13 responses to “Globally credible GHG policy would help, not hurt, the oilsands”

  1. NicR

    Andrew -

    I’ve been following your blog for a few weeks and really enjoying the commentary. Haven’t had much of a reason to comment, because I agree with most of what you say. Here, though, I have a quibble. You imply in this post that the main reason that Canada’s GHG emissions have grown faster since 1990 (which I agree is an arbitrary baseline) than those of European countries is our faster population growth and faster economic growth. Partly, this is right. But another key factor is the fact that the EU countries have reduced GHG intensity much faster than Canada. We can determine the relative significance of these three trends by decomposing emissions growth as follows:

    GHG = POP * GDP/POP * GHG/GDP

    In Canada, population has grown by about 20% since 1990, similar to Australia and US, but substantially higher than the 5-10% aggregate growth rate in most of the EU countries. As you say, this puts upward pressure on emissions in Canada. Normalizing for population growth makes Canada’s growth in emissions look less severe compared to Europe. The second term – per capita economic growth – is a wash. Canada grew (on a per capita basis) at a similar rate as most EU countries. A bit faster than France, a bit slower than the UK, but similar. The last term, though, is missed from your commentary, and I think it’s important. Canada’s GHG intensity dropped by about 20% since 1990, or roughly 1%/year. This sounds like a lot, but it less than half the 35-50% drop in UK, Germany, Netherlands, Belgium, etc. And the drop in these countries isn’t a one-time blip due to busting coal unions and discovery of gas in the UK, or the reunification of East and West Germany (although there is a noticeable blip in the series around 1990-1992). In contrast, emissions intensity in European countries continues to improve at a faster rate than Canada ever since 1990. I think part of this is due to the “aggressive” policies, urban planning, etc. that David Suzuki loves about Europe. Although there are laudable initiatives like the Specified Gas Emitters Framework in Alberta, I think Canada does continue to lag behind.

    Great post as usual, and keep up the good work,

    Nic

  2. Joel Wood

    Andrew,

    Great post as always. Is there research to suggest that policies similar to your fee-bate and R&D approach would be as efficient or more efficient than a carbon tax with the revenue reducing other distortionary taxes? Or is this more of a pragmatic policy suggestion since it is based on tweaking the current Alberta framework?

    Joel

  3. NicR

    Joel, a shameless plug:

    This issue of Canadian Public Policy contains an article called “Intensity-based climate policy in Canada” that addresses the issue that you ask about:
    http://economics.ca/cgi/jab?journal=cpp&article=v36n4p0409

    1. Joel Wood

      Thanks Nic. I’ll give your article a read. I hadn’t looked at the February issue yet. It looks like there is also an article on wind power investment in Ontario. Interesting.

      Joel

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