U.S. Electric Bus Demand Outpaces Production as Cities Add to Their Fleets

Cities are still working through early challenges, but they see health and climate benefits ahead. In Chicago, two buses save the city $24,000 a year in fuel costs.

China’s BYD electric bus company has a factory in Lancaster, California. While the vast majority of the world’s electric buses are in China, the U.S. numbers are growing. Credit: Li Ying/Xinhua via Getty Images

In the coastal city of Gulfport, Mississippi, the state’s first fully-electric bus will soon be cruising through the city’s downtown streets.

The same goes for Portland, Maine—it just received a grant to buy that state’s first two e-buses, which are set to roll out in 2021. And Wichita expects to have Kansas’ first operating electric bus picking up passengers as early as this month after receiving a federal grant.

As cities and states across the country set ambitious mid-century climate change goals for the first time and as prices for lithium-ion batteries plummet, a growing number of transit agencies are stepping up efforts to replace dirtier diesel buses with electric ones.

Nearly every state has a transit agency that now owns—or will soon own—at least one electric bus, according to a recent report from CALSTART, a clean transportation advocacy group.

Demand for e-buses is outpacing manufacturers’ ability to supply them, resulting in hundreds of backlogged orders in the United States, said Fred Silver, vice president of CALSTART.  “Almost every state now has a program. So that is unique—it’s gone beyond interest in just a few states.”

The U.S. numbers are still small compared to the hundreds of thousands of electric buses in China, but they’re growing. There are about 650 e-buses on U.S. roads today, but that’s more than double the 300 that the clean energy research group BloombergNEF counted last year. And under current pledges by states, cities and urban transit agencies, at least a third of the nation’s nearly 70,000 public transit buses will be all-electric by 2045, according to a separate report from the U.S. Public Interest Research Group (U.S. PIRG).

So far, California leads the pack, with more than 200 e-buses in service and several hundred more in backlogged orders. Only five states—Arkansas, New Hampshire, North Dakota, South Dakota and West Virginia—have no transit agencies planning to operate electric buses or hydrogen fuel cell buses, another type of zero-emission vehicles.

Swapping diesel for electric buses isn’t as simple as pressing the starter button, though, and local transportation agencies are still feeling their way through the challenges. The upfront costs are still higher for electric buses than diesel; cities have to build out charging infrastructure to support them; and, in some cities, electricity rates have cut into the savings.

But urban leaders also see long-term benefits in fuel savings and for human health and the climate.

The transportation sector has become the largest contributor of greenhouse gas emissions in the United States, responsible for nearly 30 percent of total emissions across the country, according to Environmental Protection Agency data. Heavy-duty vehicles, which include passenger buses, garbage trucks and delivery trucks, account for about a quarter of the global warming emissions from vehicles. And the latest climate science makes clear that emissions from all automotive tailpipes must fall to zero by around mid-century to have a shot at avoiding catastrophic climate change. MORE

 

Climate change denial may have been defeated in 2019. But what comes next won’t be easier

Defeating the climate crisis is just the beginning of the struggle – and tough political choices will have to be made

 ‘Several difficult questions which were previously kept in the background – or indeed actively suppressed – by the environmental movement are becoming impossible to ignore.’ Photograph: John Lamparski/Getty Images

Will 2019 be remembered as the year in which climate change denial was defeated? The global climate strike, Greta Thunberg’s meteoric rise to international prominence, as well as several high-profile international conferences and reports – all contributed in putting climate skeptics on the back foot.

Even Donald Trump, who previously claimed that the climate crisis was a “hoax” invented by China to hold back American industry, has recently begun to brag about all his administration has done to address it. Following suit, the rest of his party is scrambling to develop a coherent environmental platform, more in line with their electoral base’s shifting views.

But the next steps in the global fight against the climate crisis remain far from clear. In the speech she delivered to US Congress in September, Thunberg maintained: “No matter how political the background to this crisis may be, we must not allow it to become a partisan political question. The climate and ecological crisis is beyond party politics. And our main enemy right now is not our political opponents. Our main enemy is physics.”

While Thunberg’s intention was evidently to preserve the environmental movement’s unity and common resolve, this may paradoxically soon start to look like a new form of climate denial. As the issue rises to the top of everyone’s agenda, several difficult questions which were previously kept in the background – or indeed actively suppressed – by the environmental movement are becoming impossible to ignore. 

The environmental movement is going to have to become more, not less, politicized, to keep up the momentum

For one, no one seems quite clear what is the ultimate goal of the global fight against the climate crisis. Is it merely to enable constant economic growth in a sustainable way, or is it about imposing limits on humanity’s ambitions, in pursuit of a more harmonious relationship with nature?

Even assuming that question can be settled, it remains to be determined what is the relationship – and whether there are any tradeoffs – between environmentalism’s overarching goal(s) and other potentially desirable ends, such as personal freedom, distributive justice and respect for established traditions and ways of life.

Then there is the issue of means. Whether humanity chooses to fight the climate crisis through centralized, state-based efforts, decentralized market mechanisms, or individual and community-level changes in lifestyle has profound political and distributional consequences. So, it matters what decisions are made in this respect.

Finally, even the relevant temporal horizon remains open to disagreement. Should we care about what happens in 10,000 years? A few generations? Or the immediate 20 years?

Far from having straightforward answers, all these questions are inherently political, since they point to deep conflicts in values and interests. They delineate the contours of a new “politics of environmentalism” that is beginning to take shape as climate change rises to the top of humanity’s present concerns.

