I'll Bet You Didn't Know That...

They don't have a clue. Your federal government and our various provincial governments are in the same boat. None of them has assessed the risks we face from climate change or what we need to do to adapt to it.

This is kicking the can down the road and whistling past the graveyard at the very same time.

They don't want to know. If they knew they might have to tell us what's coming. If we knew what's coming we then might ask them what in hell they're doing about it. And if they had to tell us what they're doing about it - essentially squat - then we might scorn them or, worse, compel them to do something about it and there's no room in their plans for that sort of Herculean undertaking.

It's so much easier if we all gaze out over the stern and pretend that iceberg off the bow isn't there at all.

This isn't misfeasance any more. It's full blown malfeasance. It's not just doing something wrongfully, carelessly, perhaps negligently.  It's deliberate wrongdoing.

They don't want to deal with this on their watch. It's too big, too scary, too fraught with political risk.

Back in June, 2014, large parts of Calgary were underwater as The World Council on Disaster Management held its annual conference in Toronto, which itself had recently experienced a freak flood.  The message was that Canada's outdated and decaying essential infrastructure was vulnerable to natural disasters.

Dr. Saeed Mirza, emeritus professor at Montreal’s McGill University specializing in structural engineering, added that the monumental infrastructure costs accumulated over decades of negligence have left Canada particularly vulnerable to catastrophic events.

“The frequency and intensity of these events has been increasing at an escalating rate and what was a one-in-100-year event at one time may become the norm,” he said. 

“When we look at Calgary, we had a flood there in 2005 and they called it a one-in-100-year flood, while this one according to some descriptions in the news has been three times as bad.” 

Mirza estimated that Canada’s infrastructure requirements have reached a cost of about $1 trillion, while a recent survey by the McKinsey Global Institute earlier this year stated that worldwide infrastructure needs are about $57 trillion. 

“In terms of funding, the amounts of money are truly frightening and there’s no government in the world that can find the kind of money necessary to bring existing infrastructure up to par,” Gordon said. 

The lack of political will is one of the biggest obstacles to infrastructure funding, which is why Mirza proposed that Canada adopt a best practices solution to addressing our climbing infrastructure costs.

"No government in the world can find that kind of money." Okay, but what if we don't? What if we don't replace essential infrastructure,what then? Have you ever been to a Third World country?

What we do know is that the costs of not acting, the costs of waiting until that essential infrastructure fails, will be substantially greater. That's because there will be economic loss atop the costs of replacing the infrastructure. And then you'll see "trickle down" in action with the velocity and power of a sledgehammer in freefall.

The taxes our parents' and grandparents' generations invested in that infrastructure was integral to the prosperity that their descendants, us, enjoyed. Only we also liked the idea of "everyday low taxes" which meant we didn't want to pay for those same things when it came our turn. We didn't pay for routine maintenance. We didn't pay for replacement. We haven't built for the next generations as those before ours freely did for us.

Which allows me to segue into a book I'm about to read, John Kenneth Galbraith's "The Affluent Society." First published in 1958 I've picked up the 1984 4th edition. I got  hooked by this passage from The Times Literary Supplement.

Why worship work and productivity if many of the goods we produce are superfluous - advertising 'needs' created by high-pressure advertising? Why grudge expenditure on vital public works while ignoring waste and extravagance in the private sector of the economy. Classical economics was born in a harsh world of mass poverty, and it has left us with a set of preconceptions hard to adapt to the realities of our own richer age. And so, too often, 'the bland lead the bland.' Our unfamiliar problems need a new approach.

It sounds more relevant today than ever. The problems, perhaps novel in the post-war prosperity, are now commonplace and extensive.

You're Paying for Those Pot Holes Whether They're Fixed or Not

It's no secret that essential infrastructure in North America is in a bad way. Neglect driven by tax cutting has led to deterioration in everything from roadways to overpasses, bridges, sewers and water mains.  The end result is essential infrastructure in immediate need of repair and replacement.

An illustration of the problem comes from a forced retreat of the "just in time" manufacturing sector.

Companies like Whirlpool and Caterpillar are making costly additions to their otherwise sinewy supply chains to compensate for aging U.S. roads that are too potholed and congested for "just in time" delivery.

Some opt to keep more trucks and inventory on the road. Others are leasing huge "just in case" warehouses and guarded parking lots on the edges of big cities. All that activity raises costs, which are expected to increase even more if roads are allowed to deteriorate further and an improving economy boosts traffic.

Whirlpool, for instance, has set up a network of secure drop lots outside Chicago, Milwaukee and Minneapolis. A washing machine that used to go from regional distribution center to local distribution center to customer in one day now sits overnight in a parking lot.

It "adds an extra day of lead time, which means extra inventory," said Whirlpool Corp logistics chief Michelle VanderMeer.

Then there are the parking lots and the guards. “That’s real physical infrastructure and security that we have to pay for," she said. "We’d rather be investing our money elsewhere," she added, declining to estimate Whirlpool's expenses.

Last summer, as Calgary flooded, the World Council on Disaster Management held its annual conference in Toronto.

Dr. Saeed Mirza, emeritus professor at Montreal's McGill University specializing in structural engineering, added that the monumental infrastructure costs accumulated over decades of negligence have left Canada particularly vulnerable to catastrophic events.

"The frequency and intensity of these events has been increasing at an escalating rate and what was a one-in-100-year event at one time may become the norm," he said.

Mirza estimated that Canada's infrastructure requirements have reached a cost of about $1-trillion, while a recent survey by the McKinsey Global Institute earlier this year stated that worldwide infrastructure needs are about $57 trillion.

Canada needs a major infrastructure overhaul.  The premiers are trying to engage the federal government but Harper thinks a $50 billion programme spread out over ten years should suffice.  

 Welcome to Third World Canada.

The Funny Thing Is - It's Here and What Have We Done to Adapt to It?

You might not have seen video of the dramatic flash flooding that swept the historic town centre of Elliott City, Maryland, but that doesn't matter. Perhaps you didn't see the devastation of New York City and the Jersey Shore by Hurricane Sandy. Maybe you've been in a coma for the last decade and more.

Most of us, at least most of the sentient population, have experienced powerful yet "early onset" impacts of climate change. "Global Weirding" is one example. Spring weather conditions in the midst of winter. Floods and droughts. Coastal erosion. The ever poleward migration of species - birds, mammals, fish, insects, even viruses. There are shared or common impacts and others that are regional or even local, sometimes the result of topography.

Our government tells us it has a plan. It's going to introduce carbon pricing that should encourage a reduction in greenhouse gas emissions of some order by some future date, perhaps 10, certainly not more than 20 years from the date of implementation, if ever. As Catherine McKenna so fecklessly reminds us, this is a "national unity" issue first and foremost.

There are two parts to this problem. One is mitigation - cutting GHG emissions in hope of forestalling the onset of climate change. The other, the one that gets so little love, is adaptation. That goes to our resilience to withstand steadily worsening climate change impacts that we're not going to be able to avert. That is "locked in" climate change, the steadily heating atmosphere that will unleash severe storm events of increasing frequency, severity and duration. It's the sort of thing that promotes a category 3 hurricane to a full blown category 5 monster.

There are ways to blunt nature's worsening weather wedgies but they're not cheap. Some sea level rise can be contained, for a while, by constructing stronger and higher sea walls in suitable areas. Major cities can construct major floodways along the lines of the Red River Floodway, "Duff's Ditch," that Manitoba premier Roblin built in the 60s to protect Winnipeg. We know that Calgary could sure use one or more of those, Toronto too. Then there's the restoration and replacement of essential infrastructure that was engineered and constructed to meet the gentler climate demands of a time now past.

Here's one thing we know. Fixing this problem will never be cheaper than it is right now. It might have been cheaper yet if we had only started ten years ago but that is spilt milk at this point. We know it will be vastly more costly, adding in economic loss and disruption, if we keep putting this off much longer. So what's the hold up?

