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Credit: Rachael Annabelle/Unsplash
International court rules against Koch Industries in carbon pricing case
An international tribunal ruled that Canada is not obligated to compensate Koch Industries for the losses it claimed after the cap-and-trade program was canceled in Ontario.
In short:
- Koch Industries sought compensation for over US$30 million in losses following the termination of Ontario’s cap-and-trade program by the Doug Ford government in 2018.
- The case, which hinged on whether emissions credits qualify as investments, was dismissed by the International Centre for Settlement of Investment Disputes.
- This ruling comes after a four-year legal battle, highlighting Koch Industries' history of opposing environmental policies through legal means.
Key quote:
“We don’t know for sure but if the case was tossed out on jurisdiction then it’s likely that the tribunal agreed with Canada that Koch’s purchase of emissions credits in Ontario does not qualify as an investment.”
— Stuart Trew, director of the Canadian Centre for Policy Alternatives’ trade and investment research project
Why this matters:
Critics argue that the Ford government's decision to cancel the cap-and-trade program was ill-considered and pushed the financial burden onto all Canadians, with federal government resources now being used to defend against the Koch family claim. This has sparked discussions on the implications for future environmental policy adjustments, as lawsuits such as this one could deter governments from implementing new or modified environmental policies due to fear of litigation.
Peter Dykstra: Clearing up some myths about the seven—yes, seven—Koch brothers.
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The Saskatchewan government is partnering with Natural Resources Canada to help farmers and communities prepare for climate change.
Three things Christine Lagarde can do to cement her legacy on climate.
Managing Director Lagarde has positioned the IMF as an important and credible voice in the debate about climate change. Now it’s time for the Fund to expand and institutionalize this new role, helping poor and vulnerable countries understand and confront the macroeconomic and financial risks of climate change.
WASHINGTON DC, Oct 11 2017 (IPS) - The International Monetary Fund (IMF) and climate change do not often appear in the same headline together. Indeed, environmental issues have been, at most, peripheral to the Fund’s core functions. But now economists inside and outside the IMF are beginning to understand that climate change has significant implications for national and regional economies, and so it’s worth reconsidering the Fund’s role in addressing the climate challenge.
To her credit, Managing Director Christine Lagarde has boldly injected the IMF’s voice into the global debate on policy responses to climate change and has identified a number of roles the Fund can play.
The Fund has conducted valuable work on how carbon emissions can be reduced through market prices that reflect the negative externalities of those emissions. In particular, the Fund has become a leading voice for quantifying and streamlining or eliminating fossil fuel subsidies, as well as for introducing carbon-pricing mechanisms.
What is still missing, however, is a bigger role for the IMF in enabling countries to prepare and manage the potential impacts of climate change. There are three things the Fund could do, building on its current efforts, that would make a big difference:
1. Deepen Research on Macroeconomic and Financial Impacts of Climate Change
In a climate change debate that has become heavily politicized, the Fund’s technical and nonpartisan voice is uniquely valuable. Few questions are as important as understanding the possible effects of a changing climate on the world’s economies, especially the most vulnerable ones.
The Fund has recently started to make important contributions in this area. In a paper published last year, the IMF started to look into the implications of climate change on so-called “small states”. And last week, the Fund devoted for the first time a whole chapter of its flagship World Economic Outlook to the impacts of weather shocks on economic activity.
Building on these foundations, the Fund should focus its research capabilities on a key question, namely whether climate change is having have a “level effect” or a “growth effect” on per capita income. If the former, then climate change will only destroy a given amount of income over time (think of damaged bridges and buildings) but not affect the capacity of the economy itself to grow. If the latter, then climate change is also harming the drivers of growth themselves, such as the productivity and availability of workers, the productivity of agriculture, and the flow of investment. The economy’s growth rate will slow as a result, and losses will compound year after year, leaving an economy significantly worse off than if only level effects applied.
