A slight economic impact has been predicted once Alberta’s new climate change policy comes into effect in January.
The plan, which includes the end of coal-fired electricity plants by 2030 and higher levies on carbon emitters, would slow economic growth by .05 percent, according to a government document released Oct. 31.
The government has developed a credible climate plan that looks at every aspect of the economy, Shannon Phillips, the minister responsible for the Climate Change Office, told reporters.
“There is no no-cost scenario in climate policy,” she said.
“You can move forward with costly regulations or perhaps spend billions of dollars on carbon capture or storage or perhaps undertake a cap-and-trade system that would result in a capital transfer out of Alberta or you can do what most economists across the spectrum have indicated is the least cost to the economy, which is to price carbon.”
International investors want a credible climate change plan, and Phillips anticipated $10 billion investment in renewable energy. The economic prospects should further improve if a pipeline is built to move Alberta oil to tidewater, she added.
“We are looking at .05 percent off the expected GDP rate of growth, and that does not factor in all the other investments we expect,” she said.
The economic model was based partly on Statistics Canada numbers that takes into account currency changes, population changes, exports, imports, inflation and oil prices. The ongoing analysis will change over time as the plan continues to be developed.
However, groups are asking for more detailed information and worry that these changes could result in soaring energy bills.
The Manning Centre, a conservative think- tank in Calgary, asked for more information about costs to households and small businesses. The government suggested electricity prices could go up by 20 percent between 2021 and 2025 and 10 percent between 2026 and 2030.
“Our concern is that the government hasn’t released too much analysis on how their changes are going to impact both consumers and businesses,” said Colin Craig, director of strategic communication at the centre.
He said the policies have been poorly thought out. The low price of oil has already damaged the economy, and adding more costs worsens the outlook.
“Government policies have made a bad situation worse because the provincial government doesn’t have a clue about economics so they bring these polices in force and don’t really understand what the ramifications are and obviously the end result is job loss and financial pain for business,” he said.
He said the climate plan needs more homework and could come with unintended consequences. One of those is an Alberta cost of production that is not competitive with other jurisdictions.
“When you have one jurisdiction that is imposing heavy costs on businesses, then that reduces their ability to compete,” he said.
“Not only could some producers in the agriculture sector face stiffer competition from products outside the province that don’t have those government charges, but also it could (hurt) Alberta’s ability to compete when it wants to export its products because the prices here are going to be higher.”