Home grown: 67 years of US and Canadian house size data

Graph of the average size of new single-family homes, Canada and the US, 1950-2017
Average size of new single-family homes, Canada and the US, 1950-2017

I was an impressionable young boy back in 1971 when my parents were considering building a new home.  I remember discussions about house size.  1,200 square feet was normal back then.  1,600 square feet, the size of the house they eventually built, was considered extravagant—especially in rural Saskatchewan.  And only doctors and lawyers built houses as large as 2,000 square feet.

So much has changed.

New homes in Canada and the US are big and getting bigger.  The average size of a newly constructed single-family detached home is now 2,600 square feet in the US and probably 2,200 in Canada.  The average size of a new house in the US has doubled since 1960.  Though data is sparse for Canada, it appears that the average size of a new house has doubled since the 1970s.

We like our personal space.  A lot.  Indeed, space per person has been growing even faster then house size.  Because as our houses have been growing, our families have been shrinking, and this means that per-capita space has increased dramatically.  The graph below, from shrinkthatfootprint.com, shows that, along with Australia, Canadians and Americans enjoy the greatest per-capita floorspace in the world.  The average Canadian or American each has double the residential space of the average UK, Spanish, or Italian resident.

Those of us fortunate enough to have houses are living in the biggest houses in the world and the biggest in history.  And our houses continue to get bigger.  This is bad for the environment, and our finances.

Big houses require more energy and materials to construct.  Big houses hold more furniture and stuff—they are integral parts of high-consumption lifestyles.  Big houses contribute to lower population densities and, thus, more sprawl and driving.  And, all things being equal, big houses require more energy to heat and cool.  In Canada and the US we are compounding our errors: making our houses bigger, and making them energy-inefficient.  A 2,600 square foot home with leading edge ‘passiv haus’ construction and net-zero energy requirements is one thing, but a house that size that runs its furnace half the year and its air conditioner the other half is something else.  And multiply that kind of house times millions and we create a ‘built in’ greenhouse gas emissions problem.

Then there are the issues of cost and debt.  We continually hear that houses are unaffordable.  Not surprising if we’re making them twice as large.  What if, over the past decade, we would have made our new houses half as big, but made twice as many?  Might that have reduced prices?

And how are large houses connected to large debt-loads?  Canadian debt now stands at a record $1.8 trillion.  Much of that is mortgage debt.  Even at low interest rates of 3.5 percent, the interest on that debt is $7,000 per year for a hypothetical family of four.  And that’s just the average.  Many families are paying a multiple of that amount, just in interest.  Then on top of that there are principle payments.  It’s not hard to see why so many families struggle to save for retirement or pay off debt.

Our ever-larger houses are filling the air with emissions; emptying our pockets of saving; filling up with consumer-economy clutter; and creating car-mandatory unwalkable, unbikable, unlovely neighborhoods.

The solutions are several fold.  First, new houses must stop getting bigger.  And they must start getting smaller.  There is no reason that Canadian and US residential spaces must be twice as large, per person, as European homes.  Second, building standards must get a lot better, fast.  Greenhouse gas emissions must fall by 50 to 80 percent by mid-century.  It is critical that the houses we build in 2020 are designed with energy efficient walls, solar-heat harvesting glass, and engineered summer shading such that they require 50 to 80 percent less energy to heat and cool.  Third, we need to take advantage of smaller, more rational houses to build more compact, walkable, bikable, enjoyable neighborhoods.  Preventing sprawl starts at home.

Finally, we need to consider questions of equity, justice, and compassion.  What is our ethical position if we are, on the one hand, doubling the size of our houses and tripling our per-capita living space and, on the other hand, claiming that we “can’t afford” housing for the homeless.  Income inequality is not just a matter of abstract dollars.  This inequality is manifest when some of us have rooms in our homes we seldom visit while others sleep outside in the cold.

We often hear about the “triple bottom line”: making our societies ecologically, economically, and socially sustainable.  Building oversized homes moves us away from sustainability, on all three fronts.

