US & Canada Low-Carbon Transformation Requires Solutions To 4 Major Challenges – Part 1

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This article originally published on Medium.

We are at a challenging point in time. The UN IPCC 1.5 degrees report has made it clear that we have until 2030 to make major strides to achieve that aspirational COP21 target, and if we don’t 2 degrees is quite a lot worse. But there are systemic barriers to progress for many of the solutions.

Recently, I was discussing these barriers with a peripatetic serial marketing entrepreneur, Elisha Israel, who is working on his next startup, one focused on assisting sustainability entrepreneurs to find clients. Elisha was asking for my input as I consult in the space, providing business and technical strategic guidance to clients in multiple industries and startups. When I say peripatetic, I was serious, as Elisha has been traveling full time for close to a year and intends to keep it up until mid-2020, all while continuing to manage his marketing business and start a new one. When he and I spoke, he was in Tangier, Morocco in Northern Africa, which he’d reached by high-speed rail after taking a ferry from Spain. That’s right, there’s more high-speed rail in Africa than in North America. And, of course, it runs on electricity.

What are the roadblocks, and what can be done to overcome them? This series of articles lays them out, dissects them and suggests solutions.

First off, it’s important to remember that there are multiple sources of greenhouse gases, and multiple solutions. The short list of major sources includes transportation running on gasoline, diesel, bunker fuel, and kerosene; electrical generation with coal and natural gas; industrial emissions including concrete and steel manufacturing; and land use practices which severely curtail biological sequestration of carbon in the short and long term including high-tillage agriculture and deforestation. The short list of major solutions, as I laid out in a recent article, includes electrifying everything, overbuilding renewables, continent-scale grids with HVDC, pumped-hydro storage, changing agricultural practices, fixing concrete and steel, pricing carbon aggressively, shutting down coal and gas aggressively, stopping subsidies to fossil fuels, and eliminating high global warming potential HFCs in refrigeration.

We have to address these solutions on an accelerated basis in North America. After all, the United States and Canada have the highest per capita greenhouse gas emissions of any of the G20 countries and aren’t addressing them rapidly. And, of course, the US is responsible for more of the historical greenhouse gas emissions than any other country, including all 28 of the countries in the EU combined, and double the total historical emissions of China. Last year, the United States’ emissions increased by 3.4%, substantially more than the 2.3% increase in China, which is doing much more to address the solutions listed than North America is.

So what are the blockers Elisha and I discussed? The short list includes:

• Inverted political power with cities at the bottom of governance structures
• Patchwork regulation
• Utilities and transit poorly positioned for transformation
• China being the only scaled manufacturer of many necessary technologies

This article deals only with the first, with each of the other three in following pieces.

Inverted political power

When most western democracies were established, about 10% of people lived in anything like an urban center. The majority of people lived in rural areas and were directly involved in agriculture and resource extraction industries. The large majority of economic wealth was generated in rural areas.

As a result, when constitutions were established, cities were afterthoughts, relatively speaking. Federal governments established regional governments with states in the US and provinces in Canada slowly negotiating entrance over time into the two countries. In Canada and the US, that included provisions which favored sparsely populated provinces and states, giving them more representation than more densely populated areas. Further, it gave provinces and states control over the cities. I laid this out with Canadian examples in an article I published a year ago, An urban manifesto: cities need equal political weight.

Now, in 2019, 80% of the population of Canada and the US is urban, with a very high percentage living in the most densely populated cities and urban areas. And most of the GDP is coming from these urban areas as well. As I pointed out in the article:

“It’s worth looking at a 2018 snapshot of the four largest urban areas in Canada compared to Canada overall. At 0.15% of Canada’s area they represent a fraction of a percentage of Canada’s landmass, but close to 40% of GDP and population.”

The same is true for the major urban areas of the United States. Cities are where the majority of the people live and where the majority of GDP arises in the 21st century.

And a very large percentage of the actions that must be undertaken to solve climate change are urban-centric. The vast majority of movement of humans is in and between urban areas, so solutions for transportation are heavily weighted to cities. Similarly, the vast majority of freight shipment is into urban areas. The vast majority of new buildings and all of their embodied carbon is in urban areas, as are the vast majority of existing buildings requiring retrofitting of heat pumps to replace gas furnaces and high global warming potential HFCs in air conditioning. The vast majority of electricity is consumed by industry, commerce, and residences in urban areas. They are the most efficient and lowest carbon way for large numbers of people to live, but when everybody lives in cities, they are huge aggregate sources of greenhouse gases.

Yet every urban vote counts less than the votes of people living in rural areas in two of the richest countries in the world. And cities have few revenue generation options and have to go, cap in hand, to provinces and states to unlock infrastructure funding. As often as not, federal and state governments are dominated by rural-dwelling politicians whose power arises from these dynamics, and who are uninterested in helping cities as opposed to funneling money into their more rural districts.

There are three or four solutions for this challenge, but few of them are going to be realizable quickly enough to deal with a 2030 deadline. Let’s step through them.

