An Appealing Concept: Exercising Your Right to Participate Can Make a Difference

14ar cover thumbIn Ontario, we are fortunate to have some unique opportunities to participate in environmental decision making by the provincial government. Thanks to the Environmental Bill of Rights (EBR), which celebrates its 20th anniversary this year, the public receives notice of government proposals that could have a significant effect on the environment, and has a right to comment on them – before the government makes a decision.

But your rights don’t always end when a decision is made. For certain government decisions to authorize (or refuse to authorize) activities that affect the environment – by issuing “instruments” such as licences, permits and approvals – there are several ways the public can continue to be heard:

  • By seeking leave (permission) under the EBR to appeal (challenge) a decision to issue particular types of instruments, such as certain permits to take water or environmental compliance approvals;
  • By directly appealing a decision to issue a Renewable Energy Approval under the Environmental Protection Act or certain decisions made under the Planning Act; and
  • By participating in an appeal initiated by someone else, including the instrument-holder themselves.

Exercising your right to participate in any of these ways can make a difference! Here’s just one example that I highlighted in my Annual Report this year:

In October 2012, Nestlé Canada Inc. filed an appeal of the Ministry of the Environment’s decision to impose certain conditions in a Permit to Take Water. The permit at issue allowed Nestlé to continue to take water from a well near Erin; the company had been drawing water from the well since 1988 and bottling it for commercial sale at a different location. In April 2012, Nestlé applied for a new permit to replace a previous version that would expire in August 2012.

Compared to the previous permits issued for this well, the 2012 permit allowed Nestlé to take more water per minute and per day between April and September, as long as a total monthly cap was not exceeded. Nestlé had requested this condition to allow it greater flexibility in its operations. The permit imposed another condition, which further restricted the maximum daily water taking during drought conditions; this restriction was the subject of the appeal.

Following the filing of the appeal, two non-profit non-government organizations (NGOs), Wellington Water Watchers and the Council of Canadians, applied for and were granted party status in the appeal, meaning they were entitled to make their own submissions on any potential changes to the permit.

Subsequently, Nestlé and the ministry reached an agreement that would loosen the drought restrictions and see the company withdraw its appeal; they submitted this settlement agreement to the Environmental Review Tribunal for approval, as required. The NGOs objected to the terms of the agreement, however, arguing that loosening the drought-related restrictions would not be in the public interest. At a preliminary hearing in October 2013, the Tribunal agreed with the NGOs and refused to approve the proposed settlement, instead ordering a full hearing (click here to read the Tribunal’s decision). A month later, Nestlé filed notice that it wished to withdraw its appeal; none of the other parties objected and the Tribunal accepted the withdrawal and dismissed the appeal without changing any of the conditions of the permit.

I believe that this case demonstrates the importance of public involvement in appeal processes. Without the NGO’s submissions it seems unlikely the Tribunal would have rejected the original settlement agreement, since there would have been no one to raise issues relating to the public interest. As a result of their involvement, the Tribunal was asked to carefully consider these aspects, which ultimately led to a stronger, more protective permit.

For information about other appeals and leave to appeal applications, I would encourage you to read more in the ECO’s 2013/2014 Annual Report.

You can find more information about how to exercise your rights under the EBR in Ontario’s Environmental Bill of Rights and You: A guide to exercising your right to participate in environmental decision making in Ontario.



Environmental Commissioner Boosts Energy Literacy

Toronto, 15 Oct 2014 – Ontario’s Environmental Commissioner today released Smart from Sunrise To Sunset, to alert the public and decision makers to the ability of the Smart Grid to change how they think about electricity.

Find out more … 

A look at the science on neonicotinoids

14ar cover thumbIn the ECO’s latest Annual Report, we examined the environmental effects of neonicotinoids – a class of pesticides used throughout Ontario. New research on neonicotinoids is being published at an astounding rate, demonstrating an overwhelming level of concern within the scientific community. While much of this research initially focused on the effects of neonicotinoids on pollinators, serious issues are being raised surrounding the broader ecological implications of neonicotinoid use.

The use of neonicotinoids has increased significantly since their introduction in the 1990s. They are now the most widely used insecticides in the world. Neonicotinoids act systemically, meaning that they diffuse throughout the tissues and sap of treated plants, and are found in pollen, nectar and guttation droplets (i.e., small drops of liquid exuded by some plants). They are most commonly used as seed treatments, but they can be applied in other ways, such as foliar sprays and soil additions. Pollinators are primarily exposed to neonicotinoids through nectar and pollen and, notably, through contaminated dust generated during the planting of treated seeds.