Graph sources:
US Department of Commerce/US Census Bureau, “2016 Characteristics of New Housing”
US Department of Commerce/US Census Bureau, “Characteristics of New Housing: Construction Reports”
US Department of Commerce/US Census Bureau, “Construction Reports: Characteristics of New One-Family Homes: 1969”
US Department of Labour, Bureau of Labour Statistics, “New Housing and its Materials:1940-56”
Preet Bannerjee, “Our Love Affair with Home Ownership Might Be Doomed,” Globe and Mail, January 18, 2012 (updated February 20, 2018) 

The cattle crisis: 100 years of Canadian cattle prices

Graph of Canadian cattle prices, historic, 1918-2018
Canadian cattle prices at slaughter, Alberta and Ontario, 1918-2018

Earlier this month, Brazilian beef packer Marfrig Global Foods announced it is acquiring 51 percent ownership of US-based National Beef Packing for just under $1 billion (USD).  The merged entity will slaughter about 5.5 million cattle per year, making Marfrig/National the world’s fourth-largest beef packer.  (The top-three are JBS, 17.4 million per year; Tyson, 7.7 million; and Cargill, 7.6.)  To put these numbers into perspective, with the Marfrig/National merger, the largest four packing companies will together slaughter about 15 times more cattle worldwide than Canada produces in a given year.  In light of continuing consolidation in the beef sector it is worth taking a look at how cattle farmers and ranchers are fairing.

This week’s graph shows Canadian cattle prices from 1918 to 2018.  The heavy blue line shows Ontario slaughter steer prices, and is representative of Eastern Canadian cattle prices.  The narrower tan-coloured line shows Alberta slaughter steer prices, and is representative for Western Canada.  The prices are in dollars per pound and they are adjusted for inflation.

The two red lines at the centre of the graph delineate the price range from 1942 to 1989.  The red lines on the right-hand side of the graph delineate prices since 1989.  The difference between the two periods is stark.  In the 47 years before 1989, Canadian slaughter steer prices never fell below $1.50 per pound (adjusted for inflation).  In the 28 years since 1989, prices have rarely risen that high.  Price levels that used to mark the bottom of the market now mark the top.

What changed in 1989?  Several things:

1.       The arrival of US-based Cargill in Canada in that year marked the beginning of integration and consolidation of the North American continental market.  This was later followed by global integration as packers such as Brazil-based JBS set up plants in Canada and elsewhere.

2.       Packing companies became much larger but packing plants became much less numerous.  Gone were the days when two or three packing plants in a given city would compete to purchase cattle.

3.       Packer consolidation and giantism was faciliated by trade agreements and global economic integration.  It was in 1989 that Canada signed the Canada-US Free Trade Agreement (CUSTA).  A few years later Canada would sign the NAFTA, the World Trade Organization (WTO) Agreement on Agriculture, and other bilateral and multilateral “free trade” deals.

4.       Packing companies created captive supplies—feedlots full of packer-owned cattle that the company could draw from if open-market prices rose, curtailing demand for farmers’ cattle and disciplining prices.

Prices and profits are only partly determined by supply and demand.  A larger factor is market power.  It is this power that determines the allocation of profits within a supply chain.  In the late ’80s and continuing today, the power balance between packers and farmers shifted as packers merged to become giant, global corporations.  The balance shifted as packing plants became less numerous, reducing competition for farmers’ cattle.  The balance shifted still further as packers began to utilize captive supplies.  And it shifted further still as trade agreements thrust farmers in every nation into a single, hyper-competitive global market.  Because market power determines profit allocation, these shifts increased the profit share for packers and decreased the share for farmers.   The effects on cattle farmers have been devastating.  Since the latter-1980s, Canada has lost half of its cattle farmers and ranchers.

For more background and analysis, please see the 2008 report by the National Farmers Union: The Farm Crisis and the Cattle Sector: Toward a New Analysis and New Solutions.

Graph sources: numerous, including Statistics Canada CANSIM Tables 002-0043, 003-0068, 003-0084; and  Statistics Canada “Livestock and Animal Products”, Cat. No. 23-203

 

 

Rail lines, not pipelines: the past, present, and future of Canadian passenger rail

Graph of Canadian railway network, kilometres, historic, 1836 to 2016
Canadian railway network, kilometres of track, 1836 to 2016

One kilometre of oil pipeline contains the same amount of steel as two kilometres of railway track.*  The proposed Trans Mountain pipeline expansion will, if it goes ahead, consume enough steel to build nearly 2,000 kms of new passenger rail track.  The Keystone XL project would consume enough steel to build nearly 4,000 kms of track.  And the now-cancelled Energy East pipeline would have required as much steel as 10,000 kms of track.  (For an overview of proposed pipelines, see this CAPP publication.)

With these facts in mind, Canadians (and Americans) should consider our options and priorities.  There’s tremendous pressure to build new pipelines.  Building them, proponents claim, will result in jobs and economic development.  But if we’re going to spend billions of dollars, lay down millions of tonnes of steel, and consume millions of person-hours of labour, should we be building soon-to-be-obsolete infrastructure to transport climate-destabilizing fossil fuels?  Or should we take the opportunity to create even more jobs building a zero-emission twenty-first century transportation network for Canada and North America?  Admittedly, the economics of passenger rail are different than those of pipelines; building a passenger rail system is not simply a matter of laying down steel rails.  But for reasons detailed below, limiting global warming probably makes significant investments in passenger rail inevitable.