A big one is for cities to declare climate change an emergency, as many have done already. Over 1,000 jurisdictions, a majority of them cities, have done so already. I published a piece recently looking at Vancouver’s choice to do so, and the resultant climate emergency response plan. Why is this useful? First off, it’s symbolic. It provides a useful focus for attention on the need for change. It typically requires an emergency response plan be formulated that lays out how the city will address the emergency. It can often unlock federal and state money, as it’s understood by higher scales of government that when its citizens and its cash-cow urban areas are under duress, they have to step up.

There are potential downsides, ones that are worth paying attention to. Emergencies are treated as special instances in governance. Often, standard provisions about unlawful arrest, freedom of speech, and freedom of movement can be curtailed. Assets can often be frozen. States of emergencies are often declared by authoritarian or dictatorial governments to give them powers to suppress dissent, a frequent topic in the literature on the subject. That’s part of the reason why many analysts were uneasy when President Trump was suggesting declaring a state of emergency over the southern US border. And it’s why I’m uneasy about Bernie Sanders suggesting the same thing at a federal level related to climate change, allowing him free reign to privatize electrical generation. Federal governments declaring states of emergency brings about far too many negative consequences outside of truly extraordinary circumstances to undertake it lightly. The same is not true for US and Canadian cities, where it merely gives them more leverage to unlock funding and resources for the necessary transformation.

To this end, I recently coached a major consultancy’s strategy director on a methodology for assessing Toronto’s climate emergency initiative. I provided him with guidance, references, and a recommended methodology on assessing and providing feedback to Toronto, recommending that assessing Vancouver’s starting point, approach and levers against Toronto’s starting point, approach and levers was the most effective mechanism.

Another is amalgamation or at least marshaling of regional purchasing power. Amalgamation brings pain with the advantages, as Toronto found after the forced amalgamation at the hands of the new Conservative government in 1998, a trend as Conservative governments in that province have been quite actively interventionist in Toronto’s affairs, and rarely to positive outcomes. But 21 years later, after most bylaws and standards have been homogenized, the city has an operating budget of $13.5 billion and a 10-year capital budget and plan of $40.7 billion. That’s major purchasing power to enact change. By comparison, the City of Vancouver is one of 24 municipalities that make up Metro Vancouver and has an operating budget of only $1.5 billion, even though Metro Vancouver’s GDP is $135 billion.

The Lower Mainland of BC is a patchwork of municipalities, some having declared an emergency, some not. Richmond and Burnaby declared this year, but New Westminster, Surrey and Abbotsford aren’t on board. As a result, the 2.6 million people in the region and the GDP aren’t being fully leveraged for action on this issue.

In a theme for this series, looking to China brings value. The nation announced in 2011 that it would effectively amalgamate the Pearl River Delta’s nine cities into a single megacity of 42 million people, greater than the population of California or Canada. That’s coming to fruition. The Special Economic Zone and now city accounts for 10% of all of China’s GDP.

But amalgamation is a slow and disruptive. Focusing urban governance efforts on increasing the spread of emergency declarations and using that lever to provide additional funding and powers to regional administrative bodies such as Metro Vancouver would be advantageous, but it’s tricky too. There’s no clear path to 2030 through amalgamation or the limited authority of regional sub-state level governance bodies.

A path that’s perhaps easier to realize is a global urban cryptocurrency. A year ago I was on a North American trade organization panel at a conference in Vancouver. Another panelist was Simon O’Byrne, who runs the global urban planning, design, architecture and engineering practice for Stantec, the global engineering firm headquartered in Alberta. More on him later as we look at other blockages.

In that panel, my shared point of view was amalgamation or more common governance of major urban areas, along with a common cryptocurrency. The large majority of people who shuttle around the world for business do so from city to city, and the cities have much more in common with one another than the countries do. Some bemoan this, others, myself included, celebrate this. We are already seeing the rise of post-Westphalian governance, and the emergence of a global distributed state of cities is a possible outcome of this.

But the start could be with the rise of an urban currency shared among many cities, based on cryptocurrencies. I wrote about this in 2018 in the major blockchain report I authored that year, articulating the case for post-national currency management as an emerging reality. There’s nothing to stop three or four major cities from declaring a common urban currency and inviting other urban areas to join except the will to do so. And with that currency would spring new revenue streams. Others are suggesting this in more limited ways. Fouad Khan suggested that New York form its own currency in a Nautilus thought-piece in early 2018. I think that’s too limited a perspective. Cities banding together to create a currency of the future for the wealth generation centers of today and tomorrow makes more sense.

Economy 2.0 should be urban, and interact with Economy 1.0, the rural economy of yesterday, through federal governments.

This is the first in the series of articles on the subject of barriers to rapid climate responses in governments and business, and how they might be overcome. Further articles will cover the patchwork of regulations, the lack of preparedness for transformation in utilities and transit organizations, and the reality that we’ll have to buy our solutions from China.