Energy & Climate Change

Index:

Open Letter to Federal Government (here)

Votors need to make the right choice for environment (here)

Getting Serious About Global Warming and Climate Change (here)

What is Renewable Energy? (here)

What are your Emissions? (here)

The Resource Curse: The Alberta Context (here)


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An open letter to Prime Minister Justin Trudeau from 200 conservation,
environmental and social justice groups with hundreds of thousands of

supporters in Canada on the opening of the 44th Parliament

From the letter:

... We must put in place stronger actions to cut greenhouse emissions. And we
must deliver a comprehensive plan — with timelines and targets — to halt and

reverse nature loss by 2030 and bring nature to full recovery by 2050.

Your platform commitments to establish new protected areas, reverse nature
loss, support Indigenous-led conservation, and restore and enhance wetlands,

grasslands and peatlands offer a strong foundation, and resonate across the

platforms of other major parties. To be effective and meaningful, implementation

of these commitments needs to advance climate action, biodiversity conservation,

Indigenous rights and social and racial equity. ...

For more information, click ... here.


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Published in The Lethbridge Herald 
25 August 2021

Voters need to make the right choice for environment,

The first international effort to understand the impact of releasing massive amounts of carbon dioxide and methane into the atmosphere from the burning of oil, gas and coal was published in 1990. Over thirty years later, the Intergovernmental Panel on Climate Change continues to publish the synthesis of climate research based on the efforts of thousands of scientists worldwide[1]. The latest report continues to tell the same message as previous ones, only with much greater clarity. It’s not looking good. We are in the midst of a climate emergency with an ever-diminishing amount of time to respond meaningfully.

What does a climate catastrophe look like? If you haven’t heard, it is quite grim - even for wealthier nations accustomed to simply buying what they need. The recent IPCC report says that CO2 levels are higher than they’ve been since before the emergence of hominids 2 million years ago. These greenhouse gases trap a lot of energy in the lower atmosphere. Energy is heat. Climate is shifting northward bringing with it a higher number of extreme-hot days. Hot air carries more moisture which can cause more extreme rain events, and more frequent and prolonged droughts. Weather extremes reduce food production, as witnessed across the prairies this summer. Secure food production is fundamental for maintaining a stable society.

The extra heat energy will continue to melt snowpack and glaciers, affecting natural river flows and threatening reliable water sources for irrigation, intensive livestock operations, and industry. Coniferous forests are already stressed and replanted clear-cuts will fail to thrive in this warming climate. Dry forests burn, adding even more greenhouse gases to the atmosphere. Diminished forests hold less water for instream flow needs and late-season human uses. Plants and animals that cannot shift with the climate to which they have adapted will go extinct[2]. New disease and pest vectors will thrive, introducing further challenges to ecosystems on which we rely[3].

There is more: diminishing arctic ice, disrupted ocean currents, rising sea levels, greater storm surges and inundation of coastal cities and farmland, ocean acidification, and a massive loss of fecund coral reefs. The IPCC report is rich in details of the interrelations and impacts of climate disruption within our ecosystems - it is science. Said more directly, it is warming almost everywhere, it is warming rapidly, it is going to get worse before it gets better, and it will only get better if we reach ‘net zero’ carbon emissions as soon as possible.

To achieve this with some modicum of international fairness is a daunting task. The scientists are not sugar-coating the risks of our continued indifference to greenhouse gas emissions. As one scientist has said[4]: “There is nowhere to run, nowhere to hide.” And, ultimately, we are all in this together (except, maybe, for a few billionaires hiding out in their prepper-villas in New Zealand[5]). A fundamental shift of this magnitude will require global cooperation and abundant financing. But there are individual acts that have a collective impact, too. Waste less food, buy durable goods you really need, reuse and recycle, turn down the thermostat, plant a tree.

The best thing you can do in the near future that could make a difference: vote for a decision-maker willing to act. Join SAGE this fall in asking what our municipal and federal leaders will do for our collective future and a stable climate.

SAGE is a leading voice for a healthy and sustainable community.

