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Two new reports call for end to subsidies and phase-out of Canada’s oil and gas industry

By Elizabeth Perry - Work and Climate Change Report, April 19, 2021

Two new reports expose Canada’s continuing financial support of the fossil fuel industry and call for a phase-out. These appeared in the same week as the federal government reported Canada’s latest National Inventory of Emissions to the United Nations’ UNFCC, showing that the oil and gas industry is the top source of carbon emissions in Canada.

The first report, by Environmental Defence, is Paying Polluters: Federal Financial Support to Oil and Gas in 2020 , released on April 15. It estimates that the government has provided or promised at least $18 billion to the oil and gas sector in 2020 alone, including $3.28 billion in direct subsidy programs and $13.47 billion in public financing. Paying Polluters decries the lack of transparency – especially for funding through Export Development Canada – but nevertheless attempts to list the tax subsidies and direct spending programs, in an Appendix at the end of the report. In addition to obvious subsidies, the tally includes loans for pipeline construction, research into new technologies for cleaner processes, job subsidies for reclamation of oil wells, and even policing costs for pipeline construction – think $13 million taxpayer dollars paid to the Royal Canadian Mounted Police to protect the construction site of the Coastal GasLink pipeline.

Environmental Defence concludes with five recommendations, including a call for greater transparency, and for “a roadmap to achieve Canada’s commitment to phase out inefficient fossil fuel subsidies before 2025, and shift these investments and public finance towards supporting a path to resilient, equitable zero-carbon societies.” It should be noted that the government first pledged to phase out these subsidies in 2009. The report is summarized, with reactions, by Sarah Cox in The Narwhal, on April 16.

A second report, Correcting Canada’s “One-eye shut” Climate Policy, was released on April 16 by the Cascade Institute. It summarizes Canada’s history of fossil fuel production, and refutes those who argue that we are a small country whose emissions don’t compare to those of China or the U.S. Calling on Canada to accept its global responsibility, the authors state that “Canada’s 2021-2050 oil and gas production would exhaust about 16 percent of the world’s remaining carbon budget. Canada is indeed a “carbon bomb” of global significance.” This is the first of many hard-hitting, frank statements in the report, including a highly critical discussion of the “fool’s gambit” of hydrogen production, and an assessment that “A highly resourced and well-organized “regime of obstruction” has developed in Canada to block effective climate action and ensure increased fossil fuel extraction.”

Lithium, Batteries and Climate Change: The transition to green energy does not have to be powered by destructive and poisonous mineral extraction

By Jonathan Neale - Climate and Capitalism, February 11, 2021

I have spent the last year working on a book called Fight the Fire: Green New Deals and Global Climate Jobs. Most of it is about both the politics and the engineering of any possible transition that can avert catastrophic climate breakdown. One thing I had to think about long and hard was lithium and car batteries.

I often hear people say that we can’t cover the world with electric vehicles, because there simply is not enough lithium for batteries. In any case, they add, lithium production is toxic, and the only supplies are in the Global South. Moreover, so the story goes, there are not enough rare earth metals for wind turbines and all the other hardware we will need for renewable energy.

People often smile after they say those things, which is hard for me to understand, because it means eight billion people will go to hell.

So I went and found out about lithium batteries and the uses of rare earth. What I found out is that the transition will be possible, but neither the politics nor the engineering is simple. This article explains why. I start by describing the situation simply, and then add in some of the complexity.

Lithium is a metal used in almost all electric vehicle batteries today. About half of global production of lithium currently goes to electric vehicles. And in future we will need to increase the production of electric vehicles from hundreds or thousands to hundreds of millions. That will require vast amounts of lithium.

There are three ways to mine lithium. It can be extracted from rock. It can be extracted from the brine that is left over when sea water passes through a desalination plant. Or it can be extracted from those brine deposits which are particularly rich in lithium. These brine deposits are the common way of mining lithium currently, because it is by far the cheapest. Most of the known deposits of lithium rich brine are in the arid highlands where Bolivia, Chile and Argentina come together.

Lithium mining is well established in Chile and Argentina. In both countries the local indigenous people have organized against the mining, but so far been unable to stop it. The mining is toxic, because large amounts of acid are used in the processing. But the mining also uses large amounts of water in places that already has little enough moisture. The result is that ancestral homelands become unlivable.

