Focus on Latin America: Colombia’s rejected peace and the Pink Tide in trouble

Political Eh-conomy Radio returns with a new logo, new life and a new episode focused on Latin America. First up: Aaron Tauss, assistant professor of International Political Economy at the Universidad National in Medellin, Colombia. I spoke with Aaron to better understand the devastating and unexpected “No” vote in Colombia’s referendum on a peace deal that would have ended 50 years of civil war. His analysis is deeply rooted in the broader economic forces shaping contemporary Colombia.

Second, I speak with Kyla Sankey, a researcher from the UK who wrote a terrific article for Jacobin on the state of the Pink Tide of left governments that swept Latin America in the early 2000s. Kyla looks at the present problems and future prospects of a Pink Tide limping along as the right has returned to power in Argentina and Brazil, while Venezuela remains mired in political and economic crisis.

focus-on-lat-am

Read More

Why Alberta shouldn’t look to Norway, and why that’s a reason to Leap

One of the clearest memories I have from my only trip to Norway is the repeated failures at hitching a ride. What appeared to be an unbroken string of brand new Audi’s and BMW’s whizzed by my friend and I, dirty and sweaty after a few days hiking and camping in the mountains. “Where am I that the comforts of our rich assholes are the rights of common citizens?”, I remember thinking.

You’ve probably seen at least one article saying that Alberta should be more like Norway. I don’t want to rehash that debate. But I think we’ve gone about it the wrong way and seeing why can tell us a lot about today’s sparring over the Leap Manifesto.

Comparing Alberta unfavourably to Norway for squandering its oil wealth has been a familiar trope of media and progressive organizations, especially since the oil price crash (here’s just the CBCToronto Star and Globe and Mail). The comparison has become so ubiquitous that it has also spawned a cottage industry of counterarguments from the right too. In short, Norway has been putting away the money it gets from oil in a sovereign wealth fund since 1990. The fund is now the world’s largest and worth over $1 trillion. Alberta’s fund, although older and actually the inspiration for Norway’s, is a paltry $15 billion. (Norway and Alberta have similar populations.)

The funny thing, however, is that Norway’s gigantic fund doesn’t pay for much of what the government does. Taxes do that. Take a look at the numbers. Public revenues in Norway at all levels of government are equal to over half of GDP (nearly 55% in 2014). Meanwhile, federal, provincial and local government revenues in Alberta make up somewhere around 30% of provincial GDP. That’s a massive difference. Alberta tax rates are lower: on individuals, on corporations and on consumption. In addition, the Norwegian government not only owns a majority share in its largest oil company, Statoil, but also taxes oil profits at a much higher rate. A special tax on “excess profits” takes the top marginal corporate rate on oil corporations to 78%. (more…)

Read More

Where is Quebec going after the strikes, where is Canada’s economy going after the oil crash?

I have two Canadian updates this week. The first is from Nora Loreto on what’s happening in Quebec after the fall’s anti-austerity strikes. Nora is a Quebec City-based journalist and labour activist. She gives an account not only of what happened during the strikes in Quebec, but also what to expect in their wake (see the previous podcast, from just before this strike wave, here). Second, Armine Yalnizyan, economist at the Canadian Centre for Policy Alternatives, is back with an analysis of Canada’s economy after the oil price crash.

151106_199bo_club-mont-royal-syndiques_sn635

Read More

COP21, climate inaction and corporate power

This week marks the beginning of the COP21 climate talks in Paris, the latest episode in a UN framework that has been trying, and failing, to reduce global carbon emission for over two decades now. For my first interview, I caught up with Oscar Reyes, Barcelona-based climate policy researcher, to get an overview of what to expect from the talks. Oscar works with the Institute for Policy Studies and has also been affiliated with the Transnational Institute; he has a long history of excellent critical writing and activism on climate issues.

In the second part of the episode, I speak with Shannon Daub, Communications Director for the CCPA British Columbia office. Shannon discusses the CCPA’s important new project that will trace the fossil fuel industry’s networks of money and influence across Canada, particularly the Western provinces. Climate inaction and corporate power: a key duo to examine on the eve of another summit that looks to tinker at the edges of a very dangerous status quo.

profit drown

Read More

Climate and competitiveness in the tar sands

Anytime the oil barons and baronesses are smiling for the cameras with NGOs and politicians, we should at least be interested, if not outright worried. Was the release of Alberta’s new climate change strategy just an occasion for the oil execs to ham it up for the cameras pretending all is well or do they have truly something to be smiling about?

Now, because I don’t want to constantly feel like the asshole at a party—complaining about children ingrates at a baby shower, enumerating an ex-husband or wife’s flaws at a wedding, laughing at a funeral—here’s an important positive: Alberta plans to use half of the money raised by its new broad carbon tax for “just transition” policies. A large chunk of the money will go towards supporting now-more-expensive heating, fuel and other consumption for poor and working families, while some will go towards retraining and other opportunities for those who lose their jobs. Just introducing the phrase “just transition”, which appears in the climate document four times, into the mainstream is a success.

I want to, however, focus on another phrase, much more dominant in the report: “competitiveness”. The report worries about the competitiveness of the tar sands with more stringent climate policies. Oddly enough, in a world of low oil prices, Alberta’s oil industry is already relatively uncompetitive. The biggest recent competing source of “unconventional” oil, fracked oil from US shale formations largely concentrated in North Dakota, has seen huge efficiency gains and falling break-even prices. This means that it is profitable to extract oil there at ever-lower global oil prices. In short, the tar sands are today having hard time keeping up with the pace of innovation elsewhere. Today, the lowest-cost producers of US shale oil can produce profitably at lower oil prices than producers in Alberta’s tar sands.

