon hits $170 per tonne, though the analysts say that figure doesn’t account for the “behavioural response by farmers” that will see them reducing their emissions as the cost rises.

By far the biggest-ticket item in report was the more than $6.1 billion over five years that fossils took away as tax breaks for Canadian development expenses, a long-standing federal program that reimburses up to 30% of a fossil’s expenses to buy new oil, gas, or coal fields and bring them into production.

The annual tax subsidies—which ranged from $1.3 to nearly $2.4. billion over the five-year span—reflect eligible expenses that have levelled off in recent years, the PBO report shows [pdf]: the totals started out around $15 billion per year toward the beginning the century, then spiked as high as $35 to 40 billion between 2005 and 2014, before beginning to moderate in 2015 as the impact of falling oil prices began to hit.

“Yearly growth in the total cumulative resource-related expense pools has slowed since 2014 but they remain at historically-elevated levels,” the PBO writes. “Corporations in the oil and gas sector have experienced declining profits due to various factors since 2014, and therefore corporations have had less opportunity to use expense pools to reduce their taxable income. Moreover, oil, gas, and coal mining corporations have reduced exploration and development since 2014—new annual expenses averaged $21 billion from 2015 to 2019 compared to $31 billion from 2005 to 2014.”

The PBO also points to two long-term advantages that Canadian taxpayers have extended to the fossil industries: companies are allowed to carry forward unused expenses indefinitely if they don’t claim them in a given tax year, and some categories of expenses can be “renounced” to shareholders to reduce their taxable incomes.

The cumulative expense pool hit a high of about $150 billion in 2014, compared to about $40 billion in 2001, the report states. But the PBO says renounced expenses have fallen off sharply in recent years due to declining fossil investment and restrictions on the tax rules that allow the expenses to flow through to investors.

Environmental Defence Canada Senior Program Manager Julia Levin said the PBO report sheds light on a category of tax subsidies that analysts had known about, but for which no public data had been available.

“These are specific measures, specific deductions the government has decided to make available to oil and gas companies so that they pay us less money,” she told Local Journalism Initiative reporter John Woodside. “It would be great if the only way to access this information wasn’t through senators’ requests to the PBO, but at least we can fill in some blanks, and we’re filling in those blanks with big numbers.”

In May 2020, Oil Change International reported that Canada was leading the G20 with the highest per capita fossil fuel subsidies, totalling at least C$13.8 billion. Earlier this year, Environmental Defence put the total at $18 billion for 2020.

‘Big Foreign Oil’ Influence Drives Canadian Fossil Production, GHG Emissions, Report Warns

The Canadian Association of Petroleum Producers (CAPP) gets special billing as “Big Foreign Oil’s apex lobby group” in a new study that contrasts the trickle of international funding to climate campaigners with the overwhelming influence of foreign fossils in driving up Canada’s oil and gas production and greenhouse gas emissions.

Out of 48 companies represented on CAPP’s board last year, 37—or 77%—“were confirmed, or likely, fully or majority foreign-owned,” writes Parkland Institute founding director Gordon Laxer, in a Toronto Star op ed. The more detailed analysis [pdf] shows 16 foreign-owned subsidiaries representing 1.6 million barrels of oil production with board seats. Another 24 companies responsible for nearly 3.7 million barrels per day are almost all based in Canada, but at least 20 of them are 51 to 100% foreign-owned.

The remaining eight produced 113,913 barrels of oil and oil equivalent in 2018.

“Foreign ownership means foreign funded,” Laxer states, noting that that reality was a focal point for Alberta’s now-discredited inquiry into foreign funding of Canadian climate campaign groups. “The public inquiry followed the money trail and found a pittance,” he writes. But “size matters. All big oil and gas corporations operating in Canada are fully or a majority foreign-owned, gaily wave the Maple Leaf flag, and list their headquarters in Calgary.”

It wasn’t supposed to be this way. After Russia was accused of interfering with the 2016 presidential election in the United States, Ottawa forbade “foreign entities” including “corporations outside Canada” from spending on elections, Laxer says. But the new rules “left a mile-wide loophole that CAPP drove a gas-guzzling Hummer through,” by allowing political activity by companies headquartered in Canada.

That political space allowed CAPP to log 11,452 contacts with Canadian officials between 2011 and 2018, and three per week in the first year of the pandemic lockdown, making the Calgary-based association “the main obstacle to Canada cutting carbon pollution from the production of oil and gas,” he adds.

And with all of that influence, “where does CAPP get funds to employ 36 full-time lobbyists, subsidize front groups like Canada’s Energy Citizens, that deceptively pose as citizen-based, and spend big on advertising?” Laxer asks. “CAPP’s revenue is unavailable, but about 97% of it must come from its foreign-owned corporate members because its membership fees are based on their oil production.”

With momentum building to ban election spending by foreign-influenced corporations in the U.S., Laxer says federal and provincial governments should curb similar “election meddling” in Canada. A company is considered foreign-influenced if foreign governments hold 5% of shares, foreign non-government shareholders hold 20%, or “aggregate foreign ownership” accounts for 50%, he explains.

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4.8 Million Canadians Facing Coastal Flooding as Study Stresses Nature-Based Adaptation

Nearly 4.8 million Canadians living within 10 kilometres of the country’s east and west coasts are “likely to be greatly affected” by future flooding brought on by sea level rise, extreme weather, or changing tides, the Intact Centre for Climate Adaptation concludes in a new report issued last Thursday.

Though little has been done to date to prepare for those impacts, “we can no longer manage coastal risks by endlessly fighting against natural processes,” the centre’s managing director of climate-resilient infrastructure, Joanna Eyquem, said in a release.

“There are real win-win opportunities to work with nature in the long-term, with multiple benefits for the community and beyond.”

