A Vision for a Diversified, Sustainable 21st Century Economy

Today in the House I rose to provide my response to the speech from the throne. In it outlined a different vision from the government. That vision is for a diversified, sustainable 21st century economy.

Text of my Response to the Speech from the Throne

INTRODUCTION

As I sat in this chamber on Monday, listening to the government lay out its vision for our province — the turning point we find ourselves in and the “chance” we have to develop our LNG industry — I was reminded of the day I decided to run for politics.

I never thought I would be standing in this chamber, speaking to you. I am trained as a scientist, not a politician. Yet having spent a career studying the physics of the atmosphere and ocean and the science underpinning past, present and future climate change and climate variability, it became harder and harder for me to sit on the sidelines. Over the years I’ve given hundreds of presentations about the challenge of global warming to diverse audiences around the world.

Many, if not most, of my presentations have been in front of youth, both in my university classes and out in our public schools. I’ve spoken about the need for economic policy to ensure the internalization of externalities associated with the release of greenhouse gases to the atmosphere. I’ve praised leaders, including a former Premier and Cabinet Ministers who have taken bold steps to introduce such policies. I’ve pointed out that the predicament we face is perhaps the greatest of all possible Tragedies of the Commons. Every individual in the world shares the atmosphere. Presently, it is in the best interest of every person in every household in every municipality in every city in every province in every country in the world to do absolutely nothing about global warming since the cost of action is born by the individual, yet the cost of inaction is distributed amongst seven billion people globally. There is only one equilibrium solution to this, and other, Tragedies of the Commons. And that is collapse.

Perhaps the most common question I get asked after my presentations is what can a single individual do to be part of the solution to global warming? All too often we read about the increasing severity of climatic events, knowing at the same time that we are contributing to climate change. People get discouraged.

I’ve invariably responded with two answers. I’d point out the power of the pocketbook and targeted consumer purchasing. I’d point out the importance of participating in our democracy. And the latter, I would target most pointedly to the youth in the audience.

Only between 30 and 40% of youth between the ages of 18 and 24 vote in, for example, federal elections. Those being elected do not have to live the consequences of the decisions that they are making. Yet those who will have to live with such consequences are not participating in our democracy. I suggest to the youth in the audience that in addition to changing their own habits, the best way that they can make a difference is to elect people into office who demonstrate the courage and leadership to deal with the challenge of global warming. And if those who are running aren’t going to address the issues of intergenerational equity and the sustainability of our social, economic and environmental systems, then they should consider standing for election or finding someone who is willing to stand. After giving that response over and over to so many young people, I eventually came to terms with the fact that I had to take my own advice.

My work on global warming and past, present and future climate change and climate variability has allowed me to see firsthand the potential that BC has to develop a leading 21st century economy. From our access to cheap, renewable energy, to our educated workforce, to our innovative business community, to the quality of life we can offer here, together with British Columbia’s natural beauty, we have an opportunity to develop our Province into one of the most prosperous jurisdictions in the world. But such a vision requires real leadership — leadership that is honest about the challenges and the opportunities in front of us; real leadership that also takes the challenge of global warming seriously, understanding the need to build a sustainable, diversified and resilient economy for this generation and the next.

It is with this in mind, that I stand here today, deeply disappointed and profoundly concerned about the direction our government is going.

Those of you who know me, know how important I believe it is that we change the tone of conversation in the legislature. We must be willing to support a good idea, regardless of who it comes from. We must have the courage to make our decisions based on evidence, and not the other way around. I am not one to sling mud for the sake of it. Our challenges are too big, and the consequences are too profound, for that. Opposing for the sake of it does nothing to rebuild the trust and cooperative relationships we so desperately need in our political system. So when I say I am profoundly concerned about the direction our government is going, I say it with sincerity.

GOVERNMENT’S VISION – LNG

I want to turn now to the binary choice that was laid out for us in Monday’s throne speech and I want to talk about what that vision will really mean for British Columbians.

