1) As Chile teeters its way into a constitutional reform, the conflicting positions between fossil fuels and the impacts of renewable energy sourcing remain
2) A new study shows beavers are essential to the health of their ecosystems and our water quality
3) As Emmanuel Macron begins his six month reign as EU President, hopes are high for his monumental carbon tax
Chile is halfway into a potential overhaul of it’s constitution spurred by social and environmental activists and at the heart of this massive undertaking is the head-on collision we are seeing play out throughout the world including the United States – the paradox of our need to get off fossil fuels while also protecting local ecosystems and communities.
How this plays out could reverberate not only across South America but across the world as well. What happens in Chile this year is something we all should be paying close attention to.
UNRAVELING THE PARADOX
Chile’s economy has long been founded on natural resources from mining copper and coal to farming salmon and avocados at massive scale. Add to that the exponential growth of demand for lithium, and the fact that the largest lithium miner in Chile – a company called SQM – provides 1/5th of all the lithium in the world. This is because the Atacama Desert sits on top of a massive repository of saltwater brine that contains large amounts of lithium as well as other valuable minerals.
At the core of the environmental paradox here are copper and lithium. These are both really important components in the batters that power our electric vehicles and battery cells we need to store electricity for the grid. This storage ability is key for transitioning to renewables such as wind and solar since they do not produce output consistently 24/7, we need better battery storage to counteract this intermittence in order to shift more of our power from these sources. Copper and lithium are critical for this in the current state of battery technology.
However, mining these resources is having some really harmful effects to local communities in these areas, particularly in that it is leading to a water crisis. The regions around the Atacama desert are already drying up due to increased temperatures and longer dry seasons from global warming, so the removal of the water resources underground that is necessary for extracting lithium for example is compounding this issue even further. This is leaving local communities in peril from a lack of negation and water. We can also see this effect via a key wildlife indicator species – the flamingo. The Atacama Desert regions are the only spots where flamingo populations are dropping substantially since 1997, a trademark wildlife species of Chile that is quite stable everywhere else.
It’s not just the brine being extracted either, as new mining technologies can pull water and the minerals that come with it as far South as the glaciers that line the southern tip of the country.
So on one hand the world needs these resources from Chile to accelerate the push into clean energy via the battery parts required to do so. On the other hand, this ecosystem is collapsing and with it the livelihoods of the people and wildlife that depend on it.
This is one of many drivers of the 2019 protests that have led to the pending Constitution reform
REFOUNDING A NATION
Those 2019 protests were driven by the mass inequality spreading across Chile since the current Constitution was adopted in 1980. Many powerful young faces emerged that have continued to grow their influence. The most notable of them being 35-year old Gabriel Boric, who was just elected President in the 2021 election.
When it comes to mining, the opposition cites how the economic gains of these efforts are not being felt at all by the people bearing the costs and damage of them. These resources are primarily being exported – copper accounted for over 50% of Chile’s exports last year – and the proceeds are being pocketed by the mining company owners and investors, who live far far away from the regions where the mining is taking place. Meanwhile, the communities impacted by these damages are struggling more than ever as their way of life is getting upended from the ecosystem damage.
Part of Boric’s plan is to raise the taxes on mining companies that would then fund more local community relief efforts and projects, as well as nationalize the lithium industry to move it from private to public control and give part ownership back to nearby Indigenous and local communities, something SQM says will stifle innovation and efficiency and lead to an economic downturn for the country.
These changes go beyond Boric’s own political agenda and have led to a referendum to potentially rewrite the entire constitution of the country with the eyes of modernize the governing system with the complexity of 21st century problems, namely climate change and social inequality.
In early 2021 a public election saw a 78% vote in favor of a new Constitution, formalizing the process for setting it. As of July 2021, a delegate of 155 people was formed to draft a new Constitution for the country, with important protocols like 17 seats going to Indigenous communities and capping any single gender identity at no more than 55% representation. In addition, any private citizen can add a provision to be reviewed if it gets at least 15,000 virtual signatures. This Convention now has until July of 2022 to draft the new Constitution at which time it will still need to get approval from Chilean Congress to fully pass. Something pundits say is unlikely given the divided nature of Chile’s Congress, much like the US, however President Boric’s election is a further sign this may actually happen.