What's going on in your region? Are they building the road networks of the future? Are they reinforcing your bridges and overpasses? Anyone upgrading your water mains and sewers? How about your already wobbly electrical grid? Getting a new one of those? Is your public health authority preparing for the new challenges of a new climate?

You'll recognize that your government has the problem in hand because they'll be spending tens of billions, many tens of billions of dollars on climate proofing your society.

Back in 2014, when Calgary was swamped from its most recent, once in a gazillion year floods, the World Council on Disaster Management held its annual conference in Toronto.

Dr. Saeed Mirza, emeritus professor at Montreal’s McGill University specializing in structural engineering, added that the monumental infrastructure costs accumulated over decades of negligence have left Canada particularly vulnerable to catastrophic events. 

“The frequency and intensity of these events has been increasing at an escalating rate and what was a one-in-100-year event at one time may become the norm,” he said. 

“When we look at Calgary, we had a flood there in 2005 and they called it a one-in-100-year flood, while this one according to some descriptions in the news has been three times as bad.” 

Mirza estimated that Canada’s infrastructure requirements have reached a cost of about $1 trillion, while a recent survey by the McKinsey Global Institute earlier this year stated that worldwide infrastructure needs are about $57 trillion.

Now there's a handsome number, 57 trillion dollars to meet the world's essential infrastructure needs. Boy have we been robbing Peter to cut taxes for Paul!

Here's another number, one that our politicians have foremost in their minds. It's 27 trillion dollars. That's roughly the value of proven fossil fuel reserves already subscribed on global stock markets and bourses.  That number keeps our politicos tossing in their beds at night because they know if the carbon bubble bursts, most of that wealth simply evaporates causing no end of fiscal mayhem to banks, institutional investors, pension plans and, yes, government treasuries. No wonder these little shits love their pipelines so much.

Canada's approach? Oh, we'll throw 30, maybe 35 billion at the problem over 5 years. Maybe we can cook up some sweetheart deals to get the private sector to come up with another 50, maybe 60 billion that they can then fleece back from the public together with interest and hefty profits.

Here's the problem. 30 billion dollars, that's a political number that is not connected in any way to the enormity of the problem. It's just whatever they pulled out of their backsides. That much was clear when, in March of this year, a joint audit by the federal environment commissioner and the auditors general of nine provinces found that the premiers and your prime minister don't have a clue.

Neither the federal government nor the provinces have adequately assessed the risks a changing climate poses to the country and have no real idea what might be needed to adapt to it, concludes a scathing new audit released Tuesday. 

...It says while many governments have high-level goals to cut emissions, few have detailed plans to actually reach those goals, such as timelines, funding or expected results from specific actions. 

Assessments to adapt to the risks posed by climate change have been haphazard, inconsistent and lacking in detail, with no timeline for action and no funding, the report notes. 

It also calls Canada’s emissions goals a hodgepodge of different targets, with no consistency in how emissions are measured or whether cuts will target overall greenhouse gas outputs or just those from specific economic sectors. Only two provinces and Ottawa have actually laid out their specific 2030 emissions targets, and none are on track to meet them, Gelfand said.

Dame Cathy disingenuously steered the audit into mitigation and well clear of adaptation. Then again, she would.

“The previous government did nothing for a decade, but we’re 100 per cent committed to our target,” McKenna said. “Hard things are hard, we have a plan and we’re already seeing measurable results.”

That sounds just like what Harper used to say about Chretien - all talk, no meaningful action.  The problem didn't begin with Harper, dearie.

There's something telling that Cathy didn't even address adaptation. What it tells me is that I and you, we, and our kids and grandkids are pretty much on our own as far as this government, like its predecessors, is concerned.

What that means is that we're getting "behind the power curve" on climate change adaptation which means it will become increasingly more costly and more difficult to deal with as their dereliction mounts, year by year. Unless something changes, we're in for a hard landing.

Harper is Letting Canada Crumble

It's an urgent, trillion-dollar threat that Harper thinks we should throw $50-billion dollars at over ten years.   Hint:  He should have made a $50-billion down payment on it in his stimulus budget in 2009.

Stephen Harper is thinking of funding a $50-billion/10-year infrastructure programme.   That money won't even keep up with the pace of deterioration much less rebuild Canadian infrastructure to meet the challenges of climate change over the century ahead.  At least Nero fiddled while Rome burned.

In June, while Calgary was flooding, the World Council on Disaster Management held its annual convention in Toronto.   One expert in attendance, Dr. Saeed Mirza, emeritus professor at McGill, warned that Canada's aging infrastructure was in dire need of upgrading and replacement.   He estimated we were looking at expenditures in the neighourhood of a trillion dollars and far more than than if we continued to put it off.

In January,  2009, the Brookings Institute made the case for similar, massive infrastructure spending in the United States.

"Major infrastructure projects of the past - such as the interstate highway system in the 1950s - were associated with steep increases in productivity.  This productivity has receded in recent decades as investments have lost direction
and failed to focus on key areas.   Without a national strategy for infrastructure, we are not experiencing the economic benefits of transformational programs like the interstates, the social benefits of iconic programs like rural electrification, or the sustainability benefits of air and water pollution control programs of the 1970s and 1980s."

It was Mark Twain who coined the line about how, to a man who has only a hammer, everything looks like a nail.  Harper has that same lack of focus, a chronic inability to distinguish between spending and investing.  That much was plain in his 2009 stimulus budget that I termed at the time his "pinata budget."     

Too timid or ideologically hidebound to take the responsibility for investing the stimulus funding on something that would be useful to the country, he gave it away to those who were ready to put a new deck on the cottage.  It was a colossal waste of money.  A subsequent study concluded the money, all of it borrowed,  was squandered so poorly that Canada lost out on 150,000 potential jobs.

The Harper government knows Canada is facing an infrastructure crisis but it's not about to tell the public any time soon, not while it still can kick that can down the road.  What it knows only surfaced through access-to-information demands from the media.

The country and the very government responsible to protect it are falling apart on Stephen Harper's watch.  He's digging us a very, very deep hole.

A Political Stress Test, An Idea Whose Time Has Come.

Imagine a government fully committed to meeting the multiple threats of climate change. What would that government look like? What would it be doing? How would that be reflected in economic policy?  How would that government be implementing adaptation strategies to build resilience in the mid- to long-term? What other criteria would come into play?

This sort of exercise could form the basis for a political stress test to gauge just how well or poorly a particular government is dealing with looming climate change. This is, after all, an existential threat of a magnitude never experienced in the course of human civilization.

Most governments, our own included, would be failing miserably. They're not preparing for the future and their dereliction will exact a horrible price on the populace in the decades ahead.

The fact is, climate change is not their priority. It isn't. Dealing with climate change is disruptive, costly and easily kicked down the road. Here's an example. We've been warned that essential Canadian infrastructure is not up to the challenges of this new climate, the anthropocene. In 2014, while Calgary was neck deep in flood water, the World Council on Disaster Management held its annual conference in Toronto.

Dr. Saeed Mirza, emeritus professor at Montreal’s McGill University specializing in structural engineering, added that the monumental infrastructure costs accumulated over decades of negligence have left Canada particularly vulnerable to catastrophic events. 

“The frequency and intensity of these events has been increasing at an escalating rate and what was a one-in-100-year event at one time may become the norm,” he said. 

“When we look at Calgary, we had a flood there in 2005 and they called it a one-in-100-year flood, while this one according to some descriptions in the news has been three times as bad.” 

Mirza estimated that Canada’s infrastructure requirements have reached a cost of about $1 trillion, while a recent survey by the McKinsey Global Institute earlier this year stated that worldwide infrastructure needs are about $57 trillion.

A trillion dollars, for Canada, is an almost unimaginable amount of money. Yet these disaster management types warn that the damage of ignoring the problem will be much greater.

Here's the point. If our governments - federal, provincial, even municipal - are setting us up for some future collapse, don't you think we should be aware of that, especially before we go to the polls? Should you not be able to consider that factor as part of the "informed consent" represented by how you mark your ballot?