We already see this new politics taking shape in emergent debates over competing proposals for addressing the climate crisis. Bernie Sanders’ and Alexandria Ocasio Cortez’s respective versions of the Green New Deal are very different from the proposal for a European Green Deal recently put forward by the new president of the European commission, Ursula von der Leyen.

The first approach wants to connect the issue of the climate crisis with social justice, and advocates for a massive expansion in the role of the state to manage the transition to renewable energy. The second approach treats the issue of the climate crisis in isolation from other social and political issues, and proposes market rather than state mechanisms to address it.

Nor are these the only two options on the table. Another prominent strand of contemporary environmentalism is the one heralded by Pope Francis in the 2015 encyclical letter Laudato Si, which folds the struggle against the climate crisis into a broader critique of the “modern myth of unlimited material progress” on the basis of a religiously inspired conception of the inherent rights of the “natural order”.

While this chimes with radical ecology’s longstanding commitment to the idea of “de-growth”, it is also compatible with classical conservatism’s critique of modernity, which has traditionally stigmatized the hubris in humanity’s dream of complete domination over nature. Several ideas contained in the pope’s encyclical have in fact been taken up by more conservatively minded political and religious organizations, in an attempt to give greater resonance to the conceptual affinity between political conservatism and natural conservation.

Even some strands of the nativist far right have begun to develop their own brand of environmentalism. The French Rassemblement National’s leader, Marine Le Pen, has sought to connect the problem of environmental degradation with her party’s broader opposition to globalization and immigration. This translates into a form of “green nationalism” focused on the protection of local cultures, products and traditions.

This growing diversification of environmental positions is a sign that the movement as a whole is maturing. Environmentalists of all stripes are realizing that there remain important political decisions to be made even after climate crisis denial has been defeated.

These decisions cannot be taken by purely technical or scientific means. On the contrary, the fact that the environmental movement has so far remained the preserve of a small technocratic elite has done more to invite populist backlashes than to further its own goals.

It is a good thing that all the available options are now being laid bare, in order to better assess their relative merits in an open and democratic way. Whether we like it or not, the environmental movement is going to have to become more, not less, politicized, to keep up the momentum it has acquired so far.

• Carlo Invernizzi-Accett

The Silly, Scary Truth about Alberta’s New Ministry of Truth

Ridiculed for their lies and bumbling, Jason Kenney’s propagandists soldier on.

One critic called Alberta Premier Jason Kenney’s energy ‘war room’ an ‘expensive joke.’ That made his war room brain trust upset. Photo by Greg Fulmes, the Canadian Press.

Jason Kenney is learning that it’s not easy to set up a state-run propaganda agency.

Right off the bat, the Alberta premier’s “war room” swore, as every propaganda outfit does, that it would “reject what is false and promote what is true.”

The agency, officially named the Canadian Energy Centre and launched earlier this month with an annual budget of $30 million, picked one of its first battles with the Medicine Hat News.

That newspaper’s crime was to publish an opinion piece by Jeremy Appel that lambasted the agency’s motives: “Its entire premise is based on the notion that anyone who opposes oilsands expansion is a liar with ulterior motives.”

Appel called the war room “an expensive joke” and “a grave threat to our right to dissent.”

And he criticized Kenney for arguing, just like the extremist Ezra Levant, that the province needed a propaganda agency because Canadian oil is more ethical than Saudi or Russian oil.

“Are Albertans supposed to pat themselves on the back because they don’t jail and execute dissidents, but merely dedicate public resources to their vilification and harassment without a shred of transparency?”

Appel’s column proved something that George Orwell once wrote: that “if liberty means anything at all it means the right to tell people what they do not want to hear.”

And so, the CEC immediately swung into action. Grady Semmens, a CEC agent and former Trans Canada PR guy, sent the paper a note saying it wanted to respond to the “comments and inaccuracies” in Appel’s column. (For the record, Semmens describes himself as “a purpose-driven public affairs professional.”)

The subsequent “guest column” makes no mention of any “inaccuracies” but swears the propaganda outfit will be “informative, positive and educational.”

But how can a group staffed largely by conservative partisans or hydrocarbon fundamentalists be anything but ideological, political and false?

It starts at the top. Tom Olsen, CEC’s managing director, used to serve as the press secretary for Tory premier Ed Stelmach and was a failed United Conservative Party candidate in the last election. (Count Olsen as at least one Albertan put back to work by Kenney.)

Pumping a deflated ‘enemy’

Olsen and his indoctrinators, employing the Orwellian technique of inventing an enemy, pretend to be fighting a war against a foreign-funded, anti-oilsands campaign that largely ended four years ago. As Olsen blared, his agency “is a direct response to the domestic and foreign-funded campaigns against Canada’s oil and gas industry that have divided Canadians and devastated the Alberta economy as energy production in the United States and elsewhere has ramped up.”

Apparently Olsen has no knowledge of the 2014 oil price collapse, or other well-documented factors hurting his province’s petro-prospects.

And he apparently also forgot that years ago, four oilsands executives sat down with five environmental groups involved in the anti-tarsands campaign led by Tzeporah Berman. In backrooms, they all agreed to a half-assed plan to limit emissions as opposed to production, which, rightly or wrongly, largely derailed the campaign.

The NDP government later joined in the climate policy agreement, leading to a splashy announcement in November 2015.

Retiring Suncor executive Steve Williams confirmed the war’s end in an interview in the Calgary Herald last year: “If you look at the vigour of the off-oilsands campaign, it hasn’t been there. You’ve seen projects approved, you’ve seen Fort Hills built and started up.”

