Mayor Jensen's flip-flop
By David Broadland, July/August 2014
Let’s apply the climate-change lens to a comparative cost-benefit analysis of sewage treatment options.
Environment Minister Mary Polak’s refusal to invoke an untested provision of the Environmental Management Act may have saved Capital Region taxpayers the additional cost—on top of the $65 million the CRD has already spent—of a long and costly court battle with no certain outcome. In a May 27 letter Polak told the CRD, “Even if the Province were willing to intervene, the facts at this time do not provide a strong basis for intervention using the provisions of the Environmental Management Act.”
What seems clear now is that a completely new plan for sewage treatment in the core municipalities needs to be developed. Where will it come from?
We might look to Oak Bay Mayor Nils Jensen for direction on this. At a sewage committee meeting back in December 2012, Jensen asked his fellow CRD directors to pause and do “a full environmental study that will assess the comparative environmental impact of the current process and proposed process for disposing of liquid waste before the CRD plans are finalized.” Jensen also said, “The motion does not seek to abandon the idea of treatment, nor does it seek to overly delay the project.” His motion to do such a study was defeated, but among those directors who supported him was Esquimalt Mayor Barb Desjardins. In support of Jensen’s call for a comparative study, Desjardins said, “We should be using climate change as one of the overall lenses” through which projects like this are considered.
Now Desjardins has forced the process to pause, and, surprisingly, Jensen has become one of the most vocal proponents for getting on with a treatment plan for which no comparative environmental cost-benefit analysis has been done. Doing anything other than a central plant at McLoughlin Point, Jensen now says, could endanger funding agreements with senior governments, creating the potential for an “astounding hit” to taxpayers. Had he been successful back in December 2012, where might that have led?
If Jensen had been successful, we might now have the information that the CRD’s scheme for McLoughlin Point would produce no net environmental benefit, and that it was simply an obedient, least-cost response to orders from senior governments: one trying to placate the government of Washington state so as to obtain its support in Vancouver’s bid for the 2010 Olympics, the other wrongly classifying Victoria’s sewage effluent as being high risk when the scientific evidence indicated a low risk.
Jensen may have flip-flopped, but his original idea, if extended, could create needed community consensus on how to treat sewage and where to put that treatment.
If Jensen had been successful, we would have seen an assessment of the current practice compared to McLoughlin’s secondary treatment. But for many of us, that wouldn’t have gone far enough. Desjardins’ idea—and she’s supported in this by Saanich Councillor Vic Derman—is that whatever sewage treatment plan is developed, it should be a robust response to the threat of climate change. There’s strong support in the community for examining that approach. Jensen’s idea of a comparative environmental assessment ought to include that option, too.
Fortunately, substantial work was done on this concept back in 2008 in a Provincial study on integrated resource management called Resources from Waste. Given that Colwood, Langford, View Royal, Esquimalt and even Victoria are now considering distributed treatment plants—which in aggregate are likely to have a much higher capital cost than the McLoughlin scheme—the work done in the 2008 IRM study, and the peer reviews done afterward, ought not be ignored.
Why? Let me take you through an admittedly superficial comparative cost-benefit analysis that considers just one climate-change lens: the greenhouse gas emissions associated with capital costs for three different courses of action. Then I’ll compare those with the emission reductions each course of action could provide.
The financial resources that will be used to develop and build sewage treatment facilities in Victoria will come from taxes on economic activity across Canada. That economic activity is inextricably linked with the national production of greenhouse gas emissions, and the relationship between the two can be quantified. In 2013, for every million dollars of economic activity in Canada, 416 tonnes of CO2 were emitted. It doesn’t matter whether you are a school teacher in Saanich or a truck driver in Fort McMurray—you both rely on the burning of fossil fuels, and your relative reliance is in direct proportion to how much money you take out of the Canadian economic pot. So when you hand over some of your income in the form of taxes to governments so they can fund public infrastructure, there is an emissions burden attached.