Getting better answers to this question is essential for policymakers making decisions about how much to spend today to avoid damage tomorrow.
2. Formally Incorporate Climate Change Into Policy Dialogue
One of the Fund’s core functions is macroeconomic surveillance. This function brings Fund staff into regular policy dialogues (called Article IV consultations) with financial authorities in virtually every country in the world.
Financial authorities have a key role to play in preparing for climate change, as they are charged with budget planning and managing fiscal and financial risks. The Fund should bring climate risk into the dialogue as a formal part of its consultations, not just with small states, but with a much larger set of vulnerable countries as well, including systemically-significant ones.
This year, in collaboration with the World Bank, the Fund launched the first Climate Change Policy Assessment (CCPA) during the Article IV consultations for the Seychelles. The assessment focused on policy options to reduce vulnerability to climate change; the Seychelle authorities found it to be very useful. More CCPAs are planned – a small handful per year – but this is simply not fast enough given the urgency and gravity of the challenge.
The Fund should formalize CCPAs as a routine part of Article IV consultations for a broad swathe of vulnerable, low-income countries. This will require investing in staff capacity and training, including in the Fund’s Monetary and Capital Markets Department, which can help countries identify how climate risks and opportunities could affect their financial systems. Maximizing synergies with the World Bank on the CCPAs will also be necessary.
3. Treat Expenditures on Climate Resilience as Investments
Countries facing a balance-of-payments crisis often draw on IMF resources and enter into a program relationship with the IMF. One of the trickiest elements when negotiating such a program is how to treat different categories of spending and where to cut to restore fiscal balance. How should the Fund treat expenditures designed to provide financial protection against extreme weather events? These include, for example, deposits into a national reserve fund, premium payments on sovereign insurance against natural disasters, or the costs of issuing catastrophe (“cat”) bonds.
Protecting some of these expenditures from program-mandated cuts is fully appropriate, as they are designed to provide a measure of fiscal protection to the government in the aftermath of an extreme weather event. For instance, the Fund might treat cat bond issuance costs and insurance premiums as investments with potential upside, rather than as expenditures, thereby exempting them from cuts.
Managing Director Lagarde has positioned the IMF as an important and credible voice in the debate about climate change. Now it’s time for the Fund to expand and institutionalize this new role, helping poor and vulnerable countries understand and confront the macroeconomic and financial risks of climate change.
“This article was originally posted at World Resources Institute’s Insights blog”
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Hey Saskatchewan, let's talk about the 'ugly side' side of oil.
It is time for people in oil-producing communities to start speaking up about the noxious gasses that are poisoning their health, the spilled salt water and oil that contaminates their fields, and the infractions that oil companies commit in their everyday operations.
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Hey Saskatchewan, let's talk about the 'ugly side' side of oil
By Emily Eaton in Opinion, Energy, Politics | October 1st 2017
#2 of 3 articles from the Special Report:
The Price of Oil
A pile of old pump jacks and batteries, tainted red with corrosion, lies north of Oxbow, Sask. in September 2017. Photo by Mark Taylor for the Toronto Star
It is time to end the culture of silence around the oil industry in Saskatchewan.
It is time for people in oil-producing communities to start speaking up about the noxious gasses that are poisoning their health, the spilled salt water and oil that contaminates their fields, and the infractions that oil companies commit in their everyday operations.
It is also time that the Saskatchewan government end the secrecy and cover-ups that pervade its regulation of the oil industry.
A year-long joint investigation by National Observer, the Toronto Star, Global News and four journalism schools across the country has uncovered that the Government of Saskatchewan has failed to regulate the oil industry in the public interest, resulting in egregious impacts on public health and the environment. Instead of properly monitoring and enforcing its own regulations, the government has instead invested its time and resources in defending the industry at all costs.