For one we are happy and supportive of seeing Constitutional reform to push forward a long term environmental and social agenda. This is something needed in so many other parts of the world, including the United States, in order to better prepare us to tackle these key modern issues that have changed so much since many of these doctrines were written. If 78% of people in Chile believe their 1980 Constitution is outdated, well what does that say about our 1776 version. Even if a new Constitution doesn’t pass Congress, getting this far is a key sign of progress and Boric’s election should pay dividends.
In terms of the paradox of mining the materials needed for our energy transition vs. environmental and local community protection, this is much more complex and there is by no means a one size fits all solution here. The trade-offs have to be carefully evaluated. In the case of Chile, the collapse of the Atacama ecosystem seems pretty significant and likely if mining continues as is, so some tightening of the screws is necessary. At the very least, the economic benefits of this extraction absolutely need to be shared by the local communities bearing their long term costs. Likewise, in the case of the Maine CMP Corridor debate here in the US that went the way of rejecting a proposal that would accelerate clean energy into the Northeast US at the cost of building a corridor through Maine’s forests, the trade-offs there seemed to clearly support the corridor build out as the environmental costs long-term where quite minimal and containable. This is what we mean when we say we need case by case evaluation.
Ultimately, we also need to keep investing in battery technology and move towards products that don’t require such large amounts of scarce minerals such as copper and lithium. We are already seeing that in a story we covered last year of a group of scientists at Virginia Tech who figured out how to use the biomass of certain food waste – such as apple cores – to provide a key batter component for the larger scale, industrial sized batteries that will be used for our grid. Albeit it still needs to be proven out at scale. We’ll need more innovation like that.
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NEW STUDY PROVES THAT BEAVERS ARE AWESOME AND WE REALLY NEED THEM
The most comprehensive study ever done on the relationship between beavers and the watershed ecosystems they inhabit was just published out of the University of Minnesota Duluth. The study spanned an incredible 70 years across 5 unique watersheds and forms a pretty clear conclusion: beavers are essential to the health of their ecosystems and with it our own water quality.
You are probably familiar with the dams beavers build. However, you may not know the positive effects they have.
A group of beavers – called a colony – will move around quite a bit from pond to pond across their lifetime and across generations. They leave lasting positive effects even when they leave a pond for a new one, one of the key findings in this study. Abandoned ponds from beavers have a much higher ability to store surface water than older ponds that dry out over time without them.
Moreover, beavers leave a sort of pond mosaic in the watershed regions they populate by taking the concentration of a single larger pond and spreading it out throughout an ecosystem into thriving smaller ponds and streams as you’ll see in the illustration below.
In doing so, they increase the overall surface area of a wetland, help diversify it, improve water quality from improving ecosystem resilience, and help maintain more stable water temperatures.
In a nutshell, the watershed areas with active, healthy beaver populations are more resilient to human interference and climate change.
HOW THE STUDY WAS CONDUCTED
The study was done over the last 70 years along the Northern Shore of Lake Superior.
In the early part of the 20th century beavers were near extinct due to the massive fur trade that was rampant between 1600 and 1900. They started to recolonize watersheds in the area by 1950, and populations finally stabilized a bit in the 80s, although they fluctuate since there is technically no limit to trapping beavers for locals. This change in population structure and fluctuation even post stabilization provided scientists with a working variable to look at changes to the overall ecosystem.
There is a clear positive correlation between beaver population density and surface water volumes. Something pretty important for our own well being as the more surface water is present, the stronger our underground aqueducts are which then provide a big part of our drinking and irrigation water.
They also noticed that as beaver population density varies from watershed to watershed, deficits in one sort of counterbalance another making the overall surface area water of the region much more stable.
So while many people historically have removed beavers for fear their dams disrupt the flow at a specific point in a river or stream – which absolutely they do – the overall effect of beavers on ecosystem health and water quality more broadly across the region is now abundantly clear.
This is the exact type of science and insights we need to continue to help tie the well being of wild species like beavers to the well being of natural ecosystems to our own well being – drinking and farming water!
