Kyoto Too Expensive for Canada

by William Yeatman on March 5, 2002

in Kyoto Negotiations

It is unlikely that Canada will be able to achieve its Kyoto targets without significant harm to the economy, Nancy Hughes Anthony, President and CEO of the Canadian Chamber of Commerce, said at a press conference on March 4.

Hughes accused the Canadian government of being less than honest with Canadians. “They are leaving the impression,” said Hughes, “that all it will take is for businesses to readily adopt new processes and for consumers to change their behavior overnight. Then Canada could meet its commitment of reducing greenhouse gas emissions by as much as 30 percent by the year 2012.”

Hughes noted that the governments Climate Change Website claims that consumers can reduce greenhouse gas emissions by buying energy efficient appliances and conserving on home heating. But this is deceptive, says Hughes. “Consumers will be asked to do a lot more.”

The burden on industry will be enormous, according to Hughes. “As Canadian industries bring in new technologies and fuel sources, it just isnt feasible to get them broadly in place by 2012.” Many of the technologies, such as fuel cells, that the government is relying on to meet its targets are still “mostly pilot projects,” said Hughes.

“It is unlikely that we will see fleet replacement with fuel cells in ten years when only prototypes are available now,” she said. “The technology is still being developed. Then we will need to allow companies time to retire existing fleets of trucks and cars. Then there is the infrastructure to support this new fuel source.”

Moreover, forcing companies to accelerate the retirement of plants and equipment will leave them with stranded investment costs that will be passed on to consumers and shareholders.

A major obstacle to Canadas compliance with Kyoto is its trade relationship with the U.S. Hughes pointed out that the U.S. has reduced greenhouse gas emissions by importing natural gas and nuclear- and hydro-generated electricity from Canada. “Yet the generation and production of these increases Canadas overall emissions.” Even though the federal government has lobbied to receive credit for clean energy exports, “It is not clear when or if this will be successfully achieved.”

She also pointed out how competitively devastating it would be for Canada to ratify the treaty, while the U.S., which buys 87 percent of Canadas exports, stays out.

The Canadian Chamber of Commerce calculates that Canadas cost of complying with Kyoto would be a loss of about $30 billion per year in GDP, or a reduction of 2.5 percent. That comes to about $1,000 for every man, woman and child in Canada.

All these factors led Hughes to conclude that, “Canada cannot achieve its Kyoto targets and therefore, it would be foolish for Canada to ratify Kyoto at this time.”

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