Jobless Rate Could Soar on Kyoto Compliance - Canada
CANADA: April 20, 2007


OTTAWA - Canada's unemployment rate would jump by 25 percent and its economy would move into recession if the country had to implement short-term Kyoto Protocol targets immediately, the Conservative government warned on Thursday.

 


The three opposition parties have passed a bill in the House of Commons demanding that the government implement the requirements of the Kyoto Protocol on climate change to cut greenhouse gas emissions dramatically in the period 2008-12.

Environment Minister John Baird said that meeting Kyoto targets would mean a one-third cut in Canadians' consumption of gasoline and diesel, and cutting by one third the emissions from factories, beginning in eight months.

"There is only one way to make that happen -- the government would need to manufacture a recession," Baird told a Senate committee examining the opposition Kyoto bill in testimony that was marked by rancor over the Conservatives' plans.

The Conservatives insist that the Liberals, from whom they took power in February 2006, waited too long to restrain greenhouse gases by the amounts to which Canada committed for the 2008-12 Kyoto period.

Baird said gasoline prices would have to rise by 60 percent and electricity by 50 percent, and the price of natural gas would have to more than double.

A study from his department forecast that this would mean that the economy would decline by 6.5 percent relative to current projections in 2008. By 2009, there would be 275,000 job losses and the unemployment rate would rise by a quarter.

The opposition parties as well as the small Green Party, which does not have a seat in Parliament, said the economic model Baird's department used made such false assumptions that it was useless, while ignoring the costs of doing nothing.

"This is a rigged study," Green leader Elizabeth May told reporters. "This is about designing the assumptions in such a way that you are guaranteed to have maximum negative economic impact unnecessarily. So this is a propaganda attempt."

She said the study assumed there would be no economic improvements from becoming more energy-efficient.

It also assumed there would be no use of technology such as carbon sequestration -- intended to remove carbon, partly blamed for global warming, from the atmosphere and bury it.

"How can anyone take them seriously?" Liberal Member of Parliament David McGuinty asked at a news conference. "This is shock-and-awe communications by Mr. Baird."

Baird said the government was enthusiastic about carbon sequestration but said this was only likely to be in widespread use by 2015 or so and couldn't be relied on in the short term.

He backed up his economic analysis by producing letters from five economists who had looked at the model.

They all said it was a reasonable or plausible analysis, though one -- the University of Calgary's David Keith -- said the report overstated the difficulty of implementing policies in the short term.

TD Bank chief economist Don Drummond, a former associate deputy finance minister, said a massive carbon tax implemented almost immediately appeared to be the only way to meet Kyoto in the short term.

"I sincerely hope no serious consideration is being given to implementing the policy. The economic costs are not acceptable," he wrote.

The Conservatives have announced several programs to curb greenhouse gases but environmentalists are looking for Baird's long-awaited announcement of imposed emissions targets on industry.

 


Story by Randall Palmer

 


REUTERS NEWS SERVICE