Kyoto Based on Tenuous Assumptions, Ottawa Not Telling Full Story

Ottawa - The Canadian Taxpayers Federation (CTF) today released updated projections of the cost to Canadian families to implement the Kyoto Protocol. The international treaty, which will come into effect tomorrow, requires Canada to reduce average carbon dioxide emissions to 6 per cent below 1990 levels by 2008-12, but because the country's output of greenhouse gases has increased by 30 per cent since 1990 dramatic cuts in energy output are needed in short order.

The CTF update is based on its November, 2002, study entitled Counting the Costs: The Effects of the Federal Kyoto Strategy on Canadian Households, authored by noted academic Dr. Ross McKitrick. The original report predicted the price increases and wage reductions needed to bring energy consumption down to Kyoto levels would reduce annual real net household income by $2,700 annually. The updated figure raises the cost to $3,000 per household, per year, by 2010.

"The only way to meet Kyoto targets without spending billions of tax dollars to buy 'hot air' from Russians is with strong price incentives to curb energy demand here at home," said CTF Federal Director John Williamson. "And this means raising the cost of energy by way of higher taxes, which will mean lower wages and reduced family incomes."

The underlying assumptions of the 2002 study have not changed, namely that Ottawa has not conducted an independent review of the science or cost estimates behind Kyoto; that preferences for energy consumption are stable; and the assumptions of a smoothly-functioning international emissions credit market are flawed.

"As a result of Ottawa's inaction on the Kyoto file the cost paid by Canadians will be higher. Canada will need deeper cuts, over a shorter period of time, and this will have a negative impact on the economy," noted Williamson. "Ottawa is stuck in a dreamland. Environment Minister Stéphane Dion sounds more like Chairman Mao than a responsible Cabinet minister when he says Kyoto 'will appeal to Canadians; that will, I think, mobilize the population to a great cause.'"

"It is simply not possible to reduce CO2 emissions to the level required by the protocol by asking Canadians to turn down the thermostat, wash their clothes in cold water, and retrofit home windows. The more Canadians learn about Kyoto the less they like about it, particularly when it will mean making drastic changes to our way of life without a corresponding reduction in global emissions," concluded Williamson. "Ottawa needs to get real; Canada alone cannot save the environment on the backs of its taxpayers."