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Economy

Reliance on fossil fuels remains virtually unchanged despite trillions for ‘clean energy’

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From the Fraser Institute

By Elmira Aliakbari, Julio Mejía, and Jason Clemens

” after tens of trillions of dollars spent on the transition away from fossil fuels, consumption declined by 3.8 percentage points as a share of total global energy. “

At COP28, the recent United Nations climate change conference in the United Arab Emirates, bureaucrats, politicians and activists from nearly 200 countries gathered to push for a “transition away from fossil fuels” and continue and indeed expedite efforts to achieve a global net-zero “carbon footprint” by 2050. However, despite significant spending on clean energy, the world’s dependence on fossil fuels remains largely unaffected, calling into question how realistic the commitment to zero emissions by 2050 is in the real world.

The UN staged the first “COP” conference in Berlin in 1995, marking the beginning of a collaborative international effort of energy transition and decarbonization. According to one report, global investment in renewable energy totalled US$7 billion in 1995.

Today, according to the latest data from the International Energy Agency (IEA), investment in “clean energy” by both governments and private industry reached more than US$1.7 trillion in 2023. That’s roughly the equivalent of the entire Australian economy this year. This spending includes more than just renewable power (wind, solar, etc.), which totalled $659 billion in 2023, but also electric vehicles, battery storage, nuclear, carbon capture and more.

More broadly, according to the IEA numbers, from 2015 to 2023, governments and industry worldwide have spent $11.7 trillion (inflation-adjusted) on clean energy. For context, this is basically the equivalent of all the goods and services produced in Germany, Japan and the United Kingdom combined in 2023. Simply put, an extraordinary amount of money and resources have been allocated to the transition away from fossil fuels for the better part of three decades.

So, what’s the return on this investment?

According to data from the Statistical Review of World Energy, from 1995 to 2022, the amount of fossil fuels (oil, gas and coal) consumed worldwide actually increased by 58.6 per cent. Specifically, oil consumption increased by 34.2 per cent, natural gas by 86.7 per cent and coal by 72.7 per cent.

There was, however, a small decline in the share of total energy provided by oil, gas and coal during that time period, falling from 85.6 per cent of total energy use in 1995 to 81.8 per cent in 2022. In other words, after tens of trillions of dollars spent on the transition away from fossil fuels, consumption declined by 3.8 percentage points as a share of total global energy.

Meanwhile, renewables increased from 0.6 per cent of total energy to 7.5 per cent over the same period but both nuclear and hydro declined (6.5 per cent to 4.0 per cent and 7.3 per cent to 6.7 per cent, respectively). In other words, the 3.8-percentage point decline in fossil fuels as a share of total energy in 2022 was offset by a net increase in clean energy of the same amount.

In addition to the massive amounts of spending, much of it paid for by taxpayers, this transition has come with other costs. Renewable sources such as wind and solar are not always available and therefore require back-up energy systems. Lack of investment in back-up systems and required infrastructure has resulted in marked price increases in energy and/or blackouts in parts of Europe and the United States.

At COP28, conference attendees including Canada’s Environment Minister Steven Guilbeault pledged to reach net-zero emissions—that our economy will emit no greenhouse gas emissions or offset its emissions—in 26 years. But given the trillions spent, the limited progress in reducing global reliance on fossil fuels, and the price increases and reduced energy reliability in countries that have meaningfully transitioned, that goal seems unrealistic in the real world.

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Economy

Trudeau’s bureaucrat hiring spree is out of control

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From the Canadian Taxpayers Federation

Author: Franco Terrazzano

Bureaucrats love to think of themselves as “public servants,” but who is really serving who around here?

Prime Minister Justin Trudeau added another 10,525 bureaucrats to the taxpayer payroll last year. Since becoming prime minister, Trudeau has added more than 108,000 new federal bureaucrats.

That’s a 42 per cent increase in the federal bureaucracy in less than a decade.

Ask yourself, are you getting 42 per cent better services from the federal government? Unless your paycheque comes from taxpayers, the answer is a big fat NO.

While Trudeau’s bureaucracy grew by 42 per cent, Canada’s population grew by 14 per cent.

That means there would be 72,491 fewer federal paper pushers had Trudeau kept growth in the bureaucracy in line with population growth.

It’s not just the size of the bureaucracy that’s ballooning – the cost is too.

The total cost of the federal payroll hit $67 billion last year, a record high. That’s a 68 per cent increase over 2016.

Trudeau gave federal bureaucrats more than one million pay raises in the last four years alone.

Since taking office, Trudeau also rubberstamped about $1.4 billion in taxpayer-funded bonuses to bureaucrats working in federal departments.

The bonuses were paid out despite the Parliamentary Budget Officer finding “less than 50 per cent of [performance] targets are consistently met.”

Then there’s the bonuses at failing Crown corporations.