Using that figure of 416 tonnes of CO2 per million dollars of economic activity, the emissions burden associated with the CRD’s $840-million secondary treatment scheme at McLoughlin Point works out to roughly 350,000 tonnes.
Compare that, as Mayor Jensen wanted to in 2012, with the emissions associated with the economic activity of doing nothing. Doing nothing would save 350,000 tonnes of emissions. With an average car creating 4.5 tonnes per year, doing nothing would be like taking 78,000 average cars off the road for one year compared to the emissions burden attached to the McLoughlin scheme.
Let’s look at a (more costly) distributed model. What is the emissions burden associated with the capital costs of the 32-plant treatment scheme presented in that 2008 IRM study? It focussed on recovering resources—energy, water and minerals—rather than treating sewage. Its approach was capital intensive because plants needed to be located close to the sources of sewage and to potential users of the energy recovered. What would the emissions burden on the capital cost of that plan be?
The authors of the study gave a range of possible capital costs. Let’s start with their most pessimistic figure, $976 million. In the peer reviews of the study, the most critical review suggested the authors may have underestimated capital costs by 60 percent. Let’s be conservative and make that adjustment to the study’s most pessimistic cost estimate. That yields a capital cost of $1.6 billion. The emissions burden associated with that capital cost is 670,000 tonnes. Compared with doing nothing, that’s like putting 149,000 average cars on the road for one year.
In terms of the climate-change lens, though, just comparing the emissions burden of these three capital cost scenarios isn’t going far enough. That’s because the do-nothing scenario can’t do anything to reduce emissions. What about the other two scenarios?
According to Seaterra Chair Brenda Eaton, “By recovering resources from our wastewater the Resource Recovery Centre will reduce greenhouse gas emissions by 6000 tonnes per year when in operation. That’s the equivalent of taking 1200 cars off the road each year.” But compare that with the emissions burden associated with that project’s capital costs: 350,000 tonnes. It would take 58 years of operation of the Resource Recovery Centre to “pay back” the initial emissions burden attached to the capital cost of the McLoughlin-Hartland scheme.
Now here’s where peering through Desjardins’ climate-change lens is illuminating: The IRM study authors’ most pessimistic estimate of emission reductions associated with their potentially $1.6-billion scheme was 367,500 tonnes per year. In other words, after two years of operation, the initial emissions burden associated with the capital cost would be paid back in emission reductions. IRM would do this by extracting the maximum possible thermal and chemical energy in sewage, and use that energy to reduce burning of fossils fuels in the CRD. The study also estimated the resale value of recovered resources—energy, water and minerals—at between $60-$436 million per year. Now that’s astounding.
Eventually, an appropriate price will be put on carbon emissions. We all know that’s coming, even if we don’t want to pay for it. A recent report by economist Lord Nicholas Stern and co-author Simon Dietz found the cost of climate change has been badly underestimated globally and suggested the price of carbon should range from US $32-$103 per tonne of CO2 by 2015 and rise to between $82-$260 per tonne of CO2 by 2035.
If it’s possible to reduce emissions by 367,500 tonnes a year with IRM, the economic value of that carbon reduction alone could soon range between $12-$38 million per year. Using Stern’s figures for 2035, that range could be $30-$95 million.
One of the peer reviewers of the IRM study was Dr Charles McNeill, who was then with the UN’s Environment and Energy Group in New York. McNeill wrote, “I realize this is rightfully an initial feasibility study, but to summarize my view, after reviewing numerous studies of similar approaches from different countries, I conclude that this IRM plan is conceptually sound and on the right track, and if implemented it would likely provide a model of great value to countless municipalities throughout the world.”
Think of the economic value of being seen in that light, globally.
Jensen’s and some other CRD director’s biggest fear about not proceeding with the McLoughlin scheme—right now—is that $500 million in funding from senior governments will be lost. Desjardins and many other citizens fear we will lose much more than that by not looking beyond the superficial level of capital costs and funding deadlines.
Mayor Jensen, please flip back to your previous good idea and let’s take a harder look at all the options before proceeding.
David Broadland is the publisher of Focus Magazine.