Canada govt study shows possible huge Kyoto costs
Date: 14-Oct-02
Country: CANADA
Author: Randall Palmer
It was the most drastic of four possibilities outlined by the government as it grapples with how to reduce carbon dioxide emissions, believed by many scientists to be responsible for global warming.
The government, facing heated opposition from business, the opposition Canadian Alliance party and the energy-producing province of Alberta for pledging to ratify the protocol, has maintained the costs of Kyoto would not be large.
Environment Minister David Anderson sought to allay concerns by saying that the studies released last week included only the costs, not the job or economic benefits from moving to cleaner energy.
"The ultimate results will probably be either a wash or - and I'm an optimist here - I think quite substantial positive number of job gains," he told reporters in Parliament.
But while he was making his remarks, officials from his and other government departments were presenting the various scenarios to reporters showing potentially hefty costs.
The scenario they said they thought most likely, with governments financing their costs by squeezing their spending elsewhere rather than raising taxes, was for a loss of 60,000 jobs by 2010. That would raise the unemployment rate - currently at 7.7 percent - by 0.4 percentage points.
It would also cut 0.4 percentage points, or about C$5 billion a year in today's dollars, from the gross domestic product by 2010, according to the projection.
But under a scenario where taxes would be hiked and where the price companies might have to pay to emit carbon dioxide would be substantially higher, as many as 240,000 jobs would be lost, adding 1.4 percentage points to the unemployment rate.
And GDP would be 1.6 percent, or an estimated C$21 billion a year, lower. Each household would have C$1,700 a year less disposable income than otherwise would have been the case.
"The mandate of government is to help create economic prosperity, not reduce it," stated Nancy Hughes Anthony, president of the Canadian Chamber of Commerce.
She pointed out that all of the scenarios presented by the government last week left out how the government intended to achieve a reduction of 70 of the 240 megatonnes of carbon dioxide emissions it will need to cut.
The government wants to account for the 70 megatonnes by getting credit for exporting clean energy such as natural gas, mainly to the United States, but the Kyoto protocol makes no provision for this and the Europeans have rejected this.
"The government is fudging its ability to meet the Kyoto targets, leaving Canadians with a false impression about the impact of the Kyoto Protocol," said Hughes Anthony, a member of a coalition opposing speedy implementation.
Environment Minister Anderson has frequently pointed to this summer's drought on the Prairies, which hit farmers hard, to contend that whatever the costs of implementing Kyoto, the costs of doing nothing are greater.