Don't you think you should have some say on whether we're preparing a viable future for our young people?  I do. If we don't, they're just going to take us over that cliff.

Is Montreal an Object Lesson for Canada?

Montreal's atrophied infrastructure should stand as an object lesson on political responsibility for our federal government and every provincial and municipal government from coast to coast to coast.

To comprehend the root causes behind the extensive rot plaguing Montreal’s infrastructure network — a circulatory system comprising 6,000 kilometres of roads and 9,000 kilometres of water mains and sewage pipes — it is useful to think of it as a car.

Spend minor amounts on oil changes and other preventive maintenance and your vehicle will age gracefully, says Gabriel Assaf, professor of civil engineering at Montreal’s École de technologie supérieure. Forgo those needs, and small problems will morph into hugely expensive ones.

“It’s the same thing with our infrastructure network,” Assaf said. “We’ve neglected it for many years and now we have to change the engine. ... Obviously it’s a huge deal, and obviously the elected officials don’t have any clue how to finance this. They are facing a huge problem based on a lack of responsibility.”

Montreal has serious problems with the city's road network, its sewers and water mains but it's standard fare for most jurisdictions where politicians have been reluctant to raise taxes needed for maintenance and repairs.   Everybody, including our federal government, wants to kick expensive problems down the road for future governments or other levels of government to handle.

Three years ago, then auditor general Sheila Fraser castigated the Harper regime for allowing government infrastructure to crumble.

These problems are made far worse by the onset of climate change impacts.   In June, as Calgary flooded, the World Council on Disaster Management held its annual convention in Toronto.

Dr. Saeed Mirza, emeritus professor at Montreal’s McGill University specializing in structural engineering, added that the monumental infrastructure costs accumulated over decades of negligence have left Canada particularly vulnerable to catastrophic events.

Professor Mirza estimated the cost of repairing and upgrading Canadian infrastructure as needed to withstand climate change impacts at one trillion dollars.   He emphasized that not spending that trillion dollars would cost far more in the long run.

Ultimately you can rule a country in five year stretches but that's not the same as governing.  It takes guts to govern a country, guts and a strong sense of responsibility.

A trillion dollars.  That's some serious stimulus spending only it's more than money spent.  It's money invested in infrastructure that will pay for itself, returning value to taxpayers well into the distant future.

How Much Of a Third World Country is Okay for Canada?

We've been given a price tag for adapting Canada's essential infrastructure to climate change - one trillion dollars, give or take a few billion.   I'm pretty sure that's an American trillion - one thousand billion - not the British trillion - one million billion.

So let's say we spread that out over fifty years at twenty billion per annum.   The federal government alone supposedly takes in some $260-billion a year so $20 to 30-billion a year spread out among the feds, provinces and municipalities should be doable.

Do we have a fifty-year window to rehabilitate our infrastructure?  That's highly unlikely.  We're probably going to have to pick and choose what to maintain, what to fix and what to simply abandon, at least for the time being.

At the same time, we've got a lot of infrastructure that's been getting very long in the tooth such as eastern Canada's power grid, our national railway system and did I mention the 401?   The point is, not all of this infrastructure overall is going to be a drag on the economy or our government treasuries.  A good chunk, maybe most, will pay dividends for decades, perhaps generations.  Putting money into essential infrastructure is an investment just as much as it is an expense.  There was a time we understood that.

The alternative, the status quo, is to kick these problems down the road instead of coming to grips with them today.   That, however, is the road to Third Worldom.  Utilities become interrupted, unreliable.   Water service is available intermittently even as freshwater erupts through roads from broken mains.   Sidewalks become impassible, roads become broken and cratered.  Life itself becomes governed by sporadic conditions.

Cheating the Future

The trouble with austerity-obsessed politicians is their inability to resist stealing from the future.  Wary of upsetting the voters, these morally-lacking pols, try to shield them from cuts by paring money from essential infrastructure projects.  We were greeted to a stellar example of this in Montreal with its crumbling bridges and water mains.  Other Canadian cities aren't far behind.  Even Angela Merkel's Germany is feeling the neglect and it's hitting the country's economy.

The once-soaring bridges are sagging. Some trains’ switching equipment, once top-of-the-line, haven’t been updated since the time of the kaisers. Well-engineered canal locks are succumbing to silt and neglect.

Germany’s network of roads and railroads is one of the densest and most developed in the world. But the bottlenecks are starting to crimp Germany’s export-driven economy, experts say. Even maintaining the status quo will require nearly doubling current levels of spending, according to a recent report issued by a government commission.

“Germany is the second-largest of the world’s exporting nations, but only if our transport system is functioning. If not, our economy will be in a dangerous situation,” said Kurt Bodewig, a former transportation minister who led a federal commission that recently recommended that Germany needs to spend $9.7 billion a year more on infrastructure just to maintain its current network. Merkel’s new coalition agreement increases spending by a fifth that much.

In Canada, not only is our infrastructure crumbling but it's outdated, incapable of withstanding climate change impacts.  In June, as Calgary was reeling from its second, "once a century" flood in 8-years, the World Council on Disaster Management held its annual conference in recently-flooded Toronto.  Dr. Saeed Mirza, professor emeritus at McGill in structural engineering, estimated that Canada needed to invest upwards of a trillion dollars to upgrade and update our essential infrastructure across the country.

It is each generation's responsibility to maintain their nation's infrastructure for the next generation.  In other words, we owe our future generations a trillion dollars in infrastructure repairs and upgrades.  Yes we'll have to raise taxes to cover the costs.  That's how government pays for things.  Yet we'll pay a good deal more down the road if we don't meet our responsibility today.  That's simply cheating the future.

 

You Want a Carbon Tax? Then Do It Right.

One of the greatest hurdles facing mankind in the struggle with climate change is the political factor. It's a terrible thing to leave the major decisions on this up to our political caste.  They're far more focused on getting elected in three or four years than they are in what might befall your grandkid 40 years down the road. Of course it's a massive conflict of interest and of course they get to decide whether they'll come down on their own side or your grandkid's. How do you think that's bound to turn out?

Carbon "pricing." Apparently Justin Trudeau intends to go that route. It's actually carbon taxing but what politician can bear to be that honest?

This is where we run into trouble. Carbon pricing is an exercise in political number fixing. Most of the numbers that constitute climate change orthodoxy are political numbers. That's because politics overrides science. We'll have no scientific numbers thank you very much. That would be irresponsible.

It'll be a gathering of the sphincters. Justin will pull a number out of his ass. Rachel will pull another number out of her ass. Brad will hunt around endlessly before angrily insisting there is no number up his ass.

The idea is that a carbon price discourages consumption of fossil fuels and it does, somewhat. Yet it only works if it hurts and if it hurts you've got another political football. Brad Wall has chosen to kick.

The sop for the hurt is to claim the tax will be revenue neutral. You're paying more at the pump but that'll be offset by cost reductions elsewhere. At the end of the day you'll come out about the same. Don't worry, be happy.

I've got a better idea. The first one concerns Canada's ailing, aging infrastructure. Even if we hadn't kicked Earth's climate into overdrive, a lot of our once awesome infrastructure is crumbling. Highways, overpasses, bridges, electrical grids, sewers and water mains - that sort of thing. It has served us well in the post-war era. It has allowed us to enjoy incredible prosperity. Yet now it's nearing terminal mode.

That infrastructure is what keeps the economy ticking over. It goes down, the economy goes with it. Think of it as the roof that keeps the rain out of your house. It doesn't last forever. Every 20 to 40-years it has to be replaced. Your house won't last long if you don't.

Climate change makes our infrastructure predicament much worse. I was reminded of this last night when we received another of our newfound biblical downpours. My eavestroughs were doing fine until the series of squalls passed overhead and then they quickly were overrun. Message: if we're going to be getting rains like this, and worse, I need new, larger capacity eavestroughs, downspouts and, probably, drainage tiles. Think of it as the first greeting card from the Anthropocene.

