In its frenzy to 'do something' about greenhouse gas (GHG) emissions, BC's Liberal government created a $25 million Innovative Clean Energy Fund to subsidize projects fitting its green agenda. The fund will be financed from a new 0.4 per cent levy (government speak for tax) on hydro bills. But hold on. The government is taxing hydro, one of the greenest energy supplies in the country, to support green energy projects This makes no sense.

Only 3% of BC's GHG emissions come from energy, and 93% of BC's energy comes from green-friendly hydro. Taxing low emission energy to develop low emission energy sounds like another wasteful government subsidy program that could even have unexpected, and very negative results. What if people decide to start using their wood-burning fireplaces to save on heating costs That will mean an increase in air pollution. Moreover, subsidies undermine the logical reason for bringing the private sector into the electricity market: to keep electricity prices competitive.

Money from the new energy tax can go into any clean power or energy efficiency technology in the electricity, alternative energy, transportation, or oil and gas sectors. The goals vary, but one of the most poorly thought out is to showcase BC technologies that could have strong demand internationally. Power from sexy, alternative energy projects are very expensive, with wind at $71-$91, tidal at $100-$360, and solar at $700-$1,700 per megawatt hour. The last thing a country like China is going to do is import a more expensive energy technology. The energy subsidy, like most subsidies to business, is unlikely to result in the development of a made-in-BC high-tech export industry. Remember how the fast-ferries were going to re-start BC's shipbuilding industry

Another goal of the subsidy program is to demonstrate the commercial viability of new energy technologies. Taxpayers recently gave $89 million for a two-station, 20 bus hydrogen fuel cell demo project for the Olympics. How many 'demonstration projects' do taxpayers need to support We need to get back to the basic rationale for bringing the private sector into the energy market - to keep costs down, and stop using GHG's as an excuse for new taxes and subsidies.

The cost of electricity from our heritage hydro facilities is about $25 per megawatt hour. That will probably go up in the future because BC's hydro assets are old, the demand for energy is growing, and we will need new sources of supply. To keep prices down and shift some of the risk for new projects from the taxpayer to the private sector, the BC government sensibly introduced competition into the electricity market. Small, private hydro projects started operation in the 1990's and since 2002, BC Hydro's new sources of energy must come from the private sector. As a result, we now have 35 operating run-of-river hydro projects supplying electricity to BC Hydro, and the price of energy has remained competitive.

BC is fortunate to have competitively priced hydro as its main source of electricity. Hydro is low in GHG emissions, but just how much lower do we need to get, and at what price Increasing taxes to subsidize pet green projects with lofty, expensive, and probably unachievable goals is a step in the wrong direction.