December 15, 2011
EDMONTON, AB, Dec. 15, 2011/ Troy Media/ – We look to auditors to do more that audit financial statements. They are also accountable for ensuring that the processes used to create financial expenditures, risks and liabilities are diligent and follow due process. So when the Auditor General of Ontario draws attention to some challenging questions about the provincial green strategy, we should pay close attention.
Most commentators have looked at the implications of this systematic, thorough and generally devastating review in terms of green energy and the strategy of support for renewables. I argue argued previously that we have arrived at ‘peak renewables‘ – the point at which renewable energy supports have peaked and where governments gradually or dramatically retreat from their green agenda so as to deal with the real economy. The Pielke Law that states that economic challenges and reality will trump climate change mitigation every time.
But there is another aspect to the Auditor General’s (AG) report which is troubling. It is the role the public service played in the development and execution of this green ‘strategy’ (sic).
The voice of reason
The public service is intended to be a voice of reason, caution in public policy development. Public servants are the route to systematic and thorough analysis of options, ideology independent and not subject to political pressure, either from their own Minister and the governing party (or parties) or from lobby groups and special interests. This means that public servants, at all levels, execute their daily functions in a way that best serves the Crown.
For some observers, impartiality means the prudent management of administration. For others, impartiality involves advice that is based on a range of aspects and considerations and that may include information that the minister or the government of the day does not want to hear. In these instances, public servants must remember that they have a responsibility to provide information on policies and programs, but are not expected to, nor should they debate the merits of policy decisions made by the government. Once a decision is made, however unfortunate that may be, the task of the public servant is then to implement that decision in an efficient and effective way.
Ministers are meant to exercise decision-making (preferably based on evidence) having been provided with systematic and thorough advice from the public service. They may choose not to follow advice, to ride rough-shod over that advice, but Ministers need to cherish both the quality of that advice and its independence from their agenda and ideology. The more they shape the advice they receive to ensure it fits with the predetermined intentions, the less useful that advice is likely to be.
So now let us to turn to the report and its implications: In its 34 pages it catalogs these issues as they relate to the public service:
1. No systematic business cases were developed before or after decisions were made about renewable energy to evaluate impacts on either costs or environment. The AG says that this is because the Ministerial directives were clear and explicit – the task was to implement and deliver, not analyze and review. Issue: surely cost benefit and lifecycle environmental impact assessments are part of the delivery process even if they were not, as they should have been, part of the decision making process?
2. So as to accelerate delivery of a Ministerial decision, decisions were made to suspend the review of the energy plan submitted by the Ontario Power Authority (OPA), on which they had already spent $10.7 million and involved a major consultative process, and replace the OPA plan with a Government Long-Term Energy Plan which was based on enacting Ministerial directives. Issue: when did a Ministerial plan become, by definition, better than a plan developed by a process defined in law and involving public consultation? At what point does a process laid out in law become suspended by fiat? What advice did the public service provide to the Minister here?
3. The Minister determined to operate a feed-in-tariff and ended their Renewable Energy Standard Offer Program (which was over-subscribed). The Minister then resisted all efforts to control and manage the feed-in-tariff so as to ‘maintain investor confidence’ – this despite the repeated advice of the OPA to control the feed-in tariff. Issue: what advice was the Minister given by his own staff with respect to the advice received by the OPA?
4. Contract negotiations with a Korean consortium were conducted by the Ministry and a payment of $437 million was agreed (later reduced to $110 million) in addition to the Feed in Tariff, making it one of the most attractive incentive green energy deals on the planet. The justification of this was that there were substantial ‘made in Ontario’ requirements for parts and labour built into the agreement to stimulate job creation, despite the fact that no economic analysis and no business case was ever developed. Nor were relevant authorities – notably the OPA and the Ontario Energy Board – consulted or canvassed. The AG makes explicit that normal due diligence processes were not followed (page 108) and no formal cabinet approval was obtained for this contract. Issue: what on earth was the public service doing? How could such a major activity be undertaken by the public service without due diligence and necessary approvals?
5. The reality is that the transmission grid is already close to capacity. The AG suggests that some 10,400 MW of power available through renewables is ‘stranded’ and cannot be accommodated on the transmission grid as it exists (see page 91 of the report). This affects 3,000 feed-in-tariff holders who are being paid for producing power which no one can use. Issue: At what point did the public service document the smart grid challenges of green and renewable energy in a way that may have affected decision making? The AG report does not indicate what advice Ministers were given with respect to this issue.
We have a problem
One could go on – this AG’s report being one of the best reads of a formal document for some time. But the point is made: we have a problem, well in fact several.