Climate change will be bringing the same reality to our core (can't live without it) infrastructure. Our aging infrastructure was designed by engineers to meet conditions of their day. It was not designed for today's severe weather events of increasing frequency, intensity and duration. The deluges that swamped first Toronto and then Calgary, utterly defeating their storm sewer systems demonstrate how vulnerable we've become. When a once-a-century flood starts turning up once in every five or ten years, you're facing a new reality and you have to figure out how to cope with it.

From sea to shining sea to shining sea we've got a looming infrastructure crisis of massive proportions. Think several hundreds of billions of dollars to do the job. One Canadian expert suggested it could reach upwards of a trillion. He also pointed out that the cost of not dealing with it will be far greater, potentially an economy killer.

Money isn't the only problem. As with most aspects of climate change, there's a big time factor. Time is not on our side. Even a Herculean effort would probably take 20 to 30-years. There's a lot of process involved - study, analyze, propose, evaluate, decide, plan, fund, contract and implement. That takes time.

What if, instead of fixing our carbon price based on some half-assed, negotiated political number reflecting a notional revenue-neutral pipedream, we decided to be honest? What if we decided the carbon taxes should be used, federally and provincially, for essential infrastructure rehabilitation and replacement? Why not take those carbon taxes and invest them in assets, infrastructure, that will yield economic dividends for decades to come?

If we're not going to let the economy and, with it, our society collapse, we're going to have to find the money somewhere for a massive infrastructure makeover. That's code for "tax." Why not get some estimates for how much this is going to cost and work out what percentage of that cost should and could be realized through carbon taxes?

See what that does? That cuts out a whole lot of political numbers. Politicians instead would have to use numbers of calculated precision formulated by engineers, scientists and contractors. It won't be pretty but at least it will be grounded in reality. Doesn't that sound like a good idea?

Ontario's Infrastructure Marshall Plan

Kudos to Ontario's Liberal government.   While their provincial counterparts elsewhere in the country are furiously burying their heads in the sand, Ontario is going to introduce a 10-year plan to replace crumbling infrastructure. 

Infrastructure means funding and funding means taxes.   Infrastructure also means investment and investment means long-term returns on capital.   However not spending on infrastructure only makes the problems more expensive in the long run.   There's a reward if you do it and there's an even bigger penalty if you don't.

One of the greatest leadership failings of contemporary politicians is their short-sightedness.  When you see the world in the context of the next election cycle, there's a powerful temptation to kick problems down the road.  Eventually, however, these problems tend to grow too large to avoid any longer and that's usually when they've become punishingly expensive to address.

Bear in mind, it's not a matter of replacing the sort of infrastructure we enjoyed in the 70s and 80s.  That world is gone and it's not coming back for generations to come.  We now have to build better, stronger and sometimes different infrastructure to cope with the onset of climate change impacts.  Roads, bridges and such have to be built to withstand more heat, more cold and potentially severe flooding.  There's not much point building more stuff that's susceptible to those conditions.

Remember back in June when Calgary's SaddleDome was awash in floodwater?  By sheer coincidence that was when the World Council on Disaster Management gathered in Toronto for its annual conference.  One of the experts in attendance was McGill University professor emeritus, Dr. Saeed Mirza.   The professor, a specialist in structural engineering, estimated that Canada needed a trillion dollars worth of infrastructure upgrades to meet the conditions that will be coming at us this century.

So congratulations Ontario for being willing to finally bite the bullet on infrastructure.  May you example inspire every other provincial government across this country.
 

Canadian Infrastructure Not Ready for Climate Change. Calgary Gets Two Once-a-Century Floods in 8 Years.

Decades of neglect have left Canadian infrastructure vulnerable to severe weather events of the sort now ravaging southern Alberta.

The World Council on Disaster Management kicked off its annual conference this morning in Toronto, itself the scene or recent heavy flooding.

“How prepared are we? One way of answering that is that we will never be as prepared as we could be,” said Adrian Gordon, former President & CEO of the Canadian Centre for Emergency Preparedness.

“We’re simply that much closer to the next big disaster. What it’s going to be, who knows? Right now it’s Calgary, tomorrow it could be something else.”

Dr. Saeed Mirza, emeritus professor at Montreal’s McGill University specializing in structural engineering, added that the monumental infrastructure costs accumulated over decades of negligence have left Canada particularly vulnerable to catastrophic events.

“The frequency and intensity of these events has been increasing at an escalating rate and what was a one-in-100-year event at one time may become the norm,” he said.

“When we look at Calgary, we had a flood there in 2005 and they called it a one-in-100-year flood, while this one according to some descriptions in the news has been three times as bad.”

Climate change has had a “significant effect” on both the intensity and frequency of these events, but denial of its existence and a lack of preparedness on the part of municipal governments have exposed the holes in our infrastructure system, Mirza added. 

Now brace yourself.  Mizra estimates the tab for properly upgrading Canadian infrastructure would be in the vicinity of a trillion dollars.   And here's the thing, the cost of not upgrading our essential infrastructure will be even greater unless, that is, you're willing to live in a cave.

A trillion dollars.  That's a lot of stimulus spending.

Hey, Think You're Resilient?

"Resilience."  It's the new climate change buzz word.  It applies to individuals, communities, institutions, and infrastructure.

Resilience is the ability to bounce back from repeated climate change impacts. It's the ability to withstand repeated floods, for example.  That might require making your home resilient by having it mounted on stilts well above ground level.  It might entail constructing new floodways to channel flash floods away from communities.

Resilience planning was one topic of discussion at the 2014 World Climate Week summit in New York.

It's not just the Third World that is taking up the issue of resilience.  In the United States, the Department of Homeland Security is exploring ways of protecting the infrastructure of American cities from climate change impacts.

"Increasingly, we've moved ...from a security focus to a resiliency focus," said Caitlin Durkovich, assistant secretary for infrastructure protection at Homeland Security, an agency better known for its fight to curb terrorist threats.

Durkovich spoke Thursday on a panel at the Rising Seas Summit, a three-day conference organized by the U.S.-based Association of Climate Change Officers to discuss tools and ideas on building resiliency, particularly against rising sea levels.

In the aftermath of 2012's Hurricane Sandy, which devastated large swathes of the Northeastern U.S and caused over $60 billion in damages, Durkovich said her department reviewed the task of rebuilding with a new focus on "how to think about baking in resilience from the get-go."

To that end, she said, she has assembled a team of specialists, including city planners, in conjunction with the National Academy of Science to develop better tools for planning.

...the Portland, Maine area is being looked at in terms of risks from rising sea level, how floods might be mitigated and how to deal with saltwater intrusion into what had been bodies of fresh water. The results will then be shared with other coastal communities, she said.

California, which has the country's second longest coastline after that of Alaska, also is looking increasingly at climate change adaptation and resilience, said fellow panelist Ken Alex, senior policy advisor and director of the California Governor's Office of Planning and Research. 

He said California derives about $1 billion annually from its emissions cap-and-trade program, which sells greenhouse gas emissions permits, and the state has decided that all that revenue must be spent in ways "linked to resilience."

You'll find no comparable effort underway in Canada.  Ottawa could care less.  It doesn't want to discuss climate change impacts or resilience planning.   That costs money, potentially up to a trillion dollars or more, and the Harper regime, having defunded the federal government, now quests for a balanced budget.  

Which means the problem devolves to the provinces.  At least that's what I had expected when I contacted my own town's municipal engineer.  We're a seaside resort town.  We depend on summer tourism revenue.  We have these amazing, shallow beaches where kids can frolic safely in the salt water.  Parents love it.  It brings them here in droves.  

So what, I asked, is being done to prepare for sea level rise?  I fully expected to hear of some provincial task force underway to guide all the coastal communities, including Vancouver and Victoria, on what to expect and preparations for meeting the impacts - resilience.  No, sorry, nothing of the sort.

