Kyoto’s Outcome in One Word

Worth A Look, Environment, Frontier Centre

OTTAWA – The House of Commons environment committee was warned yesterday the economy could shrink annually by over 5% until the end of the decade if Ottawa insists on meeting the short-term obligations under the Kyoto environmental protocol.

The evidence, tabled by Kyoto critic and climate change expert Ross McKitrick from the University of Guelph, painted a dire economic portrait of what Kyoto means to Canadian households — and that is, undoubtedly, a recession.

“People would be astonished if they understood what Kyoto entails,” said Mr. McKitrick, an economics professor. “The costs are huge.”

He said his warning of a 5.3%-a-year reduction in per capita economic growth is based on Canada’s obligation under Kyoto to cut carbon output by 25% over the next five years. It is also calculated using historical data that indicates a direct link between greenhouse gas emissions and the pace of economic growth in the country.

“To reach the Kyoto target is economically infeasible,” Mr. McKitrick told the Parliamentary committee. “Assuming this committee does not aspire to such outcomes for Canada, sticking to the Kyoto timetable and target is not an option,” he said in prepared testimony for the committee.

However, Mr. McKitrick, in an interview following his committee appearance, said he is not predicting such an outcome for the economy — because he doubts the federal government will allow that to happen.

Nevertheless, he said it is “counterproductive” for the Liberal government to continue to tell Canadians Kyoto is a realistic policy goal.

The Kyoto accord is an environmental treaty, signed in 1997, that calls on Canada to reduce greenhouse gas emissions — such as carbon dioxide — by 6% from 1990 levels by 2010. This is a goal government documents have suggested is unachievable, without spending hundreds of millions in buying so-called emissions credits or imposing new regulatory measures that control carbon output.

It is estimated Canada’s carbon output has increased 30% from 1990 levels.

Canada is a signatory to the accord, as are Russia and most of the European Union. However, Canada’s biggest trading partner, the United States, is not, and neither are the emerging economic powers of China, India and Brazil — countries Canadian industry will be forced to compete against in the decades to come.

Stephane Dion, the Environment Minister, is scheduled to release the Liberal government’s strategy to honour Kyoto next Wednesday — nearly two months after the environmental accord went into force worldwide.

Mr. Dion and other ministers have argued the Kyoto targets are attainable. Moreover, they argue Kyoto will prove to be an economic boost to Canada as companies develop environmentally friendly technology that will be in demand.

The delay in bringing in a plan proves Kyoto is unworkable, Mr. McKitrick argued in his prepared testimony. He noted the targets and timetables in the accord are “arbitrary” and “artificial.” He tabled evidence that indicates the growth in carbon output is directly tied to the growth of per capita GDP — an indication of Canadian households’ gross average income.

“Emissions are physically tied to fossil fuel consumption and therefore tend to follow economic growth very closely,” the professor said.

Both he and another economics professor, Marc Jaccard of Simon Fraser University in Burnaby, B.C., said Ottawa should be looking at more practical, longer-term policies that would reduce greenhouse gas emissions, with goals to be achieved 15, 20 or 30 years down the road.

In the most recent budget, the Liberal government has set aside $5-billion to spend on its climate change strategy. Money is allocated into funds designed to buy emission credits (which can be used to help Canada meet its Kyoto target), develop technology and help provinces build or refurbish infrastructure.