[1] https://www.ipcc.ch/report/sixth-assessment-report-cycle/

[2] https://www.worldwildlife.org/press-releases/half-of-plant-and-animal-species-at-risk-from-climate-change-in-world-s-most-important-natural-places
https://www.pnas.org/content/117/8/4211

[3] https://www.nature.com/articles/nature.2013.13644

[4] https://www.ctvnews.ca/climate-and-environment/un-climate-crisis-report-warns-there-s-nowhere-to-run-nowhere-to-hide-1.5539596

[5] https://www.theguardian.com/news/2018/feb/15/why-silicon-valley-billionaires-are-prepping-for-the-apocalypse-in-new-zealand

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Published in The Lethbridge Herald
04 June 2021

Getting Serious About Global Warming and Climate Change

The Canadian Net-Zero Emissions Accountability Act (Bill C-12) recently passed second reading in parliament. Though the science of climate change has been well established since the 1980s, and the first consensus report from the Intergovernmental Panel on Climate Change (IPCC) was published in 1990, there has been little achieved globally to meet the necessary zero-net-emissions of greenhouse gases by 2050. This is also reflective of the Canadian response, as we have neglected to meet any emission targets these past three decades. We are speaking here of a ritual of failure.

What does ‘net-zero’ really mean? To use a house as an example, ‘net-zero’ would mean that your home would generate as much energy as it uses (for heating and electricity). To accomplish this in a home, you would first try to minimize wasted energy (turn off those lights, and turn down the thermostat when you are not at home). You might then invest in improved efficiencies, like better windows, insulation, and high-efficiency furnaces and water heaters. To achieve net-zero, you would then invest in solar panels (or buy ‘green’ electricity) to provide the remaining energy consumed in the home.

Net-zero for a whole country is manifestly more complicated. A national framework would work roughly like the home – reduction, achieve efficiencies, and shift to renewable energies. But it gets more complicated when carbon offsets like sequestration and Clean Development Mechanisms (CDMs) are introduced. Carbon offsets allow companies or whole sectors of the economy to pay other companies to reduce emissions or sequester carbon in the soil or underground.

On a personal level, for example, one might decide to fly to Europe on vacation. Your share of the flight would produce 0.11 kg CO2(eq) for each kilometer. A round trip from Calgary to London (14,000 km) would produce about 1500 kg CO2(eq). Through a carbon credit process, you would now pay a company who has permanently removed (sequestered) that amount of carbon from the atmosphere, or a company that has purchased a more efficient technology that has prevented carbon emissions to the atmosphere. The result is a net-zero emission of greenhouse gases.

On a larger scale, whole industries that find it difficult to reduce their carbon emissions may pay other industries for sequestering carbon, or implementing technologies to reduce carbon emissions.

As an example of carbon sequestration, a farmer might be credited with carbon offsets for agricultural techniques that keep more carbon in the soil. The farmer could then sell these credits to a company that produces emissions – the sequestration in one area balances the emissions in another (the result is ‘net-zero’). Other schemes might include tree planting (biosequestration) or technologies that remove carbon from a smokestack or directly from the atmosphere. In general, carbon sequestration allows for some continued use of fossil fuels, as long as the equivalent amount of carbon is removed from the atmosphere.

Similarly, Clean Development Mechanisms (CDMs) allow a Canadian company to pay for the emission reduction on behalf of another company (anywhere in the world), with Canada getting credit for the reduction. It might benefit the emerging economy by lowering pollution, and it would be less expensive for the Canadian company compared to other available options. This extra complexity, however, requires more bureaucracy to validate and account for carbon offsets, and it allows for wealthy nations to continue business-as-usual emissions and meet targets by simply buying it – a carbon indulgence.