The undeniable truth is that British Columbians have been sold a bill of goods that is not based in reality. In an election where the government was set to fall, a Hail Mary pass was thrown. It was packaged in a message of hope and opportunity, so compelling it couldn’t be ignored: 100,000 jobs; $1 trillion dollars to the GDP; a $100 billion prosperity fund; the elimination of our provincial deficit; thriving hospitals and schools. And the end of our provincial sales tax.

As we all know, that pass was caught and we now have a government that is trying to deliver on its political promises — whatever the cost and whatever the risk to our province.

The problem is, the economics simply aren’t there to support an LNG industry on the scale of what was promised. I’ve been pointing this out for nearly two years now. The supply gap is too narrow. A recent Peters & Company report estimates that while LNG demand will increase to more than 500 million tons per annum by 2030, LNG supply will reach 800 million tons per annum. In the time since the government first announced its LNG plans, we have already seen Russia sign a $400 billion, 30-year agreement with China. We have seen the U.S. gulf coast become the most efficient place in North America to build LNG plants. Other jurisdictions like Australia, Malaysia, and Qatar have already established LNG export industries. We have seen Talisman sell its assets in BC, we’ve witnessed Apache pull out of Kitimat LNG and just this week we saw Petronas threaten to pull out of the Pacific NorthWest LNG project. We know that drilling in the dry gas fields in and around Fort Nelson is grinding to a halt. And we know that the only thing sustaining the drilling efforts around Fort Nelson in the Montney Formation are the condensates. These are transported to Alberta to be mixed with bitumen to form pipe-ready diluted bitumen. There is no market for our gas as the market is saturated with supply. These developments do not bode well for our hypothetical LNG prospects.

While the government continues to base its promises on five to seven LNG plants, industry has clearly and consistently said it only expects between one and three plants. If the industries that are building the LNG plants say the economics are not there to support five plants, then where is the government getting its numbers from?

If we are to speak of leadership, as the Throne Speech does, then we cannot ignore one of the most essential qualities of any leader: Having the courage to be honest. Honest with British Columbians about the risks and consequences of government decisions, and honest about the reckless hype of government promises.

Unfortunately, as the economics underpinning the government’s LNG promises continue to crumble, that courage—that leadership—is absent. And it is British Columbians who will ultimately pay the price.

Petronas’ announcement this week is perhaps the best example of this. The announcement makes it clear that the only way we will land this industry is if we agree to their demands of lower taxes and minimal regulations. It is truly shocking to see a state-owned company try to pressure our government to give away our natural gas resources. Even more worrisome is to know that the real negotiations are all occurring behind closed doors. We will only know what has been given away as a cost of landing this political promise when it is too late to change course.

Yet, the government’s gamble goes further than this. While our government doubles down on LNG, it is leaving other industries by the wayside. Our film industry, our high tech industry, our tourism and our forestry and fishing industries, are all being ignored by a government that is dead-set on its LNG ambitions.

The fact is, this government has no back-up plan. We have staked our jobs, our health care, our education, our debt repayment and so much more, all on the gamble of an LNG windfall. But I ask you today: What if the LNG industry is correct? What if we only get one or two LNG plants? What if those plants aren’t realised until the mid 2020s? What if we don’t get the windfall this government has promised? Is gambling the creation of new jobs, the adequate and sustainable funding of our education and health care systems and the repayment of our debt, on the back of a risky political promise the right thing to do? More importantly, is it demonstrating real leadership? I don’t believe it is.

Our challenges are too big, and the consequences too profound, to ignore the evidence. We need a new vision for B.C.—one that begins with true leadership—leadership that is grounded on the courage to be honest with British Columbians, to recognize our overzealous promises and to move forward responsibly.

DIVERSIFIED ECONOMY

In contrast to the vision laid out in the throne speech, a true 21^st century economy is marked by a focus on developing diversified industries that provide local, high-paying and sustainable employment over the long-term. Rather than relying on a single industry in one part of the province to provide prosperity for British Columbia’s future, true leadership demands an approach that develops varied opportunities across the province.