Still, no good propagandist discards a deflated enemy when falsely pumping one up better serves his purpose. Fighting a battle that has largely ended is surely good work if you can get it. MORE

 

How to Halt Global Warming for $300 Billion

UN scientists say reclaiming wasteland could capture carbon

 Global effort would stall emissions growth for up to 20 yearsVanishing Forests

$300 billion. That’s the money needed to stop the rise in greenhouse gases and buy up to 20 years of time to fix global warming, according to United Nations climate scientists. It’s the gross domestic product of Chile, or the world’s military spending every 60 days.

The sum is not to fund green technologies or finance a moonshot solution to emissions, but to use simple, age-old practices to lock millions of tons of carbon back into an overlooked and over-exploited resource: the soil.

“We have lost the biological function of soils. We have got to reverse that,” said Barron J. Orr, lead scientist for the UN Convention to Combat Desertification. “If we do it, we are turning the land into the big part of the solution for climate change.”

Rene Castro Salazar, an assistant director general at the UN Food and Agriculture Organization, said that of the 2 billion hectares (almost 5 billion acres) of land around the world that has been degraded by misuse, overgrazing, deforestation and other largely human factors, 900 million hectares could be restored.

Returning that land to pasture, food crops or trees would convert enough carbon into biomass to stabilize emissions of CO2, the biggest greenhouse gas, for 15-20 years, giving the world time to adopt carbon-neutral technologies.

“With political will and investment of about $300 billion, it is doable,” Castro Salazar said. We would be “using the least-cost options we have, while waiting for the technologies in energy and transportation to mature and be fully available in the market. It will stabilize the atmospheric changes, the fight against climate change, for 15-20 years. We very much need that.”

Vanishing Forests

The heart of the idea is to tackle the growing problem of desertification — the degradation of dry land to the point where it can support little life. At least a third of the world’s land has been degraded to some extent, directly affecting the lives of 2 billion people, said Eduardo Mansur, director of the land and water division at the FAO.

Marginal lands are being stressed around the globe by the twin phenomena of accelerated climate change and a rate of population growth that could lift the global tally to almost 10 billion people by 2050, he said. Much of that growth is in areas such as Sub-Saharan Africa and South Asia where land is already highly stressed.

“The idea is to put more carbon into the soil,” said Orr. “That’s not going to be a simple thing because of the natural conditions. But keeping the carbon in the soil and getting that natural vegetation, grazing land etc. thriving again — that’s the key.”

An aerial view of planted trees in a desert in China’s Gansu province. Photographer: Wang He/Getty Images

Last month, at a UN conference on desertification in New Delhi, 196 countries plus the European Union agreed to a declaration that each country would adopt measures needed to restore unproductive land by 2030. The UN team has used satellite imaging and other data to identify the 900 million hectares of degraded land that could be realistically restored. In many cases, the revitalized areas could benefit the local community and host country through increased food supply, tourism and other commercial uses.

Key to returning dry lands to vegetation is the use of fertilizer, said Mansur. “Fertilizers are essential for increasing productivity. Good fertilizer in the right quantity is very good for the soil.”

But decades of poor agricultural practices in both rich and poor nations have resulted in misuse, either from using the wrong products, using too much fertilizer, or in some areas using too little so that the soil loses its nutrients.

Farmers add fertilizers at a plantation near the city of Bhubaneswar, India, in 2016. Photographer: NurPhoto via Getty Images

“The problem unfortunately is big and it is growing,” said Mansur. “The main cause of emissions from agriculture is poor land management. But the solutions are known: Sustainable land management, sustainable water management, sustainable soil management.”

Mansur stresses that the problem isn’t about reclaiming desert, but restoring wasteland that was productive before human intervention.

“Don’t mix desertification with desert,” he said. “A desert is an ecosystem. There are deserts on the planet that have to be preserved.”

Dry Belts

Nor is it merely a matter of planting trees, since each area has to be considered in terms of the people who live there and how they can live on the land sustainably.

Kenya, for example plans to plant 2 billion trees on 500,000 hectares to restore 10% of its forest cover, but it is also working on ways to adapt to the changes in climate.

We have to improve our livestock and crops to be drought resistant or drought tolerant,” said Kennedy Ondimu, director of environmental planning and research at the country’s Environment Ministry. “We have to look at developing our indigenous vegetables and indigenous livestock gene bank apart from embracing hybrid crop varieties and livestock varieties. We need to prioritize animal breeding.”

Samburu tribes people shelter under a tree at a livestock market in Kenya. Photographer: Tony Karumba/AFP via Getty Images

In Costa Rica, farmers are using deforested land to produce CO2 neutral coffee, which commands premium prices among consumers. The nation is also replanting rainforest to encourage eco-tourism, which has become the country’s second-biggest earner.

Still, the tide of desertification won’t be easy to turn. In India, more than 20% of the country is considered wasteland and scant water resources are making the situation worse. In Chile, home to the world’s driest desert, the Atacama, the government is spending $138 million improving irrigation as the region’s driest decade on record forces fruit farmers to migrate south to escape the advancing desert. Further north in Brazil, the worst fires in years ravaged the world’s largest rainforest.

Amazon forest fire in August. Photographer: Leonardo Carrato/Bloomberg

Yet, Castro Salazar says dozens of countries are fighting back with programs designed to reverse the loss of farmland and at least 20 nations have major efforts underway to replant lost forests.

“All these countries were able to keep producing the food they needed and growing the forest cover,” he said. “The myth was that in order to increase your productivity and your food sovereignty and security you needed to slash or burn the forest. We documented that it’s not true.”

