Les Leyne had an interesting article in today’s local paper, Cement industry fears carbon tax squeeze, which prompted me to write a letter to the editor in response. It seems to me that this problem offers an opportunity for some disruptive creative thinking, which could create a win-win situation for municipalities and industry.

Some key excerpts from Leyne’s article:

When Premier Gordon Campbell whipped together a carbon tax exemption for municipalities just in time for their September convention, the lineup formed quickly for similar breaks.

Assorted sectors of the economy have ideas on why they should get some help in coping with the carbon tax. The municipalities won their case because they have no one to pass the costs on to, other than taxpayers, who are already paying it in their own lives. So the municipalities’ carbon tax bill will be picked up by the province — if they promise to get carbon-neutral by 2012.

Leyne notes that one of the first industry groups to come forward was the cement producers, who claim that the carbon tax will chew up to 107% of their profits (quite the claim…).  The cement industry produces a huge amount of CO2, has to find a way to reduce its carbon footprint, and is crying about how the carbon tax is going to put them out of business.  Leyne notes, however, that European manufacturers have lived with a carbon tax regime for years, and are still doing ok.  So it’s really more about changing the industry’s mindset — maybe to something more like “yes we can,” as opposed to “no can do.”

Leyne writes that some of the greenhouse gases produced by the cement industry are “unavoidable”:

Cement is the powdery glue that holds concrete together when water is added. Making the stuff involves emissions. More than half of the emissions are unavoidable — breaking down limestone releases carbon dioxide. The rest of the emissions come from generating the heat used in the process, which is mostly done by burning coal. The industry is already paying the carbon tax on that fuel and claims a bill of $6 million since it took effect July 1.

I was reminded, however, of the MIT Technology Review article, A concrete Fix to Global Warming, which focused on how CO2, released during the production of cement, could be sequestered in cement products.  That means that instead of focusing on buying offsets and so forth, a better approach to reducing the carbon footprint for real would be to focus instead on incorporating CO2 sequestering methods into the manufacturing process.

The industry is worried it’s being driven out of business:

“Surely to God you weren’t trying to put us out of business when you came up with the carbon tax,” McSweeney told politicians.

Liberal MLAs had no response. But privately, the government doubts the claims of peril.

The presentation was almost identical to one the industry made in Europe several years ago. But carbon taxes were imposed widely there, and the impact was minimal.

Government also discounts worries about competitors outside the province. With just a handful of big companies in the world, it’s not a competitive industry. And cement has to be produced close to where it’s used. (pg.2 of article)

So what’s in that MIT Technology Review article to help with this problem?  Well, part of the problem from my point of view is that, as per Leyne’s remarks, most of the emissions are unavoidable and that you’re upping the ante by burning coal to create the needed heat for processing.  The implication is that there’s nothing in the manufacturing process that let’s you shift the equation, yet the Technology Review article (see particularly page 2) suggests there are plenty of people working on different ways of sequestering the CO2 that’s released.

Which means that this is an industrial process ripe for new thinking and disruption, and the municipalities could jump into the breach to kick-start the process.

Which brings me to my letter, written out of frustration over the slowness of adaptive and innovative strategies by municipalities here, even when our provincial government is kicking them (as per Bill 27).  Here is the letter I wrote:

Kudos to the BC Liberals for putting industry under pressure — not to destroy it, but to force it to innovate, because it really is time for more creative thinking when it comes to environmental issues.  Municipalities and industries need to step up, perhaps to collaborate.

It’s known that finding ways to sequester the C02 produced by cement production continues to be a contested holy grail for the industry.  The “squeeze” of a carbon tax might actually be the opportunity to make sequestration a more realistic goal.

A Nova Scotia company (Carbon Sense Solutions) recently claimed that it has a process that sequesters all emissions from cement production by storing them in precast concrete products. Our cement factories typically don’t also produce precast concrete products, but consider a scenario where there is more creative cooperation between industry and municipalities.  In such a world it might make sense to add facilities that produce precast concrete products, if municipalities (which also need to meet carbon-neutral goals) found ways to use precast concrete (vs concrete mix) for public works (roads, sidewalks, etc.) projects.

There will have to be a lot more innovative thinking, literally to disrupt traditional supply-chain set-ups.  If the carbon tax “squeezes” industries and municipalities to embrace that disruption creatively and constructively, it’ll be a win-win for us all.

(For more on the still-contested methods of carbon sequestering in the cement-making process, see http://www.technologyreview.com/energy/21117/page1/)

No idea if the paper will publish it, but here’s hoping for creative innovation from industry and municipalities.

Posted: 11|8|08 at 5:05 pm. Filed under: business, green, innovation, times_colonist.
Tags: bc, cement, ghg, industry
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