The graph above shows the total length of the Canadian railway network.  The time-frame is the past 180 years: 1836 to 2016.  Between 1880 and 1918, Canada built nearly 70,000 kms of railway track—nearly 2,000 kms per year, using tools and machinery that were crude by modern standards, and at a time when the nation and its citizens were poor, compared to today.  In the middle and latter decades of the twentieth century, tens of thousands of kms of track were upgraded to accommodate heavier loads.

The length of track in the Canadian railway system peaked in the 1980s.  Recent decades have seen the network contract.  About a third of Canadian rail lines have been torn up and melted down over the past three-and-a-half decades.  Passenger rail utilization in recent years has fallen to levels not seen since the 1800s—down almost 90 percent from its 1940s peak, despite a doubling of the Canadian population.  Indeed, ridership on Via Rail is half of what it was as recently as 1989.

Contrast China.  In just one decade, that nation has built 25,000 miles of high-speed passenger rail lines.  Trains routinely operate at speeds in excess of 300 km/h.  Many of those trains were designed and built by Canada’s Bombardier.  China plans to build an additional 13,000 kms of high-speed passenger lines in the next seven years.

Japan’s “bullet trains” began running more than 50 years ago.  The Japanese high-speed rail network now exceeds 2,700 kms, with trains reaching speeds of 320 km/h.

Saudi Arabia, Poland, Turkey, and Morocco all have high-speed lines, as do more than a dozen nations in Europe.  Uzbekistan—with a GDP one-twentieth that of Canada’s—has built 600 kms of high-speed rail line and has trains operating at 250 km/h.

The construction of Canadian and North American passenger rail networks is probably inevitable.  As part of an international effort to hold global temperature increases below 2 degrees C, Canada has committed to reduce greenhouse gas (GHG) emissions emission by 30 percent by 2030—now less than 12 years away.  Emissions reductions must continue after 2030, reaching 50 to 60 percent in little more than a generation.  Emission reductions of this magnitude require an end to routine air travel.  Aircraft may still be needed for trans-oceanic travel, but within continents long-distance travel will have to take place using zero-emission vehicles: electric cars or buses for shorter journeys, and electrified passenger trains for longer ones.

This isn’t bad news.  Trains can transport passengers from city-centre to city-centre, eliminating long drives to and from airports.  Trains do not require time-consuming airport security screenings.  These factors, combined with high speeds, mean that for many trips, the total travel time is less for trains than for planes.  And because trains have more leg-room and often include observation cars, restaurants, and lounges, they are much more comfortable, enjoyable, and social.  For some long journeys where it is not cost-effective to build high-speed rail lines, European-style sleeper trains can provide comfortable, convenient overnight transport.  In other cases, medium-speed trains (traveling 150 to 200 km/h) may be the most cost-effective option.

Canada must embrace the inevitable: air travel must be cut by 90 percent; and fast, comfortable, zero-emission trains must take the place of the planes.  Maybe we can build thousands of kms of passenger rail lines and thousands of kms of pipelines.  But given the gravity and menace of the climate crisis and given the rapidly approaching deadlines to meet our emission-reduction commitments, it isn’t hard to see which should be our priority.


*For example, Kinder Morgan’s Trans Mountain pipeline would be made up primarily of 36” pipe (914mm) with a 0.465 wall thickness (11.8 mm).  This pipe weighs 262 kgs/m.  Rails for high-speed trains and other demanding applications often weigh 60 kgs/m.  As two rails are needed, this means 120 kgs/m—half the weight of a comparable length of pipeline.

Graph sources:
Urquhart and Buckley, 1965, Historical Statistics of Canada.
Leacy, Urquhart, and Buckley, 1983, Historical Statistics of Canada, 2nd Ed.
Stats. Can., Various years, Railway Transport in Canada: General Statistics.
Stats. Can., CANSIM Table 404-0010

 

If you’re for pipelines, what are you against?

Graph of Canadian greenhouse gas emissions, by sector, 2005 to 2039
Canadian greenhouse gas emissions, by sector, 2005 to 2030

As Alberta Premier Notley and BC Premier Horgan square off over the Kinder Morgan / Trans Mountain pipeline, as Alberta and then Saskatchewan move toward elections in which energy and pipelines may be important issues, and as Ottawa pushes forward with its climate plan, it’s worth taking a look at the pipeline debate.  Here are some facts that clarify this issue:

1.  Canada has committed to reduce its greenhouse gas (GHG) emissions by 30 percent (to 30 percent below 2005 levels by 2030).