Obstacles and concerns around carbon offsets include ‘additionality’ (assessing if the carbon offset scheme is something that otherwise would not have been done) and ‘permanency’ (to be sure what is taken out of the atmosphere remains out). There is a concern about ‘carbon leakage’ where a country off-shores polluting industries to less developed countries, which doesn’t really reduce global emissions, but makes one country appear to be making gains at the expense of another. From the perspective of international trade, if one country has more opportunities for carbon offsets (or if they are not aligned with global emission reduction targets), they may have an unfair competitive advantage. This would require complex negotiations and possibly confrontational tariffs. Some sectors of the economy will have more difficulty reducing emissions than others, affecting profitability and future investment decisions, and possibly creating shortages in important industrial or building supplies. The costs of reducing carbon emissions may also fall more heavily on developing nations or the poor within developed countries, allowing unequal advantages to those who can afford to pay for carbon offsets.  In a word: Complicated.

Bill C-12 is an aspirational effort to set an accountability framework and targets to reduce greenhouse-gas emissions. The legislation proposes that the federal Minister set five-year targets beginning in 2030 to achieve net-zero by 2050. The Minister is expected to meet international commitments with an emission reduction plan based on the best scientific information available. If it sounds loosey-goosey, it is. The Climate Accountability Act is short on details, but obliges Canada to plan a framework for climate action. It is a first step. And it is an important first step.

It is an important enough first step that Bill C-12 requires non-partisan support and thoughtful improvement before the Third Reading in parliament. And it will need effective plans to be developed over the following six months to achieve targets while transitioning good jobs to a future economy. As we have learned by ignoring this issue for three decades, the longer we wait that harder it will be. As Ecojustice has said: “Net-zero by 2050 will ensure Canada’s fair share contribution to keeping global temperature rise below 1.5 C.”

The representative for Lethbridge, Rachael Harder may want to hear from her constituents on this topic before Third Reading of Bill C-12. SAGE has been a leading voice for a healthy and environmentally sustainable community since 1984.

Bill C-12: An Act respecting transparency and accountability in Canada’s efforts to achieve net-zero greenhouse gas emissions by the year 2050

Climate Action Network
High-level recommendations for Bill C-12, the Net-Zero Emissions Accountability Act

EcoJustice
A strong climate law for Canada – Answers to your questions about Bill C-12

Carbon offsets:

Can you really negate your carbon emissions? Carbon offsets, explained.

Carbon offsets: Worth buying to fight Climate Change?

What are carbon offsets?

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What is Renewable Energy?

The challenge is to reduce the enormous amount of fossil energy we use and replace it with cleaner energy. Pollution has an enormous impact on human health and the integrity of natural systems, so less of it is better for everyone. Renewable energy technologies convert energy from inexhaustible sources into electricity. The energy source in the case of solar panels (photovoltaics) is the sun, whereas the energy source for wind turbines is the velocity and mass of the wind. Conventional energy sources include fossil fuels like coal, oil and natural gas. Nuclear fuel is also non-renewable.

Renewable energy technologies require fossil energy to manufacture (as 90% of world energy consumption is currently derived from fossil fuels and renewable energy technologies are not yet made from renewable energy – though this is the long-term goal). The process of manufacturing renewable energy technologies result in various forms of pollution including those from steel production, concrete production, plastics production, and electronics production. This is no different, however, than the pollution from manufacturing conventional energy technologies which require similar materials (steel, concrete, plastics, and electronics), but includes pollution from their fuel sources like oil and natural gas refining and coal production.

Another very important concern that might relate more to renewable energy technologies is the land-use where they are sited. Installing solar panels or wind turbines on grasslands has the potential of disrupting natural ecosystems. It is better to use brownfield sites (land that has already been used for industrial activities), or in the case of solar, built environments like rooftops and parking lots, for the installation of renewable technologies.

It is clear that reducing energy consumption is always the best choice to reduce pollution.

The main reason for installing commercial-scale renewable energy technologies is to reduce pollution compared to conventional fossil-fuel technologies. To do this, the renewable technology must generate more energy when compared to the energy consumed in their manufacture (and to install and maintain). Every 1 unit of fossil energy invested up-front in the renewable energy technology permits more units of energy to be delivered from the sun or the wind.

