Canadian establishment must wake up to reality—the Biden administration is going big on the climate

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      This week, many Canadians woke up to the Biden administration's passion for climate action.

      Not only did the new president cancel the $10-billion Keystone XL pipeline from Canada, he ensured that America rejoined the Paris Agreement to contain the growth of greenhouse-gas emissions.

      There were several other measures, too. Biden protected areas of the Arctic Ocean from drilling, halted drilling on federal land, and asked the Environmental Protection Agency to review Trump's lower standards for methane emissions.

      The president also put people on notice that vehicle-emission standards will be reviewed. And Inside Climate News reported that the Biden administration is going to review at least 10 Trump administrion rules around lighting, air-conditioning, and appliance efficiency.

      In a commentary published this morning on the Our Daily Planet website, cofounder and copublisher Monica Medina noted that anyone who thinks that Biden would be a "climate incrementalist" should think again.

      "Like the Sesame Street bit or the Tom Hanks film, the word of the week in the White House was BIG," Medina wrote.

      She expects more climate action in the coming week. So far, there's been no indication that Enbridge's $9-billion Line 3 pipeline from Alberta to Wisconson is in jeopardy.

      National Geographic created this explainer for the Keystone XL pipeline in 2017, The cost reached $10 billion by 2020.

      Climate risks to financial system

      Medina is well-sourced about the White House; her husband, Ron Klain, is Biden's chief of staff.

      Her column noted that the nominee for the secretary of the treasury, Janet Yellen, said in her confirmation hearing that the benefits of going big will far outweigh the costs over the long term when interest rates are so low. 

      "What Yellen said about boldness in the face of grave risk of much worse economic disaster could apply equally to the climate crisis," Medina added.

      Moreover, Yellen is committed to looking at the risks to the financial system that might result from climate risk.

      The Straight has already reported on climate advocates occupying senior positions in the Biden administration, including incoming national climate adviser Gina McCarthy. She's a former administrator of the Environmental Protection Agency.

      Other climate keeners are incoming transportation secretary Pete Buttigieg, international climate adviser John Kerry, and incoming energy secretary Jennifer Granholm, who was born in Vancouver. She was governor of Michigan when a massive oil spill from an Enbridge pipeline polluted the Kalamazoo River.

      "Transportation is the area with the biggest upside—investments in bigger and better batteries for energy storage and electric vehicles, big trucks and airplane technologies so they can run more efficiently and on clean fuels, and maybe even the elimination of obsolete roads to restore walkability and connectivity within cities that have been literally divided by highways," Medina noted. 

      She also pointed out that red and blue states will both benefit from large expenditures on climate initiatives, which will firm up support for the president's agenda. 

      Calgary-based TC Energy has touted its plan to achieve net-zero emissions of greenhouse gases from the operation of Keystone XL.

      But that has not swayed Biden officials. They're far more worried about overall carbon emissions as the bitumen from the Alberta oilsands is refined and later burned as opposed to far, far smaller emissions from the pipeline's operation.

      A week before the inauguration, the Georgia Straight print edition featured a cover story on Biden's climate plans.

      McCarthy's bitumen problem

      Prior to her appointment, the national climate adviser, McCarthy, headed the Natural Resources Defence Council, which is a sharp critic of the use of diluted bitumen.

      "In 2014, the EPA stated that tar sands oil emits 17 percent more carbon than other types of crude, but ironically, the State Department revised this number upward three years later, stating that the emissions could be '5 percent to 20 percent higher than previously indicated'," the NRDC states on its website.

      With regard to Keystone XL, this is what it stated: "That means burdening the planet with an extra 178.3 million metric tons of greenhouse gas emissions annually, the same impact as 38.5 million passenger vehicles or 45.8 coal-fired power plants."

      This morning on the CBC Radio program The House, Canada's ambassador to the United States conceded that there was no hope of changing the Biden Administration's cancellation of the Keystone XL project certificate.

      Kirsten Hillman said this even as she suggested that Canada can help meet America's energy needs.

      "But we have to recognize that the Biden administration has put fighting climate change at the centre of their agenda," Hillman cautioned. "Not only their domestic agenda but their international agenda."

      John McArthur

      Currency risk

      In 2018 with low oil prices, Canada generated $86.7 billion through the export of crude oil. That was 16 percent of all of Canada's exports.

      If the Biden administration is truly planning to go big on the climate, Canadians can expect crude oil exports to fall significantly to the United States in the coming years.

      And that has the potential to drive down the Canadian dollar relative to the U.S. greenback unless Canada cranks up other parts of its economy.

      For Canadian investors, the message might as well be "buy U.S. stocks", ideally not in the fossil-fuel sector.

      That's because as the loonie gets pummelled, Canadians will want to protect themselves against the currency risk.

      That can come by moving money out of the country rather than sticking with Canadian companies listed on Canadian exchanges.