2.  Oil production from the tar sands is projected to increase by almost 70 percent by 2030 (From 2.5 million barrels per day in 2015 to 4.2 million in 2030).

3.  Pipelines are needed in order to enable increased production, according to the Canadian Association of Petroleum Producers (CAPP) and many others.

4.  Planned expansion in the tar sands will significantly increase emissions from oil and gas production.  (see graph above and this government report)

5.  Because there’s an absolute limit on our 2030 emissions (515 million tonnes), if the oil and gas sector is to emit more, other sectors must emit less.  To put that another way, since we’re committed to a 30 percent reduction, if the tar sands sector reduces emissions by less than 30 percent—indeed if that sector instead increases emissions—other sectors must make cuts deeper than 30 percent.

The graph below uses the same data as the graph above—data from a recent report from the government of Canada.  This graph shows how planned increases in emissions from the Alberta tar sands will force very large reductions elsewhere in the Canadian economy.

Graph of emissions from the Canadian oil & gas sector vs. the rest of the economy, 2015 & 2030
Emissions from the Canadian oil & gas sector vs. the rest of the economy, 2015 & 2030

Let’s look at the logic one more time: new pipelines are needed to facilitate tarsands expansion; tarsands expansion will increase emissions; and an increase in emissions from the tarsands (rather than a 30 percent decrease) will force other sectors to cut emissions by much more than 30 percent.

But what sector or region or province will pick up the slack?  Has Alberta, for instance, checked with Ontario?  If Alberta (and Saskatchewan) cut emissions by less than 30 percent, or if they increase emissions, is Ontario prepared to make cuts larger than 30 percent?  Is Manitoba or Quebec?  If the oil and gas sector cuts by less, is the manufacturing sector prepared to cut by more?

To escape this dilemma, many will want to point to the large emission reductions possible from the electricity sector.  Sure, with very aggressive polices to move to near-zero-emission electrical generation (policies we’ve yet to see) we can dramatically cut emissions from that sector.  But on the other hand, cutting emission from agriculture will be very difficult.  So potential deep cuts from the electricity sector will be partly offset by more modest cuts, or increases, from agriculture, for example.

The graph at the top shows that even as we make deep cuts to emissions from electricity—a projected 60 percent reduction—increases in emissions from the oil and gas sector (i.e. the tar sands) will negate 100 percent of the progress in the electricity sector.  The end result is, according to these projections from the government of Canada, that we miss our 2030 target.  To restate: according to the government’s most recent projections we will fail to meet our Paris commitment, and the primary reason will be rising emissions resulting from tarsands expansion.  This is the big-picture context for the pipeline debate.

We’re entering a new era, one of limits, one of hard choices, one that politicians and voters have not yet learned to navigate.   We are exiting the cornucopian era, the age of petro-industrial exuberance when we could have everything; do it all; have our cake, eat it, and plan on having two cakes in the near future.  In this new era of biophysical limits on fossil fuel combustion and emissions, on water use, on forest cutting, etc. if we want to do one thing, we may be forced to forego something else.  Thus, it is reasonable to ask: If pipeline proponents would have us expand the tar sands, what would they have us contract?

Graph sources: Canada’s 7th National Communication and 3rd Biennial Report, December 2017

Earth’s dominant bird: a look at 100 years of chicken production

Graph of Chicken production, 1950-2050
Chicken meat production, global, actual and projected, 1950 to 2050

There are approximately 23 billion chickens on the planet right now.   But because the life of a meat chicken is short—less than 50 days—annual production far exceeds the number of chickens alive at any one time.  In 2016, worldwide, chicken production topped 66 billion birds.  Humans are slaughtering, processing, and consuming about 2,100 chickens per second.

We’re producing a lot of chicken meat: about 110 million tonnes per year.  And we’re producing more and more.  In 1966, global production was 10 million tonnes.  In just twelve years, by 1978, we’d managed to double production.  Fourteen years after that, 1992, we managed to double it again, to 40 million tonnes.  We doubled it again to 80 million tonnes by 2008.  And we’re on track for another doubling—a projected 160 million tonnes per year before 2040.  By mid-century, production should exceed 200 million tonnes—20 times the levels in the mid-’60s.  This week’s graph shows the steady increase in production.  Data sources are listed below.

