Baird says Kyoto will lead to economic collapse

CTV.ca News Staff
Apr. 19 2007

Environment Minister John Baird attacked the Kyoto accord on Thursday as a costly measure that lead to economic collapse.

"I think that we must strike a balance in order to act responsibly, we must take bold measures for the environment and we must let our economy go forward so Canadians can keep their jobs and build a promising future," Baird told a Senate Committee in French on Thursday.

The Senate committee is considering a bill put forward by Liberal MP Pablo Rodriquez that would force the government to comply with the Kyoto targets.

Baird told the committee that analysis from economists shows implementing the Kyoto Protocol would mean:

· Gasoline will cost more than $1.60 a litre over the 2008-to-2012 period

· 275,000 Canadians working today will lose their jobs by 2009

· Job loss will cause unemployment rates to rise 25 per cent by 2009

· The decline of economic activity in the range of $51 billion

"Please, however, don't take my criticism of Bill C-288 as a condemnation of Kyoto. Our government remains committed to the principles and objectives of the United Nations Framework Convention on Climate Change and the Kyoto Protocol," Baird said.

"We accept our international obligations and will make our best effort."

Toronto economist Don Drummond has said in a letter to reporters that it would be impossible to meet the Kyoto emissions-cutting target without a massive carbon tax of approximately $195 a tonne.

However, a study released in late February by the group Friends of the Earth and Corporate Knights magazine put the cost of Kyoto compliance at $100 billion over four years, which they said would be about $20 per week for a family of four.

Kyoto calls for Canada to cut its greenhouse gas emissions to six per cent below 1990 levels by 2012. As of 2003, those emissions had increased by 27 per cent above 1990 levels.

If Canada doesn't meet its treaty obligations, it faces a 30 per cent penalty under the next phase of the Kyoto accord.

In addition, the opposition parties have forced the government to rewrite its Clean Air Act, which didn't mention the word Kyoto.

Baird has said the government will adopt intensity targets, which require cuts in emissions per unit of production, but allow overall emissions to go up if production rises.

Environmentalists have blasted that approach, saying GHG emissions from sectors like Alberta's oil sands could rise dramatically.

With files from The Canadian Press

Baird paints apocalyptic scenario of Kyoto compliance for committee

OTTAWA (CP) Environment Minister John Baird has presented an apocalyptic scenario of what it would take to comply with the Kyoto Protocol, suggesting that prices would soar while thousands of jobs disappeared.

``There is only one way to make it happen, to manufacture a recession,'' Baird told the Senate environment committee Thursday.

He said 275,000 Canadians would lose their jobs, gasoline prices would jump 60 per cent and natural gas prices would double.

``The cost to maintain a home or business would skyrocket,'' Baird told the committee.

He said his predictions were based on studies by some of the country's leading economists, but environmentalists said they were based on assumptions chosen to produce frightening conclusions.

Baird said the government remains committed to the Kyoto Protocol even though it is opposing a Liberal private member's bill which would force Canada to comply with the treaty's emissions-cutting targets.

The bill, put forward by Liberal MP Pablo Rodriguez and passed by the Commons, would present the government with a huge conundrum if it is also passed by the Senate. The Conservatives would be faced with implementing measures they say are irresponsible.

Baird called on Canadians to support a Conservative plan to combat climate change ``without pulling every last penny from their pockets.''

Liberal Senator Dennis Dawson accused Baird of scare tactics.

``The sky is falling_ we've seen this before,'' Dawson said.

``Every time we talk about changes that protect the environment we would 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.

Liberal Colin Kenny challenged Baird to provide a step-by-step explanation of how he arrived at his dire figures.

Baird referred Kenny to a document that he provided to the committee, but committee chair Liberal Tommy Banks said he could not find any arithmetic in the document that justified the figures.

A leaked letter by Toronto-Dominion economist Don Drummond supports some of Baird's warning, suggesting that Kyoto could not be achieved without a massive carbon tax of $195 tonne.

But that letter did not contain any detailed analysis.