The more technical term for this is EROEI: Energy Returned over Energy Invested. A technology must have an EROEI greater than 1. If it is less than 1, that means you have used more energy making the technology than you will generate in the life-cycle of the technology. A contemporary example of this is fusion, which currently uses more energy than it generates.

Here are some examples of EROEI:

In the case of solar, the energy it takes to manufacture a square meter of panel is 1150 kWh. A kWh, or ‘kilowatt-hour’, is the same unit of energy in which you purchase your electricity. In Lethbridge, a square meter of solar panel will produce about 225 kWh of electricity each year. If the solar panel lasts its expected lifespan of 25 years, it will produce 5 times more energy than it took to manufacture it. That is an EROIE of 5.

Similarly, the energy it takes to manufacture a common 2-megawatt wind turbine is almost 2.8 million kWh. The wind turbine will produce about 3.5 million kWh each year for an expected lifespan of 20 years. Generally, a wind turbine will produce 25 times more energy than it took to manufacture it, for an EROEI of 25.

The EROEI is a useful way of evaluating the energy balance for technologies or even fossil energy sources. For example, it currently takes 1 unit of fossil energy to produce 20 units of fossil energy in conventional oil production. Unconventional oil production, like bitumen production which requires large volumes of steam generated from natural gas, has an EROEI typically lower than 4. This is a main reason why bitumen receives a much lower price per barrel on the market.

What is Renewable Energy?

Today, it is a process of making fossil fuels more productive. Take one unit of energy from a fossil fuel, use it to make a renewable energy technology, and generate 5 to 25 times more energy over time. Because you are increasing the efficiency of the original unit of fossil fuel, you are creating smaller amounts of pollution per kWh of electricity produced.

To expand on this concept, one unit of fossil fuel can be burned to make steam to generate electricity (at an efficiency of about 35% for coal, and as much as 50% for natural gas). This same fuel might be burned to make a renewable energy technology which, in turn, will generate energy over time. The same amount of fossil-fuel is burned in both cases, creating the same amount of pollution. The renewable energy technology will, however, produce many more times the amount of energy over time, so the pollution is, in essence, diluted. Less pollution per energy produced is the result. The following example shows how the emissions per kWh of electricity is reduced over time, compared to the fossil technologies that currently comprise the Alberta electricity system.




The caveat!   

Renewable energy technologies have to be installed in locations that maximize sun or wind exposure, and all of the electricity generated must be used. To take the example of solar panels, if the panel is installed in a location that is shaded part of the day, it will not produce at its maximum potential. This means that the pollution created up-front is not going to be diluted as much over time. It is an important concept, as it is possible to make more pollution than conventional sources using poorly located renewable technologies. Maximizing the potential also requires a well-designed and operated electricity system (grid) that will receive electricity when it is generated and provide electricity when it is needed. If the electricity using renewable technologies is produced when it is not required, it is wasted. The electricity grid must become a shock absorber for intermittent generation from renewable technologies.


Global societies have recognized the undesirable side effects of fossil fuels (coal, gas and oil). First, the reduction of energy use is the most effective means of reducing pollution. Second is using the energy more efficiently: replacing fossil fuel electricity generation with renewable energy technologies improves efficiency and reduces pollution. It will take a monumental effort to assign our remaining fossil-fuel allowance to manufacture and install renewable energy technologies in an effort to vastly reduce fossil-fuel consumption in the future. And there will be significant challenges in designing and operating an electricity grid based on intermittent sources: a combination electricity storage and managing electricity demand by industry and households will be required. It is likely that natural gas generation will be required in Alberta as a back-up when demand exceeds generation.

In summary, when one wonders what renewable energy is today, think of it as improving efficiency (making more energy from each unit of fossil fuel energy), and think of it as a means of reducing pollution.

We live in a full world: renewable energy technologies are an existing way to do better and begin to reduce our environmental impact. 

 

GreenHouse Gas Fact Sheet
PDF FORMAT

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What are your emissions?

We hear in the media a lot of talk about greenhouse gas (GHG) emissions, but few of us know how we contribute or how to calculate them for our own lives. And since it was probably this New Year’s Resolution to learn, cut this out of The Lethbridge Herald and attached it to the fridge door!