Our provincial government is standing idle, leaving it to our municipalities to do their own studies and planning.  Apparently the none-too-liberal Liberal government doesn't want to find itself in a spot where it's asked to help fund resilience initiatives for coastal communities.  

It's this "head in the sand" approach that is going to backfire on us and it's not just a coastal problem.  Across the country, long-neglected infrastructure is failing.  Much of it is old and in poor upkeep and now it has to withstand climate change impacts for which it was never designed.  It's a looming, trillion dollar nightmare.

We're not a society that remains capable of raising that kind of money.  We won't accept the tax burden.  The idea that infrastructure spending is an investment in our communities, our safety and our prosperity into the future is too ethereal for us, an affront to our need for instant gratification.  Let someone else do it, at some other time.  Kick it down the road.  

Unless we manage to kick this selfish mentality, we have already become part of a dying society.  Go to the Third World.  See what happens when infrastructure collapses.  Watch torrents of freshwater erupt from the streets while there's nothing to be had from the taps.  Encounter washed out bridges that don't get repaired.  Experience rotating power outages, streets plunged into darkness.  

We're left to repair an overpass or to fix a broken water main when one fails but that does nothing to overhaul an entire system that is in decay.  That is merely putting out fires, not preparing for the future.

One Arrogant Bastard - Steve "Mr.Perfect" Harper

I can think of only four world leaders who don't make mistakes - Robert Mugabe, Kim Jong Il, George w. Bush and our very own Stephen Harper. Come next month, Steve's going to have to carry that flag by himself for the Western World.

Steve didn't see the recession coming, did absolutely nothing to prepare Canada for it - not his fault. Who could'a known? Came out of nowhere. The fact that anyone could have known, that credible economists were screaming warnings to all who would listen, isn't a problem for Steve because Steve doesn't listen to those types - you know, Nobel Prize economists. Sheesh, he's got his own degrees in economics, what does he need those guys for?

And, because that wasn't a Stevie mistake, he's going to put all of SIX BILLION DOLLARS into infrastructure programmes to kick start the economy. Seriously, six billion dollars? Less than a third of what we're squandering on that other emergency, Afghanistan?

Steve this isn't money being pissed away, not like every dollar we're losing in Afghanistan. Infrastructure spending (assuming you're serious about doing it right, not gaming it for your own personal political advantage) is money invested, it's money that produces things that will bring a lasting return to the country.

Sorry but six billion dollars for infrastructure spending to fight off what, according to Harper, could turn into a depression is chump change, a pittance. The United States is looking at a trillion - for starters - possibly two, even more. Going on a one to ten ratio, that would translate into a hundred to two hundred billion infrastructure programme for Canada, not a meagre six billion.

Harper's underwhelming $30-billion all-in rescue package (not even half of what we just pumped into the banks) also includes "measures to spur consumer spending." Steve, the problem isn't how many toasters we're buying from Canadian Tire. Most of the crap we're buying comes from China anyway and, while I'm sure they too will appreciate anything that helps them sell more of those products, I'm not at all sure that money will help Canada all that much when it's sitting in a Beijing savings account (or a sovereign wealth fund).

Steve says he also wants to focus on job retraining, better housing for Aboriginals and low-income Canadians, and promoting energy-saving household renovations. Sounds to me like he's pulling the old Bush/Cheney and puffing up his grand scheme by tossing in as many existing government projects as he can to make his "stimulus package" sound better.

Then there's going to be an aid package to the auto industry, aid for the forest industry. Given that this joker is stuck in permanent campaign mode, who knows what that will mean by the time the money flows?

And then there's the coalition and the events that sparked it. Steve insists that cutting off funding to political parties is the right thing to do, something that's "overwhelmingly supported by the public." No, it wasn't a crass political scheme at all, not by a man as principled as our Furious Leader.

Principled? As in honest? As in candid? That's why this greasy child of Cheney couldn't help himself from pumping out this totally knowing lie in his yearender with the Conservative Television Network, "Canadians certainly did not elect a coalition under which the Bloc Québécois would have a veto to govern the country."

As an aside, CTV knows that's a deliberate lie to mislead the Canadian people. CTV knows the Bloc has no veto, much less a "veto to govern the country" under the coalition agreement. Why then does it allow Harper to make such a deliberate and calculated lie on their network? Why does the Conservative Television Network permit itself to serve as a propaganda arm for the prime monster?

Well at least Harper ends the year as he conducted it - completely and deliberately lying to the Canadian people, misleading and manipulating them, and holding this nation and its institutions in utter contempt.

Societies Sometimes Do Stupid Things. They Usually Pay Dearly For It.

The title of Jared Diamond's now classic book says it all, "Collapse, How Societies Choose to Fail or Succeed." (If you haven't read it you can get it free here in pdf, epub or Kindle format). The operative word isn't "fail" or "succeed", it's "choose." Diamond illustrates how many societies that have collapsed chose their fate, sometimes quite knowingly.  The usual situation is one generation that exploits something out of sheer self-interest knowing full well that it could destroy the society for generations to come. Does that sound familiar?

An excellent example is our modern mantra of "everyday low taxes." A politician who tries to raise taxes is an enemy of the people. It's part of the neoliberal model that, for most, has become a race to the bottom and that leaves us fearful, confused and often angrily divided at the signs of chaos we recognize but do not quite understand.

A lot of the infrastructure we rely on, without which our prosperity would falter and collapse, was paid for by our fathers' and grandfathers' generations. That includes everything from the Trans-Canada Highway, especially the 401, to our electrical grid and the sewers and water mains so critical to our towns and cities. Someone had to pay for it, we didn't.

We haven't even paid to maintain all that stuff. It's crumbling before our eyes whether it's slabs of concrete falling from overpasses onto traffic below or rivers of precious freshwater from broken mains flowing like rivers down city streets. This stuff, the essential arteries of our society and our economy, is rotting out, breaking down, and the cost of fixing it swells with every passing day like the interest charges on a delinquent credit card.

We think that everyday low taxes is the hallmark of responsible government.  When that becomes unworkable we fall back on the standard lies of having to trim waste or more budget cutbacks, ever more defunding of government.  We won't raise revenue. We'll pretend we can magically find it just behind the curtain and then go out and borrow it and leave the bill to our kids. That's what passes today for responsible government. We used to chuckle that "military intelligence" was an oxymoron. Well now you can add "responsible government" to that list.

It's easy to blame the political caste but there can be no responsible government without a suitably responsible voting public and it's been a while since we had one of those. Our political caste is partially to blame for the decline in our civic virtue but the main culprit is probably the corporate or commercial sector with which our governments chose to share our national sovereignty, their blood sacrifice at the altar of neoliberalism. Civic responsibility might, indeed would, represent an obstacle to those intent on maximizing consumerism.

We don't believe in responsible government. You can't when you don't trust government to spend your tax dollars. Again a good measure of the blame rests with our political caste that is, if we're to be completely honest, completely untrustworthy.  Thatcher, Reagan and Mulroney ushered in the neoliberal order but they also abdicated much of their responsibility owed their peoples to the corporate sector. Decisions they ought to have safeguarded in the public interest were instead yielded to the superior wisdom of the private sector, the market. Those decisions included critical long-term issues that were effectively handed to an entity that thinks in terms of the next fiscal quarter.

We were bequeathed, "gifted" if you like, a wonderful country with terrific infrastructure and, with it, we grew and prospered. Only, like things that come with no strings attached, we tend to take these gifts for granted. Our political leadership, by not taxing us to properly maintain, modernize, and replace our essential infrastructure, played a major part in conditioning us not to want to pay our share for these things. Now we have rotting water mains, rotting sewer systems, roads and bridges that are falling apart and it's all compounded by the arrival of early onset climate change impacts.

While Calgary was underwater in 2013, the World Council on Disaster Management held its annual conference in Toronto which itself had been inundated just a month or two before. In attendance was Dr. Saeed Mirza, professor emeritus in structural engineering at McGill. He estimated the cost of repairing, upgrading and replacing Canada's essential infrastructure to meet the demands of the changing climate during the 21st century could run upwards of a trillion dollars. He added that the costs to our society and to our economy of not rehabilitating our infrastructure would be much worse.  I guess unless you're willing to live in a cave.