First and foremost, leadership requires developing a better approach to how we work with this province’s First Nations that is grounded in respect and in line with recent rulings like the Tsilhqot’in decision. While the full implications of this ruling are still being discussed, I believe it is critical that we view it as an opportunity to explore an unheralded age of partnership with First Nations. We must move from any notion of “accommodation” to one that embraces the rights of First Nations in British Columbia. We must accept the challenge laid out by Justice McLachlin in the ruling when she wrote: “the governing ethos is not one of competing interests but of reconciliation”. Only if we take seriously this opportunity for cooperation can we move forward with trust in this important relationship.

This same leadership will also require an honest conversation about how to develop a diversified, low carbon economy. Let me give an example.

We know that the returns to investment will be highest for those who seize the opportunities of the 21st century—not the 20^th century economy. Windfalls will be enjoyed by those who move first with vision, not latecomers to a developed market. We are far too late to be significant players in the LNG export market—that ship has sailed. Instead, we should be identifying and seizing BC’s competitive advantages. One area of the economy in which BC possesses an enormous competitive advantage, if nurtured, is in clean technology.

This competitive advantage is shared with other jurisdictions in the region, and our neighbours to the south are already distinguishing themselves as leaders in the 21st century economy, reaping the benefits that this will provide.

California is embracing the changes to their electrical grid that are necessary to prepare for a massive influx of renewable energy that will flood the grid by 2020. And it’s not solely out of concern about climate change either — they know that this is crucial for making responsible investments of taxpayer dollars into the grid and that they need to be embarking on this strategic planning now.

Washington is joining California in leading the push for increased cost-effective energy storage capacity to improve the efficiency of off-peak energy producers like wind. Washington is also using policy tools to craft win-win situations in which both the consumer and the utility can benefit from installing clean technologies like rooftop solar and small scale wind — making it economically attractive for the utility and affordable for the consumer to install them.

For example, on May 4, 2009, Governor Christine Gregoire created the Clean Energy Leadership Council tasked with developing strategies which would accelerate the state’s transition away from fossil fuels to create a “21^st century economy”.

These strategies would accomplish this goal by building on Washington’s competitive advantages in clean tech to attract new investment, create new partnerships all with a focus on creating green jobs in the state.

Washington’s approach was based on a very clear idea — one that arguably used to be present here in BC — Washington aligned both public and private sector efforts in order to develop “market leading clean energy solutions that [could] be replicated not only in Washington but beyond its borders”.

The Council focused on determining, and building on Washington’s competitive advantages so that it could accelerate the funding and deployment of “market driver initiatives” in these areas.

Each competitive advantage area was addressed with a parallel action plan:

• Align Clean Energy Policy and Regulation
• Accelerate High Profile Clean Energy Development
• Create a Focal Point for Clean Energy Economic Development

Their approach is working.

This past summer, BMW announced an expansion to the Moses Lake carbon-fiber plant, which would see a tripling of its capacity. BMW uses the plant to produce carbon fiber ribbon employed in its i8 concept “sustainable car”. BMW cited the access to cheap, renewable power and the ability to create a “green supply chain using sustainable energy” as the reason for their investment in Washington. There are two hundred 21^st century jobs from just one investment.

Let’s move to Oregon, where on April 19^th Governor John Kitzhaber proudly proclaimed “It is time to once and for all say no to coal exports from the Pacific Northwest”. Here of course he is referring to thermal coal exports, not metallurgical coal exports. But for Governor Kitzhaber and for me as well, it’s not just about saying no. Here’s what Governor Kitzhaber said just a few days ago “Oregon has the challenge and opportunity to transition to clean, renewable energy like wind and solar because it will help the environment and create good-paying, local jobs that can’t be outsourced.”

Oregon’s vision is paying off. Google, a company that sees itself as a powerhouse of the 21^st century wants to ensure it has access to clean, renewable energy. Oregon was able to provide Google with price certainty and so the company invested $1.2 billion in the creation of a major data distribution centre in the Dalles. There are another eighty 21^st century jobs from another investment.

