Listen to Baird: this wolf may be real
"The sky is falling -- we've seen this before," Dawson said. "Every time we talk about changes that protect the environment we have people telling us they will destroy the economy."
He said similar warnings were issued about the program to curb acid rain, yet it was implemented without difficulty.
The story of “the boy who cried wolf” ends, if memory serves, with the wolf devouring the boy. Moral: it’s not crying “wolf” if there really is a wolf....
It’s a time-honoured rhetorical technique, all the same -- to dismiss any and all warnings of the consequences that attend a given course of action as so much fear-mongering. It appeals to our eyeball-rolling reflex, flattering our self-image as doughty skeptics, over whose eyes no wool may be pulled.
Hence the Liberal riposte to the Environment minister’s estimates of the costs to the economy of adopting their declared policy with respect to global warming, as contained in Bill C-288: a bill that would commit us, not merely to comply with our Kyoto targets, but on the original Kyoto timetable-- a distinction that seems to elude most of the media. Rather than attempt to rebut the minister’s figures, the Liberals’ main defence has been to accuse him of scare tactics.
But it's not scare tactics if in fact those are the costs. And indeed the minister’s numbers -- if you accept his assumptions -- are quite plausible, as a number of expert reviewers have attested, including Don Drummond, the former Finance department chief economist, and Mark Jaccard, perhaps Canada’s leading authority on the economics of climate change.
The key assumption is that the bulk of the required reductions -- 75% -- would have to be achieved domestically, rather than by buying emissions credits abroad. We’ll get to that assumption in a second, but the implications if you accept it are stark. At 770 megatonnes per year, we are now about 36% above the target set out in the Kyoto protocol: 6% below 1990 levels, or 563 Mt.
The deadline for meeting this target is not, as commonly reported, 2012. Rather, it is 2008 to 2012: the target is defined as the average annual emissions over that period. Yet emissions are currently projected to grow another 10% over the next five years, to roughly 850 Mt. So it isn’t just a matter of somehow cutting 200 Mt out of emissions by next year, but of cutting nearly 300 Mt by 2012 -- an average reduction of 33% from the baseline forecast. If we fall short of that target in the first year, we have to exceed it in subsequent years.
It took 17 years for Canada’s greenhouse gas emissions to rise from 600 Mt to present levels. To reverse all of that increase in the space of one year, or even five, would require the most extreme measures, as the Environment study indicates, including an across-the-board carbon tax of $195 a tonne.
This is an enormous shock for the economy to absorb, even with offsetting cuts in personal and corporate income taxes. Eventually, it adjusts. And indeed, eventually, as the opposition protests, there would be some offsetting benefts from greater energy efficiency. But in the short-term, the dislocation would be severe.
So let’s relax the minister’s assumption. Let’s suppose we buy a much higher proportion of the emissions credits overseas, for $25 a tonne. I have no objection to this in principle: as with any other import, if it’s cheaper to buy them from foreigners, we should. The question is to what extent this can be done in practice -- again, within the very limited time frame to which the opposition would commit us.
There are two broad ways of obtaining these credits. One is from developing countries, through the Joint Implementation or Clean Environment Mechanisms established under Kyoto. But the total worldwide supply of these is an estimated 85 Mt, and the government’s projection already assumes we have bought 65 Mt of these.
The other place to buy credits is on the international emissions trading markets. But these are only just getting under way, and it is to be doubted whether they could yet handle the kinds of demands we would be placing upon them. Moreover, much of the supply of credits would come from places like Russia, whose economy conveniently collapsed just after the Kyoto baseline year, leaving it with much unused capacity. Again, no objection in principle -- but this is Russia we’re talking about. Do we really know what we’re purchasing, or from whom?
Last, there is the legal question. The clear expectation at Kyoto was that the greater part of the required reductions would take place domestically. While no specific percentage is mentioned, the Protocol speaks of a “significant element.” The so-called “flexibility” mechanisms were intended to be “supplemental” to domestic action, not a replacement for it. So it would arguably violate at least the spirit of Kyoto to rely so heavily on purchases abroad.
And since complying with Kyoto is the only reason we would be engaged in this mad dash to hit an arbitrary target by an artificial deadline, what exactly would we be accomplishing?
4/21/2007