Exposure to neonicotinoids has been linked to both lethal and sublethal effects on pollinators. There is now clear evidence that acute exposure to neonicotinoid-contaminated dust is linked to mass bee deaths observed during the planting of seed treated crops. In fact, Canada’s Pest Management Regulatory Agency (PMRA)’s investigation into the 2012 and 2013 bee kills in Canada concluded that neonicotinoids were a contributing factor in many cases. Accordingly, in 2013, the PMRA declared that “current agricultural practices related to the use of neonicotinoid treated corn and soybean seed are not sustainable.” (.pdf)

Furthermore, a number of studies have concluded that neonicotinoids can also cause adverse sublethal effects on bees, such as:

Even with lower concentrations, cumulative and/or synergistic effects may cause impaired colony function or even failure. For example, one recent study concluded that chronic sublethal stress can be a cause of honey bee colony failure, noting that if many bees in a colony become impaired, it may lead to a cumulative effect on normal colony function.

In recent years, substantial declines in honey bee populations have been observed, notably in North America and Europe. This decline includes colony losses in Ontario: over the last eight years, the average overwintering loss of bee colonies in Ontario has been approximately 34 per cent – more than double the 15 per cent winter loss rate that is considered to be acceptable by apiculturists. In fact, last winter, Ontario lost 58 per cent of its honey bee colonies. In addition to these overwintering losses, a number of other large-scale bee deaths have been reported in Canada. In the spring and summer of 2012 and 2013, the PMRA received numerous reports of honey bee mortalities (.pdf) from beekeepers in Ontario, Quebec and Manitoba. The resulting Health Canada report concluded that the planting of corn seeds treated with neonicotinoids contributed to the majority of the bee mortalities that occurred in the corn growing regions of Ontario and Quebec.

Signs are emerging that many wild pollinators, particularly bumble bees, are in decline as well. For example, the Committee on the Status of Pollinators in North America has stated that long-term population trends are demonstrably downward for several wild bee species, as well as for some butterflies, bats and hummingbirds.

Although the impact of neonicotinoids on bees has received a great deal of attention, honey bee declines may be a visible warning sign of a larger ecological problem.  Troubling questions are being raised about the broader environmental effects. Only a small portion of the active substance is taken up (.pdf) by plants in seed-treated crops, while the rest enters the environment. This is of great concern because neonicotinoids are not only persistent in soil and water, but are also water soluble and highly mobile within ecosystems.

As a result, neonicotinoids can accumulate in soil, potentially having adverse effects on soil ecosystems (.pdf) and creating a likelihood of uptake by subsequently planted crops and wild plants. They also have the potential to migrate into ground and surface water. Runoff and spray drift can impact aquatic invertebrates in streams and ponds. For example, in one study conducted in California, imidacloprid was detected in 89 per cent  of surface water samples – with 19 per cent of samples exceeding toxicity guidelines. Another recent study in the Netherlands demonstrated that aquatic macro-invertebrates are less abundant in surface water with higher imidacloprid concentrations, suggesting potential consequences for the food chain and ecosystem functions.

Neonicotinoids may also be posing serious risks to birds and mammals. For example, a July 2014 study found that declines in insectivorous birds are associated with high neonicotinoid concentrations. The researchers state that their “results suggest that the impact of neonicotinoids on the natural environment is even more substantial than has recently been reported and is reminiscent of the effects of persistent insecticides in the past.” Questions are also being raised regarding the potential human health effects of neonicotinoids.

In June 2014, the Task Force on Systemic Pesticides released the most comprehensive review of the effects of neonicotinoids to date. The Worldwide Integrated Assessment of the Impact of Systemic Pesticides on Biodiversity and Ecosystems examined over 800 scientific studies spanning the last five years, including studies sponsored by industry. Among the study’s main conclusions is that “The combination of prophylactic use, persistence, mobility, systemic properties and chronic toxicity is predicted to result in substantial impacts on biodiversity and ecosystem functioning.”

As a result of this rapidly evolving body of research, the ECO recommended that the Ministry of Agriculture and Food and the Ministry of the Environment undertake monitoring to determine the prevalence and effects of neonicotinoids in soil, waterways and wild plants. The Ontario government needs to develop an effective action plan on neonicotinoids. We cannot ignore the problem and accept the risk of an ecological catastrophe.

