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Electric buses: Over $1,500 per tonne of GHG emissions avoided

Montreal, November 4, 2021 – With many policy-makers gathered in Glasgow for COP26, the Quebec government made a big show of announcing over $5 billion in spending for the purchase of electric city buses. According to the Montreal Economic Institute’s preliminary calculations, this would be one of the most expensive and least effective measures for reducing Quebec’s GHG emissions. Miguel Ouellette, Director of Operations and Economist at the MEI, had some thoughts on the matter.

“We all agree that Quebec can and must take action to achieve its GHG emission reduction targets. Yet the government has a moral duty to achieve these reductions at the lowest possible cost. Unfortunately, it is doing the exact opposite,” says Mr. Ouellette. “Without even taking into account the $2.6 billion that will serve to retrofit garages for the electric buses, it will cost over $1,500 for each tonne of GHGs not emitted due to this enormous expenditure of $2.4 billion for the purchase of these buses. Moreover, even assuming that the money saved by not buying new gas-powered buses is returned to taxpayers, the cost per tonne avoided still works out to around $500. Meanwhile, a tonne of emissions currently goes for about $29 on the carbon market. As for the federal carbon tax, it is currently $40, and will rise to $170 by 2030,” adds the economist.

“No matter how you slice it, the cost of this Quebec government measure is clearly much too high for the anticipated benefit. Even compared to an elevated federal tax, the reduction of emissions through the purchase of electric buses is nine times more expensive! It’s the equivalent of making long detours down country roads instead of taking the highway to get where you’re going,” concludes the economist.

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The Montreal Economic Institute is an independent public policy think tank. Through its publications, media appearances, and advisory services to policy-makers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.


Interview requests: Marie-Eve McNicoll, Communications Advisor, Cell. 581-777-5060, Email: memcnicoll@iedm.org

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