Musings on sustainability, values, etc.

One of the stranger aspects of the NB Power deal is watching committed environmentalists fighting hard against a proposal that will move the province from 63% of its electricity production from burning fossil fuels to zero within 10 years (it is possible that will be extended but the Premier on the radio would commit to only 10 years). 

And another sign we are living in bizarro world, a heard a university prof who has been advocating for environmentalism – and pushing hard for massive reductions in carbon emission in the province – arguing that the Heritage Pool is a ‘serious problem with the NB Power deal because power beyond the pool will have to be purchased at market rates’.  This should be a golden opportunity to double down on energy conservation efforts in the province.  Ask Liz Weir about just how much work there is left to be done to get our homes and businesses to energy efficiency.

I realize the opponents of the NB Power sale of its energy generation (that’s all it is now) are throwing everything at the wall to see what will stick but this is about as weird as I have ever seen.  I debated the thing with a guy the other day who was adamant that a) the deal was a greedy grab by industry to get cheap power and b) the very next argument out of his mouth was that industrial rates under the deal will be far higher than under the status quo.  Which is it?

But that actually isn’t my main point today.  It’s a lead in to another subject that I have blogged about in the past – the issue of environmental sustainability.  It is not an area where I have any real subject matter expertise but I have observations.

Why do we just assume consumption is on an upward growth trend forever?  I was at a conference a couple of years ago (before the recession) on the Atl. Gateway and the expert was confidently predicting a doubling of cargo from Asia into North America within 20 years.  I remember thinking at the time how much crap can we import?  How many cars, how many 50 inch TVs, how many toys, video games, clothes can we consume?  isn’t part of sustainability containing the demand rather than just trying to make the supply more environmentally benign?

I would say we should work to reduce consumption in North America – energy and goods.  I don’t think there is much correlation between the accumulation of stuff and happiness.  I have visited Latin America 14 times and I see no correlation. 

Some will say that this kind of talk is heretical for an economic developer.  Isn’t my goal to increase economic activity?  Yes and no.  My goal is that places like New Brunswick would have enough economic activity to support the population and the costs of our social and common infrastructure. 

Consumption – is actually at the lower end of economic value add.  Think about the economic value chain of a product like an iPod.   If a NBer buys an iPod for $200 – only a fraction of the economic activity associated with that iPod stays in New Brunswick.  The plastic used in the process is from the US, the manufacturing is from China (?), the R&D is in California, the profit is mostly in California, the marketing activity is in California, the customer service is in India (?). 

All New Brunswick gets is about $5-$10 in low value add retail wages and a little transportation activity.

Think about it another way.  If we cut our non-essential durable and non-durable goods consumption in a place like New Brunswick by a half – there would be more than enough money left over to fully implement the 100-mile diet for all New Brunswickers – at a much higher value add than consumptive retail.

Just rambling again today but in my mind these issues of sustainability, conservation, corporate responsibility and the business expection of a reasonable return on invested capital are starting to converge.

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12 Responses to Musings on sustainability, values, etc.

  1. mikel says:

    Come on, where’s the evidence that there will be any move to conservation just because there is a different generator? Cause and effect. On the contrary, with the ENTIRE system as a public utility there is more ability to focus on conservation.

    But you are living in a province with basically a two party system where the guy who got the least votes won, where he immediately flipped on his most important election promise. A province where the liberals have lowered taxes and are selling utilities and the tories are complaining about the taxes and promising to keep them. All within a realm that only has ONE private media company which also has extensive energy production and use interests. And you’re just cluing in NOW that you live in a strange place??

    This goes back to a main problem nobody wants to talk about-how to fund a public utility. On the con side everybody says “they only have so much debt because its cheaper to fund with debt and the government likes it that way”. That’s TRUE, but what isn’t mentioned is the alternative method of funding-namely, your taxes. A government that mentions higher taxes may as well head for the door.

    This is playing out in nasty ways, for example in order to attract private investment NBPower has to promise to pay a premium for power generation, and even that has had few takers. I mentioned before about how cheap our power is now, and how much they are willing to pay wind generators. The ONLY other way to keep rates down is to subsidize it through taxes (or add more debt).

    Conservation feeds into that. It’s a catch 22 for government in that IF they keep low rates they need to subsidize it through taxes, or add debt. They don’t want to do either, so want to pawn it off to other companies because those generations costs are hidden inside private contracts they say they aren’t allowed to divulge. YOu’ll still be paying for them though, don’t think you won’t.

    And again, its those environmentalists who are again turning out to be right, they’ve been saying this for years. However, you are wrong in one respect, go back and look at energy use for residential back to the 70’s. Energy use HAS been on a downward slope, its only industrial users that has climbed. Even today look at how many switch to low watt bulbs. If you don’t think people who pay $350 a month in winter for energy aren’t conserving, well, I don’t know what to tell you. But unfortunately few public policies are built to help them out.

