Canada’s government wants us to pay for our GHG emissions … and everybody else’s, too

From today’s Financial Post, another look at Canada’s emissions, and again, wondering why our government portrays us as the environmental bad guys?

Early in my banking career in a discussion about statistics I was told an old joke that rang true enough that it stayed with me. The story goes like this: An interview for a job opening attracted a mathematician, a statistician and an economist. The employer asks them each to calculate the answer to two plus two. The mathematician says four. The statistician, after studying it for an hour, declared the answer to be somewhere between three and five. And several hours later, the economist raises his hand to ask: What answer would you prefer?

The joke explains why it’s so interesting to examine economic data presented in isolation of other related data. For example: the popular manner to present data related to GHG (greenhouse gas) emissions is via “per capita” output, but a better measure would calculate GHG emissions against the economic output of the country. The reason is that the impact on emissions is affected by a country’s population density, its climate and its trade (especially exports) all of which have an effect on GHG emissions.

As one example, the new NAFTA (or USMCA) is a trade deal between Canada, with a population density of four people per square mile; Mexico, with 57 people per square mile; and the U.S., with 92 people per square mile. Obviously, density per square mile will have a direct impact on GHG emissions, and the ability to get products to business and consumer markets, be they imported or exported or produced locally. Similarly, each country’s climate will impact GHG emissions. Canada is much colder than either Mexico or the U.S. It’s why Canadians who can afford it head south in the winter, while the rest of us stay home and try to stay warm by generating GHG emissions.

Canada’s GDP in 2017 was $1.653 trillion and our international trade saw us export $549.6 billion or 33.2 per cent of our GDP. We imported $573.6 billion, leaving us with a trade deficit of $24 billion. Our largest exports were “energy products,” totaling $94.8 billion, mainly crude oil and crude bitumen.

Natural Resources Canada notes of Canada’s crude oil production: “GHG emissions per barrel of oil produced in the oilsands have fallen 29 per cent since 2000” and “Canada is the fourth largest producer and fourth largest exporter of oil in the world.” It also notes that the oilsands emit about 60 megatonnes of GHGs per year. That’s 8.5 per cent of Canada’s total emissions and 0.13 per cent of annual global emissions. Eighty per cent of the emissions in a barrel of Canadian oil are emitted by the end user — almost all of it outside of Canada.

Now, if one examines GHG emissions of Middle Eastern oil-producing countries such as Saudi Arabia, UAE, Kuwait, Qatar and Oman, one finds they emit more GHGs “per capita” than Canada — and way more GHG emissions per $1,000 of GDP.

In 2017 Canada exported $444.9 billion to its biggest markets: NAFTA and China (comprising 81 per cent of all Canadian exports). Those exports generated GHG emissions of 301 kilograms per $1,000 of GDP, totaling approximately 133,915 kilotons.

Our imports from the U.S., Mexico and China amounted to $414.5 billion and represented about 181,386 kilotons of GHG emissions produced in those three countries. So, despite importing $30.4 billion less from the U.S., Mexico and China, the GHGs that those countries produced to make goods imported by Canada was around 47,471 kilotons higher than the GHGs Canada produced to export goods to those three countries — exports of which oil made up the largest share, and exports that were actually worth more in total value than the higher-emitting imports.

Despite this, Prime Minister Justin Trudeau and Minister of the Environment Catherine McKenna want to hit all Canadians with a carbon tax. In effect, they want us to pay for our trading partners’ emissions as well as our own. But if we really wanted to contribute to a global reduction in GHGs, perhaps the better way would be to build a pipeline or two in order to get our low-emission crude to foreign markets. That would generate good jobs and tax revenue for Canada while reducing global emissions. Who knows? It might even help balance the federal balance the federal budget.

Parker Gallant is a retired bank executive.

 

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Is it time for Canada to claim environmental hero status?

Canada’s greenhouse gas emissions are well below the world average and despite a resource extraction economy, our air pollution improvement is among the best in the world—so why are we made to feel so guilty?

Recently, I discussed to how politicians continue to “virtue signal when advocating for renewable energy.  And sometimes, they omit facts. That might be because the omitted facts fail to support the “virtue” they are promoting, like a clean green environment, or maybe, the politicians don’t feel the need to discuss  cost/benefit or examine that closely.

New information has come to light as to why politicians leave out the facts sometimes.

On December 19, 2018 an article by Philip Cross published in the Financial Post on renewable energy was blunt in its lede: “StatCan just exposed how worthless ‘green’ industries are to Canada’s economy” — that was exactly what many have long suspected.  Mr. Cross  detailed how false or exaggerated information is fed to politicians by proponents of ventures (wind and solar power, for example) and how those politicians in turn, embarked on “virtuous” actions, based on those supposed facts.

They issue press releases which are then gobbled up by the media for the masses to digest.

Excerpts from the Cross article highlight the failings of those “green” industries. 

“Environmental and clean-technology industries accounted for a puny 3.1 per cent of Canada’s GDP in 2017. More importantly, StatCan noted that this ratio has remained relatively stable since 2007 when the data began. The green economy’s share of GDP stagnated for 10 of the biggest years for pro-green policies and hefty government support, and against historically slow growth in the rest of the economy. If the green economy cannot flourish in these circumstances, it is doubtful it ever will.