The capacity of our petro-industrial civilization to double and redouble output is astonishing.  And there appears to be no acknowledged limit.  Most would predict that as population and income levels rise in the second half of the century—as another one or two billion people join the “global middle class”—that consumption of chicken and other meats will double again between 2050 and 2100.  Before this century ends, consumption of meat (chicken, pork, beef, lamb, farmed fish, and other meats) may approach a trillion kilograms per year.

Currently in Canada the average chicken farm produces about 325,000 birds annually.  Because these are averages, we can assume that the output of the largest operations is several times this figure.  In the US, chicken production is dominated by contracting.  Large transnationals such as Tyson Foods contract with individual growers to feed birds.  It is not unusual for a contract grower to have 6 to 12 barns on his or her farm and raise more than a million broiler chickens per year.

We’re probably making too many McNuggets.  We’re probably catching too many fish.  We’re probably feeding too many pigs.  And it is probably not a good idea to double the number of domesticated livestock on the planet—double it to 60 billion animals.  It’s probably time to rethink our food system.  

Graph sources:
FAOSTAT database
OECD-FAO, Agricultural Outlook 2017-2026
Brian Revell: One Man’s Meat … 2050?
Lester Brown: Full Planet, Empty Plates
FAO: World Agriculture Towards 2030/2050, the 2012 revision

The 100th Anniversary of high-input agriculture

Graph of tractor and horse numbers, Canada, historic, 1910 to 1980
Tractors and horses on farms in Canada, 1910 to 1980

2018 marks the 100th anniversary of the beginning of input-dependent farming—the birth of what would become modern high-input agriculture.  It was in 1918 that farmers in Canada and the US began to purchase large numbers of farm tractors.  These tractors required petroleum fuels.  Those fuels became the first major farm inputs.  In the early decades of the 20th century, farmers became increasingly dependent on fossil fuels, in the middle decades most also became dependent on fertilizers, and in the latter decades they also became dependent on agricultural chemicals and high-tech, patented seeds.

This week’s graph shows tractor and horse numbers in Canada from 1910 to 1980.  On both lines, the year 1918 is highlighted in red.  Before 1918, there were few tractors in Canada.  The tractors that did exist—mostly large steam engines—were too big and expensive for most farms.  But in 1918 three developments spurred tractor proliferation: the introduction of smaller, gasoline-engine tractors (The Fordson, for example); a wartime farm-labour shortage; and a large increase in industrial production capacity.  In the final year of WWI and in the years after, tractor sales took off.  Shortly after, the number of horses on farms plateaued and began to fall.  Economists Olmstead and Rhode have produced a similar graph for the US.

It’s important to understand the long-term significance of what has unfolded since 1918.  Humans have practiced agriculture for about 10,000 years—about 100 centuries.  For 99 centuries, there were almost no farm inputs—no industrial products that farmers had to buy each spring in order to grow their crops.  Sure, before 1918, farmers bought farm implements—hoes, rakes, and sickles in the distant past, and plows and binders more recently.  And there were some fertilizer products available, such as those derived from seabird guano (manure) in the eighteenth and nineteenth centuries.  And farmers occasionally bought and sold seeds.  But for most farmers in most years before about 1918, the production of a crop did not require purchasing an array of farm inputs.  Farm chemicals did not exist, very little fertilizer was available anywhere in the world until after WWII, and farmers had little use for gasoline or diesel fuel.  Before 1918, farms were largely self-sufficient, deriving seeds from the previous years’ crop, fertility from manure and nitrogen-fixing crops, and pulling-power from horses energized by the hay and grain that grew on the farm itself.  For 99 of the 100 centuries that agriculture has existed, farms produced the animal- and crop-production inputs they needed.  Nearly everything that went into farming came out of farming.

For 99 percent of the time that agriculture has existed there were few farm inputs, no farm-input industries, and little talk of “high input costs.”  Agricultural production was low-input, low-cost, solar-powered, and low-emission.  In the most recent 100 years, however, we’ve created a new kind of agricultural system: one that is high-input, high-cost, fossil-fuelled, and high-emission.

Modern agriculture is also, admittedly, high-output.  But this last fact must be understood in context: the incredible food-output tonnage of modern agriculture is largely a reflection of the megatonnes of fertilizers, fuels, and chemicals we push into the system.  Nitrogen fertilizer illustrates this process.  To produce, transport, and apply one tonne of synthetic nitrogen fertilizer requires an amount of energy equal to almost two tonnes of gasoline.  Modern agriculture is increasingly a system for turning fossil fuel Calories into food Calories.  Food is increasingly a petroleum product.