This ongoing obsession with everyday low taxes is a genuinely stupid thing. It's reached the point where it is presenting a threat to the future of our society. We're that threat. We, the "not my problem, man" voting public and the political leadership we elect, we're that threat.

Now The Guardian Chimes In - Time to Nationalize Canada's Fossil Fuelers

They took their sweet time.  On Tuesday we proposed nationalization of fossil fuel companies as the best way to keep hydrocarbon reserves safely in the ground and clearing the way for a transition to clean, alternative energy.

Now it's The Guardian calling for putting Canada's oil companies under public control.

It would be hard to invent a more destructive ritual of national self-punishment. Year after year, we hand oil companies gigantic tracts of pristine land. They skin them of entire ecosystems. They vacuum billions of dollars out of the country. Their oversized power, sunk into lobbying and litigation, upends government law-making.

And Canada’s return? The exploitation of the tar sands provides just two percent of our GDP. It has gutted manufacturing jobs and made a mockery of our emissions targets. And now that oil prices are crashing – as resource commodities predictably do – it is putting a vicious squeeze on government spending.

Some will insist that nationalizing Canada’s oil industry is a fringe, radical idea. But half of Canadians already support it, according to one survey. That’s despite decades of relentless misinformation about the supposed perils of government regulating or running business. Even in the province that is home to the tar sands, more than one in three favoured the idea. Beware of your neighbours, Albertans: they’re harbouring closet nationalizers.

Canadians value that their hospitals, schools, transit, and libraries are run in the public interest. So why not our energy? Sure, the old style of nationalized companies – centralized, bureaucratic and often corrupt – is easy to criticize.

...These entities wouldn’t be run by CEOs accountable only to share-holders, or by bureaucrats accountable only to politicians: they would involve diverse boards with elected representatives of workers, consumers, and First Nations.

They could hardly squander Canada’s wealth more than those now running the industry. While oil companies have become the richest corporations in history, both federal and provincial governments have settled for capturing single-digit rents and taxes. An Alberta bumper sticker from the 1980s summed up this approach: “Please God, let there be another oil boom. I promise not to piss it all away next time.” But piss it away they have.

Take as a contrast Norway. A majority owner of Statoil, it has retained most of its oil revenue. A pension fund ensuring future savings for its citizens contains almost a trillion dollars – that’s nearly $200,000 per person. Alberta has produced twice as much oil; its fund, meanwhile, has been pilfered by its governments and holds a paltry $18 billion. Nationalization would be a way to finally put our hands on oil money and start directing the earnings toward something useful: like investment in renewable energy and green infrastructure.

Canada’s oil corporations have made a profitable mess of the country: it’s long-past time to put them under public, democratic control.

Amen to that.

Trudeau's Bricklin

As Michael Harris puts it, "When companies with iffy projects begin to lose their nerve, they can always turn to government — the investor of last resort. History shouts as much from the leaky rooftops of multiple mega-flops." He's referring to - of course - the Trans Mountain pipeline.

The first person to invest in Malcolm Bricklin’s eponymous sports car was then premier Richard Hatfield of New Brunswick. 

The car came gull-winged for the gullible. After producing just 3,000 cars, the pipe-dream of an American millionaire died as a costly fiasco to Canadian taxpayers. 

...Former Newfoundland premier Brian Peckford invested boots and all in the now comical Sprung Greenhouse. He was trying to corner the market on English cucumbers in a place with one of the lowest levels of sunshine in the world. 

After a predictably short history, which mostly amounted to dimming the kitchen lights in Mount Pearl every time the greenhouse fired up, Sprung left the province. Newfoundlanders were left holding the bag for the most expensive cucumbers on earth — a whopping $30 million loss. 

 And so, the case for caution with Kinder Morgan, the Texas oil company with cold feet. With one toe in the water of the Trans Mountain pipeline expansion and one foot on Texas terra firma, the company is threatening to walk away from the $7.4 billion deal.

The federal cavalry, under the command of Gen. Trudeau, is trying to ride to the rescue. That is passing strange. This is the same Trudeau who dissed the Harper-era green light to Trans Mountain, declaring in 2015 that approval for the project needed “to be re-done.”

...If there is money to be made, an investor can always be found. If the project runs with the dogs, government should not take out the national credit card to feed it. 

There are already signs of how Trudeau hopes to get cash to Kinder Morgan. One place would be the Canada Pension Plan Investment Board, which sits on a fund of $356 billion as of last March. 

But why should Canada’s pension fund invest in a high-risk venture like a bitumen-carrying pipeline that cuts right through Canada’s third-largest metropolis? 

Why would the CPPIB risk pension funds on pipelines, when a growing number of banks internationally won’t touch tar sands projects? 

Why would the agency put money into a wave of the past, at a time when the rest of the world is transitioning away from fossil fuels — and we were supposed to be among them? 

Why should the CPPIB touch Kinder Morgan when surging shale production in the United States is set to produce 11 million barrels of “clean” oil a day by the end of 2019? The Americans are already poised to hit the 10 million barrels per day threshold this year. 

If Trudeau is truly desperate to get this project rammed through, here is something to watch for. He might turn to the Canada Infrastructure Bank (CIB), that sketchy, new institution designed to champion so-called public-private partnerships, or P3s. 

Interestingly, the new CEO of the CIB is Pierre Lavallee. He spent six years at the pension investment board, where he managed assets worth $94 billion. The new bank has yet to invest any of its $35 billion fund in a single project, though its enabling legislation has been passed.
How long can it be before the telephone rings? “Mr. Lavallee, it’s Mr. Morneau on the line.” 

If the CIB invests in Kinder Morgan, it will instantly persuade the new bank’s critics that it is merely a giant slush fund for pet Liberal projects. Trudeau inspired much of the caustic reaction to the new bank himself. The way that the bank was created was shamelessly Harper-esque — buried in a 300-page omnibus bill, with only two hours in committee for opposition parties to study and amend it. 

Maybe Trudeau knew his adventure in P3s, which he admittedly promised in the 2015 election, couldn’t stand up to much scrutiny. Ontario Auditor General Bonnie Lysyk found that P3s in that province cost taxpayers an extra $8 billion. And if she has it right, it will get much worse.

And what about the Saudis?

And there is one more reason Trudeau should not commit taxpayers’ money to the Trans Mountain pipeline expansion — through the CPPIB or CIB. Though rising oil prices have recently made some tar sands operations marginally profitable, those prices are highly volatile and likely to come down. The reason is Saudi Arabia. 

The kingdom is on the cusp of selling shares in Saudi Aramco, the world’s largest and most profitable oil company, with an estimated worth of $1.5 trillion U.S. Though no date has been chiselled in stone for the IPO, the Saudis are now saying sometime in 2019. 

Whether it’s listed internationally or sold privately, the sale could be a global game-changer for the oil industry. With five per cent of the equity of this resource behemoth potentially on the table, it is hard to imagine how that would not siphon off investment from riskier Western energy projects that depend on high oil prices to be viable. 

And those prices could dramatically plummet if the Saudis decide that it is in their interests to turn on the oil taps again [which is in the works]. That would bring down the price of oil, allowing the kingdom to recover markets lost to shale gas and tar sands operations, while the Saudis were building the price for a potential IPO by cutting production. 

Some other reasons energy investors might prefer Riyadh to the land of tar sands? Dirt cheap production costs, no court cases, and no environmentalists: just the king and his buddies. 

Mr. Prime Minister, don’t invest in a Bricklin.

Neil Macdonald on Trudeau's Betrayal of the Canadian People

Political cowardice is something we're getting used to from our federal Liberal government.  Justin Trudeau may have a lovely smile but very, very weak knees. When it comes to taking bold steps demanded of true vision, he's usually a no-show. Can you say "electoral reform"? I know Justin cannot.

