The steady stream of bad news from Alberta's oil patch is a potent reminder of the boom-and-bust nature of being a resource commodity exporter. It's a story deeply understood in Canada's resource communities, as decisions made halfway around the world dictate whether you will have a job tomorrow or not.
The outlook for fossil fuel-exporting industries is likely to get even worse if governments are successful in negotiating a new global deal to limit carbon emissions this year. On the heels of a climate deal with China, U.S. President Obama stated in his State of the Union address: "No challenge poses a greater threat to future generations than climate change."
It is now widely recognized that anywhere from 2/3 to 4/5 of proven fossil fuel reserves worldwide must be left in the ground to avert catastrophe. That means high-cost producers like Canada are most likely to get squeezed out.
Canadian politicians have existed in a state of denial of these facts, pushing instead for more bitumen, coal, and LNG exports. Canada’s claim to being an "energy superpower" may be an empty boast if demand for our fossil fuel exports dries up.
But what does all this mean for people whose livelihoods current rely on these industries?
In our research, we talked with resource workers around B.C. who have experienced boom-and-bust cycles first-hand—especially in forestry, where mill closures have led to job losses and economic insecurity for the province's many forest-dependent communities. What we uncovered is a very unhappy legacy. A concern is that climate action could mean the loss of well-paying jobs and key employers and a repeat of this tragic pattern.
As we plan for a transition to a zero-carbon economy, we will need to ensure a "just transition" for fossil fuel industry workers, who should not have to pay the price of doing the right thing on climate change.
In past resource busts, families have faced extreme financial and emotional instability due to job loss of one or more income earners. Income loss can increase levels of stress that lead to drug and alcohol addiction, domestic violence, and divorce. When a factory closes, there are also ripple effects throughout the economy, as reduced spending forces the closure of small businesses and service providers, municipal government budgets collapse, and the residential housing market becomes glutted with "stranded assets."
In B.C. and elsewhere in Canada, the lure of work in Alberta's oil sands has already affected life in resource communities, although high pay in Alberta does not necessarily make for a good quality of life. The movement of workers to “the patch,” with families left behind, means the diminishment of common community functions like volunteer fire-fighters, Little League coaches, et cetera. Workers would prefer to stay in their communities and united with their families.
Stable management of fossil fuel industries over a two to three decade wind-down period with a just transition plan can get us off the resource rollercoaster, and better serve workers, communities, and the B.C. economy.
A lot of work will be required to build the zero-emission economy we need—but we should embrace that. Building new, green infrastructure for the future includes investments in district energy systems, localized food systems, regional rapid transit, efficient buildings and "zero waste" management of materials—all of which can be a major economic benefit in rural and resource communities.
We also need to stop lumping in all resource sectors together. While fossil fuel industries are at the heart of the climate problem, there can and should be a bright future for renewable resources like forestry. With strong stewardship and enhanced value-added, forestry in B.C. could support an additional 20,000 good permanent jobs—far more than will arise from any LNG development. This means reversing direction on forestry policies that have gutted the industry and its connection to supporting communities.
A coherent managed approach would also allow for planned transitions for workers that include income supports, advanced skills training programs, and apprenticeships. This means investing in skills that are transferable from carbon-intensive to green industries. Pro-active planning and collaboration across government, industry, and unions is critical for ensuring a just transition.
This new "green social contract" will require a reallocation of financial resources. We recommend creating a just transition fund out of resource royalties or carbon tax revenues. The fund could enhance income security for workers, support early retirement initiatives for some, and help people through retraining and job search processes.
Rather than trying to cultivate the next boom (think LNG), our aspirations should be to develop a high-quality, full-employment strategy that supports workers, families, and communities to transition beyond fossil fuels.