SOURCE

 

International Monetary Fund: Tackling Tax Havens

The billions attracted by tax havens do harm to sending and receiving nations alike

Until the 2008 financial crisis, tax havens were generally seen as exotic sideshows to the global economy, Caribbean islands or Alpine financial fortresses frequented by celebrities, gangsters, and wealthy aristocrats. Since then, the world has woken up to two sobering facts: first, the phenomenon is far bigger and more central to the global economy than nearly anyone had imagined; and second, the biggest havens aren’t where we thought they were.

Tax havens collectively cost governments between $500 billion and $600 billion a year in lost corporate tax revenue, depending on the estimate (Crivelli, de Mooij, and Keen 2015; Cobham and Janský 2018), through legal and not-so-legal means. Of that lost revenue, low-income economies account for some $200 billion—a larger hit as a percentage of GDP than advanced economies and more than the $150 billion or so they receive each year in foreign development assistance. American Fortune 500 companies alone held an estimated $2.6 trillion offshore in 2017, though a small portion of that has been repatriated following US tax reforms in 2018.

Corporations aren’t the only beneficiaries. Individuals have stashed $8.7 trillion in tax havens, estimates Gabriel Zucman (2017), an economist at the University of California at Berkeley. Economist and lawyer James S. Henry’s (2016) more comprehensive estimates yield an astonishing total of up to $36 trillion. Both, assuming very different rates of return, put global individual income tax losses at around $200 billion a year, which must be added to the corporate total.

These highly uncertain estimates vary widely because of financial secrecy and patchy official data and because there’s no generally accepted definition of a tax haven. Mine boils down to two words: “escape” and “elsewhere.” To escape rules you don’t like, you take your money elsewhere, offshore, across borders. I prefer such a broad definition because these havens affect far more than tax: they provide an escape route from financial regulations, disclosure, criminal liability, and more. Because the main corporate users of tax havens are large financial institutions and other multinationals, the system tilts the playing field against small and medium enterprises, boosting monopolization.

Political damage, while unquantifiable, must be added to the charge sheet: most centrally, tax havens provide hiding places for the illicit activities of elites who use them, at the expense of the less powerful majority. Tax havens defend themselves as “tax neutral” conduits helping international finance and investment flow smoothly. But while the benefits for the private players involved are evident, the same may not be true for the world as a whole; it is now widely accepted that in addition to tax losses, allowing capital to flow freely across borders carries risks, including the danger of financial instability in emerging market economies.

As a general rule, the wealthier the individual and the larger the multinational corporation—some have hundreds of subsidiaries offshore—the more deeply they are embedded in the offshore system and the more vigorously they defend it. Powerful governments also have a stake; most major havens are located in advanced economies or their territories. The Tax Justice Network’s Corporate Tax Haven Index ranks the top three as the British Virgin Islands, Bermuda, and the Cayman Islands—all British overseas territories. The organization’s Financial Secrecy Index ranks Switzerland, the United States, and the Cayman Islands as the top three jurisdictions for private wealth.

To grasp why rich jurisdictions top the lists, ponder how many rich Nigerians might stash secret assets in Geneva or London—then consider how many rich Swiss or Britons would hide assets in Lagos. Offshore capital tends to drain from poor countries to rich ones.

And the offshore system is growing. When one jurisdiction crafts a new tax loophole or secrecy facility that successfully attracts mobile money, others copy or outdo it in a race to the bottom. That has contributed to a dramatic decline in average corporate tax rates, which have decreased by half, from 49 percent in 1985 to 24 percent today. For US multinationals, corporate profit shifting into tax havens has risen from an estimated 5 percent to 10 percent of gross profits in the 1990s to about 25 to 30 percent today (Cobham and Janský 2017).

The principles of the international corporate tax system were laid down under the League of Nations almost a century ago. They treat multinational enterprises as loosely connected “separate entities.” This is a fiction: multinationals in fact draw great strength from their unitary nature, reaping market power and economies of scale. If the whole is worth more than the sum of its (geographically diverse) parts, which countries get to tax that extra value? It is rarely lower-income countries, since the system tends to give preference to the place where multinationals have their headquarters, usually rich countries.

What is more, multinationals can manipulate the so-called transfer prices of transactions between these affiliates to shift profits from high- to low-tax jurisdictions. For example, a firm’s affiliate may hold a patent in a low-tax haven and charge exorbitant brand royalties to affiliates in high-tax countries, thus maximizing profits in the low-tax jurisdiction. In theory, transfer prices are meant to reflect market prices that would prevail in arm’s length transactions between two unrelated parties. But such prices often cannot readily be established: try valuing a unique widget for a jet engine that isn’t sold on the open market, or a drug patent. In practice, the value is often what the company’s accountants say it is.

The main alternative to “arm’s length, separate entity” is something called “unitary tax with formulary apportionment.” This system considers a multinational to be a single entity and apportions profits geographically according to a formula reflecting real economic activity, which could be a mix of sales, employment, and tangible assets. In theory, this method cuts out tax havens: if a firm has a one-person office in Bermuda, the formula allocates a minuscule portion of its global profits there, so it hardly matters whether Bermuda taxes its portion at a zero rate. In practice, this system also suffers technical difficulties, and the choice of formula is highly political—but it is simpler, fairer, and more rational than the current system.

Indeed, many US states, Canadian provinces, and Swiss cantons have for some time used limited versions of the system for subnational taxes, even though it is not yet used internationally. A move is already underway to require multinationals to break down and even publish financial and accounting information on a country-by-country basis, which could provide relevant data for an international allocation formula. Many other incremental stepping-stones toward the alternative are possible, so change can be evolutionary rather than revolutionary.