Then there's the problem of Canada's decaying, sometimes derelict infrastructure. That's everything from the electrical grid to sewer and water lines, roads and highways, air and sea ports, railway lines. Those are essential services. Without them our society would probably collapse within a week after the grocery store shelves fell empty.

We're now at that point where successive governments, federal and provincial, have kicked the problem down the road so long and so far that we've run out of road.  Governments have to dig deep to come up with the money to fix what can no longer be ignored but this is the age of "Everyday Low Taxes." Absent real leadership, tax increases can destroy political futures.

I recall Richard Nixon telling David Frost that the true test of political leadership was the ability of a leader to persuade the public to support a measure that was either painful or unpleasant. If you can't get them to swallow the bitter medicine, you're shite as a leader.  Which brings us back to Trudeau, the Liberal government and our major infrastructure problem. That problem, in four words, is "somebody has to pay."

The Trudeau government, in an act that marries cowardice with betrayal, has decided to let the public sector take over the government's own responsibilities. They call it PPP or Public-Private Participation. The private contractor builds, and essentially owns, the highway recovering its costs and a hefty profit directly from the public.

One of the grand lies that's endlessly told by the politicians perpetrating this cowardly dodge is that the private sector carries all the risk. That's why they get to lard their pockets with that extra profit. It's a nice story but history, especially recent history, reminds us that it's bullshit.

By recent history I mean last month's failure of British construction giant, Carillion. The Tories had done all sorts of PPP deals with Carillion - roads, hospitals, schools, prisons, you name it. It was all great until it wasn't. When Carillion went down, all that risk bounced straight back into the laps of the public - and the public purse. After all, someone has to pick up where the outsourcing contractor left off.

But Carillion, huge as it was, still was just a fluke, right? These things happen. They sure do, a lot. Since Carillion went down two more outsourcing contractors, Interserve and Capita,  hit the skids.



The recent collapse of Carillion, which had contracts with the government to provide services such as NHS cleaning, school dinners and prison maintenance, has intensified the spotlight on the sector.

Days after Carillion plunged into liquidation, the government was forced to deny that rival outsourcer Interserve was on the same path to oblivion, after it had been reported that it was on a watchlist of troubled companies.

Serco, one of the largest outsourcing players, has been struggling to regain its financial stability since a 2013 scandal when it overcharged the Home Office for electronic tagging of criminals.

Now Capita has become the latest in the sector to suffer a major setback as its new chief executive, Jon Lewis, “kitchen-sinked” an array of bad news by releasing it all at the same time. Shares in the firm tumbled 47.5% to a 15-year low after Lewis slashed profit forecasts, announced plans to tap the market for £700m of investment and suspended a dividend that was worth more than £200m to shareholders last year.

Some industry observers saw the writing on the wall for the outsourcing sector long ago. Tim Wainwright, an expert on outsourcing at global accountancy firm EY, said outsourcers have been squeezed by the need to provide services ever more cheaply, even as their costs have risen.

So now prime minister What, Me Worry? and his finance minister Bill Churn Baby, Churn Morneau want to drag Canada - and the Canadian public - down the same road traveled by Carillion, Interserve, Serco and Capita. There you go, problem solved.

The CBC's Neil Macdonald has apparently had enough of this PPP bullshit.

Bill Morneau, our federal finance minister, tells us the government's dodgy-sounding scheme to let private investors build and manage public infrastructure is a "win-win-win," as though such a thing exists.
...

Anyway, he must feel a bit of a fool. He's from Bay Street, and must know that in business, somebody usually gets the better end of a deal, and generally, the great white sharks of the business world — the huge institutional investors he's hoping will relieve the government of a traditional responsibility — eat very well indeed.

Trudeau is even promising the private sector zero or little risk.

According to information in documents obtained by the Canadian Press, the government is promising a healthy, guaranteed "revenue stream" for years. The exact return is not specified, but such investors tend to demand between 10 and 20 per cent – "equity-like return and bond-like risk," as the Wall Street aphorism so neatly puts it.

Best of all for the investors, according to the documents, the government is suggesting it might even chip in some extra cash to pad investors' returns. It's a path to heaven with no alternate route to hell.

And guess who will pay for all this? The cheery fog exhaled by Morneau and his fellow cabinet ministers isn't very specific about that, but there is ultimately only one bill-payer, and we all know who he, or she, is.

Shooting blindfolded. Not a real confidence builder.

Government documents suggest that the goal is to raise about $240 billion from investors over the next 12 years, for a total of $300 billion in spending.

But how the government arrived at that figure is a mystery. There has been no methodical assessment of what we need. Other countries have done that sort of homework. We haven't.

The government's own Economic Advisory Council complained about this lack of data, and finally just resorted to citing estimates between $150 billion and $1 trillion. That's quite a margin. Another authoritative study, the McKinsey Report, has said there's no need at all for additional infrastructure spending in Canada.

"Meaning we don't have a clue," says an assessment by Azfar Ali Khan and Randall Bartlett, economists at the University of Ottawa's Institute for Fiscal Studies and Democracy. "We don't even know what and where the investment needs are."

In any case, there are precisely no projects under way. At least none that we know of. So far, apparently, it's been a confidential, informal courtship of big-money investors — a dance with tightfisted, powerful people, all looking for the sweetest deal possible.

So, kids, prepare yourselves and your own kids and their kids for a potential multi-generational ass raping. Sort of like British Columbia's Fast Cat ferry fiasco only times a gazillion. 

Have Humans Become a Climate Change "Feedback Mechanism"?

In case you're wondering, we're considered a "positive feedback"

From Australia to California, Atlanta to London, climate change has settled in as a more or less permanent fixture.  Australia is roasting, California is parched, Atlanta was frozen solid and London is staring into the face of severe and perpetual flooding.  What to do, what to do?

The lead editorial in The Guardian proclaims climate change as "weather of Olympian extremes."

Even before 1988, when global warming first became an item on the international agenda, climate scientists had begun to warn that, were average temperatures to rise with greenhouse gas levels, then extremes would become more damaging, more frequent, or both.

Since then, the warnings have multiplied, and intensive and sustained research by scientists in Britain, Europe, China, Australia and the US has told the same story: if there are no steps to reduce greenhouse emissions, then average global temperatures will continue to rise, and extremes of heat and cold, of evaporation and precipitation, will continue. And yet each extreme triggers new energy demand.

Sea defences, river dredging and the pumping of water from flooded farmland all consume expensive energy. The alternative is catastrophic loss; by 2100, according to a European study this month, without adaptation, storm surge damage to coastal cities could total $100 trillion a year.

In a blizzard, cities and homesteads have no choice but to turn up the thermostat. As summer temperatures soar, so will the demand for air conditioning: the US today uses about as much electricity to cool its offices, malls and homes as it did in the 1950s to supply the needs of the whole nation for all purposes.

In a cycle of positive feedback, demand for fossil fuels will continue to grow, and temperatures will continue to rise.

Say what?  Storm surge damage could soar to $100-Trillion a year, as in with a "T"?  What this editorial appears to suggest is that we're now locked in.  Ever worsening climate change impacts will compel us to consume ever more fossil fuel in adaptation efforts.  We've long known of feedback mechanisms - the disappearance of polar ice, the thawing and burning of the tundra, the release of Arctic methane - but now we, mankind, have become a positive feedback unto ourselves?

When is extreme weather no longer 'extreme'?  Perhaps when it becomes the new "normal."  By now most of us will have learned of the devastating storms, heavy rains and flooding that have beset Ireland and the southern half of England.  The chief scientist at Britain's Met Office, Dame Julia Slingo, has warned this is what Britain can expect from climate change over the next 20-years.

Colin Thorne, the chair of physical geography at Nottingham University, writes that the flooding scenario Britain's former chief scientist, Sir David King, warned ten years ago would hit the U.K. in 2030 has arrived prematurely and very unexpectedly.  The choices, says professor Thorne, are bleak.