The first is the policy arrogance of the political elite. They can talk up green energy powerfully and make it sound like it is a solution. Yet we know, and the AG points out, that rising energy costs due to green energy actually increases unemployment. For every green job created, it is likely that two others are lost in other sectors leading green energy to be a source of net job loss. We do not know, because the advice to Ministers is not subject to freedom of information requests, what the advice was but the suspicion is that the focus was upon enacting Ministerial decisions rather than caution, systematic analysis of consequences and ensuring due diligence. The Ministerial response hints at this throughout the AG document.
The second is the lap-doggedness of the public service. Having worked on this file early on in its development, the alignment of public servants with the Ministerial policy was clear: green was right, coal was wrong; CO2 was bad, wind power was good and so on. That is, there were few, if any, voices which were skeptical of the claims of the green energy lobby or of the climate change lobby. Yet it is a part of the work of the public service to be skeptical, especially when a policy decision could lead to unemployment and increased energy poverty, as it is doing in Ontario and has done in other jurisdictions (Britain, for example). An impartial service needs to demonstrate this for every policy, not just for those for which it has n ideological disinclination.
In another context, the UN’s International Panel on Climate Change (IPCC) is subject to some ridicule as a credible body precisely because it has been hijacked by a clique and a lobby. A recent study by Canadian journalist Donna Laframboise makes clear just how much influence certain environmental groups have over the work and reporting of the IPCC. She found that substantial claims made by the IPCC in the name of science were, in fact, argued from non-peer reviewed sources by environmental lobbyists. Large numbers of contributors to their major reports were directly linked to organizations such as Greenpeace and the World Wide Fund for Nature (WWF); five out of 10 contributors to one chapter have a formal, documented link to WWF, 28 out of 44 chapters of the report included at least one individual affiliated with WWF. The all-important Working Group 1 chapters of the 2007 report, the scientific foundation of the report, contained 431 references to non-peer reviewed material. In the complete report, 5,587 references were not peer-reviewed (30 per cent of all references); of these, only six were flagged as such. Sources used to support IPCC assertions were newspaper and magazine articles, unpublished Masters and Doctoral theses, Greenpeace and WWF documents as well as press releases.
By the end of March 2010, it had been shown that at least 16 claims of impending climate doom in the IPCC’s key 2007 report had been based on work done by environmental activists, most of which had not received independent reviews before being presented as ‘fact’ by the IPCC. For instance, the IPCC’s insistence that up to 40 per cent of the Amazon rain forest was under imminent threat came from a World Wildlife Fund-International Union for the Conservation of Nature joint report written by a scientist-consultant and a freelance environmental journalist.
These revelations do not inspire confidence in an organization that claims to be, and is portrayed, as basing its conclusions on peer-reviewed literature. This is an especially important example of the pattern we are drawing attention to here, since these lobby-based presentations have led the world to create a $100 billion annual fund to be transferred from the developed world to the developing world to compensate for the impacts of climate change; has led to major economic disruption in the worlds energy system with a focus on green energy and renewables; major expenditure on climate change mitigation running into trillions of dollars.
The AG’s report on the green strategy of the Government of Ontario also suggests that we should now question the veracity of the public service and its role it this debacle.
But I have a suggestion. In Britain, there is a process by which public servants involved in a process can file their objections to a Ministerial deciision – e.g. on the Feed in Tariff – without fear of punishment. They record the basis of their objection and attach analytic material to justify their objection. Then they get on and do what the Minister has instructed. Once the Government changes (after an election), then the objections are made public. After the fall of the Government of Gordon Brown, for example, the Daily Telegraph reported that:
‘. . . ministers overruled civil servants on spending plans on at least four occasions since the start of 2010. Advice from officials was ignored on a further nine occasions in 2009. This compared with just five occasions in the previous three years. Three quarters of these objections were on the grounds of value for money’.
The Public Service Commission encouraged and enables the filing of such information so as to protect the integrity of the service.
End bonuses to public servants
We should also end the payment of bonuses to public servants. As the gap between public sector benefits (pay and pensions) widens in comparison to the private sector (in favour of the public sector), the bonus schemes based on assessments informed by Ministerial opinion (whatever the process map says), this is no longer an appropriate way to compensate public servants. Productivity generally in the public service appears to be either flat or falling – we need to rethink the rewards and supports so as to improve performance, increase job satisfaction and attract and retain smart people.
Finally, we should make it very clear that public servants serve the Crown not just the current Minister. A career public servant of 35 years will likely serve between 15 and 20 Ministers. They represent the interests of citizens on an inter generational basis. They should be trained to do so. An investment in professional development is a key to this, but so too is the training of Ministers into the effective use of a public service.
I have the privilege of working with many public servants closely. I have the greatest respect for those who chose to serve in this way. But I have watched their morale and commitment ebb and flow as their work is de-professionalized and degraded. It is time to unleash their talents in productive ways so that we can have better, smarter polices and much better government. The Ontario case makes clear that this is urgent.
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