The high-input era has not been kind to farmers.  Two-thirds of Canadian farmers have been ushered out of agriculture over the past two generations.  More troubling and more recent: the number of young farmers—those under 35—has been reduced by two-thirds since 1991.  Farm debt is at a record high: nearly $100 billion.  And about the same amount, $100 billion, has had to be transferred from taxpayers to farmers since the mid-1980s to keep the Canadian farm sector afloat.  Farmers are struggling with high costs and low margins.

This is not a simplistic indictment of “industrial agriculture.”  We’re not going back to horses.  But on the 100th anniversary of the creation of fossil-fuelled, high-input agriculture we need to think clearly and deeply about our food production future.  As our fossil-fuel supplies dwindle, as greenhouse gas levels rise, as we struggle to feed and employ billions more people, and as we struggle with many other environmental and economic problems, we will need to rethink and radically transform our food production systems.  Our current food system isn’t “normal”: it’s an anomaly—a break with the way that agriculture has operated for 99 percent of its history.  It’s time to ask hard questions and make big changes.  It’s time to question the input-maximizing production systems agribusiness corporations have created, and to explore new methods of low-input, low-energy-use, low-emission production.

Rather than maximizing input use, we need to maximize net farm incomes, maximize the number of farm families on the land, and maximize the resilience and sustainability of our food systems.

Carbon tax will not cause fossil fuel use to fall: Canada’s NEB

Graph of Canadian fossil fuel use and NEB projections to 2040
Canadian fossil fuel use, historic and projections to 2040

The graph above is based on data from a recent report by Canada’s National Energy Board (NEB)—a federal government agency.  The October 26 report, Canada’s Energy Future 2017, predicts that Canadians will be consuming fossil fuels at the same rate in 2040 as we are today.  The NEB is projecting that fossil fuel use will not fall, nor will attendant greenhouse gas (GHG) emissions.

The graph’s blue bars show Canadian fossil fuel use over the past 11 years.  The brown line shows the NEB’s projections for the future.  The units, exajoules, are not important.  What is important is that the NEB predicts no drop in fuel consumption.

Most important, is that the NEB’s projections take into account the federal government’s carbon tax.  Ottawa has announced that the provinces must impose a carbon tax of $10 per tonne in 2018, escalating to $50 per tonne by 2022.  All provinces must impose a tax, or some equivalent carbon-pricing scheme.

At the Paris climate talks in 2015, Canada joined other nations in committing to limit the global average temperature increase to 2.0 degrees C (relative to pre-industrial levels).  To help achieve that goal, Canada has made an international commitment to reduce its GHG emissions by 30 percent (relative to 2005 levels) by 2030.  The NEB is, in effect, saying that Canada will fail to meet its commitment of a 30 percent reduction; the carbon tax, along with all other measures announced so far, will not cause a decline in fossil fuel use or emissions.

The preceding should surprise no one.  The federal government’s carbon tax starts out at $10 per tonne of carbon—equivalent to about 2¢ per litre of gasoline.  Over the next half-decade, it rises to $50 per tonne—about 11¢ per litre.  Many Canadians do not know the price of gasoline to the nearest dime.  And gasoline prices over the past year were down as much as 40¢ compared to three years ago.  An 11¢ per litre carbon tax is not going to cause gasoline consumption to fall.  Similarly modest taxes on other fuels will likewise prove ineffective.

Canadians need to understand that they are being deceived.  Politicians—eager for re-election and afraid of hard conversations with voters—are understating the magnitude of the climate crisis and overestimating the effectiveness of our actions to counter the threat.

How do we actually reduce fossil fuel use, cut emissions, and stabilize the climate?  A carbon tax is needed, but it must be much higher: $200 to $300 per tonne—equivalent to 50¢ to 75¢ per litre of gasoline.  But such a tax is unbearable for citizens (and politicians) unless 100 percent of the total tax collected is rebated back to citizens on a per-capita basis.  We need a carbon-tax-and-refund system.  Under such a system, we would all pay taxes on gasoline, home heating fuel, etc. and pay indirectly on the energy embedded in our products.  Goods that required a lot of energy to produce or transport would cost more.  But offsetting these new costs, we would receive back all the carbon tax money collected, on a per-capita basis.  Thus, if a person’s energy consumption is below average, he or she would finish the year money ahead—his or her per-capita refund would exceed the carbon taxes paid.  On the other hand, someone who wants to drive a Hummer and heat and cool a huge home will come out money behind.  Another way of thinking about this tax-and-refund system is that it transfers money to those doing the right things from those doing the wrong things.  And the former group can take their carbon tax refunds and invest them in home energy retrofits, solar panels, and other emission-reduction measures, setting the stage for even larger carbon tax savings next year.

