Natural Resources Committee on April 21st, 2009

[Dr. Alan Meier]

I'm not aware of any specific models. I think it's more a matter of the boundaries and starting assumptions that you put into the existing models. It's a business model in a sense. How radical an idea are you willing to accept? I don't know how to answer that question in terms of saying yes, there is this model XYZ, made by some university or planning consultancy or something like that. It's more a state of mind, that the people who are using the current models need to be able to consider and take in new kinds of information about these energy strategies, whether it's on the supply side or the demand side, and incorporate them with reliable data so that they can make decisions that can include them.

[Alan Tonks, Liberal, York South—Weston, ON]

Thank you, Dr. Meier.

Mr. Foster, the objective of transforming our economy, and certainly the role that our workers play, is absolutely fundamental. You've addressed that. You've given us illustrations in St. Paul, in Minnesota. You've talked about Germany creating 250,000 jobs. You've also talked about the implications with respect to having a 25% target for the transformation of energy production away from fossil fuels.

Is there part of that national strategy that you talked about in your policy statement and a worker re-education, a new skills upgrading, a new transformation strategy, taking place in the United States as part of investing in new technologies? You not only need to commercialize those technologies, but you also need to service them and train people to provide the backup that goes with not only building them, but maintaining them. Is there a national strategy on re-employment, if you will?

[David Foster]

Thank you very much for that question.

First of all, yes, there certainly is recognition of the importance of worker training and retraining, both as part of the strategy of implementation of the transformation to the clean energy economy and as a response to changes in the economy overall, making some skills in some parts of the country redundant and requiring other skills in other parts of the country for economic expansion.

Dealing with those kinds of worker training issues is extremely important. Parts of the recently passed stimulus bill, or the American Recovery and Reinvestment Act, addressed those questions of worker retraining. In the proposed Waxman-Markey bill, there will be a major section dealing with the training needs of workers in order to respond to those changes in the economy.

I would say, however, that there's an aspect of worker retraining that I think gets overstated. It's important to remember that one of the prime economic benefits of these big clean-energy investments is that they will re-employ people with skills that they already have. In the current economic crisis, the six most common strategies for solving global warming available to us will produce great demand for jobs that people who are currently unemployed could put to quick and ready use.

For instance, in the strategy of building retrofitting to make buildings more energy-efficient, we did a study that picked the ten most common job categories required. Not surprisingly, those job categories are primarily in the construction field. They include carpenters, electricians, wall insulators, drywall installers--all the jobs that currently in the U.S. are experiencing an over 20% unemployment rate.

One of the main benefits of making big investments in energy efficiency in our building stock is that it takes advantage of existing job skills. It takes advantage of the very unemployment weaknesses that are dragging the economy down. It puts money into the hands of important consumers, who then turn it over in the economy and create demand for other products.

I think in our discussion about clean energy and global warming, we sometimes overemphasize the level of worker retraining required to undergo that transformation. We underestimate the degree to which these investments will actually reinvigorate much of our existing infrastructure in manufacturing and construction.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Foster.

Thank you, Mr. Tonks.

We go now to the Bloc Québécois.

Madame Brunelle, you have up to seven minutes.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

Good day, gentlemen, and thank you for joining us.

Mr. Leier, you spoke of the importance of integrating energy policies and we don't disagree with you. You maintain that policies of this nature can be adapted to demand and supply.

The example you gave us of Toyama is one where an interesting integrated policy approach was taken. I'd like to hear more about it. You say this city was able to adapt and opted to focus on grouping together its infrastructures. However, as you know, in Canada and the United States, we see a considerable amount of urban sprawl.

In Toyama's case, where did this awareness and the will to adopt this approach come from? Was it a matter of governments having the political will to act? In Quebec, efforts were made to revitalize downtown Montreal and to encourage people to live downtown instead of in the suburbs. It hasn't been an easy process, after trying for 40 or 50 years to sell people on the advantages of living in the suburbs. Where does one start?