Until a decade or so ago, there were few political brakes on the expansion of tax havens. After the 2008 crisis, however, governments came under pressure to close large budget deficits and to placate voters furious about taxpayer-funded bank bailouts, widening inequality, and the ability of multinationals and the wealthy to escape tax. The Panama Papers and Luxembourg Leaks revealed the use of tax havens for often nefarious purposes and reinforced the pressure to do something. So the Organisation for Economic Co-operation and Development (OECD), the rich-country group that is the main standard-setter for international tax matters, launched two big projects.

One is the Common Reporting Standard (CRS), a regime to exchange financial information automatically across borders so as to help tax authorities track the offshore holdings of their taxpayers. But the CRS contains many loopholes; for example, it allows people with the right passport to claim residence in a tax haven, rather than in the country where they live. The United States constitutes an even bigger, geographic loophole: under the Foreign Account Tax Compliance Act, it collects information from overseas on its own taxpayers, but it shares little information the other way, so nonresidents can hold assets in the country in conditions of great secrecy, making the United States a major tax haven.

Still, the CRS brought some results. The OECD estimated in July 2019 that 90 countries had shared information on 47 million accounts worth €4.9 trillion; that bank deposits in tax havens had been reduced by 20 to 25 percent; and that voluntary disclosures ahead of implementation had generated €95 billion in additional tax revenue for members of the OECD and the Group of 20, which includes major emerging market economies.

The other big initiative was the base erosion and profit shifting (BEPS) project, aimed at multinational corporations. This was the OECD’s effort to “realign taxation with economic substance” without disrupting the long-held international consensus supporting the arm’s length principle, which was bolstered by tax-escaping multinationals and their allies. While BEPS did improve transparency for multinationals, it was ultimately seen as something of a failure by the OECD, especially for the digitalized economy.

The United States also belatedly recognized that, with a consumption-heavy economy, it made sense to shift taxing rights toward the place where sales occur. And emerging market economies, including Colombia, Ghana, and India, which gained more clout starting in 2016, have pushed for new approaches. The OECD began considering sales-only formulas, but some lower-income countries favor a formula that includes employees and tangible assets, which would give them greater taxing rights. These shifts away from arm’s length orthodoxy represent a step toward tax campaigners’ demands for formula apportionment.

In January 2019 the dam began to break. For the first time, the OECD conceded publicly a need for “solutions that go beyond the arm’s length principle.” In March, Christine Lagarde, then managing director of the IMF, called the method “outdated” and “especially harmful to low-income countries.” She urged a “fundamental rethink” with moves toward formula-based approaches to allocating income. In May, the OECD published a “road map” proposing reforms based on two pillars: first, determining where tax should be paid and on what basis, and what portion of profits should be taxed on that basis; and second, getting multinationals to pay a minimum level of tax. Professor Reuven Avi-Yonah, of the University of Michigan Law School, said the plan was “extraordinarily radical” and would have been “almost inconceivable” even five years ago.

We are now at the start of the most significant period of change to the international corporate tax system in a century. Progress will hinge on power struggles: between countries, rich and poor, and within countries, between ordinary taxpayers and those that profit from the current system. But radical change is feasible. The Tax Justice Network, which I have worked with, now sees its four core demands, initially dismissed as utopian, gaining global traction: automatic exchange of financial information across borders, public registers of beneficial ownership of financial assets, country-by-country reporting, and now unitary tax with formula apportionment.

But corporate tax is just a start. To understand the broader issues, we must consider the forces that make the offshore system tick. Switzerland’s example is illustrative. In past decades, politicians in Germany, the United States, and elsewhere have clashed with Switzerland over banking secrecy, with little success. In 2008, however, after discovering that Swiss bankers had helped US clients evade tax, the Department of Justice took a different tack: it targeted not the country, but its bankers and banks. In response, the embattled private players became major lobbyists for reform, and Switzerland soon made major concessions on banking secrecy for the first time. The lesson: any effective international response must include strong sanctions against the private enablers, including accountants and lawyers—especially when they facilitate criminal activity such as tax evasion.

On a deeper level, consider this. The engine of the offshore system is competition among jurisdictions to provide the best ways to avoid taxes, disclosure, and financial regulation. Traditionally, such a race to the bottom is framed as a collective action problem requiring collaborative, multilateral solutions. But cooperative approaches have flaws. Some jurisdictions feel inclined to cheat as they seek to attract mobile capital, so collective action can be like herding squirrels on a trampoline. Moreover, it is tough to mobilize voters in support of complex cross-border collaboration, especially when the goal is to help foreigners or low-income countries.

There is a radically different, more powerful, approach. The relevant question is, Do the financial flows attracted by tax havens help the receiving countries? They certainly help interest groups there—typically in the banking, accounting, legal, and real estate professions—but do they benefit the jurisdiction as a whole?

A new and growing strand of research by the IMF, the Bank for International Settlements, and others suggests that the answer is no. This “too much finance” literature argues that financial sector growth is beneficial up to an optimal point, after which it starts to harm economic growth (see chart, previous page). Most advanced economies, including the United States, the United Kingdom, and other major tax havens, passed that point long ago. For them, shrinking the financial sector to remove harmful financial activities should boost prosperity.

Alongside this research, John Christensen, a former economic advisor to the British tax haven Jersey, and I have developed the concept of a finance curse, which afflicts jurisdictions with an oversize financial sector and is analogous to the resource curse that vexes some countries dependent on commodities such as oil. This “paradox of poverty in the midst of plenty” has multiple causes: a brain drain of skilled people from government, industry, and civil society into the high-paying dominant sector; rising and growth-sapping inequality between the dominant and the other sectors; an increase in local prices that renders other tradables sectors less competitive with imports; recurrent booms and busts in prices of commodities and financial assets; and an increase in rent seeking and loss of entrepreneurship at the expense of productive, wealth-creating activities as easy money flows in. Some scholars also decry “financialization,” or a shift from wealth-creating activities toward more predatory, wealth-extracting activities such as monopolization, too-big-to-fail banking, and the use of tax havens.