Now, dig out your solar powered calculator and your utility bills (or phone your provider) and follow along:

Home heating (natural gas):
Add up the GJs on your bill and multiply this number by 0.056 for your tonnes of GHGs.

For example, for a house that uses 120 GJ of natural gas over a year:
120 x 0.056 = 6.7 tonnes of GHGs.

Note:  The average home in Alberta uses roughly 120 GJ of natural gas. This also includes the energy required to heat domestic hot water (DHW) and for your natural gas barbeque or gas range, if you have one. The amount of natural gas you purchase reflects the amount of energy your home loses to the environment (mainly in the winter). This depends completely on the temperature of your home, the temperature outside, and how well insulated your home is.

Reduction:  The best way of reducing your natural gas consumption is to lower your thermostat, particularly when you are not in the home. A home will heat up quickly when you return and turn up the thermostat, or you may install a programmable thermostat if your coming and going is more predictable. You may also keep your home cooler and wear a sweater and slippers, put a heavier blanket on the bed, or heat only the rooms you are using (closing the vents a little in the rooms you are not typically spending time in).

Myth: that cooling and re-heating a home takes more energy than the amount of energy saved. This is simply not true, though homes made of concrete or other high heat capacity materials may take longer to heat back up.

Electricity:

Add up the kWh for the year and multiply this total by 0.000688 for your tonnes of GHGs.

For example, for a house in Alberta that uses 7200 kWh of electricity over a year:
7200 x 0.000688 = 10.2 tonnes of GHGs.

Note: the emissions from electricity depends on what technology-mix is used to generate the electricity to begin with. Alberta is roughly 50% coal-generated, with 40% being generated from natural gas, with thermal efficiencies ranging from 30% for some coal plants to 50% for some natural gas plants.

Reduction: Electricity consumption in a typical home is dominated by the refrigerator and the freezer. Not running additional refrigerators or freezers in the home is an easy approach to reducing electricity consumption. Allowing the home to heat up a bit in the summer before running an air conditioner is a good way to save energy and, of course, turning off lights and devices when not in use can help. Remote-controlled devices should be put on a switch that can be shut off – some research has indicated that as much as 10% of a home’s electricity consumption is what is called ‘phantom load’ – the energy used to keep televisions and stereos ready to switch on with the remote control [i].

Driving (gasoline):


Multiply your gas mileage by the number of kilometers you drove in the past year and multiply by 0.0024 for your tonnes of GHGs.

For example, for a car that uses 12.1 litres per 100 kilometers driving 15,600 km last year:
12.1 x 15,600 / 100 = 1890 liters purchased. So, 1890 litres x 0.0024 = 4.5 tonnes.

For a return trip from Lethbridge to Calgary: 12.1 litres per 100 kilometers driving 450 km:
12.1 x 450 / 100 = 55 liters purchased. So, 55 litres x 0.0024 = 0.13 tonnes
Did you need to make this trip? Could you have planned to travel with other people going the same way?

Reduction: Cars range widely in performance, so a better performing car can reduce your emissions substantially (and the cost at the pump). If you don’t need a large vehicle or truck, consider a smaller vehicle for around town. Planning car trips to include a number of chores, rather than going out multiple times is an easy way to reduce mileage. And keeping your car well maintained, including tire pressure, can help improve your vehicle performance. And, maybe, once in a while, try walking or biking instead of driving. Lethbridge has extensive plans to improve bicycle and pedestrian trails in the city.

For individual emissions, you can divide these numbers by the number of people living in the home or travelling in the car.

Food is tricky, but important:
Assuming you eat about 2600 calories a day, and according to Canadian statistics we waste about 40% from farm to fork.

(Interestingly, 20% of this is lost in our homes – for more information go to wasteless.ca).
Our food is responsible for about 2.5 tonnes per person for a Canada Food Guide diet.
This may be lower if you eat less meat or waste less food.