The NEB is telling us we’re not on track.  But we can change course.  Bold and rapid policy action now can reduce emissions by 30 percent and help limit temperature increases to 2 degrees.  But we must act.

Graph source: National Energy Board

Cattle Rustling? The growing gap between cattle and beef prices

Graph of Canadian cattle prices and retail beef prices, 1995 to 2017
Retail prices of ground beef and steak compared to farmers’ prices for cattle, 1995–2017

This week’s graph highlights the growing gap between what Canadians pay for beef and what farmers receive for their cattle.  The rising blue lines show grocery-store prices for steak and ground beef.  The comparatively flat green lines represent the prices farmers and feedlot operators receive for the cattle they sell to beef packers.  Steers (castrated male cattle) are more likely to be the source of steaks, while cows are primarily turned into ground beef.

The blue lines show what consumers pay; the green lines show what farmers get.  The widening gap between the blue lines and the green lines reveals the amount that packers and retailers take for themselves.

Let’s look first at the dotted lines.  The green dotted line shows the per-pound price farmers in Alberta receive for their cows.  (prices across Canada are similar.)  In the decade-and-a-half before 2010, that price averaged about 50¢.  In recent years it has averaged about $1.00.  One could say that farmers are receiving an extra 50¢ per pound for their cows.  These figures do not take into account rising costs (they are not adjusted for inflation) but we’ll leave that issue aside for now.  Note what happens to the blue dotted line: the grocery-store price of ground beef.  It more than triples, from about $1.70 per pound to about $5.50.  Farmers’ prices increased by 100%, but packers and retailers increased their take by 320%.  Farmers’ prices increased by 50¢, but packers and retailers increased their prices by nearly $4.00.

The solid green line shows the price that farmers (or feedlot operators) receive for slaughter-ready steers.  The solid blue line is a representative price for grocery-store steaks.  If we compare recent years to those before 2013, we see that steer prices have risen by perhaps 50¢ or 60¢ per pound.  Over the same period, steak prices have risen by $5.00 or $6.00.

There is little discernible connection between the prices consumers pay and the prices farmers receive.  This is true of cattle and beef, but also true of nearly every other farm-retail product pair.  For a graph comparing the prices of wheat and bread, click here.  Similar “wedge” graphs can be created for corn and cornflakes, hogs and pork chops, and many other farm-retail product pairs.

Food processors, packers, and retailers are choking off the flow of dollars to Canadian farms, with devastating effects.  The number of Canadian farms raising cattle has been cut nearly in half in a generation—from 142,000 in 1995 to less than 75,000 today.  Moreover, many of these farms reporting cattle are dairy farms (which do sell cattle for slaughter, but support themselves primarily from milk sales).  The number of farms classified as “beef cattle ranching and farming, including feedlots” stood at just 36,000 in 2016.  Farm debt is a record $100 billion.  And the number of young farmers (<35 years of age) today is just one-third the number a generation ago.

Canadians are paying many times over.  We’re paying a high price at the store.  We’re paying again through our taxes to fund farm support programs—money paid to farmers to backfill for the dollars extracted by powerful transnational packers, processors, and retailers.  And we’re paying yet again as our rural economies are hollowed out, our communities decimated, our family farms destroyed, and our nation’s capacity to sustainably produce food is eroded.

Graph sources: Statistics Canada CANSIM Tables 326-0012 and 002-0043.  

Everything must double: Economic growth to mid-century

Graph of GDP of the world's largest economies, 2016 vs 2050
Size of the world’s 17 largest economies, 2016, and projections for 2050

In February 2017, global accounting firm PricewaterhouseCoopers (PwC) released a report on economic growth entitled The Long View: How will the Global Economic Order Change by 2050?  The graph above is based on data from that report.  (link here)  It shows the gross domestic product (GDP) of the largest economies in the world in 2016, and projections for 2050.  The values in the graph are stated in constant (i.e., inflation adjusted) 2016 dollars.

PwC projects that China’s economy in 2050 will be larger than the combined size of the five largest economies today—a list that includes China itself, but also the US, India, Japan, and Germany.

Moreover, the expanded 2050 economies of China and India together ($102.5 trillion in GDP) will be almost as large as today’s global economy ($107 trillion).