Financial flows seeking secrecy or fleeing corporate taxes seem likely to be exactly the kind that exacerbate the finance curse, worsening inequality, increasing vulnerability to crises, and dealing unquantifiable political damage as secrecy-shrouded capital infiltrates Western political systems. And as financial capital flows from poorer countries to rich-world tax havens, labor migration will follow.

As ever, more research is needed here. Yet it seems that for many economies hosting an offshore financial center is a lose-lose proposition: it not only transmits harm outward to other countries, but inward, to the host. Countries that recognize this danger can act unilaterally to rein in their offshore financial centers, simply stepping out of the race to the bottom and curbing tax haven activity while also improving their own citizens’ well-being. This is a powerful, winning formula. SOURCE

Clearcutting B.C. forests contributing more to climate change than fossil fuels: report

 Protective wrap surrounds seedlings newly planted on a clearcut hillside along Highway 14 on the west coast of Vancouver Island in the Western Forest Products Jordan River Managed Forest area. The wrap helps to protect and nurture the seedlings. CP PHOTO/Don Denton

While B.C. aims to drastically cut fossil fuel emissions, a new report from an environmental action group says the province should end an even more dangerous contributor to climate change: clearcutting forests.

The report released last week by Sierra Club BC found 3.6 million hectares of forest were clearcut across B.C. between 2005 and 2017 — an area larger than the size of Vancouver Island.

Those areas are considered “sequestration dead zones” for 13 years after they’re clearcut. That means until newly-planted trees grow and mature, the areas release more carbon into the atmosphere from decomposing matter and soil than those young trees can capture and absorb.

 Conservationists attack NDP government over old-growth logging

After reviewing provincial data, the report found logging in B.C. contributes 42 million tonnes of carbon emissions into the atmosphere.

Add on the 26 million tonnes of carbon per year that cannot be captured because of clearcutting, and those emissions outpace the 65 million tonnes of emissions recorded annually in B.C., mainly from fossil fuels.

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“At a time when we urgently need to be reducing all forms of carbon pollution to defend our communities from the climate crisis, clearcut logging in B.C. is making the problem notably worse,” the study’s author and Sierra Club BC’s senior forest and climate campaigner Jens Wieting said in a statement.

“We can only have a stable climate if we protect intact forests, and we can only sustain intact forests if we stabilize the climate. Both are only possible if we reform forestry and give up clearcutting.”

READ MORE: District of Peachland asking province for pause on watershed clearcutting

According to Sierra Club BC, the province does not include forest carbon emissions in its official greenhouse gas inventories.

That practice should change immediately, the report argues, with the group calling for more government research and monitoring along with an overall end to clearcutting, primarily within old-growth forests.

The report found of the 3.6 million hectares of clearcut forest studied — which amounts to just over nine per cent of B.C.’s total forested land — 1.9 million hectares were old-growth forests.

Those old-growth trees are the best defence against carbon emissions due to their great capacity for capturing the gas. According to the report, B.C.’s old-growth rainforests can store over 1,000 tonnes of carbon per hectare, which is one of the highest rates on the planet.

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 Plan to allow logging of old growth forests draws criticism

“By clearcutting old-growth and older forests, we’re fuelling more global heating,” Wieting said. “We’re putting at risk the future of communities, the forests that remain standing and current and future forestry jobs.”

In his own statement, Nelson city Coun. Rik Logtenberg said local governments’ efforts to reduce carbon emissions will do little to lessen impacts on the climate unless clearcutting comes to an end.

““Clearcutting the forests that surround our communities can have serious impacts on watersheds, dirtying drinking water and putting us at greater risk from flooding, landslides, droughts and wildfire,” said Logtenberg, who also chairs a group of elected leaders known as the Climate Caucus.

“We need provincial leadership to reduce all emissions, including those from forestry, and we need reformed forestry laws to protect and restore forests as a natural defence against climate change.”

READ MORE: B.C. climate plan targets cleaner industry and transportation to hit emission targets

The province’s CleanBC plan, unveiled just over a year ago, aims to reduce greenhouse gas emissions by 40 per cent by 2030, based on 2007 levels.

Legislation was introduced earlier this year that would set interim emissions targets that will help reach that goal.

While the plan includes initiatives to reduce pollution from industry — primarily oil and gas — and pushes towards energy-conserving buildings and electric vehicles, it does not mention the forestry industry or logging practices.

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In a statement, the Ministry of Environment said it does record emissions from forestry operations, but does not apply them to the province’s emissions totals “as is standard carbon accounting practice around the world.”

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 Disturbing finding about destruction of old-growth rainforest in B.C.

 

The Ministry of Forests, Lands, Natural Resource Operations and Rural Development added it introduced the forest carbon initiative in 2017, which includes planting more trees and hauling away residual waste from forest floors.

The initiative, which is jointly funded by the province and the federal government to the tune of $290 million, has led to the replanting of roughly 12 million trees on the coast and in the Cariboo, with an anticipated 70 million more anticipated by 2022.

The ministry also anticipates 55,000 hectares of fertilization along the coast between 2019 and 2022, after seeing 14,000 hectares fertilized over the past 18 months.

