Canada Can Meet GHG Emissions Targets, While Growing Jobs, Economy

November 3, 2009

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Canada can meet targets to reduce global warming pollution, while growing jobs and its economy, according to an economic modeling study commissioned by the Pembina Institute and the David Suzuki Foundation. However, not all provinces agree with the study’s findings.

The report, Climate Leadership, Economic Prosperity (PDF), shows how Canada can achieve both the federal government’s current target to reduce its greenhouse gas (GHG) emissions 20 percent below the 2006 level by 2020, as well as a more ambitious target of 25 percent below the 1990 level by 2020. The second target is derived from analysis of the emission reductions needed to limit average global warming to 2 degrees C — a limit supported by a broad scientific consensus, according to the report.

This is said to be the first Canadian study of its kind to show regional impacts on employment and gross domestic product, and the first to comprehensively examine how Canada can meet a GHG reduction target for 2020 that goes beyond the federal government’s target.

Leading economic modeling firm M.K. Jaccard and Associates conducted an in-depth study of federal and provincial policies needed for Canada to meet two targets to reduce its greenhouse gas emissions, which indicates that Canada can implement much stronger climate policies than the U.S. and still prosper economically, according to the report.

Technological approaches cited to achieve major reductions in Canada’s GHG emissions range from increased energy efficiency and renewable energy to carbon capture and storage.

Two key findings of the Jaccard study show that Canada’s gross domestic product (GDP) would continue to grow at 2.1 percent per year on average between 2010 and 2020 while meeting the 2-degree C target, compared to 2.2 percent for the government’s target and 2.4 percent under business as usual. The country’s total number of jobs would grow by 11 percent between 2010 and 2020 while meeting either target.

To meet the 2-degree C target, a carbon price would start at $50 per ton in 2010 and reach $200 per ton by 2020, while carbon pricing to meet the government’s target would need to reach $100 per ton by 2020, or $145 per ton if Canada does not purchase any international credits, according to the study.

The study also finds that almost half of carbon price revenue can be returned to Canadians through reductions in income tax. Revenue from carbon pricing can also fund major public investments to reduce greenhouse gas emissions, such as building smart grids and transit infrastructure, according to the study.

The study also indicates the need to address very high emissions in Alberta and Saskatchewan, which would significantly reduce projected growth rates in these provinces. However, Alberta’s per capita GDP would continue to be much higher than that of any other region, and Saskatchewan’s per capita GDP would stay close to the Canadian average, according to the report.

Alberta Premier Ed Stelmach rejected the report’s findings that Ottawa can only achieve its GHG emissions targets by limiting growth in Saskatchewan, Alberta and B.C., reports CBC News.

The report says a massive restructuring of the Canadian economy will be required to meet the government’s climate-change targets, with wealth flowing from the West to the rest of the country, reports Canada’s news site.

Stelmach told reporters there won’t be another wealth transfer to Ottawa saying that federal equalization programs have already transferred $117 billion from the province to Ottawa over the last decade, reports CBC.

The study finds that economic growth by 2020 would be reduced in Alberta by 8.5 percent, in Saskatchewan by 2.8 percent and in British Columbia by 2.5 percent.

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