We must not, however, simply focus on economic growth “over there.”  The US economy will nearly double in size by 2050, and Americans will continue to enjoy per-capita GDP and consumption levels that are among the highest in the world.  The size of the Canadian economy is similarly projected to nearly double.   The same is true for several EU countries, Australia, and many other “rich” nations.

Everything must double

PwC’s report tells us that between now and 2050, the size of the global economy will more than double.  Other reports concur (See the OECD data here).  And this doubling of the size of the global economy is just one metric—just one aspect of the exponential growth around us.  Indeed, between now and the middle decades of this century, nearly everything is projected to double.  This table lists just a few examples.

Table of projected year of doubling for various energy, consumption, transport, and other metrics
Projected year of doubling for selected energy, consumption, and transport metrics

At least one thing, however, is supposed to fall to half

While we seem committed to doubling everything, the nations of the world have also made a commitment to cut greenhouse gas (GHG) emissions by half by the middle decades of this century.  In the lead-up to the 2015 Paris climate talks, Canada, the US, and many other nations committed to cut GHG emissions by 30 percent by 2030.  Nearly every climate scientist who has looked at carbon budgets agrees that we must cut emissions even faster.  To hold temperature increases below 2 degrees Celsius relative to pre-industrial levels, emissions must fall by half by about the 2040s, and to near-zero shortly after.

Is it rational to believe that we can double the number of cars, airline flights, air conditioners, and steak dinners and cut global GHG emissions by half?

To save the planet from climate chaos and to spare our civilization from ruin, we must—at least in the already-rich neighborhoods—end the doubling and redoubling of economic activity and consumption.  Economic growth of the magnitude projected by PwC, the OECD, and nearly every national government will make it impossible to cut emissions, curb temperature increases, and preserve advanced economies and stable societies.  As citizens of democracies, it is our responsibility to make informed, responsible choices.  We must choose policies that curb growth.

Graph source: PriceWaterhouseCoopers

Full-world economics and the destructive power of capital: Codfish catch data 1850 to 2000

Graph of North Atlantic cod fishery, fish landing in tonnes, 1850 to 2000
Codfish catch, North Atlantic, tonnes per year

Increasingly, the ideas of economists guide the actions of our elected leaders and shape the societies and communities in which we live.  This means that incorrect or outdated economic theories can result in damaging policy errors.  So we should be concerned to learn that economics has failed to take into account a key transition: from a world relatively empty of humans and their capital equipment to one now relatively full.

A small minority of economists do understand that we have made an important shift.  In the 1990s, Herman Daly and others developed the idea that we have shifted to “full-world economies.”  (See pages 29-40 here.)  The North Atlantic cod fishery illustrates this transition.  This week’s graph shows tonnes of codfish landed per year, from 1850 to 2000.

Fifty years ago, when empty-world economics still held, the fishery was constrained by a lack of human capital: boats, motors, and nets.  At that time, adding more human capital could have caused the catch to increase.  Indeed, that is exactly what happened in the 1960s when new and bigger boats with advanced radar and sonar systems were deployed to the Grand Banks and elsewhere.  The catch tripled.  The spike in fish landings is clearly visible in the graph above.

But in the 1970s and ’80s, a shift occurred: human capital stocks—those fleets of powerful, sonar-equipped trawlers—expanded so much that the limiting factor became natural capital: the supply of fish.  The fishery began to collapse and no amount of added human capital could reverse the decline.  The system had transitioned from one constrained by human capital to one constrained by natural capital—from empty-world to full-world economics.  A similar transition is now evident almost everywhere.

An important change has occurred.  Unfortunately, economics has not internalized or adapted to this change.  Economists, governments, and business-people still act as if the shortage is in human-made capital.  Thus, we continue our drive to amass capital—we expand our factories, technologies, fuel flows, pools of finance capital, and the size of our corporations, in order to further expand the quantity and potency of human-made capital stocks.  Indeed, this is a defining feature of our economies: the endless drive to expand and accumulate supplies of capital.  That is why our system is called “capitalism.”  And a focus on human-made capital was rational when it was in short supply.  But now, in most parts of the world, human capital is too plentiful and powerful and and, thus, destructive.  It is nature and natural capital that is now scarce and limiting.  This requires an economic and civilizational shift: away from a focus on amassing human capital and toward a focus on protecting and maximizing natural capital: forests, soils, water, fish, biodiversity, wild animal populations, a stable climate, and intact ecosystems.  Failure to make that shift will push more and more of the systems upon which humans depend toward a collapse that mirrors that of the cod stock.

Graph source:  United Nations GRID-Arendal, “Collapse of Atlantic cod stocks off the East Coast of Newfoundland in 1992