(OTTAWA) The economic cost of greenhouse gas (GHG) emissions is nearly five times higher than previously thought, Federal Environment Minister Steven Guilbeault said on Wednesday.
Posted at 9:10 p.m
Mia Rabson The Canadian Press
The minister told attendees at a climate change conference in Ottawa that the government has used updated scientific and economic models to overhaul the way it assesses the costs of climate change to Canadians.
The new figures have been in the works for months, but they follow a recent report by the Parliamentary Budget Officer on the economic costs of carbon pricing. This report did not explicitly equate the cost of the price of carbon with the cost of climate change itself.
PHOTO SEAN KILPATRICK, THE CANADIAN PRESS
Federal Environment Minister Steven Guilbeault
“The social cost updates of carbon simply show that every tonne of greenhouse gases costs the economy more,” Guilbeault said at the Net Zero Leadership Summit.
The social cost of carbon assesses the financial impact of each tonne of emissions on everything from food production to human health, disaster repair bills to property values.
The idea is that increased emissions contribute more to global warming, and that any increase in average global temperatures can increase the number and severity of extreme weather events.
More than seven years ago, an analysis estimated the cost to be about $54 per tonne in 2020. Guilbeault said the updated model suggests the number is actually closer to $247.
This year it is even higher at $261 per tonne of emissions and will reach $294 by 2030.
“Pause for a moment to understand what that means,” Guilbeault said.
Every ton of carbon that we reduce this year saves society as a whole $261, and we’re talking about reducing megatons, that’s millions of tons.
Steven Guilbeault, Federal Minister for the Environment
Between 2005 – the year Canada uses as the baseline for its 2030 emissions targets – and 2021, Canada eliminated 62 million tonnes of greenhouse gas emissions. Based on the new social cost of carbon, this equates to a saving of nearly $10 billion.
However, that figure does not include an estimate of the cost of disposing of those 62 million tons. The carbon price was $40 per tonne in 2021 and will rise to $170 per tonne in 2030.
Last year, a federal analysis of gasoline and diesel emissions reduction regulations found the cost of these policies was about $151 per ton.
In 2017, the Ecofiscal Commission of Canada estimated the cost of the Quebec EV subsidy to be about $355 per ton. Most provinces and the federal government now have some form of subsidies for electric vehicles.
Canada plans to phase out at least another 231 million tons by 2030. This would save 68 billion in emissions, but there are no direct comparisons to illustrate the cost of such a target.
Canada has taken dozens of other measures to meet this goal, including phasing out coal-fired power, developing renewable electricity, banning the sale of cars for gasoline, and limiting emissions from the oil and gas industry.
A recent analysis of carbon pricing by the Parliamentary Budget Officer shows that government climate rebates outweigh the direct costs of carbon pricing for most families, but when costs such as falling incomes or job losses are taken into account, many families may have less money to spend Available in 2030 as without CO2 pricing.
Guilbeault and others have criticized the report for not making it clear that climate change is itself contributing to job losses and falling incomes.
The analysis of the social costs of carbon analysis is done in collaboration with the US Environmental Protection Agency, which released its draft values last year but is still reviewing them before releasing a final version. Canada released its final numbers on Wednesday.