A study last fall by Nicholas Stern, former chief economist of the World Bank, said costs of combatting global warming are manageable and would be much less than the costs of taking no action. Sent from my BlackBerry device on the Rogers Wireless Network

Ottawa rolls out 'validators' to bolster anti-Kyoto stand

OTTAWA — The Harper government has secured a high-profile endorsement of its position that Canada's economy would be crippled if it was forced to meet the Kyoto accord's timetable for cutting greenhouse gases.

On Thursday, federal Environment Minister John Baird will unveil a new study by his department that suggests complying with the Kyoto Protocol would hit Canada hard, a report that is certain to draw swift criticism from environmentalists.

The Conservatives are trying to add credence to the report, however, by also releasing an opinion from Toronto-Dominion Bank chief economist Don Drummond that effectively backs their findings.

“I believe the economic cost would be at least as deep as the recession in the early 1980s, and indeed that is the result your department's analysis shows,” Mr. Drummond writes in a letter to Mr. Baird obtained by The Globe and Mail.

The Tories are expected to unveil additional opinions by experts, whom they call “validators,” as they attempt to refute Bill C-288, a bill opposition parties pushed through the Commons in February.

It attempts to force the Harper government to meet Canada's targets under the Kyoto accord for reducing greenhouse-gas emissions.

Mr. Drummond's letter appears to be a political boon for the Tories, and a blow for the Liberals, as parties gird themselves for the possibility of an election campaign fought on hot-button issues such as Kyoto.

It will be difficult for the Liberals to attack Mr. Drummond, a senior Canadian economist whom political parties, including Mr. Dion's, have consulted over the years. He wasn't paid for this latest opinion, which the Tories solicited from him.

Thursday's announcement also lays the groundwork for the Tories' own plan to fight climate change: one outside the Kyoto accord timetable.

Kyoto's obligations would require massive action by Ottawa because under the accord, Canada is supposed to reduce greenhouse gas emissions an average of 6 per cent below 1990 levels in each year, 2008 to 2012.

Emissions have soared in recent years, making Canada's task that much harder — especially since Kyoto's so-called compliance period starts next year and Ottawa has never enacted a complete plan.

Mr. Drummond says he accepts the thinking that the only way to fulfill Bill C-288 and meet Canada's Kyoto timetable is to slap a carbon tax of about $195 on each tonne of greenhouse gas released by companies and other emitters.

“I grudgingly accept that a massive carbon tax implemented almost immediately is the only viable option to reach the bill's goals,” Mr. Drummond writes in his letter.

When fossil fuels such as oil and coal are burned, they release carbon that becomes carbon dioxide, the most prevalent greenhouse gas. A carbon tax is basically a levy on greenhouse emissions that seeks to restrict the burning of fossil fuels.

Mr. Drummond says the magnitude of Canada's required greenhouse-gas reductions under Kyoto is almost unparalleled.

“The policy shock analyzed is massive: a one-third reduction in greenhouse gas emissions for each of the next five years,” Mr. Drummond writes.

“Other than as a side effect of the economic collapse of Russia, nothing close to such a result has occurred anywhere.”

His letter dismisses Bill C-288 as unworkable, saying, “I sincerely hope no serious consideration is being given to implementing the policy.”

He warns that such a hefty carbon tax, designed to drive down emissions, would substantially hurt the economy even if Ottawa funnelled the revenue collected from the levy back to Canadians via personal and corporate income-tax cuts.

“This shock would represent a huge loss to Canadian competitiveness. Exports would plunge and imports rise.”

His only substantial quibble with the Environment Canada study is that he's not sure the carbon tax would have a relatively constant impact in later years.

The TD economist previously worked in the federal Finance Department for 23 years. He offers policy advice to politicians of all stripes, when asked, noting that the Bloc Québécois has never requested his help, and he has not shied away from criticizing Tory policies under the Harper government.

Mr. Drummond says his comments should not be interpreted as anti-environmental or suggesting that economic concerns should trump environmental needs. “The environment will also be a loser if rash policies are implemented because the course will be abandoned long before the environmental objectives are achieved.”