Kyoto inaction proves costly

Jul 11, 2002, vol. 24, no. 6
By Marianne Meadahl

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SFU energy expert Mark Jaccard (centre), with Bryn Sadownik and John Nyboer of SFU's energy and materials research group. The trio has written a new book on the cost of climate policy.

With each year of inaction, the costs of Canada reaching the tight time frame of the Kyoto accord grow significantly, according to a trio of SFU researchers.

After studying various and conflicting economic barometers on costs associated with lowering greenhouse gas (GHG) emissions, energy expert Mark Jaccard concludes that governments at all levels in Canada can launch low-risk policies that will lower the long-run costs of GHG reduction. But instead, their inaction while debating Kyoto ratification leads to higher costs and reduces policy options.

In their recently published book, The Cost of Climate Policy (UBC Press), Jaccard, and co-authors John Nyboer and Bryn Sadownik, show that Canada's rapidly increasing GHG emissions make a target such as Kyoto relatively costly, involving a 30 per cent reduction from where emissions otherwise would reach by 2010.

While the federal government is now suggesting that much of Canada's commitment might be achieved by purchasing low-cost credits from other countries, Jaccard says it remains to be seen if an international trading mechanism can be created in time, if the credits will be low cost, and if Canadians will accept massive transfers of funds to countries such as Russia to pay them for emission reductions that already occurred in the early 1990s as their economy collapsed.

“If, instead, significant domestic emission reductions are to be achieved, they will be costly because seven years provides little time for the turnover of equipment, retrofit of buildings, retooling of factories, expansion of infrastructure and changes in consumer preferences and lifestyles that would be required,” says Jaccard, an associate professor in the school of resource and environmental management. The researchers, who belong to SFU's energy and materials research group, show how a judicious mixture of market-oriented and regulatory policies can provide the long-run signals necessary to cause profound technological innovation, but warn that such policies take time for their effects to be felt.

Such policies, which they say should be launched quickly, can be designed in ways that reduce the risks of unnecessary costs, if more study shows higher than expected long-run costs of GHG reduction or lower than expected climate change risks.

The book doesn't take a position on whether Canada should ratify Kyoto, but instead provides decision-makers and interested Canadians with timely and expansive information that will help them determine how and by how much to reduce GHG emissions, and at what cost. The authors also provide sectoral and regional breakdowns of emission reduction actions and their costs. These include improvements in energy efficiency in buildings, vehicles and appliances; reducing personal vehicle use through the design of urban space and transportation plans; increasing the use of renewable energy, municipal waste and natural gas in electricity generation; switching toward ethanol and some hydrogen vehicles; development of technologies that separate and store carbon dioxide; and changes to forestry and agricultural management practices.

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