  2. I much prefer this direction of thinking.

    We need a way of understanding success that is not completely bound with economic indicators. First of all, success is not completely defined in economic terms, and second, even if it were, many of those indicators are misleading.

    Economic activity is what we undertake in order to realize other ambitions. It is actually the goal of very few people to “make money”. An index more analogous to the human development index might be a more reliable measure of success. Certainly, economic indicators need to be grounded in something like the HDI.

  3. houlie4 says:

    i realize this is off topic, but thought David (and others) may be interested in this report from IRPP (Dispelling Cdn myths about Foreign Direct Investment):

    http://www.irpp.org/pubs/IRPPstudy/IRPP_Study_no1.pdf

    Big theme around here I know.

  4. richard says:

    “watching committed environmentalists fighting hard against a proposal that will move the province from 63% of its electricity production from burning fossil fuels to zero within 10 years”

    Well, some of them were for it before they were against it. The enviro orgs are membership-driven – upsetting your membership might affect membership renewal rates, which reduces revenue, which might cause staff layoffs and/reduce salaries. What would you do if you were an exec in such an organization?

  5. Tell you what. To the person who started his/her comment with the insult, please repost with your name, telephone number, government department/agency you work for and I will put up your post. It’s pretty cowardly to insult someone else under the cover of anonymity. It is obvious that the majority of folks that post here are against the NB Power deal. I get that and I post their comments but I am not interested in personal insults. Why not post over at some of regular news sites. They let just about anything in and you don’t have to leave your name.

  6. mikel says:

    I’m on the fence on that one-I almost think you SHOULD post the nasty comments, there’s no reason you should have to read them alone. Then we can make fun of them.

    I thought that had slowed down some, but, again, this isn’t a referendum-people are ANGRY. They SHOULD be angry, but going after other New Brunswickers is a pretty skanky thing to do. As anybody here knows I’ve been pretty strident against the proposal and joined the facebook group in its first week. Several members took it upon themselves to get pretty nasty all because I debunked the crazy claims going out on youtube from a girl who says that half a BILLION dollars is siphoned out of NBPower each year for Graham’s personal use. Somebody posted a link to the minister dispelling the notion that NBPower actually made 70 million in profit this year with the comment “look how he talks to us like children”.

    It’s unfortunate, but again David’s rebuttal anger should ALSO be pointed at the government. If people were united against an arbitrary government decision, then perhaps people would get behind the idea of a referendum. Dictatorial government decisions should be fought against no matter whether you agree with them or not.

    I agree with Richard, this was a case where so many are simply so angry that if ANY organization came out in favour of the deal it would be membership suicide. People forget that people within organizations AREN”T speaking for themselves but for an organization, and that’s a whole different thing.

    However, that WOULD make a good organization-not just the ‘100 mile diet’ but the ‘100 mile EVERYTHING’. In Britain and a couple of european countries I believe they are making up a system of labelling that will show how much ‘carbon emissions’ each product will contribute. WHile they make it sound environmental, the reality I suspect is that it gives buyers an easy way to find out just how local each product is. I think I also read that under that previous MAI that governments wanted to pass, it would actually be ILLEGAL for companies to advertise themselves as ‘local’.

  7. Dave Prebble says:

    It is not difficult to convince oneself that a utility operator is in conflict with the idea of conservation. Because of fixed costs for labour, accumulated debt and so on, if the consumption falls too low too fast the utility will lose money whatever the cost of the supply. It is obvious that higher prices encourage conservation as pointed out by others (the “underpriced commodity is wasted theme”). Too low a price per kWh apparently contributed to brown-out problems in Ontario a few years ago according to “Energy Probe” articles.

    My point is this: Can we get a good comparison of the impact of spending $1 billion on building more generation or paying a high wholesale price for supply with spending $1 billion on easily accessed and controlled grants to cause significant consumption reductions? One example used by a person on a Canada East web comment site said $4000 spent on a heat pump could save $500. or more per year at current rates.

  8. Tom Rivington says:

    I think many that were against the deal from the outset could not be sold if the price doubled and we get to keep everything. Graham has turned a segment against him and I doubt they will change their mind, somewhat akin to those Tea Party people in the U.S.

    Maybe Graham should challenge everyone to a public debate, with moderators and fact enforcers, not that shouting match that takes place in Leg where facts are fast and loose.

    Probably a naive thought.