[Dr. Alan Meier]

Thank you for the question. I don't think I will be able to do it justice for the response, because I confess that I have never been to Toyama, although I have lived in Japan, and I've probably been to many similar cities. I would like to immediately suggest you go to their website. If you search for the name you can probably find some information about it.

Let me try to answer the question. First of all, they were facing several problems at the same time: a clear economic decline, loss of the young people, and a concomitant demographic shift. The city was growing older much faster and they could tell that they were not going to be able to supply the city services any more. They just could not afford it. It would bankrupt the city. There was a pressure at the municipal level that they had to do something in order to make the city more attractive. They did have a little more pressure than we could exert in North American cities in forcing the location, or relocation, or realignment of some of the major infrastructure items, such as the hospitals, senior citizens homes, and so on, in a way I don't think we've really tried to do.

At the same time, we have the influence of the environmental movement where they knew that they needed to reduce their carbon emissions. This is a general agreement in Japan that they have to do something about it. So it was a constructive confluence of both the positive and negative trends that they had to deal with, and they realized that the best way to accomplish it was to begin reshaping the city. It's not finished. It's a work in progress. I use it to illustrate the kinds of concepts that might happen for different reasons. You may end up finding yourself saving lots more energy, but mainly to address a completely different problem.

I suspect I'm slightly avoiding answering your question. I encourage you to make a field trip to Toyama City and experience it for yourself.

[The Chair, Conservative, Leon Benoit]

That's exactly what we were thinking.

Madame Brunelle.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

You have answered my question, but I will try to get more information. I'm intrigued by this because you worked for an energy conservation agency in Paris for three years. When I first travelled to Europe back in the 1970s, I noticed that people were already more energy conscious. Among other things, cars were already much smaller. I was also struck by the fact that in London, people had small refrigerators—you were talking about refrigerators earlier— whereas here in North America, people had very large appliances.

Are we in North America behind in our way of thinking? Have we relied too heavily on our plentiful supply of energy, including hydroelectric power, and as a result, have we become energy hogs? Is that why it is so hard to convince people to cut their energy consumption?

[The Chair, Conservative, Leon Benoit]

To Mr. Meier.

[Dr. Alan Meier]

I think you have several questions there, and I'll try to address some of them.

It's clear that Europe uses less energy per person and per unit of GDP than do the United States or Canada. It's also clear that the price of energy, especially fuel, is much higher in Europe, and that has influenced the choice of vehicle. There are some other trends that you certainly could have observed in Europe.

But I want to address another question, about whether we're lagging. I'm going to tell two stories. First of all, Canada has had minimum energy efficiency standards for appliances for, I think, at least 15 years. I can tell you that in Europe they have only now introduced them, except for a couple of appliances that came in earlier. Only now has Europe created a legal framework for these efficiency standards that Canada has had in place for years.

Now, it's true that the lifestyles are very different. I'll jump to the question of whether we can reduce our electricity consumption. I'd like to illustrate my answer to that--which is yes--by pointing out that the city of Juneau, Alaska, which is north of most of Canada, recently had an interruption of its cheap hydro because of an avalanche. It switched to diesel fuel for its electricity, so the price of electricity went up tenfold overnight.

In the space of about six weeks, we managed to engineer a 30% reduction in electricity use for the entire city of Juneau, and that happened without anybody having a blackout. The economy continued without any interruption. And how did they do it? They actually became aware of their electricity consumption. And that was without any technology. That was just a behavioural change. Now, imagine what would happen if we put in new technologies.

So you can see that there are actually great opportunities to reduce electricity consumption. Even without changing behaviour, you can get some. With changing the way we treat energy, we can get even more.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Meier, Madame Brunelle.

We'll go now to the New Democratic Party and to Mr. Hyer for up to seven minutes.

[Bruce Hyer, NDP, Thunder Bay—Superior North, ON]

Can I share that time with Mr. Cullen?

[The Chair, Conservative, Leon Benoit]

Absolutely.

[Bruce Hyer, NDP, Thunder Bay—Superior North, ON]

I have a question for Mr. Foster.

Mr. Foster, I'm really curious about the technology, and I could talk to you about that all day long, but I'm also interested in the process by which we persuade ourselves to make these huge social and technological changes that we are considering.