What are the "hard choices" to which King alluded in 2004? Perhaps the best way to consider them is in relation to the three major causes of flooding: coastal, river, and surface water.

The enormous volumes of water and geographical scale of coastal flooding set it apart from the other two and, as an island nation with extensive areas of densely populated, low-lying land along our coasts and estuaries, we are especially vulnerable. Let's be clear: we cannot hold the line everywhere – it would cost too much and would destroy irreplaceable shoreline ecosystems through "coastal squeeze".

The Dutch take coastal protection very seriously indeed and they're very good at it too – even they now plan for and allow their coast to adjust to accommodate changing tides, waves and currents through "managed retreat". No, the future for coastal management in the UK will involve realigning defences by retiring them landward. The difficult choices for government are not in deciding where, or how much to retreat, but rather in finding equitable ways to relocate and, perhaps, compensating those affected for their financial losses and personal sacrifices.

Thorne sees a variety of options available to respond to river flooding but urban flooding poses real challenges.

Our cities rely largely on Victorian pipe and surface drains, often combined with sewer systems (Combined Sewer Overflows, or CSOs), that were never designed to handle rainstorms with the intensity and duration to which they're now subjected. When a CSO occurs, raw sewage mixed with flood water enters our streams and may overflow into our communities. The first hard decision is to separate storm water from sewage – this reduces the damage, misery and health impacts of urban flooding but at a considerable replacement cost. People say this can't be done – we must not believe them. Portland, Oregon, proves it can be done. In 2008 as part of a city-wide "gray to green initiative", they decided to get rid of their main CSO; just six years later, it's gone, and good riddance.

That's a huge investment, a particularly bitter pill for an austerity-obsessed government like David Cameron's to swallow.  It's a problem shared by every industrialized nation and Canada is no exception.  It has been estimated that upgrading Canada's essential infrastructure to withstand the impacts of climate change that are heading our way would be upwards of a trillion dollars.  Look for that in Jimbo Flaherty's budget.

Professor Thorne also explains that flooding has to be recognized for what it can offer to regions that face cyclical floods and drought.

...by reinventing the way we manage the urban water cycle and making it a lot more like the natural cycle – recharging aquifers and surface-water stores in times of abundance to get us through what are likely to be increasingly frequent and protracted droughts. This is what Prof Cedo Maksimovic of Imperial College calls the blue-green dream. The "blue-green city" will use green spaces and corridors that turn blue during floods – reducing pressures on the pipe network while providing a wealth of benefits to citizens the rest of the time. The "Blue-Green Cities Research Consortium" is working out how this can be achieved, using Newcastle (ravaged by the Toon Monsoon in 2012, as its case study. Think it can't be done? Ask the people of Melbourne – they're at least a decade ahead of us, and their experience is just as compelling as Portland's move away from CSOs.

Now, Alberta, About That Pesky Carbon Bubble

Alberta is facing three immediate and potentially lasting problems - the prospects of frequent, severe floods; the likelihood of extended periods of severe drought; and the Carbon Bubble that hangs over the provincial economy like a Sword of Damocles.

By some accounts, the Carbon Bubble dilemma worsened yesterday with president Obama's climate change speech.  He said that approval of the Keystone XL pipeline would depend on ensuring it didn't "significantly increase" greenhouse gas emissions.  Obama could have but didn't clarify what that meant.

He might have meant total, overall emissions associated with the extra production of Athabasca bitumen - everything from extraction to refining to end-use combustion of the synthetic petroleum and its coke by-product.   In that case, barring the development of some wondrous (and yet very cheap) carbon sequestration technology that has seemingly eluded the Oil Patch for decades, Keystone is likely as dead a duck as those that land in Athabasca tailing ponds.

If he meant something far narrower in scope, something that excludes the processing and transportation emissions and the by-product emissions, Keystone might just have a chance.

What really matters, to the Bitumen Barons at least, is what a rejection of Keystone would say about their product, DilBit or diluted bitumen.  It won't be the pipeline that bothers Obama but what it's carrying.  Rejecting Keystone would be a body blow to bitumen, denouncing it as an unacceptable climate change hazard.

Think this doesn't worry Harper and Redford?  Look at the lengths they went to in cajoling the Euros not to label Athabasca bitumen a "high carbon" fossil fuel.  How much bitumen do the Euros buy?  Next to nil.   But, if the E.U.'s position on dilbit mattered so much to the Alberta and federal governments, what would it mean if bitumen's biggest customer, the United States, moved against it?

Athabasca bitumen is not merely high-carbon but also high-cost.  Extraction, processing and transporation is not only very costly but carries really big environmental costs that, to date, have largely been ducked.   Today bitumen is being squeezed, having to compete with lower cost natural gas and conventional oil energy produced through fracking.   There's a reason Alberta's royalties are so pitifully low, several reasons in fact.

Slowly but finally we are waking up to the realities of climate change and its impacts.  We've had several years in which to observe mega-floods, mega-droughts and severe storm events of increasing intensity and frequency.   We have come to understand that there's an immediate, direct and massive cost associated with our new climate.   In Canada alone it's estimated we will need to spend a trillion dollars to upgrade our essential infrastructure to withstand climate change impacts.  That's a million million dollars, a thousand billion if you like, a pretty hefty bill for a country of 35-million people.  It's also an amazing stimulus package even if we pare it down to just ten or twenty per cent.   Unless we want to live in caves, we're just going to have to bite the bullet.

Canada, of course, is not alone.  Just about every other country is facing its own infrastructure time bomb.   Every other country is having to cope with our new and more severe climate.  We're all getting a climate change smack upside the head and, being forced to confront it, we begin to ask questions.

Yes, the denialists are right, no matter what we do about our emissions we won't see any improvement in climate change impacts in our lifetimes.   We can't really make things better for at least a century.  What the denialists never want to talk about, however, is that we can certainly make conditions much worse, especially for our children and grandchildren, if we don't act - effectively and soon to decarbonize our societies and our economies.

So, as these realities spread and sink in, societies and nations are going to have to make choices.   They'll have to decide how much more fossil fuels we'll consume and, of those fossil fuel reserves, which should still be used and which should be left in the ground.

It's pretty obvious that, once you accept that the carbon economy is making your future painful, you'll decide that your essential carbon energy needs should be met with the cleanest, lowest-carbon sources and that it's best to leave the high-carbon fuels in the ground.  Which brings us to bitumen, the highest-carbon form of anything that could be considered petroleum.   Burning that, including the really high-carbon, high-sulpher petcoke by-product that's quietly shopped around to unscrupulous foreign customers, just doesn't make any sense at a societal level.

It's a good bet, therefore, that bitumen's days are numbered.  A recent report in Britain's prestigious Financial Times  noted market analysts already beginning to steer major clients away from high-carbon fossil fuels.

"...high-carbon assets will face increasing regulatory constraints and a growing risk of becoming stranded assets.

“The only realistic method for asset owners to manage climate risk is to hedge their portfolios – to invest in low-carbon assets so that when carbon is re-priced, either directly or indirectly, the destruction of value in their high-carbon investments is offset by an increase in value in their low-carbon investments.”

The first step in this rebalancing of portfolios is for institutions to find out how exposed their current investments are, and then to tell people about it.

This is a significant leap for the sector, which has a tendency to be secretive. “There is a crisis of transparency in this industry,” Mr Poulter says.

“Asset owners have never been put on the spot before.”

Yes, it's right there, in print, "stranded assets."   That is the likely fate of high-carbon fossil fuels.  They face becoming stranded, unmarketable, essentially valueless and, when they do, all of the deferred royalties, subsidies and grants,  and unfunded environmental costs will remain in the liabilities column.

And there is, indeed, "a crisis of transparency" in Canada's bitumen industry and its governmental minions, federal and provincial.  They don't want to discuss the risks and viability of high-carbon fossil fuels like Athabasca bitumen.  They don't want to acknowledge the danger of the Carbon Bubble or the risks of bitumen becoming a stranded asset.

When government works that hard not to discuss something obvious, you should ask why.