“As this year’s devastating floods in B.C. have shown, we are still not doing enough to defend our communities from the extreme impacts of climate change,” added Standards Council of Canada CEO Chantal Guay. “In this new normal, all adaptation solutions—including those that harness the power of nature—need to be on the table.”

But Canada “does not yet have a strategic planning framework or standard classification of approaches for coastal risk management,” states the report, produced by the Intact Centre, the Standards Council, and the National Research Council. It urges measures to protect communities by combining “grey” infrastructure like sea walls and storm surge barriers with nature-based solutions like dune and wetland restoration.

It also calls on governments to standardize the way the two sets of adaptation options are evaluated, develop national monitoring standards for adaptation efforts, and build capacity for the private sector to participate in nature-based approaches.

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Energy Regulator Projects Rising Oil Output through 2032, ‘Sets Canada Up for Climate Failure’

The Canada Energy Regulator (CER) is setting Canada up for climate failure with a report that projects increasing oil and gas production through 2032, relies overwhelmingly on unproven carbon capture technologies, and runs counter to decarbonization analysis and commitments from international agencies, the recent COP 26 climate summit, and the latest federal Speech from the Throne, according to climate policy and campaign groups responding to the report.

The report, released last Thursday, predicted unabated fossil fuel use (meaning fossil fuel combustion without carbon capture and sequestration) will decline 62% by 2050, The Canadian Press reports. But it also foresees total production rising to a peak of 5.8 million barrels per day in 2032, before declining slowly to 4.8 million barrels per day in 2050, only slightly below today’s levels.

The report says that’s because of the nature of Canada’s tar sands/oil sands facilities, which it says are long-lived and have low operating costs once built. [Especially if you ignore the cost of cleaning up 1.3 trillion litres of toxic mine tailings and abandoned wells that could cost up to C$260 billion to remediate—Ed.] The projections suggest the pipeline system out of Western Canada would still be nearly at capacity into the mid-2030s.

Climate Action Network-Canada said the CER modelled net-zero scenarios for the first time—but only for the electricity sector, not fossil fuels. And all the scenarios in the report are missing essential information on the greenhouse gas emissions that would result.

That means the scenarios in the CER report “are setting Canada up for climate failure,” CAN-Rac said in a release. And the “continued failure to confront the reality of the climate crisis” puts the CER “out of step with the International Energy Agency (IEA), which released a Net Zero by 2050 roadmap last May and included net-zero modelling in its fall World Energy Outlook 2021. In contrast to the CER that continues to model growth in Canadian oil and gas production, the IEA models scenarios that assume global oil demand has already peaked, and for global gas demand to peak by the mid-2020s.”

“Canada can’t implement a whole-of-government approach to the climate crisis if hard-won progress is undermined by a government agency’s continued production scenarios that ignore the science and Ottawa’s own climate commitments,” said CAN-Rac National Policy Manager Caroline Brouillette. “Canada needs a map towards a climate-safe future at the front and centre of its energy scenarios. Status quo modelling only sets us on a path to climate disaster.”

“In 30 years, if our oil production is at the same level it is today, we’re in serious trouble,” said Dale Marshall, national climate program manager with Environmental Defence Canada. “Because Canada is a high-cost, high-carbon oil producer, and if Canada is at the same level of production it’s at today, then that means other sources of oil will be even more so. And we’ll be cooked. That’s climate catastrophe.”

“The most ambitious scenario in Canada’s Energy Future 2021 assumes climate catastrophe and an economy unprepared for the global energy transition,” said Pembina Institute Senior Analyst Nichole Dusyk. “As Canadians experience the devastating impacts of climate change, it simply cannot be overstated how important it is for CER modelling to present scenarios that assume Canada and the world act to limit global warming to 1.5°. A roadmap to net-zero is essential to creating effective climate policies, such as the planned emissions cap for the oil and gas sector.”

Dusyk urged Natural Resources Minister Jonathan Wilkinson to “direct the CER to model energy pathways consistent with achieving net zero emissions to ensure that Canada has the necessary information to make policy and investment decisions that lead to a sustainable energy future.”

CP says the forecast is based on the regulator’s assumption that the current pace of increasing efforts to reduce greenhouse gas emissions in Canada and around the world will continue.

The CER also laid out a business-as-usual scenario that looked at energy demand in the event that there is no new climate action beyond current policies. It would see crude oil production peak at 6.7 million barrels per day in 2044.

Marshall said he was disappointed by how “pessimistic” the CER was in its forecast. Even its scenario that assumes an acceleration of climate policy efforts in years to come makes it clear that net-zero by 2050 targets are unlikely to be met.

“Their plan doesn’t even show Canada achieving its Paris climate commitments,” Marshall said. “I think the projections are unrealistic and overly pessimistic, in terms of what we might be seeing in climate action in Canada and around the world.”

But Ben Brunnen, chief economist for the Canadian Association of Petroleum Producers, maintained the CER overshot the mark when forecasting a decline in Canadian oil production by 2050. He said CAPP believes Canadian oil and gas producers have the capacity to invest in technologies that will allow them to meet more stringent policies around emission reduction, while still increasing production to meet global demand.

“Beyond 2035, there are so many variables that it creates pretty substantial uncertainty. But our expectation is we would not see as significant decline as what CER is anticipating,” Brunnen said. “I would actually expect that the Canadian oil and gas industry would potentially have a more favourable growth profile, compared to what CER is indicating.”

The Canada Energy Regulator also took its first look at what Canada’s electricity system might look like in a net-zero world, CP says. In these scenarios, emissions from the electricity sector drop dramatically, with battery storage playing a significant role alongside immense growth in wind and solar.

The main body of this report was first published by The Canadian Press on December 9, 2021.

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