READ MORE: B.C. bans logging in sensitive border area after urging from Seattle mayor

In a statement, BC Council of Forest Industries president and CEO Susan Yurkovich didn’t dispute the Sierra Club’s science, but pointed to its track record in “sustainable forest management.”

“Each year, we harvest less than one per cent of the working forest land base and three trees are planted for every one harvested,” she said. “We have more forested areas certified to internationally recognized sustainability standards than any other jurisdiction in the world.”

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Yurkovich went on to say buildings and products created with forested materials also store carbon dioxide, helping reduce greenhouse gas emissions.  SOURCE

To replace gas taxes, Oregon and Utah ask EVs to pay for road use

Gas taxes pay for the upkeep of our roads, but electric cars don’t use gasoline.

The end of 2019 saw a bunch of headlines proclaiming that it was a huge year for the electric vehicle. Yet more declare that actually, 2020 will be the year the EV really takes off. It’s true there are now more EVs; plug-in hybrid ones, battery ones, and even hydrogen fuel cell EVs in a range of shapes, sizes, and prices, and five of them made it into my list of the 10 best things I drove last year. When the numbers for 2019’s plug-in EV sales are complete, we expect more EVs to have been sold in 2019 than any year before, even if total new car sales in the US have dropped.

Still, let’s not get ahead of ourselves; EVs might be outselling manual transmissions by nearly 2:1, but they still account for little more than a rounding error in the context of ~17 million new car and truck sales. If that has you depressed, take heart that the trend for EV sales is moving in the right direction. And it’s a trend that is starting to worry some of the states. That’s because the US has traditionally paid for the upkeep of its roads via direct taxation of gasoline and diesel fuel, which means that as our fleet becomes more fuel-efficient, that revenue will drop in relation to the total number of vehicle miles traveled each year.

Utah tries something new

As a result, some states are starting to grapple with the problem of how to get drivers to pay for the roads they use in cars that use less or even no gas per mile. At the start of this year, Utah has begun a pilot Road Usage Charge program, coupled to an increase in registration fees for alternative fuel vehicles. Assuming a state gas tax of 30c/gallon and 15,542 miles/year driven, Utah says it collects $777 a year from a 6mpg heavy truck, $311 from a pickup getting 15mpg, $187 from a 25mpg sedan, $93 from a 50mpg hybrid, and nothing from anyone driving a battery EV.

So in 2020, Utah is increasing vehicle registration fees. In 2019, registering a BEV in Utah would cost $60; in 2020 that will be $90, increasing to $120 in 2021. PHEV fees were $26 in 2019, increasing to $39 this year and $52 in 2021, and not-plug-in hybrid fees have gone from $10 to $15, increasing to $20 next year. An extra $30 a year—or even $60 a year—is pretty small in the grand scheme of things, particularly considering how much cheaper an EV is to run.

But Utahns with EVs have an alternative. Instead of paying that flat fee, they can enroll in the pilot program that involves fitting a telematics device to the car that tracks the actual number of miles driven on Utah’s roads, or use an API from Smartcar to report mileage that does not require adding hardware. These are billed at a rate of 1.5c/mile, but only until the total equals whatever that year’s registration fee for the vehicle would have been; participating in the pilot means you could pay less than you would otherwise, but Utah’s Department of Transportation says that participants would not ever be charged more than that year’s registration fee. The data will be collected by a contractor called Emovis, which operates toll roads around the US. MORE

‘Fair deal’ panel town hall fails to stoke support for Wexit

The visit of Premier Jason Kenney’s “fair deal” panel to Fort Saskatchewan, an industrial oil town just northeast of Edmonton, may have been intended to be a separatist open-mike night when it was added as a stop on the travel itinerary by the UCP’s brain trust.

Whatever they expected when they ginned up their maximum-pressure campaign on the federal Liberals, though, that’s not what they got yesterday evening when about 100 souls braved temperatures creeping close to minus 30 to go to the town’s recreation centre and offer their two cents about Alberta’s role in Confederation.

Some of the folks who showed up, of course, may have just wanted to get a peek at Preston Manning, the godfather of the Canadian right and the panel’s most prominent member. Alas for the curious, Manning took a powder, as he did the night before in Fort McMurray too.

But despite the panel’s baked-in assumption that Alberta’s getting a raw deal from the rest of Canada and its apparent effort to lead witnesses to the conclusions the government wants, plenty of people got up on their hind legs, proclaimed their love of Canada and advised the panel members they thought the province needs to start trying to work with our fellow citizens instead of just yelling at them.

“We need policies that build bridges, not walls,” as one speaker put it.

That thought even seemed to have occurred to a number of speakers at the two-hour, town-hall style meeting who said they felt Alberta isn’t getting a fair deal but were pretty sure making threats and throwing tantrums wasn’t going to make things better.

That isn’t what I was expecting when I drove to Fort Saskatchewan, and nor was the surprising number of town-hall participants who advised the panel the time has come for Alberta to join the grownups of Confederation and adopt a sales tax like every other jurisdiction in the country.

“The ‘Alberta Advantage’ may be a luxury we can no longer afford,” said one man before calling for implementation of a sales tax.

But if any message came through with crystal clarity for MLA panel members Tany Yao, Miranda Rosin and Drew Barnes to take back to their UCP caucus-mates, it was this: “Leave our pension funds alone.”

Or, more to the point, as several speakers put it, keep your hands off our Canada Pension Plan! And (one also said) we don’t trust the Alberta Investment Management Corporation either.

Well, you’ve got to love an Edmonton crowd, where progressivism runs deep even in a small-town on the periphery where the demographics lean hard toward grey hair and pale skin.

