New Analysis Shows Economic Benefits From Meeting Kyoto Target

The Bottom Line on Kyoto: The Economic Benefits of Canadian Action presents an economic analysis of policy proposals from the federal government’s National Climate Change Process. The study was commissioned by the David Suzuki Foundation and World Wildlife Fund.

Unlike some recent position papers from industry, the study weighs both the costs and benefits of shifting to a clean energy economy.

“Our study concludes that reducing greenhouse gas emissions will not slow down the Canadian economy or kill jobs. On balance, industry, workers and consumers will benefit,” said principal author Dr. Stephen Bernow, vice-president of the Tellus Institute. Dr. Bernow is an internationally recognized authority on energy policy and a past adviser to the World Bank and the U.S. Department of Energy, among many others.

“The benefit of implementing these policies to reduce annual greenhouse gas emissions would exceed the costs. Our study forecasts the net addition of 52,000 Canadian jobs by 2012, and a $2 billion addition to the GDP, over and above the growth forecast in ‘business as usual’ Canadian government projections.”

The policies that were analyzed would promote a shift to more energy-efficient buildings, cleaner transportation and industrial technologies, and local electrical co-generation. The resulting forecast shows job growth across the economy from industry’s investment in new technologies and from consumers re-directing money away from energy to other goods and services.

“No economic study can predict the future, but this report shows that Canadian critics of the Kyoto Protocol are mistaken,” said Jennifer Morgan, Washington-based Director of the Climate Change Campaign at World Wildlife Fund. “Climate change is only getting worse while governments delay. It’s time for Canada to ratify Kyoto, and give a positive signal to the companies and communities investing in clean energy technologies.”

“The federal government is delaying its adoption of the Kyoto Protocol partly because one-sided reports have exaggerated the cost,” said Gerry Scott, Director of the Climate Change Campaign at the David Suzuki Foundation. “Canada can enjoy economic benefits and maintain its international reputation by adopting the Protocol as soon as possible.”

The Bottom Line on Kyoto forecasts the following benefits from selected emission reduction policies, over and above business as usual projections:

A cumulative net economic savings of $4 billion across the economy reaching $1.6 billion per year, or $47 per capita, in 2012.

The net addition of 52,000 jobs in the economy generally, due to the redirection of consumer spending away from fuel and electricity and toward other goods, services, activities and investments;
A $135 average annual gain in household wages and salaries; and a $2 billion increase in the national GDP.

The 1997 Kyoto Protocol calls for mandatory greenhouse gas reductions and sets targets to reduce global warming. Under the Protocol, Canadian emissions averaged over the period 2008-2012 are to be six per cent lower than in 1990.

The Boston-based Tellus Institute is a non-profit organization offering research and consulting services in such areas as energy, water, waste, and land use.