Note: Food is tricky because it depends a lot on how much you waste, where your food comes from, how it was grown, how it was transported and stored, and what your diet is comprised of [ii].  Generic data on the fossil energy embodied in our food can be useful, but it takes some context to know what is best for you at your location.

Now, what about your flying holiday?


Google the flying distance between your home and your destination. Let’s say Lethbridge to Madrid, which is a 15,700 km return flight. Multiply this total by 0.000111 for your individual GHG emissions. In this example, 15,700 x 0.000111 = 1.7 tonnes.

Emissions for other popular destinations (return) using Air Miles Calculator:

Lethbridge to Puerto Vallarta: 6600 km = 0.7 tonnes

Lethbridge to Toronto: 5200 km = 0.6 tonnes

Lethbridge to New York: 6300 km = 0.7 tonnes

Lethbridge to Hong Kong: 21,600 km = 2.4 tonnes

Lethbridge to Sydney, Australia: 26,400 km = 3.0 tonnes

Adding it all up, with two people in the home, the personal GHG emission is just about 15 tonnes per year.


This number would actually be a little low, as it does not include the emissions in the production and transportation of all of our consumer items.

The published number for Canadians is 16.7 tonnes per year which includes everything inside and outside our homes. By comparison, the United States is 15.7 tonnes per person; China is 7.7 tonnes; European Union is 7.0 tonnes; and India is 1.8 tonnes.

It is important to consider both individual emissions and the sort of emissions that come from countries. In general terms, individual emissions reflect the level of affluence, which can be controlled. But it also reflects things that are less controllable like the climate you live in, and the way the urban environment was designed, including long driving distances between home, work and play.

A country’s emissions become more important as governments dictate the incentives and disincentives to reducing emissions, and the type of economies developed (high energy products, resource dependent exports, agricultural exports, manufactured goods for home consumption or export, and so on).

If Alberta was a country, our per capita emissions would be 66 tonnes per person (amongst the highest in the world, next to Qatar), even though our personal emissions might be more along the national average of 12 to 16 tonnes per person [iii].

The difference between Canadian provinces is mainly related to the energy source for electricity, and the type of industries supported by each province.

To reduce our collective emissions, it is important to take personal initiative (the power of numbers) and to encourage governments to provide the best direction with appropriate incentives to the economy and meaningful indicators of economic effectiveness (one that indicates the most benefits to the most people).

[i]  Phantom Load (or, Vampires in Your Home)
[ii]  Food's Carbon FootPrint
[iii] Govt of Canada, Greenhouse Gas Emissions

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The Resource Curse: The Alberta Context

The discovery of Leduc 1 in 1947 set off a period of rapid oil & gas development in Alberta, attracting workers, investment and creating massive wealth in the province.

Production of conventional light oil increased steadily until the early 1970s, when production peaked.  After conventional light oil peaked, conventional heavy oil was exploited and peaked in turn in the early 21st century.  Heavy oil requires more investment in recovery, transportation and refining.  During roughly the same period, massive investments were made in northern Alberta to extract bitumen from sand.  Bitumen requires a diluent for transporting by pipeline and requires much more processing to be made into a usable product.





[Source: Canada Energy Regulator, http://www.cer-rec.gc.ca/nrg/sttstc/crdlndptrlmprdct/rprt/tghtdvlpmntwcsb2011/tghtdvlpmntwcsb2011-eng.html]

In the past 10 or 15 years, advances in technologies like hydraulic fracturing (‘fracking’) have allowed for the extraction of oil & gas from tight sands and shales.  These formations require more well stimulation and the wells typically have shorter useful lives than conventional oil and gas. This is because the oil or gas liberated by fracking flows quickly to the well and then it is done, requiring additional fracking or a new well.




[Source:  https://www.cer-rec.gc.ca/nrg/ntgrtd/ftr/2017cnvntnll/index-eng.html]


Each stage of the development of oil in Alberta has required more technology, more investment, and more energy for each barrel produced. It has also resulted in more changes in land-use, more use of fresh water, more abandoned or orphaned wells as a public liability, more air pollution, and more greenhouse gas emissions.

