Author: Dr. Roger Gibbins
A Critique of the Pembina Institute and the David Suzuki Foundation Study of the Economic Implications of Reducing Greenhouse Gas Emissions in Canada.
The recently released report by the Pembina Institute and the David Suzuki Foundation, Climate Leadership, Economic Prosperity, maintains that we can meet the Government of Canada’s greenhouse gas reduction target, and indeed an even more ambitious target set by them, without major damage to the Canadian economy. Growth would slow, but it would not stop. However, their report also identifies, and likely understates, very substantial negative economic consequences for western Canada, and for Alberta and Saskatchewan in particular.
Sharing the Load puts these potential regional effects into focus. In doing so, Canada West Foundation suggests that, just as the global climate discussions taking place in Copenhagen recognize that differences in national circumstance must be acknowledged and accommodated, so too must Canadian climate policies acknowledge and accommodate regional differences in circumstance. If we fail to do so, climate policies will not be effective, their negative economic impact will be exacerbated unnecessarily, and the political union in Canada will be badly strained.
None of this challenges the support shown by Canadians across the country for effective climate change policy. Instead, our emphasis is on the need for climate policy that is effective and equitable. If we do not share the climate policy load, if we expect one region to carry too much of the burden, we will all fail. The attitude of “tough luck for Alberta and Saskatchewan” is damaging not just to the economies of these two provinces, but to the goal of reducing Canada’s greenhouse gas emissions. Regional tension is a recipe for ineffective policy.
Just as the stakes are high if we fail to reduce emissions, so too are the economic consequences of bad public policy. According to the rather rosy predictions of the Pembina/Suzuki model, the Alberta economy will be at least $22 billion smaller (in 2005 dollars) in 2020 than it would be otherwise. Keep in mind that it will be smaller than it would be in the years leading up to 2020 and in the years after, so the cumulative impact is much greater. And this is the best case scenario.
Lying behind the slower growth is a migration of investment capital out of Alberta and a net tax transfer of over $1,000 per Albertan year after year. Things do not look quite as bleak for Saskatchewan according to the Pembina/Suzuki model, but any hopes it has of using its fossil fuel resources and uranium deposits to keep its current prosperity going will have to be thrown by the wayside.
Simply put, we feel that we can do better than saying “tough luck” to Alberta and Saskatchewan; we can do more than dismiss the lost prosperity these provinces will experience if we follow the Pembina/Suzuki recommendations as collateral damage in the war on carbon.
Our recommendation is to see the Pembina/Suzuki study as a lesson of what not to do when designing a national climate strategy. What we need is a true national dialogue that yields a much less divisive regional outcome than what’s embedded in the Pembina/Suzuki approach.