Mr. Prentice is right

It’s fashionable now to badmouth Environment Minister Jim Prentice and the Conservative government over Canada’s position on climate change. But if we step back a little, it seems the Canadian position on the Copenhagen agreement is the right one.

Mr. Prentice is right to hold back from committing Canada to the Copenhagen wave, which could be quite harmful to our country. Commitments beyond what has already been announced by Canada, namely a 20% drop in greenhouse gas emissions from the 2006 level, would hurt Canadian competitiveness. The minister is correct in emphasizing that the most effective environmental policy is one that takes the Canadian economy’s competitiveness into account. Copenhagen’s economic consequences fall into two categories:

  • 1. Consumers are hit with a green tax and pay more for the same products.
  • 2. Canadian businesses are hit with a green tax and are tempted to move to countries with a smaller environmental burden.

Either way, climate change agreements mean more taxes that Canadians can’t afford to pay, which will destroy jobs that Canadians can’t afford to lose. It seems clear that environmental issues cannot be discussed separately from economic considerations. According to a 2009 study, reducing greenhouse gas emissions by 25% by 2020 would cause Canadian GDP to fall 3.2%.

The Canadian economy has certain particularities that must be taken into account when Canada makes environmental commitments.

For example, transportation represents about 25% of greenhouse gas emissions. This exceeds the international average because our territory is much bigger than average.

Another example comes from the Canadian industrial sector, which has modernized and thus has already made significant progress in reducing polluting emissions. Cutting greenhouse gas emissions is easier for the Americans, with their older infrastructure.

Mr. Prentice’s position is in line with the interests of most citizens. And let’s not forget that, since the 1992 Earth Summit in Rio, we’ve been warned that the seven plagues of Egypt are about to strike. To the best of my knowledge, after nearly 18 years, none of these apocalyptic predictions has come true.

Michel Kelly-Gagnon is President and CEO of the Montreal Economic Institute.

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