Martin Joins the Kyoto Follies

Paul Martin's throne-speech pledge that Canada will meet -- and even exceed -- its greenhouse gas reduction targets under the Kyoto Protocol bodes ill for the competitive ability of Canadian industry and the economic well-being of individual Canadians.

First, as has been written in several open letters to Paul Martin by Canadian and International scientists, the science of Kyoto is anything but settled. Uncertainty is far too high, and computer models much too simple, to allow confidence in the predictions of politically influenced science bodies such as the United Nations Intergovernmental Panel on Climate Change. Don't just take my word for it, go and read the petition of 19,000 scientists at the Oregon Petition, which states, in part, that "There is no convincing scientific evidence that human release of carbon dioxide, methane, or other greenhouse gasses is causing or will, in the foreseeable future, cause catastrophic heating of the Earth's atmosphere and disruption of the Earth's climate. Moreover, there is substantial scientific evidence that increases in atmospheric carbon dioxide produce many beneficial effects upon the natural plant and animal environments of the Earth."

Second, Martin's Kyoto position shows gross ignorance of the key role that affordable energy plays in producing the quality of life that Martin says he wants for Canadians. Greenhouse gases are emitted when fossil fuels are burned, whether it's coal, oil, or natural gas. Reducing greenhouse gas emissions, therefore, can only be done in three ways: using less fuel, switching from higher-carbon fuels (such as coal and oil) to lower-carbon fuels such as natural gas, or switching to non-carbon energy sources such as wind and solar power to displace energy now generated from fossil fuels. But nobody is interested in building more dams, and wind and solar power can provide only the tiniest fraction of the energy needed for a competitive technological society. A study at Cornell University showed, for example, that for the U.S. to replace half of its fossil fuel use with alternative energy it would have to cover 17 percent of the continental United States -- about 1/6th of the entire landmass -- with power generation facilities.

Without a significant share of energy available from alternatives, Canada's ability to meet the Kyoto Protocol comes down to forcing rapid switches to more efficient equipment burning lower-carbon fuels. Many Canadians might think that's a great idea, but wait until they get the bill. The fact of the matter is, more efficient equipment is more expensive equipment, and installing it before older equipment is ready for retirement represents an economic loss that businesses will have to recoup those costs one way or another. Meanwhile, lower-carbon fuels are more expensive fuels. Natural gas has recently shown massive price fluctuations, and Canada's consumption of natural gas has been outpacing its production for years. Alternative energy sources are more expensive still. Since firms can't simply raise prices in competitive markets, such costs are likely to be borne by Canadians in lowered wages, or lower return to investors. Again, this is not idle speculation. Before Kyoto was ratified, Simon Fraser university professor Mark Jaccard estimated that Kyoto compliance could raise the cost of electricity by 80 percent, raise the cost of natural gas from 40 percent to 90 percent, and raise the cost of gasoline by 50 percent. While paying those higher energy bills, Jaccard estimates that the average household would take a pay cut of about 4 percent.

Energy is the master resource behind virtually everything that gives Canadians the quality of life we enjoy. We use a lot of energy not because we're profligate, but because we're a highly dispersed, cold climate, technologically advanced country. Fortunately, we have still been blessed with enough domestic energy sources to be able to compete well against the United States, even exporting power and natural gas to our largest trading partner. But under Kyoto, those exports are likely to vanish as Canada leaves its oil and coal in the ground, and burns the natural gas it currently exports.

The United States has refused to ratify the Kyoto treaty for precisely these reasons. If Canadian firms are to remain competitive against U.S. firms, abundant, affordable energy is a must. Martin's plan to 'go beyond' Kyoto virtually assures less abundant, more expensive energy, more expensive technology, and less money in Canadian pockets to pay for it all.

Paul Martin has said that he intends to improve Canadian quality of life, and reduce western alienation, but his embrace of Kyoto bodes poorly for either goal. One can only hope that in his Kyoto pledge, Martin was paying lip-service to an idea that has attained the status of religion, while in reality, he intends to do little to actually implement measures that would cripple Canada's competitiveness.