2013/14 Annual Report: Managing New Challenges

Today the ECO released his 2013/14 Annual Report: Managing New Challenges.
14ar cover thumb
Topics covered include:

  • Bees and Neonicotinoids
  • Sustainable Farming
  • Logging in Algonquin Park
  • Ministry of the Environment’s Enforcement of Pollution Rules
  • Paying the Full Costs of Drinking Water
  • Chemical Valley Pollution (MOE failing the Aamjiwnaang First Nation – Sarnia area)



Download the report

Download a summary 

Watch the press conference (recorded)

Find out more …

ECO to release 2013-2014 Annual Report

WHEN: Tuesday, October 7th, 2014 at 10:00 a.m.

WHERE: Queen’s Park Media Studio, Legislative Building, Queen’s Park, Toronto, Ontario

The report, entitled Managing New Challenges, will include substantive reviews of ministry decisions, ministry responses to applications for review and investigation, and other environmental issues.  Some topics covered include:

  • Bees and Neonicotinoids
  • Sustainable Farming
  • Logging in Algonquin Park
  • Ministry of the Environment’s Enforcement of Pollution Rules
  • Paying the Full Costs of Drinking Water
  • Chemical Valley Pollution (MOE failing the Aamjiwnaang First Nation – Sarnia area)

More information …

Aussi disponible en français.

The Ring of Fire: The Story So Far

Ring of Fire - Figure 1

(Click map to enlarge)

Most Ontarians have heard of the Ring of Fire, but few have ever been there. This is probably because the Ring of Fire is more than 500 kilometres northeast of Thunder Bay – and there are no railways or all-season roads that go to the region. This remote, crescent-shaped area has significant mineral deposits of chromite, nickel, copper, zinc, gold and other minerals that are estimated to be worth $60 billion. Over 20 companies have mining claims in the region, covering more than 2,000 square kilometres. This massive development potential and economic opportunity has made the Ring of Fire the most pressing planning issue in the Far North.

The Ring of Fire is just a small part of Ontario’s Far North region, which makes up 42 per cent of the province. The Far North is one of the world’s largest intact ecosystems, an area of international ecological significance and a stronghold for biodiversity, including at-risk species like woodland caribou, wolverine and polar bear. Its peatlands are important carbon stores, and its forests are part of the largest block of boreal forest still free from large-scale human disturbance. The Far North also holds the traditional territories of 38 First Nations communities. In 2007, the ECO highlighted the need for a strong, ecologically sound, landscape-level planning system for the Far North.

This October marks the fourth anniversary of the Far North Act, 2010. This Act was designed as the foundation for land use planning across the Far North and sets out a joint process between First Nations and the Ontario government. One of the Act’s key objectives is “the maintenance of biological diversity, ecological processes and ecological functions, including the storage and sequestration of carbon in the Far North.” In 2011, the ECO commended the government for working with First Nations to plan the orderly development and protection of northern Ontario; however, we also warned that government needed to gather important ecological information and collaborate with First Nations for the planning process to succeed.

So far, planning progress has not kept pace with the push for development. For example, the Far North Act, 2010 requires a community-based land use plan to be in place before a mine can be opened in a given area. However, many of these land use plans are years away from completion. This means that projects already in the approval process will likely be opened under an exemption order made by Cabinet – effectively circumventing the planning process under the Act.  Other recent issues in the Ring of Fire include the use of mining claims to establish transportation corridors and the illegal construction of mining-related projects.

There is serious concern about the potential environmental effects of development in the Ring of Fire, including habitat fragmentation, water and soil pollution, and wildlife disturbance. The Ontario government is currently taking a piecemeal approach to assessing and approving individual projects in the region – rather than taking a more strategic regional approach that accounts for potential cumulative effects. In 2013, the ECO recommended that the Ministry of the Environment and Climate Change, the Ministry of Natural Resources and Forestry, and the Ministry of Northern Development and Mines make a statutory commitment to long-term environmental monitoring for the Far North, including the Ring of Fire. We also recommended that these ministries establish a strategic environmental review and permitting process for the Ring of Fire.

This past March, the Ontario government signed a regional framework agreement with Matawa-member First Nations to develop the Ring of Fire. The Ontario government also recently committed up to $1 billion for infrastructure development, and in August, established the Ring of Fire Infrastructure Development Corporation. The development corporation is intended to bring different stakeholders together and to facilitate investment decisions for transportation infrastructure.

The Ontario government has made it clear that expediting development in the Ring of Fire is one its top priorities. Unfortunately, there is no indication that any efforts are underway to address the pressing environmental issues that must be dealt with to responsibly allow this development to proceed – and to ensure that it does not occur at the expense of the Far North’s globally significant ecosystem or its many First Nation communities.