Recently, the Canadian Geothermal Energy Association released a report outlining the extent of the opportunity that BC has to produce geothermal energy.

Looking at only a portion of BC, this study clearly shows that we are missing a massive opportunity to tap a renewable resource. In fact, BC is the only jurisdiction in the Pacific Rim’s ring of fire that is not producing geothermal energy.

We stand to gain by building on the expertise that our neighbours have already developed in these areas. And yet, there is still so much room to grow in this sector, to improve upon current technologies and policy innovations. We need to learn from what has worked for our neighbours, and craft them into a “made in BC approach” that respects the unique characteristics of our economy, our environment and our energy needs. A “made in BC approach” will require bold leadership to bring industry leaders, academics and government to the table to lay out a new vision for the energy system that a diversified, sustainable 21st century economy will require.

This vision will also require a serious look at the mandate of BC Hydro. Its scope should be expanded to allow for the production of geothermal power. Its role could also be expanded to facilitate the partnering of industries with clean energy producers, both existing and new, that want access to long term stable pricing for their electricity needs. In BC we have what many others do not. These are our legacy dams — the rechargeable batteries of the 21^st century energy grid that can be drawn upon when other intermittent sources are not producing electricity.

In essence, the same leadership, innovation and natural advantages that could provide us with the opportunity to become North America’s centre for clean tech can be harnessed to develop new opportunities including those within our traditional industries like forestry.

JOBS

When we singularly focus on LNG, we fail to value the sectors in BC that actually exhibit promise for growth: the number of jobs in digital media and life sciences are either greater than or on par with those in the oil and gas sector. There are three times as many jobs in information and communications technology than in oil and gas industry at present. Why are we not looking to further develop these already thriving sectors? They do not represent the same risky gamble as LNG and they could help us attract and retain skilled workers.

Instead of banking on empty promises, why do we not look instead to industries like clean tech, a sector that is already characterized by fast growth. From 2012-2013, investment in the clean tech sector tripled in Canada. Canadian individuals and business alike recognize the opportunity clean tech poses, even if our government does not. Furthermore, clean tech provides us with a rare opportunity to both mitigate climate change by reducing our emissions and to adapt to it with more resilient and localized energy systems.

Instead of tying our jobs, and our children’s jobs to the boom and bust cycle of fossil fuel industries, we should instead be looking at the long-run growth in clean industries. Rather than promising our youth positions in a hypothetical LNG industry, imagine if we trained our graduates to retool the BC economy for 21^st century industries.

British Columbia has a highly educated workforce that is prepared to take up the challenge and capitalize on the opportunity that transitioning to a 21st century economy presents. But to ensure that this workforce is sustained, we need to think carefully about where it comes from and whether or not we are valuing and considering carefully enough the intrinsic link between our education system and our work force.

EDUCATION

I committed this summer, to make education my number one priority. In fact, it should be everyone’s number one priority. The education of the next generation is the foundation of our society. If we want responsible and educated citizens who can adapt to a changing world and a changing economy, then we must ensure that our education system is being properly resourced and that teachers are properly supported.

I find the claims that we have 6 years of labour peace with teachers to be greatly misleading. What we have is 6 years to completely reimagine the relationship that exists between government and teachers. We must use this time to engage all stakeholders and figure out how to create the trust between these partners that has been missing for far too long.

We must also ensure that the education system is properly funded. Teachers, without any doubt, are the single most important profession in our society. To burden them with unsustainable working conditions is to do a great disservice to such an important profession – a disservice that is in turn extended to our children.

The Government has made choices about how education is funded. At a time when GDP has grown in BC, revenue as a percentage of GDP to government has not kept pace, and we have seen funding for education fall as well. I think it is time we make a different choice. By demonstrating real leadership in BC, we could have a renewed focus on returning to a truly progressive taxation system. The same leadership should be used to have an honest conversation with British Columbians about how we currently fund education, and how we can ensure that adequate funding is restored to our schools.