But panel staff indicated the idea that Kenney should keep his paws off the CPP comes up everywhere. So keep that in mind when you read the panel’s final report in March. If it suggests otherwise, that should set off your instinctive baloney detector.

Another thing that must come up a lot is the depredations of the UCP budget. Otherwise, why would panel chair Oryssia Lennie, a former senior civil servant, warn participants: “This is not the time to talk about the budget”?

“If you wish to speak about matters pertaining to the budget,” she advised the crowd, “please contact your MLA.”

More than one speaker pleaded for the environment. One reminded her neighbours that separation would mean you’ll need a passport to go to Kelowna. A couple of municipal politicians scored the UCP for trying to keep them from taking federal money without getting provincial permission — talk about adding red tape! And one young man astonished everyone with his passionate plea to decriminalize sex work. (Just think of all the tax revenue, he observed.)

And, yes, there was a little hard-core group of Wexiters who applauded each other’s remarks noisily and asserted, for example, that “the climate change agenda scam is being used to push socialism, which inevitably turns to communism.” Or, “the most ardent federalists seem to be taking talking points out of a union manual.”

One such fellow even advised telling the rest of Canada: “It’s a nice country you have here. Too bad if something happened to it. By the way, we’re bringing the pension back.” (You really can’t make this stuff up!)

But of the 27 folks who registered to speak — one guy previously observed by your blogger assisting George Clark of #Kudatah fame at another event spoke twice — I counted 16 who defended Canada as it is, 10 who thought constitutional reform is needed (about half of whom had drunk the Wexit Kool-Aid), and the sex-work guy.

Every defence of the CPP got a round of spontaneous applause.

The UCP grievance campaign, as one man summarized it, is just so 2003. “Albertans do not want to leave the country, they don’t want their own pension plan, and they don’t want to lose the RCMP,” he said. “We’re in the best country in the world and it shouldn’t be messed with!”

Jason Kenney, take note!

Like Manning, panel member Jason Goodstriker was also missing. The session was attended, though, by the remaining members of the panel, Stephen Lougheed, Donna Kennedy-Glans and Moin Yahya.

SOURCE

Why Women Are Particularly Vulnerable To Climate Change

Drought in Uttar Pradesh, India – Prabhat Kumar Verma/ZUMA  

BOGOTÁ — Is there a relation between women and the environment? Is it necessary to view environmental policies through female eyes? Is there is a difference in the male and female relationship to the matter? The response to all these is a definite “yes.”

Around the world, women are the most interactive with natural resources, especially in rural communities in the global South. In such areas, women produce between 60% and 80% of foodstuffs, according to figures from the World Food Program.

Within historically defined roles, rural women are also those tasked with supplying their households and communities with water. In Colombia, in a department like La Guajira in the north, this is the day-to-day life of a woman or girl in a Wayú community. The most common situation is finding a well or waterhole at one or two-hours walking distance from the settlement, though in some cases they might have to trek as much as four hours — each way!

In other words, they can spend a full working day just to fetch water, which in any case is almost never potable. Needless to say, that leaves no time for study, or for engaging in activities to earn a personal income.

 Women will bear the biggest brunt. 

Again, given the gender roles that exist in such rural communities, all of this will affect women and children in particular.

A related issue is the fact that in most rural areas, women are also responsible for preparing the food. And to cook, they use biomass fuel — firewood mostly. This may initially seem harmless and I know from visits to local communities that the sancocho soup prepared on firewood provides a most eagerly awaited family occasion. But constant contact with wood smoke can have dire consequences for health, including a very high probability of contracting respiratory illnesses when smoke is inhaled close up.

Biomass fuels likewise emit greenhouse gases like CO2 and carbon monoxide, which fuel climate change. Rural women are key subjects, therefore, in the transition to new energies in lower-income countries.

Separately, women tend to suffer the most from both natural calamities and armed conflict. More women die than men in such events due to both direct and indirect causes. Paradoxically, it is not the disaster itself that kills women but structural gender roles — such as having to care for children, the elderly and the sick — that make them more vulnerable. MORE

 

Kenya Installs the First Solar Plant That Transforms Ocean Water Into Drinking Water

The Earth is a watery place. In fact, 71 percent of our planet is covered in water [1]. Despite this, one in nine people do not have access to safe drinking water – that’s around 785 million people [2].

The trouble is, 96.5 percent of all Earth’s water is found in the oceans in the form of saline water, and is not drinkable for humans. That only leaves us with rivers, lakes, and groundwater to satisfy our water needs [1].

According to the World Economic Forum, the global water crisis ranks as the number four risk in terms of impact on society [3]. Let’s face it – humans need water to survive.

If you’re reading this from Canada or the United States, you may not understand this crisis on a personal level. After all, you can turn on a tap and have safe drinking water instantly start flowing from the faucet. This, however, is not the case for billions of people living on other continents. One NGO (Non-Government Organization) is trying to change that.

GivePower

Give Power’s mission is to install solar energy technologies that will bring essential services to developing communities in need [4]. Their most recent break-through project installed a solar-powered desalination system to bring clean, healthy water to the people in Kiunga, a rural village in Kenya [4].

With this technology, the salty ocean water will now be a viable source of water for the people living in this village. The system is capable of producing about 70 thousand litres or drinkable water every day, which is enough for up to 35 thousand people [4].

The Global Water Crisis

This ground-breaking new process could not come any sooner. The 785 million people mentioned earlier is just beginning. According to the World Health Organization, around 2.2 billion people worldwide do not have access to safely-managed water services, 4.2 billion people do not have safely managed sanitation services, and three-thousand-million lack basic facilities for washing hands [9].  MORE