The green economy is even less important for jobs, contributing only 1.6 per cent of total employment. If clean-tech and green-tech are the jobs of tomorrow, as their boosters tirelessly claim, then our job prospects are bleak indeed.”

A few weeks after the StatCan report, another discovery the media apparently missed (or ignored) came to light.

At some point in early 2018, just before the Wynne-led Ontario government lost the election, Global Affairs Canada issued a 144-page Voluntary National Review in respect to the 2030 Agenda.  The “Agenda” was a precursor to The Paris Agreement and the synergies in respect to aligning issues related to climate change are significant.

Here are a just few examples:

  1. “The Government of Canada is committed to supporting the poorest and most-vulnerable populations affected by climate change and has committed $2.65 billion in climate finance by 2020-2021 to help developing countries transition to a lower-carbon, climate-resilient economy.”
  2. “The Investing in Canada Plan allocates $9.2 billion to provinces and territories for green infrastructure investments to support mitigation projects, build infrastructure to help communities respond and adapt to the impacts of a changing climate, and build other green infrastructure that supports a healthy environment, including water and wastewater infrastructure.”
  3. “Significant investments are being made to develop a national network of charging and re-fuelling stations for alternative fuel vehicles. This infrastructure will enable Canadians to use lower-carbon or zero-emission vehicles.”
  4. ”In addition, Canada is working with its continental partners on the North American Renewable Integration Study (NARIS). By 2019, NARIS is expected to identify the key opportunities and challenges of integrating large amounts of wind, solar and hydro capacity into the North American electricity grid.”
  5. “Clean, non-emitting electricity systems will be the cornerstone of a modern, lower-carbon economy. Several programs have been introduced to support this goal, including initiatives to reduce the use of diesel in rural and remote areas, including for Indigenous communities, and support renewable power technologies, such as geothermal, tidal and offshore wind projects.”

Those five examples are a demonstration of the current Canadian government’s belief that simply spending billions of Canadian tax dollars in Canada and around the world will somehow impact climate change.

Climate change advocacy via continued virtue signaling about a carbon-tax is being challenged by several provinces; however, Canada’s federal government seems intent on causing further damage to Canada’s economy despite the evidence on “green” fails by StatCan.

The “Voluntary National Review” suggests how the spending will be paid for: “… revenues from oil and gas production will help fund the lower-carbon transition.” Clearly, “revenues from oil and gas production” is a reference to the “carbon tax” which will increase substantially over a short time period, affecting all Canadians and pushing our economic prospects down as those “revenues” a.k.a. “carbon taxes” drive up the price of everything we consume.

The “Review” references other reports/studies, for example, The Institute for Health Metrics and Evaluation (IHME) and a report on health, the “Global Burden of Disease (GBD) project [which] ranked air pollution as the fourth-leading risk factor contributing to early deaths (6.9 million deaths worldwide) each year. In Canada, the GBD ranked air pollution as the 11th leading risk factor for premature death.”

The GBD report compares data from 2007 to 2017 and provides + or – percentages. For Canada, the drop in the “air pollution” risk factor was negative 17.5% and appears to be one of the biggest drops of any country. Surprisingly, Poland which gets 80% of its electricity from coal, shows a drop of 14.4%. China was up by 1.7% whereas India was down 2.7% and the USA by 5%. Germany (the bastion of renewable energy) was down by only 2.7%. This data suggests Canada is a leader in reducing air pollution.

As one would expect, the Review says a lot about GHGs and climate change, and laid out reputed accomplishments and future plans. The Review also lectures us, telling us to use less: “The best energy is the energy we do not use. By doing more with less, Canadians can significantly reduce GHG emissions, save money, improve their environment and make their homes more comfortable.”

Most of us heard similar lectures by the Ontario Liberal government (Premier Wynne once chided Ontarians for being “bad actors” when it came to electricity use) and we did consume less. However, we failed to see any savings. In fact, we paid more for less!  (Voters didn’t buy the non-truths, judging from the election results last June.)

On the issue of GHG emissions the data available is extensive and varying.  A simple Google search on list of countries by carbon dioxide emission provides almost 8.7 million hits. Canadians are generally told they contribute 1.6% of Global GHG and from what was available in reviewing some Google links, that appears to be in the ballpark.

One measure where Canada seems to stand out favourably is in the measurement of “Emissions (kg) per $1,000 [US$] of GDP” despite our dependence on agriculture, energy, forestry and mining which collectively represent over 50% of our exports.  Canada’s emissions were 301.0 kg/$1,000 of GDP versus the world average of 490.8 kg. The USA is 324.2 kg and China is 1,235.0/kg. France stands out as the lowest at 110.5 kg and Uzbekistan is the highest at 1960.9.

Taking all this into account, and with the knowledge that Canada is leading the world in reducing air pollution while actually being a low emitter of GHGs in respect to our GDP, and despite our dependence on extraction of natural resources including oil and gas, the question is this — why is the Government of Canada demanding a carbon tax from us and penalizing us domestically with useless intermittent renewable energy and massive conservation spending? With only 1.6% of global emissions we are unable to save the world.

It’s time to let the rest of the world and their 98.4% of emissions catch up!

PARKER GALLANT