The Conference Board of Canada, usually described as a business-friendly think tank, has come out with a report that is refreshingly honest, and even a bit subversive — especially if you pay extra attention to some sidebars, consider what the authors deliberately left out, and are at least a little familiar with the science of power consumption and generation.
The full report, which is behind a freewall — it is downloadable for the cost of supplying your contact information — concludes that converting Canada’s economy to a carbon-free energy mix won’t actually cost all that much. But what I find more interesting is that much of the report’s details support the notion that even optimistic predictions are unnecessarily (small-c) conservative. This suggests the authors (Len Coad, Robyn Gibbard, Alicia Macdonald, and Matthew Stewart) are trying to serve two audiences: the captains of industry who are their patrons on the one hand, and the folks who will do the real heavy-lifting during the coming transition period on the other.
The report’s main thrust is calculating the economic impact of impending carbon taxes, which are scheduled to come into effect next year. You don’t need to worry about the precise numbers, which are all really not much more than barely educated guesses. The important part is even the more aggressive scenarios (like taxes rising to $200/tonne, several times even the highest of the carbon taxes now in effect) show that the country won’t fall apart.
Overall, the economic impact of eliminating most fossil fuels from the power generation mix is significant—but not overwhelming. The total impact on GDP, at $7.2 billion, is comparable to the output of a relatively small Canadian industry.
So that’s good news.
The even-better news is how much the authors of The Cost of a Cleaner Future: Examining the Economic Impacts of Reducing GHG Emission have managed to misrepresent about the likely future, either deliberately or disingenuously.
First, there is scant mention of the role of either energy efficiency or electrification on future power demand, even though both of these factors are critical to any useful understanding of what’s to come. First, Moore’s Law is pretty much still in effect and something similar continues to hold sway over how much energy we need to do most of what passes for work these days. Not to take into account expected declines in demand thanks to more efficient technology is bizarre to say the least.
Even more puzzling is the failure to address what happens when you switch from running your economy on fossil fuels to running on electricity. The bottom line is you lose a lot less energy to waste heat. Much effort has been made by others to anticipate this effect and the outcome of those calculations. As Mark Jacobson and Mark Delucci have demonstrated repeatedly, switching to an economy based on wind, water and solar will actually mean demand will fall, not rise, even when you take into account population and economic growth. The difference is actually about 30%. Some have taken issue with Jacobson’s numbers, but even if he’s missed something (which I doubt) and his estimates are off by a bit, the idea deserves at least some mention in a document that pretends to be running sophisticated model of future energy needs.
Instead we get lines like “To eliminate fossil fuels from the grid, over 20 gigawatts of installed generating capacity will need to be replaced.” If Jacobson is right, we’ll actually only need 14 GW. That’s significant, and if you’re a jurisdiction like Alberta or Saskatchewan, now relying on coal, oil and gas for 70-78% of your electricity, every gigawatt is going to count.
Coad et al. also seem to be stuck in old-school thinking when it comes to what generating electricity means from an industrial point of view. They write:
Acceptance of large-scale projects: Substantial investment in large-scale hydro, nuclear, wind, and transmission projects will be required in all parts of the country. Large-scale projects typically attract their share of controversy, and acceptance of these projects among environmentalists, Indigenous groups, and the public is necessary.
Yes, some large-scale projects will be built. Cities are hungry beasts. The controversial Site C hydro dam in northern B.C. will almost certainly overcome the opposition it now faces because there’s just to much potential energy sitting there for it not to be used — mostly by Alberta, which will need something to replace all the coal it’s now burning. But nuclear? Doubtful, unless we can come up with economical options for fancy new thorium reactors. The more problematic aspect of this vision is the idea that centralized electricity generation has a major role to play in the future. It probably does, but only to an extent. Decentralized, small-scale generation in the form of wind, solar, run-of-river hydro and geothermal are widely understood to be more likely candidates.
All of this means things will probably be even less disruptive, create even more jobs, and cost even less to the economy, than the report foresees. And what they foresee isn’t that dark to begin with. There are hints that the authors know this. Sprinkled throughout are references and asides that cast doubt on the conventional thinking they ostensibly embrace. For example, there’s a sidebar devoted to debunking (politely) the idea that closing the coal-fired power plants in Ontario is responsible for the recent hikes in electricity bills in the province. In reality, the causes are many and the situation is much more complicated than that. For one thing, “the province has ended up with far more generation capacity than it needs.”
There’s also a fair bit of speculation about the bigger picture, especially when the more dramatic scenarios are explored:
The fact that the GDP hit is so small relative to the lost investment in this pathway provides an interesting insight. It suggests that the investments being given up in this pathway were contributing relatively little to GDP in Canada, as most of the forgone investment would have been spent on imported goods and services.
…if we broaden the scope beyond just looking at the required investments and assess how behavioural and policy changes can impact the results, it is evident that deep emissions reductions are possible at a much smaller cost.
Indeed. Even the Conference Board of Canada is telling you to stop worrying so much about giving up fossil fuels. How about that?