We are absolutely heading towards a water crisis over the next few decades and at the current rate of change due to droughts, pollution, and climate-accelerating events like algae blooms, the major conflicts of the future will very likely be over access to quality water. We already see this playing out in some developing parts of the world. Think Mad Max Fury Road.
Beavers can help us avoid such a harsh reality, but only if we protect them.
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FRANCE’S MACRON HAS 6 MONTHS TO PUSH BIG CARBON TAX FORWARD
The President of France, Emmanuel Macron, a big advocate for tackling climate change has just started his 6 month reign over the EU, and with it, a very packed set of goals that includes a very important carbon border tax (well sort of) for the European Union.
If you are not aware, and honestly I was not before researching this story, the governance of the EU Commission rotates every six months across member country governments. From Germany to Malta, they all get their six months in rotation. As of January 1st, France is in the driver’s seat until June 30th. This means that Macron can set the agenda, goals, and chair the meetings. He decides what the focus will be. Given this is also an election year for him and he’s facing stiff competition, he is determined to push a few big ticket items forward and get them over the finish line.
The biggest one on the environmental front – The Carbon Border Adjustment Mechanism (CBAM) – essentially a program to tax the carbon emissions of imported goods. Although it’s not exactly a tax per-say as that requires unanimity approval across the EU. They are certificates that must be purchased when importing certain categories of goods and materials – cement, fertilizers, iron and steel, aluminum, and electricity – in an effort to lower the carbon emissions of imports.
This was part of Europe’s version of a Green New Deal drafted in 2019 with the CBAM details drafted this past July and now needing the commission to push it into law and get enough support across the Union. Enter Macron.
EUROPE’S EXISTING CARBON SYSTEM & IT’S MASSIVE LOOPHOLE
To back up here for a second, the EU has long been ahead of the rest of the world on making companies pay for their greenhouse gas emissions. Since 2005, the EU’s Emissions Trading System (ETS) has been a pioneer in doing so.
Essentially how it works is companies in certain industries and of certain size are given an allowance of emissions they can emit each year. When they go over, they need to pay for that by buying extra allowances from others who are staying under. Stay under and you can actually profit from it by selling them to the poor performers. It’s called a “cap and trade” system. Not a true carbon tax but a step in the right direction.
So how effective has it been. It’s been “ok”. It roughly covers 40% of all EU emissions and of that 40%, the emissions are down ~8% since 2005. Improvement but not nearly a big enough dip. So what is holding it back from driving emissions lower? A few things come to mind:
- It is not covering enough industries and enough companies in the industries it covers due to sizing thresholds that need reestablished.
- The price per ton of emissions has been pushed too far down, from a peak of $30 in 2009 to under $10 today, which then lowers the incentive for companies to worry about paying to go over the cap
- There is a pretty big ole loophole….imports!
You see, when the price of local materials become too high because of the need to buy these allowances, well many folks then just import them again. And to date, imports are not subject to the ETS. Yeah….that’s a pretty big loophole. It’s like a hole in your socks so big 3 toes are sticking out and you try and convince yourself the sock is doing it’s job to the best of its ability.
The CBAM changes this. 1 ton of emissions of GHG = 1 CBA certificate that needs to be purchased when importing that good at the current price of the gas on the ETS. If the emissions count is not 3rd party and nationally verified, you pay an additional mark-up on it. If it is, you pay the exact emissions total. If you are importing it from a country who has already put a carbon tax on it and that’s able to be audited, you would deduct that from what you owe on the CBA certificate. It may sound complex, but to put it bluntly companies would have to buy a certification to match the emissions of their imported goods and materials.
Thus eliminated one of the big issues with the effectiveness of the EU ETS. This is a big deal and a big step forward.
Macron is an interesting and sometimes polarizing guy with overall great human values and an ego to match them, but he’s the right guy at the right time to push this through. He’s aggressive and determined and he needs this win to rally his party in his own upcoming election.
Closing this loophole is absolutely something we want to see. Think of the EU as the sort of test subject for these types of things and the more success they have, the more we will see them in the US and China, who together account for over 50% of global emissions. So while the EU making these strides alone is not gonna move the needle enough, it’s the instigator we need to get the two heavyweights to follow suit.
Let’s see if Macron can pull it off.
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