Bolivia may have even richer deposits of lithium than Argentina and Chile, but mining has not begun there. The Bolivian government had been led by the indigenous socialist Evo Morales from 2006 to 2019. Morales had been propelled to power by a mass movement committed to taking back control of Bolivia’s water, gas and oil resources from multinational corporations. Morales was unable to nationalize the corporations, but he did insist on the government getting a much larger share of the oil and gas revenue.[1]

His government planned to go even further with lithium. Morales wanted to mine the lithium in Bolivia, but he wanted to build factories alongside the mines to make batteries. In a world increasingly hungry for batteries, that could have turned Bolivia into an industrial nation, not just a place to exploit resources.

The Morales government, however, was unable to raise the necessary investment funds. Global capital, Tesla, the big banks and the World Bank had no intention of supporting such a project. And if they had, they would not have done so in conjunction with a socialist like Morales. Then, in 2019, a coup led by Bolivian capitalists, and supported by the United States, removed Morales. Widespread popular unrest forced a new election in October. Morales’ party, the Movement for Socialism won, though Morales himself was out of the running. It is unclear what will happen to the lithium.

That’s one level of complexity. The local indigenous people did not want the lithium mined. The socialist government did not want extractavism, but they did want industrial development.

Those are not the only choices.

For one thing, there are other, more expensive ways of mining lithium. It can be mined from hard rock in China or the United States. More important, batteries do not have to be made out of lithium. Cars had used batteries for almost a century before Sony developed a commercial lithium-ion battery in 1991. Engineers in many universities are experimenting with a range of other materials for building batteries. But even without looking to the future, it would be possible to build batteries in the ways they used to be built. Indeed, in January 2020, the US Geological Service listed the metals that could be substituted for lithium in battery anodes as calcium, magnesium, mercury and zinc.[2]

The reason all manufacturers currently use lithium is that it provides a lighter battery that lasts longer. That gives the car greater range without recharging, and it make possible a much lighter car. In other words, lithium batteries are cheaper.

Taking the High Road: Strategies for a Fair EV Future

By staff - UAW Research Department, January 2020

The American automotive industry is constantly evolving and, throughout the union’s history, the United Auto Workers (UAW) has fought to ensure industry changes result in quality jobs that benefit workers and the economy.

The auto industry is facing a new shift in technology with the proliferation of electric vehicles (EVs). This shift is an opportunity to re-invest in U.S. manufacturing. But this opportunity will be lost if EVs or their components are imported or made by low-road suppliers who underpay workers. In order to preserve American jobs and work standards, what is needed is a proactive industrial policy that creates high-quality manufacturing jobs making EVs and their components.

Read the text (PDF).

Realizing a Just and Equitable Transition Away From Fossil Fuels

By Georgia Piggot, Michael Boyland, Adrian Down, and Andreea Raluca Torre - Stockholm Environment Institute, January 2019

Meeting agreed climate goals requires a rapid decarbonization of the global energy system, which in turn necessitates a reduction in fossil fuel production. While limiting fossil fuel use will likely bring a multitude of societal benefits — related to reduced climate risks, sustainable economic growth, air quality and human health — it is important to recognize that not everyone will benefit equally from a transition to a low-carbon economy. In particular, those who rely on fossil fuel production for their livelihood, or who were anticipating using fossil-fuelled energy to meet development needs, may carry a disproportionate share of the burdens of an energy transition.

The need for a “just transition” to a low-carbon economy — namely, a transition that minimizes disruption for workers and communities reliant on unsustainable industries and energy sources — is gaining traction in climate policy and political discourse. A call for “a just transition of the workforce” was included in the preamble to the Paris Agreement, and the United Nations Framework Convention on Climate Change (UNFCCC) secretariat has prepared a technical paper on transition planning.10 In addition, several national and regional governments have recently announced new transition planning processes, including Canada, Germany, Spain, Scotland, New Zealand, and the European Union.

A central concern of just transition efforts is to ensure that low-carbon transitions address social and economic inequality. The UNFCCC calls for a transition that “contribute(s) to the goals of decent work for all, social inclusion and the eradication of poverty.” Likewise, the European Commission aims to “boost the clean energy transition by bringing more focus on social fairness.” And the Scottish Government is seeking a transition that “promotes inclusive growth, cohesion and equality.”