(more…)

Read More

Linda McQuaig is right, but there’s more to it

Since her common-sense quip that most of Canada’s tar sands reserves will have to stay in the ground, Linda McQuaig has been vilified by much of the political establishment and (rightfully) defended by a minority of voices in the media. That the facts of climate science vindicate her has made little difference to the debate. Is this because McQuaig’s comments have inadvertently scratched at a nerve that goes far deeper?

In what would be a world very different from our own, we can imagine a fairly straight line going something like this

Climate science → Climate regulations → Fiscal policy → Just transition

First, climate scientists tell us that 85% of tar sands reserves (given how high-cost they are) will most likely have to be left in the ground if globally we are to limit warming to two degrees. In response, the Canadian federal and provincial governments slowly stop subsidizing oil development, stop funding oil-related infrastructure and prepare for industry phase out (by for example, increasing royalties as extraction nears a limit). Next comes a big push for developing green projects, whether funded through direct spending or incentives. As the oil jobs and industries wither, new green jobs, new green industries and compensating income transfers take their place. Voila: just transition level unlocked!

Have a laugh first, then ask, where is the major stumbling block between this make-believe world and our own? For now politicians are acting and being berated for differing at the first step: brushing off the problem and effectively denying the climate science. Yet beyond Petroleum Correctness is a set of increasingly onerous political and economic constraints. (more…)

Read More

Austerity and economy in Quebec

Many in English Canada recognize the CCPA, but relatively few know of IRIS. Tucked away in an old Montreal school that has been repurposed as a home for a wide array of social enterprises and NGOs, IRIS, or the Insitut de recherché et d’informations socio-economiques, has now been producing important progressive research in French for 15 years. Sadly little known outside Quebec, IRIS and its researchers have explored everything from widening inequality to resource extraction to the damage that austerity has done to Quebec’s historically more robust welfare state.

This week, I sat down with Julia Posca and Eve-Lyne Couturier, two IRIS researchers. Our conversation spans everything from the austerity agenda in Quebec to the response from the province’s social movements to the renewed push towards resource extraction in the North. Julia and Eve-Lyne provide image of Quebec that has its particularities but is also coming to terms with many of the same issues facing the rest of Canada.

As always, you can subscribe to the podcast on iTunes.

IMG_20150525_160633-2

Read More

Calling the business bluff in Alberta

The votes had barely been counted in Alberta when stories purporting to herald capital flight, particularly from the oil sands, were already appearing in venues like the Financial Post. As if on cue, the TSX fell 2%,the day after the Alberta election. What are we to make of this? Is Notley’s Alberta in the position of Rae’s Ontario 25 years ago, already being undermined?

An assessment of the NDP’s victory in Alberta grounded in reality has to account for the fact that the place of the oil industry in the province is, for the moment, being left largely unchallenged. This is no value judgment: support for the industry is the default position of most Albertans, not just elites. Given the economic importance of the oil industry and relative lack of economic diversification combined with the absence of a mass movement pushing against oil extraction and dependency, this should not be surprising.

The Alberta NDP’s program seeks to redistribute the gains from a resource economy largely left untouched. This general tendency is moderated by commitments to greater consultation with First Nations and an end to active lobbying for the Keystone XL and Northern Gateway pipelines. The latter, however, is a practical decision based on the small likelihood of these being built. All the while, for example, oil by rail continues to gather pace. The flip side of greater spending on social welfare are policies to recapture more of the proceeds of the oil boom while leaving its fundamentals intact: moderate tax increases and a planned royalty review.

For now, it seems the warnings of capital flight are thus a first salvo with a blank round. The dire words from parts of the business press and business elites are mostly bluster. Many business figures are actually taking a conciliatory tone; even the infamous “five CEOs” have taken it back. Fear-mongering is mixed with courting favour. (more…)

Read More

A review of Naomi Klein’s This Changes Everything

I have another piece up at Ricochet: a review of Naomi Klein’s big book on climate change, This Changes Everything. It’s friendly but critical, looking at what the book’s themes of austerity, the local and extractivism mean for how we build politics against climate change. I’ve included it in full below…

Naomi Klein’s big book on climate change, This Changes Everything, is at once an extensive catalogue of climate change failures and a passionate defence of budding shoots of resistance. Much more than just an up-to-date account of where we are and how we got here, it is also a meditation on how to move forward — one that needs to be critically examined.

image

(more…)

Read More

Let’s not be too quick to cheer for the market as oil prices slump

Another title for this piece could be oil prices and politics. The last few weeks have been full of worries about the fate of Canada’s oil sector. Global oil prices are falling, pipelines are stalled and a few prominent tar sands investments have been canceled. All of these stories have been accompanied by cheering from the barricades representing those who want to Canada ween itself off its high-carbon fossil fuel industry as quickly as possible.

I, too, won’t be shedding any tears for the tar sands but it is good to keep things in perspective. Questioning the market for allocation of investment towards more fossil fuel development and more climate change, the lesson of the week is not to cheer too quickly for the market’s changing fortunes. Here’s a few charts that provide some of that perspective. (more…)

Read More