Studying the costs of “green” proposals

A vast majority of Canadians would like to see a reduction in greenhouse gas emissions.

Environmental groups have proposed several actions and policies to achieve this.

Germain Belzile is a professor at École des Hautes Études Commerciales de Montréal (HEC). He is a research associate at the Montreal Economic Institute (MEI) think-tank and co-authro of a study which looked at the costs of these proposals.

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The Research Paper entitled “Can We Get Rid of Oil? The Costs of an Accelerated Energy Transition” was prepared by Youri Chassin and Germain Belzile in collaboration with Alexandre Moreau, respectively Economist and Research Director, Senior Fellow and Public Policy Analyst of the Montreal Economic Institute (MEI).

Many environmental groups have long called for a reduction of our dependence upon oil in an effort to reduce greenhouse gasses (GHG)>

While proposing a variety of ways to achieve this, little study has been done on the wider economic implications of specific proposals, and whether they would actually achieve the stated goals.

The authors of the MEI report analyzed the potential effects of the proposals of two Quebec-based environmental groups , Equiterre, and Vivre en Ville.

The study estimated that implementing the ideas of these two groups alone would cost the province of Quebec $6.4 billion, or, each household in Quebec over $1,800 a year.

In Quebec and Canada, in spite of a clear majority of over three-quarters of Canadians saying that climate change is an important issue,  barely 12% of respondents would be willing to take on an additional expense of over $1,500 a year to fight climate change.

One such proposal is the creation of the Bixi bike sharing programme in many municipalities. In Montreal, the Bixi programme went bankrupt in spite of an influx of millions of dollars of public money, and was revived this year at a cost of many more millions to taxpayers. The report says that environmental group cost estimates for such a programme at $40 million, are far off target and real costs would be over $100 million.

In spite of the costs and dramatic changes proposed, the study showed that provincial oil consumption would decrease by 20% and greenhouse gas emissions would only decrease by about 12%. They say similar limited results would be achieved elsewhere in Canada.

The study also looked into the claim that costs and job loss associated with such greenhouse gas changes would be offset by new jobs in the green technology.

The researchers found that the more likely scenario would be a rather substantial net loss of jobs, and an increased financial burden to subsidize an acceleration into green technology and jobs.

The report suggests that while GHG reduction is desired, many of the proposals would result in profound societal changes and that Canadians will bear the effects and costs.

It also suggests that policy makers study the wide ranging ripple effects of such proposed policies and that promises should be realistic and viable if they are to avoid failures such as Kyoto.

LEGER POLL: A Study of Canadian Support for Measures to  Reduce Oil Consumption