Key messages:

  • Governments are introducing new “just transitions” policies to help workers and communities move away from fossil fuels.
  • Most policies assume that justice goals will be achieved by helping those dependent on coal, oil and gas move into new roles; however, there is little critical reflection on what justice means in the context of an energy transition away from fossil fuels.
  • There are a number of gaps in current just transition policies when viewed through a justice lens. For example, no policies contain measures to improve the lives of people currently marginalized in the energy system.
  • Creating just and equitable transition policies requires collecting data on the current distribution of the harms and benefits of the energy system, and mapping out how this will change as fossil fuels become a less-prominent part of the energy mix.
  • By taking justice considerations into account, transition policies are more likely to limit social and political resistance, win a broad consensus, and achieve effective implementation.

Read the text (PDF).

Green Conflict Minerals: The fuels of conflict in the transition to a low-carbon economy

By Clare Church and Alec Crawford - International Institute for Sustainable Development, August 2018

The mining sector will play a key role in the transition toward a low-carbon future.

The technologies required to facilitate this shift, including wind turbines, solar panels and improved energy storage, all require significant mineral and metal inputs and, absent any dramatic technological advances or an increase in the use of recycled materials, these inputs will come from the mining sector. How they are sourced will determine whether this transition supports peaceful, sustainable development in the countries where strategic reserves are found or reinforces weak governance and exacerbates local tensions and grievances.

Through extensive desk-based research, a mapping analysis, stakeholder consultations, case studies and an examination of existing mineral supply chain governance mechanisms, this report seeks to understand how the transition to a low-carbon economy—and the minerals and metals required to make that shift—could affect fragility, conflict and violence dynamics in mineral-rich states.

For the minerals required to make the transition to a low-carbon economy, there are real risks of grievances, tensions and conflicts emerging or continuing around their extraction. In order to meet global goals around sustainable development and climate change mitigation, while contributing to lasting peace, the supply chains of these strategic minerals must be governed in a way that is responsible, accountable and transparent.

Read the report (Link).

Focus on China: The East is green?

By Martin Empson - Socialist Review, February 2018

China’s rapid economic expansion is based on massive state investment, low pay and manufacturing for export to the Western economies at the same time as the promotion of domestic consumerism. Global competition for resources and markets means China must continue this economic model. But this brings with it the risk of war, economic crisis and the threat of workers fighting for an increased share of the enormous wealth being generated. But it is also driving environmental disaster on a local and international scale.

Last October Chinese President Xi Jinping outlined a five-year economic strategy. He focused on putting China at the centre of the world economy, offering “a new option for other countries and nations who want to speed up their development while preserving their independence”. But commentators noted how Xi also emphasised the environment, using the word 89 times in the 3-hour, 23-minute speech and pledging to lead globally on the environment.

In a dig at Donald Trump’s withdrawal of the United States from the Paris climate agreement, Xi argued that, “No country alone can address the many challenges facing mankind. No country can afford to retreat into self-isolation.” By contrast he claimed that China had “taken a driving seat in international cooperation to respond to climate change”, and echoing Friedrich Engels, concluded that, “Only by observing the laws of nature can mankind avoid costly blunders in its exploitation. Any harm we inflict on nature will eventually return to haunt us. This is a reality we have to face.”

China faces an unprecedented environmental crisis. Mao Zedong’s decision to make China’s economy match and then overtake the West triggered numerous environmental problems. But the sheer scale of today’s economic expansion means that China’s environmental crises today are colossal.

China is the world’s leading polluter in absolute terms. The country is responsible for around 30 percent of global carbon emissions, twice that of the next biggest polluter, the US. In per capita terms, China’s emissions (7.9 tons per person) fall below those of many other industrialised countries such as the US (16.4) or Germany (9.2). But this merely highlights the size of China’s population (1.4 billion). Meanwhile, current economic trends will only drive emissions upwards. In 2000 China’s per capita emissions were just 2.7 tons per person.

Human Rights in Wind Turbine Supply Chains

By staff - ActionAid, January 19, 2018

This briefing paper sheds light on the risks that are brought about by the projected increase in demand for minerals, such as iron ore and chromium, which are needed for the production of new wind turbines. An overview is provided of how the mining of these minerals affects people and the environment in international supply chains.

The paper also describes what is expected of companies supplying the Netherlands with wind turbines in terms of their supply chain responsibility and respecting human rights. The paper then reviews efforts by these companies to undertake due diligence to identify, prevent and mitigate risks of adverse impacts in their metals and minerals supply chain.

Commissioned by ActionAid Netherlands and written by SOMO, the paper is primarily intended to inform the Dutch government and companies in the wind energy sector about the social and environmental risks in renewable energy supply chains. It’s aim is to influence and improve Dutch policy to ensure fair and sustainable mineral supply chains globally and to broaden the scope of the energy transition agenda.