Dianne and Allan Bunz visit their son Michael's tombstone in a cemetery near Wawota, Sask. on Sept. 26, 2017. Michael was a chemical salesperson killed on the job due to exposure to hydrogen sulfide. The Saskatchewan government did not issue any public safety warnings after his death. Photo courtesy of Mark Taylor for the Toronto Star
They hid information on toxic gas
Premier Brad Wall has travelled to Washington to promote cross-border pipelines, he has sparred with the Trudeau government over carbon pricing, and he has attacked those working to usher in a new (non fossil fuel-based) economy for promoting “magical thinking” characterized by “pixie dust" and "unicorns.” At each and every opportunity, the Saskatchewan government has deflected and covered up serious grievances and criticisms of the oil industry, and has tied the prosperity of the province to industry's health.
Yes...I was blinded by the pixie dust and gored by the unicorn. https://t.co/mLxoZGBxWc
— Brad Wall (@PremierBradWall) June 15, 2016
It is those living and working in the oilpatch who have been most impacted by the serious infractions of an oil industry that is virtually unregulated, and has emitted noxious gasses like hydrogen sulfide, which has poisoned people in their backyards. Yet these same people are afraid to voice their grievances for fear of chasing away the industry they rely on.
As someone who has studied Saskatchewan’s oil economy for seven years now, I understand well where this reluctance to talk about the ugly side of oil comes from.
The truth is that the Saskatchewan government has been essential to creating the culture of silence that pervades oil-dependent communities. At the same time the Saskatchewan government hid information from the public about the gasses that poisoned rural oil-producing communities, the premier boasted of the clean environmental record of the oil industry.
As The Price of Oil investigation shows, when regulators learned of companies that were breaking the rules, they kowtowed to industry by imposing no fines or consequences. Despite numerous violations and dangers affecting public health, of which regulators were well aware, the government chose to intimidate and silence critics by representing any challenges to pipelines and the oil economy as contrary to the interests of Saskatchewan and Canada.
In my research in oil-producing communities around the province, I have talked with dozens of people negatively impacted by the oil industry. One farmer recounted his long struggle to have an oil company acknowledge and address the contamination of his well water with natural gas. It took seven years for the company to test and address the problem in the first place, and then another four years until a permanent solution was implemented. This farmer reports being able to light gas on fire as it exited his kitchen tap and that his daughter, whose bedroom was in the basement next to the plumbing, has suffered severe health problems that he associates with the gas.
Saskatchewan Premier Brad Wall meets with Canadian premiers and delegates during the First Ministers' Meeting on Dec. 9, 2012 in Ottawa. File photo by Alex Tétreault
Saskatchewan has a serious problem
It is clear to anyone who cares to listen to these stories that people are suffering in rural Saskatchewan. Instead of acting on these serious infractions, the government has covered them up and denied there is a problem.
Regulators are afraid to engage the public and researchers for fear of losing their jobs should they speak frankly about the problems. The political opposition, the NDP, has also been too timid to speak openly about the real grievances of rural people, lest they be painted as anti-industry.
We have a problem in Saskatchewan. Rural communities and First Nations reserves are being held hostage by an industry that provides them with jobs, and the income that allows them to stay on the lands that their families have stewarded for generations, yet is imperiling community and environmental health. Few are willing to speak out.
We are in desperate need of a different vision for rural Saskatchewan, yet even the Official Opposition is afraid to offer one. Industry can only be better regulated if we break the culture of silence that pervades our communities and our bureaucracies.
Once we can talk frankly about the problems, we will need to step up the enforcement and monitoring of our regulations. We need to address openly and honestly the problem of fugitive emissions in our province – fully 17 per cent of our total greenhouse gas emissions come from wasted and escaped gas from the oil industry, and far too many people are being poisoned from these noxious emissions.
Most importantly, we will need to engage rural communities in developing community-level plans for transitioning to more sustainable and just economies, supported through government subsidies.
A bale of hay catches the last sunlight on a summer evening in southeastern Saskatchewan. Photo by Robert Cribb for the Toronto Star
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October 1st 2017
Emily Eaton
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