Fracking for Shale Gas Brings Wastewater Questions

If you follow environmental issues, or watched the 2012 Hollywood movie Promised Land, then you’ve probably heard of fracking.  This term usually refers to a combination of two different technologies to extract natural gas from shale rock. (The technologies are horizontal drilling and high-volume horizontal multi-stage hydraulic fracturing; here’s a useful video.  It took many years to develop this technique and you can read more about its history here (.pdf).)

Even though there are benefits from accessing more natural gas, some fear this technique contaminates groundwater or contributes to global warming. These issues are hotly debated – for a variety of different perspectives, see here, here, and here.

Regardless of one’s view of fracking for shale gas, there is one indisputable dilemma: what should we do with the wastewater it generates?

Traditional conventional wells are relatively shallow, vertical, and designed to target easily accessible pockets of gas trapped underground. Wastewater from these wells is usually deposited into deep underground formations.

In contrast, shale gas wells are deeper and use horizontal drilling to create long L-shaped wells that target natural gas trapped within tiny pore spaces of rock. Shale gas extraction can take place in areas without underground storage (.pdf), meaning industry must transport wastewater away from the well to other sites, manage it through reuse programs, or send the waste to a suitable treatment facility.

Of course, moving large volumes of this wastewater and injecting it underground may not be ideal for logistical reasons, and also because injection of wastewater into some of these wells has been linked to earthquakes. Wastewater reuse programs, while very common, offer just a temporary solution for long-term management because they work only as long as there is a net demand. So as an area matures and fracking declines, water reuse options likewise decline. Finally, even though treating wastewater is an option, our current wastewater treatment technologies are constrained by economics and overall performance. Industry must ensure the chosen treatment facility is appropriate for a specific wastewater stream, especially since components of flowback and produced water can vary so much by region and contain very-difficult-to-treat contaminants, like radium.

Unfortunately, recent history south of the border provides examples of mismatched treatment technologies for shale gas wastewater. In the early stages of Marcellus development in Pennsylvania, municipal wastewater treatment plants were used to process shale gas wastewater. These plants weren’t designed for this and they released harmful contaminants into the environment; see here and here (.pdf) for more information.  Similarly, there have been cases where brine treatment plants, which were designed to handle wastewater from conventional oil and gas operations, were unsuccessful in treating fracking wastewater.  These facilities were fined for failure to meet regulatory standards.  Other technologies are out there – reverse osmosis or thermal distillation and crystallization – but these are expensive and require a lot of energy to treat the contaminated wastewater.

The search for appropriate wastewater management strategies is likely to increase if opportunities for underground storage or water reuse diminish.  Now is the time to work on these issues in order to avoid an adverse environmental legacy

Ontario does not currently have shale gas wells. Some of our geology is similar to areas producing shale gas, so this topic is considered an emerging issue in this province. Further details are in my 2010/2011 and 2012/2013 annual reports.  Given these issues and the pending prospect of fracking in Ontario, two individuals used the Environmental Bill of Rights to request that the government develop regulations to address the potential adverse effects of fracking, including the management of fracking wastewater. In January 2013, the Ministry of Natural Resources and Forestry and the Ministry of the Environment and Climate Change agreed to undertake a joint review of this issue. I eagerly await the ministries’ response.

More information on hydraulic fracturing for conventional natural gas in Ontario is available in the Ontario Petroleum Institute’s report Safely Harvesting Energy – An Overview of Hydraulic Fracturing in Ontario (.pdf).

The Registry: Remarkable, but Ready for a Refresh

This year marks the 20th anniversary of Ontario’s Environmental Bill of Rights. It has been a good reason to celebrate, and has given me a chance to reflect on the various civic engagement tools built into the EBR.  None has been more successful or widely used than the Environmental Registry.  Let me share what the Ontario government has done right with the Environmental Registry, and also touch on a few areas for improvement.

Ontario’s Environmental Registry is a searchable online database of government proposals and decisions that have the potential to affect the environment.  The Registry casts a wide net.  It shows what the 14 ministries that fall under the jurisdiction of the EBR are working on, giving you a window not merely into the Ministry of the Environment, but also Natural Resources, Transportation, Municipal Affairs and Housing, Northern Development and Mines and so on.  The Registry is your window to engage in informed dialogue on environmental policy.  It lets the public comment before decisions are made, and offers links to background documents. It also shows you the comments that other people have made, and how these comments helped shape ministries’ final decisions.