Read the report (PDF).


November 2019 Update

This report is a follow-up to the 2018 research ‘Human Rights in Wind Turbine Supply Chains‘. This report assess the extent to which the seven wind turbine manufacturers that were examined in the initial report have acted on previous recommendations and improved their policies related to risk-based due diligence in their wind turbine supply chains. The report takes the different steps of due diligence expected by the UNGPs and the OECD Guidelines as its starting point and normative benchmark.

The research analyses the companies’ general due diligence processes as well as at how the companies approach the specific risks associated with the extraction and processing of minerals that play an important role in the production of wind turbines, such as iron, aluminium and copper. The report also provides recommendations for governments and companies.

Read the report (PDF).

China: collective resistance against iSlavery

By Gabriel Levy - People and Nature, October 23, 2017

Review of Goodbye iSlave: a manifesto for digital abolition by Jack Linchuan Qiu (University of Illinois Press, 2016)

When 15 young workers jumped or fell from the upper floors of Foxconn’s factories in China in five months of 2010 – 13 of them to their deaths – it made international headlines. People across the world felt outrage at the oppressive working conditions in which iPhones and other high-tech products are made.

Much less well-publicised were the collective resistance movements that flowered at Foxconn and other big Chinese factories in the years following the “Suicide Express”.

In April 2012, 200 Foxconn employees at Wuhan took pictures of themselves on the factory rooftop, and circulated them on social media, along with threats to jump if the company kept ignoring their demand for a wage increase. The company backed down.

This action “differ[ed] qualitatively from individual acts of suicide. Instead, it became a collective behaviour that successfully pressurised Foxconn to increase wages”, the Hong Kong-based activist and university teacher Jack Linchuan Qiu writes in Goodbye iSlave (p. 134).

Qiu describes a world – our world – in which the latest technological devices are made by workers who are subject to dehumanising super-exploitation, and are also used by those workers in organising collective resistance to their conditions.

The main focus of the book is Foxconn, the world’s largest electronics manufacturer. Its workforce of 1.4 million, mostly in China, make most i-products for Apple – including iPads, iPhones, iMacs and MacBooks – and devices for HP, Dell, Nokia, Microsoft, Sony, Cisco, Nintendo, Intel, Motorola, Samsung, Panasonic, Google, Amazon and others.

Qiu describes how, after the slew of Foxconn suicides in 2010, the Chinese state – which had always, at central and local level, supported and encouraged the company’s bosses – felt compelled to act.

The authorities sent an investigation team to Foxconn Shenzhen. Its findings, leaked to the press by a trade union official, were that Foxconn workers were being compelled to do up to 100 hours of overtime a month, while the legal maximum was 36 hours; and that the company’s “semi-militarised management system” put too much pressure on workers, both when they were at the factory and when they were off duty (p. 126).

The friction between the authorities and Terry Guo, the multi-millionaire owner of Foxconn and a Chinese media darling, was real enough – but, as I understand it, was aimed at containing and dampening worker resistance at the giant factories.

If that was the idea, it didn’t work. Foxconn workers found new ways of fighting back , and students and others in China found ways to build solidarity.

Can Coal Make a Comeback?

By Trevor Houser, Jason Bordoff, and Peter Marsters - Columbia Center on Global Energy Policy, School of International and Public Affairs, and the Rhodium Group, April 2017

From the introduction: Six years ago, the US coal industry was thriving, with demand recovering from the Great Recession, and global coal prices at record highs along with the stock prices of US coal companies. By the end of 2015, however, the industry had collapsed, with three of the four largest US miners filing for bankruptcy along with many other smaller companies. While coal mining employment has been on the decline for decades – from a peak of more than 800,000 in the 1920s to 130,000 in 2011 – the pace of job loss over the past six years has been particularly dramatic. After campaigning on a promise to end what he called his predecessor’s “War on Coal,” President Donald Trump signed an Executive Order in March 2017 ordering agencies to review or rescind a raft of Obama-era environmental regulations, telling coal miners they would be “going back to work.”

