Why Are Poor Villages Paying the Price for Canada's Electric Vehicle Demand?
As the Federal Government of Canada unveils laudable strategies to combat climate change by replacing combustion engines with zero-emission vehicles (ZEV) as per the Paris Agreement, little consideration is given to grave environmental concerns and human right violations faced by Indigenous communities and rural farmers living in proximity to lithium mines in China and Chile. These poor villages pay an enormous price for electric vehicles imported into Canada.
Lithium in addition to other minerals like graphite, cobalt and nickel is used to manufacture lithium-ion batteries. These batteries power electric vehicles (EVs). According to Baronnes a ton of lithium is needed to produce approximately 90 EVs, 60,000 tons produce one million EVs. As Transport Canada projects to increase sales of EVs to 2.7million by 2030, this implies Canada will demand approximately 200,000 tons of lithium by 2030!
Here is the problem! Conventional lithium mining creates an environmental cost borne by residents living in proximity to lithium mines. In China, Environmental Justice Atlas reports that lithium mining operations by Ronda Lithium Co., are polluting and killing fish in the Lichu River, affecting the water and livelihood of Tibetans. In Chile's Salar de Atacama lithium mining activities consumes 65% of the region’s water, this disrupts and pollutes water supply for local farmers and communities. Washington Post reports that graphite mining produces soot- a gray dust and air pollutant which settles on crops, well water and surfaces, causing respiratory issues for villagers in Mashan. These human rights violations and environmental pollutions thrive as a result of lax national environmental controls and material demand.
Clearly, current practices in mining and processing lithium turn out to be far more environmentally harmful, and are not in fact a green solution! Unfortunately, these concerns are not covered by mainstream media and are specific to regions where lithium, graphite and other materials are mined which are usually remote villages.
So, how is the federal government of Canada exacerbating these environmental concerns and human rights abuses? The basic law of supply and demand! The more EVs we demand, the more we worsen environmental degradation in China and Chile. According to Statistics Canada, ZEV car sales have increased from 460 in 2011 to over 30 000 in 2018. According to Electric Autonomy, this number continues to grow with electric vehicles accounting for 67.1% of sales in 2020.
Like every value chain cycle, EV manufacturers outsource products and services. Ford sources lithium-ion batteries from SK Innovation, a leading lithium-ion battery producer in China which sources lithium from China. Tesla Inc. and General Motors Co. source lithium-ion batteries from LG Energy Solutions. LG Energy Solutions sources lithium from SQM a company that mines lithium in Chile. Tesla is the top EV seller in Canada and Ford Motors is not so far behind.
In principle, Canada should not encourage unethical mining practices that promote climate change, environmental degradation and human rights violations. Lest we forget, Canada is delivering $2.65 billion in over five years to help developing countries transition to low-carbon, climate-resilient economies including Chile.
Since the federal government can’t halt its strategy in the transportation sector, it is pertinent to adopt an efficient solution to this issue. Banning the importation of lithium-ion batteries sourced from these regions may seem like a straight-forward solution, however, it poses market failure risk and could lead to complex supply chain agreement lawsuits for companies like Tesla that has signed a long-term lithium-ion battery supply agreement with LG Energy Solutions. Since the Canadian government may be unable to influence lithium mining practices in these jurisdictions, it is apt to shift this responsibility to EV manufacturers.
This is where an ESG compliance certificate policy for lithium-ion batteries comes in! Similar to the European Union (EU) Battery Directive all EV batteries imported into Canada will be required to have an ESG compliance certificate. The aim of the ESG compliance certificate policy is to promote cross jurisdictional sustainability goals, encourage EV producer responsibility, transparency and information sharing through trade requirements for lithium-ion batteries. In addition to other things, the ESG compliance certificate will contain information about where the lithium was mined, the name of the mining company, compliance to international mining best practices, ethical measures adopted to ensure the lowest possible environmental pollution, carbon footprint levels and confirmation of carbon tax paid for carbon emissions released.
In summary, poor villages in Chile and China should not keep paying the grave price because Canadians need to transition to ZEVs. Climate change is a global issue and remains a global threat. The federal government's commitment to mitigate climate change in the transportation sector should be aimed at promoting global sustainability strategies in the EV battery value chain.
About the Author: Ngozi. E. Maduka (NG) is an MPP student at the University of Calgary. She received her LLM at the University of Derby, England in 2013. Her research interests are in the field of climate change, specifically on energy transition in the transportation sector. In her spare time NG enjoys reading about royal history.