CBC dished out $15 million in bonuses last year, while their President and CEO Catherine Tait whined about “chronic underfunding” and begged the government for more taxpayer cash. The CBC takes more than $1 billion from taxpayers every year.

The Canada Mortgage and Housing Corporation dished out $102 million in bonuses over the last four years, while Canadians couldn’t afford to buy a home. The bonuses rained down, despite the CMHC repeatedly claiming it’s “driven by one goal: housing affordability for all.”

The Bank of Canada dished out more than $60 million in bonuses over the last three years, even though it failed to do its one and only job: keep inflation low and around two per cent.

The average annual compensation for a full-time federal bureaucrat is $125,300, when pay, pension and perks are accounted for, according to the PBO.

There are now more than 110,000 federal bureaucrats taking home a six-figure base salary – an increase of 154 per cent since Trudeau took power.

Meanwhile, data from Statistics Canada suggests the average annual salary among all full-time workers in Canada was less than $70,000 in 2023.

Here’s why all this matters:

First, it’s an issue of fairness. The last few years have spelled hardship for Canadians who don’t work for the government, but do pay the bills.

Countless Canadians were sent to the ranks of the unemployed, lost their business and struggled to afford rising rents and costly grocery trips.

They’re paying higher taxes so more highly-paid bureaucrats can take bigger paycheques.

Second, more than half of the federal government’s day-to-day spending is consumed by the bureaucracy. That means any government that wants to fix the budget dumpster fire must shrink the bureaucracy.

Let’s recap:

Taxpayers paid for 108,000 new federal bureaucrats. Taxpayers paid for more than one million pay raises over the last four years. Taxpayers paid for more than $1 billion in bonuses.

And bureaucrats barely meet even half of their performance targets – targets they set for themselves.

It’s clear Trudeau’s bureaucratic bloat isn’t serving taxpayers. It’s time to find a pin and pop Ottawa’s ballooning bureaucracy.

This column was first published in the Western Standard on July 202, 2024.

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Economy

We’re Getting Poorer: GDP per Capita in Canada and the OECD

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From the Fraser Institute

By Alex Whalen and Milagros Palacios and Lawrence Schembri

Canada lost ground compared to key allies and trading partners such as the United States, United Kingdom, New Zealand, and Australia between 2014 and 2022.

Canada had the third-lowest growth in GDP per person from 2014 to 2022 among 30 advanced economies, finds a new study published by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

“In terms of GDP per person, a broad measure of living standards, Canada’s performance has weakened substantially in recent years,” said Alex Whalen, director of the Fraser Institute’s Atlantic Canada Prosperity Initiative and co-author of We’re Getting Poorer: GDP per Capita in Canada and the OECD, 2002–2060.

The study, which examines Canada’s historic and projected GDP per capita growth compared to similar OECD countries, finds that from 2002 to 2014, Canadian income growth as measured by GDP per person roughly kept pace with the rest of the OECD, but from 2014 to 2022 Canada’s growth rate stagnated.

In 2002, Canada’s GDP per capita was higher than the OECD average by US$3,141. By 2022, it had fallen well below the OECD average by US$231. Canada lost ground compared to key allies and trading partners such as the United
States, United Kingdom, New Zealand, and Australia between 2014 and 2022.

For example, Canadian GDP per person in 2014 was $44,710 (80.4 per cent of the US total of $55,605) but by 2022, Canada was only at $46,035 versus $63,685 in the US. In other words, the gap had grown from $10,895 to $17,649 by 2022 (all measures in inflation-adjusted US dollars).

“Canada has been experiencing a collapse in investment, low productivity growth, and a large and growing government sector, all of which contribute to reduced growth in living standards compared to our peer countries in the OECD,” said Lawrence Schembri, a senior fellow with the Fraser Institute and co-author.

  • This research bulletin examines historical and projected trends in the growth of Canada’s GDP per capita, and compares these trends to those in peer countries in the OECD.
  • Canadians have been getting poorer relative to residents of other countries in the OECD. From 2002 to 2014, Canadian income growth as measured by GDP per capita roughly kept pace with the rest of the OECD. From 2014 to 2022, however, Canada’s position declined sharply, ranking third-lowest among 30 countries for average growth over the period.
  • Between 2012 and 2022, Canada lost ground compared to key allies and trading partners such as the United States, United Kingdom, New Zealand, and Australia, with Canadian GDP per capita declining from 80.4% of the US level in 2012 to 72.3% in 2022.
  • Looking forward to 2060, Canada’s projected average annual growth rate for GDP per capita (0.78%) is the lowest among 30 OECD countries.
  • Canada’s GDP per capita (after adjusting by inflation), which exceeded the OECD average by US$3,141 in 2002 and was roughly equivalent to the OECD average in 2022, is projected to fall below the OECD average by US$8,617 in 2060.
  • The root cause of Canada’s declining long-term growth in GDP per capita—recent and projected—is very low or negative growth in labour productivity reflecting weak investment in physical and human capital per worker.
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