Ontario’s Environmental Registry was early off the mark with its focus on transparency and civic engagement.  The Registry offered an online database way back when the global social network was still in its infancy.  In fact, Ontario’s Registry was online when Mark Zuckerberg, the founder of Facebook, was just ten years old.

Since 1995, Ontario ministries have used the Environmental Registry to get feedback on over 30,000 proposals.  What’s more, these proposals (and their associated decisions) are mostly still accessible online, making the Registry an archival treasure trove for anyone who follows Ontario environmental policy.  In a typical year, the Registry allows the public to comment on about 80 proposed environmental policies, acts and regulations, many with province-wide implications. On top of that, Ontarians can comment on about 2,400 site-specific permits and approvals a year, the majority of which are issued either by the Ministry of Natural Resources or the Ministry of the Environment.  And Ontarians do take advantage of their right to comment; proposed policies, acts and regulations typically receive dozens or even hundreds of comments. Sometimes a proposal will draw comments from thousands of people; last year, over 10,000 Ontarians used the Registry to comment on proposed changes to the Endangered Species Act, an issue that I addressed in my 2013 Special Report, Laying Siege to the Last Line of Defence.

Ontario is still unique in having its Environmental Bill of Rights.  But many other jurisdictions (including BC, the U.K.,  New Zealand, and Australia) also offer online tools for citizens to engage on the environment.  Some of these tools have features as good as (or even better) than Ontario’s Registry.

The Environmental Registry is not perfect; I have often reported on its shortcomings, (see Part 1.2 of my 2012/2013 Annual Report) and have encouraged the Ministry of the Environment to update this tool and make it more functional and user friendly.

I know the interface of Ontario’s Environmental Registry is a bit clunky and dated. But I encourage you to use it anyway. Here’s why: using the Registry ensures that your comments are part of the permanent public record.  If you comment via the Registry, ministries are obliged under the Environmental Bill of Rights to consider your comments when making a decision.  Your comments help to broaden and deepen society’s ongoing dialogue on important environmental matters. All in all, the Registry remains a powerful tool for public participation in environmental decision making.

I am fond of a quote by Theodore Roosevelt that prefaces my most recent annual report: “The government is us; we are the government, you and I.” The Registry allows you to put that noble principle into everyday action.



Climate Data: For Baselines, Trend Lines and the Bottom Line

data imageToday I want to zero in on the urgent need for made-in-Ontario climate projections. How can we prepare for climate change and make long-term decisions – how high to build a bridge, for example, or where to site a water treatment plant – if we don’t have reliable data and information?

Decisions on infrastructure span far into the future and have major social and economic consequences. Without trustworthy climate projections customized for Ontario’s local scales, we are handicapped, and left in the dark about the vulnerability of our assets.

In Ontario, some municipal governments and other organizations are using current climate data – such as rainfall intensity, duration and frequency curves – as well as projections to inform infrastructure design and other planning decisions. However, adaptation planning in Ontario is still in its infancy.

GHG2014 cover image thumbOntario lacks easily accessible, downscaled climate data and projections to use in preparing for the “new climate normal,” which I described in my 2014 greenhouse gas progress report.

Unlike Ontario, some leading jurisdictions understand the importance of scientifically sound, readily available and understandable information about future climate and weather conditions. They also see the business opportunity.

The United States is becoming a climate data leader, and it’s worth looking at what it’s doing as an example of best practice. The U.S. government is investing millions of dollars into climate data and modelling to ensure that federal agencies can support communities to prepare for climate change. This Climate Data Initiative is bringing together the private and public sectors to develop tools that help communities and companies prepare for climate change. The U.S. government is actively obtaining a variety of commitments from the private sector to support the initiative.

At the same time, President Obama sees the business advantage for American companies to develop new climate data products and services for both domestic and export markets. The uptake of these products and services by American companies will help ensure continued U.S. economic competitiveness in the face of a changing climate. These climate applications will be “made in America,” meaning that American companies such as Microsoft and IBM will be able to export their climate data expertise. To accelerate progress, the White House is convening private and public sector leaders around focused themes, such as food security, to develop and leverage climate data to ensure American resilience and economic competitiveness.

