In the Upcoming Budget, Ditch Kyoto

In recent days, environmentalist David Suzuki has been exhorting Prime Minister Paul Martin to go full speed ahead with implementing the Kyoto Protocol, suggesting a costly laundry list of measures that would suck money out of the Canadian economy like a nuclear vacuum cleaner. Meanwhile, in a speech to the Quebec Chamber of Commerce, Prime Minister Martin spoke a line that should be a consideration for everything that government does: A dollar misspent is a dollar unavailable for health care or education. It’s a dollar unavailable to reduce the tax burden on middle-class families.

So I’d like to point out a spectacular opportunity for Paul Martin to free up resources and money that is currently targeted in a wasteful direction, and re-direct it somewhere useful -- like to reduce the tax burden on middle-class families: ignore David Suzuki, and ditch Kyoto’s focus on greenhouse gas controls.

First, there’s simply no benefit, health, environmental, or otherwise, to implementing the Kyoto protocol. People are rightly concerned with the prospects for rapid climate changes. Nobody wants to see drastic shifts in the weather, or dangerously higher sea levels, and so on.

But Kyoto, which is based on the faulty assumption that humans are the main agent of recent climate changes only diverts resources from fruitful lines of climate research: research that would help us understand the climate better, and enable us to adapt to change regardless of origin. Even scientists who tend to sound the alarm about global warming acknowledge that meeting the goals of the treaty would provide no significant environmental benefit. Fully implementing Kyoto, according to Tom Wigley, a leading climate scientist, would prevent a warming of the atmosphere amounting to 0.07°C by the year 2050. Given that the yearly average temperature fluctuates randomly by 0.10°C, this averted warming would not even be measurable.

Second, there is plenty of waste to cut from the climate file: the federal government has pledged to spend $2 billion over the next five years to combat global warming by subsidizing dubious alternate-energy schemes, and offering people subsidies to insulate their homes. That’s on top of $1.7 billion that’s been committed (but not necessarily spent yet) on global warming since 1997.

Third, there are the economic impacts. Even prior to ratification of the protocol, Simon Fraser University economist Mark Jaccard estimated that Kyoto compliance would cost 3 percent of the economic productivity generated between now and 2010; reduce incomes permanently by 4 percent compared to what they’d otherwise be after 2010; hike electricity prices by up to 80 percent; hike natural gas prices by 40 percent to 90 percent; and hike gasoline prices by 50 percent. None of those are compatible with Mr. Martin’s desire to balance budgets and stimulate the economy.

But Jaccard’s estimate is looking lower all the time. The Canadian Federal Government recently announced that it was going to spend $1 billion to meet 8 percent of Canada’s commitment to reduce greenhouse gas emissions. As I’ve shown elsewhere, that’s just the barest tip of the iceberg. When you look at how much it has cost to raise revenue and administer environmental programs, that $1 billion becomes $1.35 billion. Now, if it’s going to take $1.35 billion to meet 8 percent of our Kyoto target, then a fairly simple calculation tells us that achieving 100 percent is going to cost the government at least $16.88 billion, and that doesn’t begin to touch the costs that businesses will incur in trying to comply with the boat-load of new regulatory measures that will be needed for Canada to meet its obligations under Kyoto.

The Prime Minister is talking a good game when it comes to controlling taxes, cutting waste, and fostering economic growth. If Paul Martin is serious about his fiscal conservatism, and if he really wants to expand the pie of prosperity so that we can better finance our social goals, a good place for him to start would be to back Canada out of Kyoto, re-focus Canada’s climate research on basic science and adaptation, and ignore the alarmism of Kyoto lobbyists like David Suzuki.