Joe Oliver: Our energy self-delusion continues
Ottawa is effectively killing any chance to reduce net global emissions by substituting Canadian gas for much higher-emitting coal in Asia
Economically developed countries have committed to start transitioning off fossil fuels, even though that commitment is disconnected from technological and economic reality. As a result, their policies have exacerbated a global energy crisis, with severe geopolitical and domestic implications. Canada is an active participant in the self-delusion.
We are ceaselessly told that the justification for radically transforming our energy system, which has brought unprecedented prosperity to billions of people, is to reduce GHG emissions and thereby save the planet from an impending climate catastrophe. Even though Canada represents only 1.6 per cent of total emissions and cannot make a difference to global climate, we have a moral obligation to do our part in a worldwide effort. A common-sense approach would be to optimize our contribution while limiting damage to the economy. Instead, we seem determined to minimize our effectiveness and maximize self-harm.
According to a recent report from Queen’s University’s Institute for Sustainable Finance, Canada will need to spend over $200 billion to fulfill the federal government’s latest pledge to reduce GHG emissions by 40-45 per cent below 2020 levels this decade. That does not include the immense opportunity cost of not developing and exporting oil and gas overseas. Furthermore, the proposed transition could jeopardize 800,000 direct and indirect jobs, including many held by Indigenous people, who account for 7.4 per cent of oil and gas sector employment. Even more bracing, RBC Economics concluded that Canada will need to spend $2 trillion to achieve net-zero emissions in 30 years.
Yet environmental NGOs argue, with serene certitude, that green energy can be a cost-effective substitute for fossil fuels. Perhaps some day, but not yet. Hence the crucial need for natural gas to bridge the transition by supplying backup energy when the sun does not shine and the wind does not blow.
Right now, the U.K. and European Union are facing an energy crisis, with rising prices and risk of blackouts, bankruptcies and, as in China, government intervention to reduce energy consumption. Since blackouts and unaffordable prices can be politically fatal, the effort to transition to green energy is in jeopardy.
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