I find the array of accessible U.S. governmental and non-governmental websites dedicated to providing accurate local climate data, projections, maps and tools truly impressive, even at this early stage. The main U.S. government climate data web portal consolidates much of the available information into a one-stop shop. Other American websites are dedicated to providing information about current drought conditions, managing agricultural risks, assessing the cost-effectiveness of low-impact development, tropical storm maps and links to many more tools and data sets. The National Oceanic and Atmospheric Administration’s National Climatic Data Center manages six Regional Climate Centers. Its Regional Integrated Sciences & Assessments team supports public and private end users to understand and deploy climate data. The National Aeronautics and Space Administration provides a variety of climate datasets and images. The U.S. is also investing in creating 3-D maps that will assist in flood risk management and other climate impacts.

By contrast, the Canadian government has no initiative of comparable scale and scope. Ontario has made some modest investments in climate change modelling. One of the modellers funded by the province has a dedicated website for Ontario climate projections. The Toronto and Region Conservation Authority  has created a real-time flood monitoring website. While these initiatives are a good start, there is clearly a large gap between the needs of climate data users (such as companies, insurers, municipalities and other organizations) and what is available. Some of these organizations can afford to hire consultants when faced with a lack of publicly-funded, scientifically-sound and properly interpreted climate data, but many cannot. I believe the provincial government has a responsibility to ensure that consistent, high-quality climate data are widely accessible in a user-friendly format. Our neighbour Quebec has created an organization, called OURANOS, to fulfill this exact function. In Ontario, the Ontario Climate Consortium is attempting to fill this gap, but without significant government financial support.

Accurate and reliable climate information is a prerequisite for adapting to climate change. Provincial stakeholders need this vital climate information to adapt Ontario’s economy and infrastructure to the changes we know are coming. Now is the time for leadership from the provincial government on this important issue.


The Unforgiving Truth About Unburnable Carbon

GHG2014 cover image thumbIn a recent blog highlighting the findings in my 2014 Annual Greenhouse Gas Progress Report, I stressed that the science of climate change is unequivocal: humans are changing the global climate through deforestation and the burning of fossil fuels. Since the rise of the industrial revolution in the mid-1800s, the concentration of carbon dioxide (CO2) in the atmosphere has increased by over 40 per cent – from 280 parts per million (ppm) to 401 ppm today.  This blanket of greenhouse gases traps radiant heat, which has already resulted in a nearly 1°C rise in atmospheric temperatures since pre-industrial times. While 1°C may not seem like a big deal, it is: the global average temperature difference between today and the last ice age 12,000 years ago was only 4°C.

The Need for a Planetary Carbon Diet

In 2009 the global community adopted a goal [.pdf] to limit global warming to 2°C compared to pre-industrial temperatures to avoid “dangerous … interference with the climate system”. We are already about half-way to this threshold. Consequently, the Intergovernmental Panel on Climate Change (IPCC) released calculations regarding a global carbon budget [.pdf] – a carbon diet if you will – that must be adhered to going forward. To have a reasonable chance of staying within a 2°C increase, the IPCC cautions that the global economy only has about 1,000 Gigatonnes (billion tonnes or Gt) of CO2 remaining for future use (see diagram). At the current worldwide rate of CO2 release (36 Gt CO2 /yr), this global budget will be exhausted in about 28 years; sooner if emerging economies like India and China don’t stem their rising carbon appetites.

Carbon budget

The Fossil Fuel Industry Wants to Feed Us More

The situation becomes even bleaker when one realizes the considerable disparity between the budget – what can be emitted while staying within the 2°C threshold – and what the global fossil fuel companies publicize are their proven reserves of fossil fuels. The 2012 World Energy Outlook published by the authoritative and independent International Energy Agency (IEA) estimated that the remaining global reserves of all fossil fuels in the ground (coal, oil and natural gas) would emit 2,900 Gt CO2 if burned.  If the IPCC’s 1,000 Gt CO2 scenario is the diet that the global economy must stick with to avoid ecological catastrophe, then about two-thirds of these fossil reserves must stay in the ground – they are unburnable carbon.

The Economics of Unburnable Carbon

Unburnable carbon raises the spectre of portfolio write-downs and stranded assets for fossil fuel-intensive industries, and raises an important financial risk for the industry‘s investors. Within Canada the S&P/TSX Composite Index is one of the most carbon-intensive stock indices in the world.In 2013, the TSX had over 400 companies listed in the oil and gas sector, representing a market capitalization (i.e., the total value or worth of the 400-plus companies) around $400 to $500 billion.

I stressed in my report that the fossil fuel industry and its investors need to re-examine business risk through this new unburnable carbon lens. Several authoritative international organizations, including the IEA, Carbon Tracker, the United Nations [.pdf] and HSBC [.pdf] are warning investors to focus this lens quickly and act accordingly to avoid another kind of catastrophe – an economic one.