  9. mikel says:

    I was one of those “against the deal from the outset” so I’ll quickly respond. Tom is right, I’ve said that numerous times that the deal could be GREAT and it still should be fought, and I”ve gone so far as to say NBers should be UNITED against stopping it. THEN have those debates. Like I’ve said, this is NOT a referendum. This is dangerous territory, I would be disgusted if there WASN”T such outcry, because this basically tells young people and the world that our ‘system’ of ‘democracy’ is a farce. It says that elections mean nothing, politicians can say what they want and its meaningless. Some people simply don’t seem to grasp the import of that.

    Had Graham announced that Hydro Quebec made an offer and there would be a referendum most of these problems go away. If the government would be impartial-and they SHOULD be impartial, there would still perhaps be some angry enough to insult the blog owner, but it wouldn’t be nearly so bad. Just go read about the VLT referendum. Anger is a ‘strategy’. When you are organized and doing activism you NEED anger, you need people to be angry enough to show up at the leg in the freezing cold on a work day, and that’s not easy to do. That’s why the anger is at least easy to understand.

    And actually, it spares the government a lot of problems. Reject the deal? Fine, but when rates go up, don’t go crying to the government. It’s not quite as simple as that, but fairly close. When Irving moves the pulp mill to Quebec, well, look in the mirror. Again, its not QUITE that simple, but it certainly puts responsibility where it SHOULD be-on the people who OWN NBPower. Not only does Graham not have the right to do this, he shouldn’t have the responsibility. Democracy is a two way street.
    I’ve gone through far more of the ‘fact based’ information than most people and its those things that convince me more than ever that its a bad deal regardless, and I don’t live in NB so honestly, what the province does doesn’t really matter to me.

    Meanwhile, the government has been caught in more lies and absurd financial claims than critics, so its a naive thought because Graham clearly knows less about the deal than most people. The fact that a liberal minister would quit and David Hay resign before the ink is even wet ought to be pretty clear markers. OK, so that wasn’t as quick as I thought.

  10. richard says:

    “I think many that were against the deal from the outset could not be sold if the price doubled and we get to keep everything”

    That’s probably true. Data don’t really matter at this point.

    One of the main reasons for the anger is that there has been so little press over the past 30 yrs on the the problems NB Power is facing. There has been little or no consistent attempt by govts to engage the public in discussions around energy policy or face the problems experienced by NB Power.

  11. richard says:

    “I think many that were against the deal from the outset could not be sold if the price doubled and we get to keep everything”

    That’s probably true. Data don’t really matter at this point.

    One of the main reasons for the anger is that there has been so little press over the past 30 yrs on the the problems NB Power is facing. There has been little or no consistent attempt by govts to engage the public in discussions around energy policy or face the problems experienced by NB Power. In public, everything has been hunky-dory, but behind the scenes McKenna and Lord saw such great problems that both thought about selling. We still have not seen much of NB Powers data, and the EUB (unlike in QC) lacks the regulatory power to get it. On the other hand, there have been enough scattered reports generated on NB Power that the public should have been demanding answers. The public has been largely complacent until now, when it is far far too late.

    A complacent public and a docile press – bad combination. And it will get worse; the NB Power sale is just small potatoes compared to the impact of GNB’s debt and the oncoming wave of federal cuts. That will hurt far far more.

  12. mikel says:

    Talk about bad information. I haven’t seen ANY evidence that the above is true. McKenna has said numerous times that “he wished he had the courage to tackle NBPower”

    http://www.cbc.ca/canada/newfoundland-labrador/story/2009/11/12/nb-mckenna-nbpower-sale-540.html

    Meanwhile, there isn’t any evidence that Lord wanted to sell NBpower, although there is lots of evidence that he wanted to sell Point Lepreau and Coleson COve.

    http://www.cbc.ca/canada/new-brunswick/story/2009/11/17/nb-nbpower-tories-605.html

    We should also add that several reports have pointed out that Bernard Lord had stated he wanted to use referenda more and more. He had one on VLT’s and was planning another on proportional representation. I serously doubt he’d consider a sale without a referendum, and we can even throw Graham’s words back at him when he agreed.

    Richard is ‘sort of’ right, but EUB meetings are all public, they are all available online. The media is more the culprit because the government has few avenues for public interaction, and this is one area where they’ve at least had some public meetings.

    But again, everybody thinks that THEY are right and if everybody just got the right information then they’d agree. WHile rates have risen, rates EVERYWHERE have risen,NB still has the cheapest rates in the northeast. And up until this year they have posted profits and over the past five years have contributed half a billion to general revenues. So the truth is somewhere in between-and certainly not at the point where ‘all is lost’ and its best just to get what one can for it.

    But its true that the public needs to get more involved, and thanks to Graham they ARE. While there is lots of bad information out there, compared to a year ago NBers are practically energy experts, and the media is following suit.

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