Around here, roughly a third of the people feel threatened economically by the changes we're talking about. A third believe, as you've said, that there are many job benefits and economic benefits to be accrued, and about a third of us seem to be undecided or uninformed.

How do we persuade the unpersuaded that we need to move quickly and decisively, and that this really isn't a threat but rather an opportunity?

[David Foster]

That's a great question, Mr. Hyer, and the one that in many ways I think is the most important question all of us in the industrialized world should attempt to answer this year in the lead-up to the Copenhagen negotiations.

As you know, I have spent most of my adult life in factory towns and among factory workers, listening to their concerns during a period of prolonged instability. In the U.S., we went through three distinct reorganizations of the steel industry, and virtually every other manufacturing industry, in which waves of blue-collar workers lost their jobs. Those jobs reappeared very often in low-wage parts of the world, and the products we once made were replaced with imports from the places with the least regulation in the global economy.

I have found that convincing U.S. workers of the benefits of these clean energy investments comes through a kind of three-stage process. The first is understanding the real cost of job loss over the last 20 years--and I've described what happened in the steel industry, that it was all about a race to the bottom. I believe most blue-collar American workers today believe deeply in their hearts that we embarked on a flawed battle of global integration that destroyed much of the manufacturing backbone of the country. They deeply relate to understanding the real cause of job loss.

Secondly, I think part of the process is understanding the economic danger of doing nothing about global warming. In my testimony I mentioned the story of what happened to aluminum smelter workers in the Pacific Northwest and being able to demonstrate concretely how a changing climate isn't a question of endangered species--it isn't a question of habitat or wildlife alone--that it's really about the profound disruption of the human economic systems and it's a disruption that's happening around us today. Aluminum workers lost their jobs because of global warming. Las Vegas, as a hospitality centre in North America, will become unliveable as a result of global warming, and those tens of thousands of workers will lose their jobs. It's making very graphic and very specific the impacts global warming is going to have on people's pocketbooks.

I certainly know I've discussed with steelworkers and pulp and paper members in the western provinces about the threat of the pine bark beetle to the boreal forest in Canada and the potential impact this global impact-related threat will have on workers' jobs.

Finally, the third piece I think is pointing to the real demonstrated promise that these events in clean energy have. We were already seeing those before the recession last year struck in full scope. There are lots of examples of ways in which clean energy investments were putting old-line blue-collar smokestack industry workers back on the job. We saw from the demand for wind turbine towers that steelworkers were called back to work in plate mills that hadn't operated in five or six years, in Gary, Indiana. We saw foundries in La Porte, Indiana, ramp up and operate at a level that they hadn't in 20 years. They hired hundreds of workers to do castings for wind turbine bases all over North America.

We saw, as I mentioned, large construction companies putting thousands of unionized construction workers on job sites in our wind-rich prairie states. The broadcasting of these images, of blue-collar workers picking up their lunch buckets and going back to job sites, walking into factories, doing the jobs they'd done for decades and doing them now for the vision of a clean energy economy, was a welcome sight to people who'd seen nothing but job losses in their communities for the last 20 years.

I think those are the three steps to creating awareness and enthusiasm about the importance of these kinds of investments being the smart, effective way to stop the recession and turn the economy around.

[The Chair, Conservative, Leon Benoit]

Mr. Cullen, you have time for one short question, please.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

It's back to you, Mr. Foster. It's good to see you again.

This is a question about the need to eliminate the notion of an economic versus an environmental debate. We saw this in the previous American administration, that it was one or the other, that Americans had to pick, the world indeed had to pick. We heard this even some weeks ago from the environment minister here in Canada.

To the workers who are being put out of work right now or have been over the last several years, how critical is it to mesh the arguments, if you will, that the recovery required for the U.S., and I would say for Canada as well, is in fact in line with a number of the environmental priorities that are directed by climate change in Copenhagen, in particular?

[David Foster]

Well, again, a great question. I think it's essential that we link those two.

