Canadian Plastics

Another risk from global warming

Global warming is all the rage these days. You can't pick up a newspaper or watch TV without seeing references to the impact of CO2 on climate change and the need to do something about it. I don't kno...

April 1, 2007   By Jim Anderton



Global warming is all the rage these days. You can’t pick up a newspaper or watch TV without seeing references to the impact of CO2 on climate change and the need to do something about it. I don’t know how serious the threat of global warming is. If we are to believe the experts, however, we have to do something right now or face serious economic and environmental consequences.

My opinion is that all risk is the product of an action’s consequences and the likelihood of it happening. The consequence of me spilling my coffee isn’t that bad, but the likelihood is high, so it’s not worth worrying about it. Similarly, the consequence of an Air Canada flight I’m on crashing is catastrophic, but the chances of it happening are low, so again I don’t worry. In terms of climate change, the consequences look pretty high, as does the likelihood of it happening, so we’d better do something about it.

Where does this fit into our industry? Mainly in the way the Canadian economy reduces CO2 emissions. A flat carbon tax may reduce fossil fuel use, but at a cost of economic growth and employment, especially if developing economies like India and China don’t play ball.

An emission trading system makes the most economic sense, since it gives polluters incentive to get clean. But the bottom line is that already-clean industries like ours need electricity — lots of it — and we need it at reasonable prices. And with whatever fossil fuel we burn, we’ll create CO2, because there’s currently no way to remove it from the combustion processes. Natural gas and coal aren’t going to work as future fuels for electricity generation if we need to curb greenhouse gases. That leaves nuclear and so-called “green” technologies like wind, wave, geothermal and small hydro.

Nuclear has been a technical success but a market failure (did a reactor ever start up on time or on budget?) and the renewables simply can’t generate enough to meet our needs at an affordable price, at least not yet.

So, what do we do?

For our industry, the first thing is to watch our backs. We will be branded as polluters and energy wasters despite the reality of the business. The resin producers will feel the pressure first, but from a CO2 tonnage perspective, I’ll bet that a ton of polyethylene measured cradle to grave can be produced with far lower emissions than a ton of steel. Unfortunately, politics plays a role here. A “cap and trade” system will essentially hand a cheque to inefficient, dirty industries that can find a new profit centre by selling their emission credits. Industries like ours, which are already highly efficient, may be forced to buy those credits if we can’t reduce our levels further.

We may be looking at a de facto subsidy to the metal industries at our expense. Plastics are the environmental choice, but we’re going to have to drive that point home, especially in Ottawa.


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