FUNDING GOVERNMENT SERVICES

This same leadership needs to be extended to truly protecting core government services.

Protecting core government services is about more than simply ensuring the existence of a funding source. It is also about ensuring that the funding source is resilient enough to coast through the boom and bust cycles of a single industry. A diversified, 21st century economy will provide that resiliency.

It will offer British Columbians the certainty of knowing that even if one industry or revenue source declines, they will still be able to access the top quality healthcare and social supports that we are so proud of. It will offer us the comfort of knowing that our quality of life is not contingent on the boom and bust cycles of the fossil fuel roller coaster.

Yet it also goes further than this to include what we ask of British Columbians as we fund these services. Over the last few years we have seen a clear shift away from our progressive income tax system towards a more regressive system of service fees. We have seen MSP premiums, BC hydro rates and ICBC rates continue to rise, while the government siphons off profits to pad their books. All of this, of course, is done to maintain the illusion of low taxes. Unfortunately, that illusion is being built on the backs of those who can least afford it. It asks lower income families who are struggling to put food on the table and the middle class, to pay more, while giving a break to those who could afford a higher contribution. Real leadership is about making the tough choice to raise the funds the government needs through the progressive tax system and not through a regressive fee-system, even if doing so isn’t as politically convenient.

CONCLUSION

In the end, all of this comes back to leadership. While I commend the government for laying out a plan for developing new opportunities in BC, I would challenge whether this plan represents the leadership it claims to represent.

Fundamentally, it is for this reason that I now bring forward my amendment to the Throne Speech

Be it resolved that the motion “We, Her Majesty’s most dutiful and loyal subjects, the Legislative Assembly of British Columbia, in session assembled, beg leave to thank Your Honour for the gracious speech which your Honour has addressed to us at the opening of the present session,” be amended by adding the following:

And that the Legislative Assembly of British Columbia accepts the responsibility of demonstrating the leadership to choose growth, to move forward and create a legacy for our children, but also recognizes that this leadership means not gambling our future prosperity on a hypothetical windfall from LNG, and instead supports the development of a diversified, sustainable, 21^st century economy.

Text of my Speech in Support of the Amendment

ON THE AMENDMENT

I have moved this amendment because I believe that true leadership requires more than gambling on external market forces- it requires having an honest conversation based on realistic expectations and a plan that has more than one avenue to success.

I believe that to put all of our eggs in one basket is a reckless approach to developing our economy. To hype expectations to an extent that simply cannot be realized is both misleading to British Columbians and undermines the certainty so often sought after by business and industry. I’ve heard from both industry and education leaders who are concerned that they need to re-direct their development strategy to align with this government’s singular focus on LNG. Where does that leave them when this government fails to deliver to the extent to which they have promised.

A better approach, and the approach I seek to highlight in my amendment, would be to promote a diversified, sustainable economy, where our prosperity is not derived from a single source, but rather by creating an interconnected and resilient economy.

I think it is important to note that the approach to developing a 21^st century economy that I highlight in my motion does not exclude a vibrant local natural gas industry. In tandem with investments in clean technology, the use of natural gas domestically could help offset far dirtier fuels. We could convert our diesel truck fleets and our BC Ferries to run on natural gas, slashing greenhouse gas emissions and creating jobs. Leadership means having the courage to be honest. There is room for compressed and liquefied natural gas, but it must fit into a broader vision of a sustainable economy.

Global warming is part of the 21^st century’s reality. It is already affecting every single British Columbian and will cost the government more every year that we choose inaction. In the 21^st century, the jurisdictions that embrace this new reality, and make addressing the mitigation of, and the adaptation to, global warming part of how they develop their economy, will find great prosperity over the long term.

Now is the time for British Columbia to take control of our own future. Instead of enslaving ourselves through reliance on hypothetical exports of a commodity that may or may not find a market elsewhere, we could, and should show leadership in the development of a diversified, sustainable, 21^st century economy.

The Vote