We're at a moment in which the model of the global economy that we were running showed that it was literally and absolutely unsustainable. In 2008 we saw a run-up on natural resource prices in everything from oil to bauxite to alumina to copper to cement. You name it. Virtually all the natural resource materials of an industrialized economy were in scarce supply and were being used as finite resources in a way that simply couldn't go on. That translated into what I think was an extremely fearful run-up on food prices, the return of food riots, the kind of demise of the green revolution that we thought was putting us on a pathway to ending world hunger. Along with this, there was this sense that the unsustainable trade deficits that the United States was running up, particularly with China, were somehow a healthy thing or a healthy model for building a sustainable global economy.

We simply can't go back to trying to recover from the current recession to re-create that same kind of triplex of problems. To do so I think really invites global and human disaster on a scale that none of us really wants to experience. We're being given, I think, a fundamental choice right now, which is to retool our economy by building it around sustainable technologies and sustainable energy forms that have the blessing of requiring us to make large enough investments that they literally can restimulate a global economy to get it back on a path of long-term sustained growth.

We need a really big galvanizing set of investments, investments on the size and scope of World War II that turned the Great Depression around, on the size and scope of things that we've done in the United States in the past by building the big national interstate highway system. The clean energy investments needed to change our economy fundamentally are of that size and scope. We can turn the economy around by letting that section of the economy lead.

Alternatively, look at the other sections of the global economy today and try to imagine what section of the economy is going to lead recovery. It's sure not going to be the banking industry. It's not going to be global finance. It's not going to be the housing market. It's not going to be in many of the other sectors that have run their course. Consequently, I think we have a clear choice to make, a clear investment to make, and it happens to be the one that's the best for the economy and the environment.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Foster, and thank you, Mr. Cullen.

We go now to the government side, to Mr. Hiebert, for seven minutes or so.

[Russ Hiebert, Conservative, South Surrey—White Rock—Cloverdale, BC]

Thank you, Mr. Chair.

Thank you both for being here today.

I'm going to direct most of my questions to Dr. Meier. I have a number of them, so I'll ask you to be as concise as possible.

The first question I have relates to what role industry or private business plays in developing the kinds of community-integrated energy systems we've been talking about. A lot of people have talked about the government's role, and I'll get to that in a minute. What are your thoughts on the role that the industry or individuals, private businesses, can play in this transition?

[Dr. Alan Meier]

Did you say there were going to be some other questions too?

[Russ Hiebert, Conservative, South Surrey—White Rock—Cloverdale, BC]

I'll get to those, but I'll do them one at a time.

[The Chair, Conservative, Leon Benoit]

Just ask the questions one at a time.

[Dr. Alan Meier]

That's a very broad question. I confess, I don't have a simple answer to it. But the way I'm thinking now, if we are going to move quickly to a future in which we're using much less energy and creating lower rates of carbon emissions, we have to involve industry and the private sector. In fact, if we're going to make this transition at all, we have to make sure that in some way it's going to be profitable, and highly profitable, for the private industry to get involved to reduce emissions and energy consumption. Otherwise, it's not going to happen.

In that context, we have to start asking what industry is going to do. We really have to figure out ways of rewarding innovation to find new ways of reducing energy consumption. I don't have all the answers there, but I do know that it's not going to happen unless private industry is deeply involved in the whole process and making a handsome profit out of it.

I don't know if I answered your question.

[Russ Hiebert, Conservative, South Surrey—White Rock—Cloverdale, BC]

I firmly agree. You can't coerce industry into making these changes; you have to make it attractive to them to some degree.

In your opening remarks, I was struck by the examples you gave. You talked about motors, specifically updated furnace fans, that can reduce 25% of the cost of a home's energy consumption in the winter. You talked about technology that would reduce the rolling resistance of tires by half. I know that in Canada we have made the transition from incandescent to fluorescent light bulbs, which is another technological change that is reducing consumption of energy.

To what degree do you think what appear to be minor changes could solve the problems we're facing? A 50% reduction of the 20% of fuel used to move a vehicle is significant. Are there a series of these kinds of technological changes that we could adopt or advertise that consumers would find appealing and be economically viable, to solve a significant portion of the problem we're facing?