This paper offers an empirical diagnosis of what caused the coal collapse, and then examines the prospects for a recovery of US coal production and employment by modeling the impact of President Trump’s executive order and assessing the global coal market outlook. In short, the paper finds:

  • US electricity demand contracted in the wake of the Great Recession, and has yet to recover due to energy efficiency improvements in buildings, lighting and appliances. A surge in US natural gas production due to the shale revolution has driven down prices and made coal increasingly uncompetitive in US electricity markets. Coal has also faced growing competition from renewable energy, with solar costs falling 85 percent between 2008 and 2016 and wind costs falling 36 percent.
  • Increased competition from cheap natural gas is responsible for 49 percent of the decline in domestic US coal consumption. Lower-than-expected demand is responsible for 26 percent, and the growth in renewable energy is responsible for 18 percent. Environmental regulations have played a role in the switch from coal to natural gas and renewables in US electricity supply by accelerating coal plant retirements, but were a significantly smaller factor than recent natural gas and renewable energy cost reductions.
  • Changes in the global coal market have played a far greater role in the collapse of the US coal industry than is generally understood. A slow-down in Chinese coal demand, especially for metallurgical coal, depressed coal prices around the world and reduced the market for US exports. More than half of the decline in US coal company revenue between 2011 and 2015 was due to international factors.
  • Implementing all the actions in President Trump’s executive order to roll back Obama-era environmental regulations could stem the recent decline in US coal consumption, but only if natural gas prices increase going forward. If natural gas prices remain at or near current levels or renewable costs fall more quickly than expected, US coal consumption will continue its decline despite Trump’s aggressive rollback of Obama-era regulations.
  • While global coal markets have recovered slightly over the past few months due to supply restrictions in China and flooding in Australia, we expect this rally to be short-lived. Slower economic growth and structural adjustment in China will continue to put downward pressure on global coal prices and limit the market opportunities for US exports. Indian coal demand will likely grow in the years ahead, but not enough to make up for the slow-down in China. The same is true for other emerging economies, many of whom are negatively impacted by decelerating Chinese commodities demand themselves.
  • Under the best case scenario for US coal producers, our modeling projects a modest recovery to 2013 levels of just under 1 billion tons a year. Under the worst case scenario, output falls to 600 million tons a year. A plausible range of US coal mining employment in these scenarios ranges from 70,000 to 90,000 in 2020, and 64,000 to 94,000 in 2025 and 2030 -- lower than anything the US experienced before 2015.

These findings indicate that President Trump’s efforts to roll back environmental regulations will not materially improve economic conditions in America’s coal communities. As such, the paper concludes with recommendations for steps that the federal government can take to safeguard the pension and health security of current and retired miners and dependents and support economic diversification. Attracting new sources of economic activity and job creation will not be easy, and even at its most successful will not return coal country to peak levels of past prosperity.

But responsible policymakers should be honest about what’s going on in the US coal sector—including the causes of coal’s decline and unlikeliness of its resurgence—rather than offer false hope that the glory days can be revived. And then support those in America’s coal communities working hard to build a new economic future.

Read the text (PDF).

Anger over China’s Deadly Workplaces after Warehouse Explosion

By Kevin Lin - Labor Notes, September 2, 2015

Disclaimer: The views expressed here are not the official position of the IWW (or even the IWW’s EUC) and do not necessarily represent the views of anyone but the author’s.

A series of chemical explosions on August 12 at a warehouse in the northern city of Tianjin is shining a spotlight on dangerous workplace conditions and precarious employment relations in China.

The accident began with fires at a warehouse owned by Rui Hai International Logistics. The company was storing illegal quantities of sodium cyanide—a highly toxic and volatile substance. Investigators at the site have also found hundreds of tons of fertilizers and other hazardous chemicals.

Firefighters reportedly sprayed water on the flames, which may have contributed to a chain reaction. Two gigantic explosions were large enough to register as minor earthquakes. Fires and secondary explosions raged on for days, creating serious concerns about air and water contamination.

The accident has already claimed 145 lives and injured more than 700. Some are still missing. The casualties include employees of the logistics firm, other workers near the blasts, firefighters, and local residents. Apartments miles from the industrial park suffered broken windows, while poorly constructed dormitories nearby simply collapsed, injuring rural migrant workers inside.

What began as an industrial accident has quickly become an environmental disaster. The week after the blasts, when the first rains came, residents reported a white foam covering the streets and a stinging sensation on their skin. Thousands of dead fish floated to the surface of the nearby Hai River.

For fear of contamination, authorities evacuated residents near the blast site. Military units and biochemical specialists were sent to clean up the area.

Hundreds of displaced residents took to the streets to call for compensation. The families of dead and missing firefighters demonstrated to demand more information and transparency.

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