These are indicators of the ‘resource curse’.




[Source: www.anielski.com/alberta-continues-to-have-a-revenue-problem/]

The Paradox of Plenty:

The ‘paradox of plenty’[1] (or the ‘resource curse’) has been observed in regions that have an abundance of a non-renewable resource. The argument is that resource-rich regions are more likely to experience low economic growth in the long-term. The International Monetary Fund considers a region ‘resource-rich’ when 20% of the fiscal revenue is derived from non-renewable resources.[2]

The cycle goes like this: A resource is discovered and the demand for this resource is established. This draws private investment from early entrants into the industry. As the industry expands and the return on investments remains lucrative, available financial capital is directed to increase the extraction, refining and transportation of the non-renewable resource. Governments invest in infrastructure that benefits the dynamic industry. Both public and private investments are made at the expense of other potentially profitable industries seeking capital.

In plain words, the eggs are placed in a single basket.

Overlooking alternative investments is called an ‘opportunity cost’[3] in economics, and represents the difference between the forgone investment and the chosen investment in the long term. When there is an extremely active and profitable economic sector in the short-term, opportunity costs can be high. Money flows to one industry for short-term rewards, which will cost the economy in the long term.

This is where the curse comes in. At some point in the resource cycle the return on investment begins to decline. This may be because the easily-extracted resources are diminished, and the resources that are more difficult to access or refine are needed to fill the gap. The government that relies on a single resource industry for revenue and for employing the productive capacity of its workers responds by supporting the struggling and influential industry in the form of increasing direct investment in industry-focused infrastructure, tax incentives, support for research & development, and reductions in royalty expectations. This is usually an honest attempt to sustain the industry (already vulnerable to boom/bust cycles in commodity markets), hoping that it will recover in the short term or within the next election cycle.

The ‘resource curse’ suggests that there will be a time when this recovery is weak, or simply non-existent. Nonetheless, out of desperation, even more money will be invested to prop up the industry – money that will never be recovered in revenues.

It becomes what Herman Daly, former senior economist for the World Bank, calls ‘uneconomic’[4]. Uneconomic growth considers the costs to society from externalities – those expenses that are not borne by the industry, but have real costs to society. Externalities might include liabilities like orphaned oil & gas wells, mining tailing ponds, contaminated soil and water from industrial effluents, biodiversity loss, and the accumulation of greenhouse gases in the atmosphere.

Since most of the available money has flowed to a single industry at the expense of other industries, the resource-rich region has not adequately diversified and it is unprepared for the loss in revenues and employment opportunities. It is not uncommon that the failing industries leave behind a legacy of obsolete infrastructure and environmental damage that become public liabilities. In many countries where this cycle has been observed, the results have included instability in democratic institutions and the rise of populism and demagoguery, a drastic reduction in public services, an increase in human desperation and a dissatisfaction in political leadership as manifested in corruption, violence, crime, scapegoating, and human rights violations.

The Paradox of Plenty is a cautionary tale. Indicators might include rising liabilities (like orphan wells and mining tailing ponds), increased public investments in infrastructure for the once-lucrative industry (often accompanied by declining private investment), lower transparency in government finances, and less civil and open public discussion. Good government leadership can mitigate many of the worst effects – by encouraging economic diversification, by adopting a long-term view in decision-making, by not relying on royalty revenues for core public services, or by saving revenues from this non-renewable inheritance for future needs.

It takes courage and foresight to recognize a faltering or uneconomic industry, and it takes wise leadership that seeks thoughtful input to avoid the worst consequences of the ‘paradox of plenty’.

[1] An interesting in-depth analysis of oil may be found in Terry Karl Lynn’s 1997 book titled “A Paradox of Plenty: Oil Booms and Petro-States.
[2] https://www.imf.org/external/np/pp/eng/2012/082412.pdf
[3] https://www.investopedia.com/terms/o/opportunitycost.asp
[4] http://www.steadystate.org/wp-content/uploads/Daly_SciAmerican_FullWorldEconomics(1).pdf