From the Fraser Institute

By Bjørn Lomborg

The best academic estimates show that over the century, policies to achieve net zero would cost every person on Earth the equivalent of more than CAD $4,000 every year. Of course, most people in poor countries cannot afford anywhere near this. If the cost falls solely on the rich world, the price-tag adds up to almost $30,000 (CAD) per person, per year, over the century.

Canada has made a legal commitment to achieve “net zero” carbon emissions by 2050. Back in 2015, then-Prime Minister Trudeau promised that climate action will “create jobs and economic growth” and the federal government insists it will create a “strong economy.” The truth is that the net zero policy generates vast costs and very little benefit—and Canada would be better off changing direction.

Achieving net zero carbon emissions is far more daunting than politicians have ever admitted. Canada is nowhere near on track. Annual Canadian CO₂ emissions have increased 20 per cent since 1990. In the time that Trudeau was prime minister, fossil fuel energy supply actually increased over 11 per cent. Similarly, the share of fossil fuels in Canada’s total energy supply (not just electricity) increased from 75 per cent in 2015 to 77 per cent in 2023.

Over the same period, the switch from coal to gas, and a tiny 0.4 percentage point increase in the energy from solar and wind, has reduced annual CO₂ emissions by less than three per cent. On that trend, getting to zero won’t take 25 years as the Liberal government promised, but more than 160 years. One study shows that the government’s current plan which won’t even reach net-zero will cost Canada a quarter of a million jobs, seven per cent lower GDP and wages on average $8,000 lower.

Globally, achieving net-zero will be even harder. Remember, Canada makes up about 1.5 per cent of global CO₂ emissions, and while Canada is already rich with plenty of energy, the world’s poor want much more energy.

In order to achieve global net-zero by 2050, by 2030 we would already need to achieve the equivalent of removing the combined emissions of China and the United States — every year. This is in the realm of science fiction.

The painful Covid lockdowns of 2020 only reduced global emissions by about six per cent. To achieve net zero, the UN points out that we would need to have doubled those reductions in 2021, tripled them in 2022, quadrupled them in 2023, and so on. This year they would need to be sextupled, and by 2030 increased 11-fold. So far, the world hasn’t even managed to start reducing global carbon emissions, which last year hit a new record.

Data from both the International Energy Agency and the US Energy Information Administration give added cause for skepticism. Both organizations foresee the world getting more energy from renewables: an increase from today’s 16 per cent to between one-quarter to one-third of all primary energy by 2050. But that is far from a transition. On an optimistically linear trend, this means we’re a century or two away from achieving 100 percent renewables.

Politicians like to blithely suggest the shift away from fossil fuels isn’t unprecedented, because in the past we transitioned from wood to coal, from coal to oil, and from oil to gas. The truth is, humanity hasn’t made a real energy transition even once. Coal didn’t replace wood but mostly added to global energy, just like oil and gas have added further additional energy. As in the past, solar and wind are now mostly adding to our global energy output, rather than replacing fossil fuels.

Indeed, it’s worth remembering that even after two centuries, humanity’s transition away from wood is not over. More than two billion mostly poor people still depend on wood for cooking and heating, and it still provides about 5 per cent of global energy.

Like Canada, the world remains fossil fuel-based, as it delivers more than four-fifths of energy. Over the last half century, our dependence has declined only slightly from 87 per cent to 82 per cent, but in absolute terms we have increased our fossil fuel use by more than 150 per cent. On the trajectory since 1971, we will reach zero fossil fuel use some nine centuries from now, and even the fastest period of recent decline from 2014 would see us taking over three centuries.

Global warming will create more problems than benefits, so achieving net-zero would see real benefits. Over the century, the average person would experience benefits worth $700 (CAD) each year.

But net zero policies will be much more expensive. The best academic estimates show that over the century, policies to achieve net zero would cost every person on Earth the equivalent of more than CAD $4,000 every year. Of course, most people in poor countries cannot afford anywhere near this. If the cost falls solely on the rich world, the price-tag adds up to almost $30,000 (CAD) per person, per year, over the century.

Every year over the 21st century, costs would vastly outweigh benefits, and global costs would exceed benefits by over CAD 32 trillion each year.

We would see much higher transport costs, higher electricity costs, higher heating and cooling costs and — as businesses would also have to pay for all this — drastic increases in the price of food and all other necessities. Just one example: net-zero targets would likely increase gas costs some two-to-four times even by 2030, costing consumers up to $US52.6 trillion. All that makes it a policy that just doesn’t make sense—for Canada and for the world.

Bjørn Lomborg

From Energy Now 

By Tammy Nemeth and Ron Wallace

Carney’s Costly Climate Vision Risks Another “Lost Liberal Decade”

A carbon border tax isn’t the simple offset it’s made out to be—it’s a complex regulatory quagmire poised to reshape Canada’s economy and trade. In its final days, the Trudeau government made commitments to mandate climate disclosures, preserve carbon taxes (both consumer and industrial) and advance a Carbon Border Adjustment Mechanism (CBAM). Newly minted Prime Minister Mark Carney, the godfather of climate finance, has embraced and pledged to accelerate these commitments, particularly the CBAM. Marketed as a strategic shift to bolster trade with the European Union (EU) and reduce reliance on the U.S., a CBAM appears straightforward: pay a domestic carbon price, or face an EU import fee. But the reality is far more extensive and invasive. Beyond the carbon tariffs, it demands rigorous emissions accounting, third-party verification and a crushing compliance burden.

Although it has been little debated, Carney’s proposed climate plan would transform and further undermine Canadian businesses and the economy. Contrary to Carney’s remarks in mid-March, the only jurisdiction that has implemented a CBAM is the EU, with implementation not set until 2026.  Meanwhile, the UK plans to implement a CBAM for 1 January 2027. In spite of Carney’s assertion that such a mechanism will be needed for trade with emerging Asian markets, the only Asian country that has released a possible plan for a CBAM is Taiwan. Thus, a Canadian CBAM would only align Canada with the EU and possibly the UK – assuming that those policies are implemented in face of the Trump Administrations’ turbulent tariff policies.

With the first phase of the EU’s CBAM, exporters of cement, iron and steel, aluminum, fertiliser, electricity and hydrogen must have paid a domestic carbon tax or the EU will charge more for those imports. But it’s much more than that. Even if exporting companies have a domestic carbon tax, they will still have to monitor, account for, and verify their CO2 emissions to certify the price they have paid domestically in order to trade with the EU. The purported goal is to reduce so-called “carbon leakage” which makes imports from emission-intensive sectors more costly in favour of products with fewer emissions.  Hence, the EU’s CBAM is effectively a CO2 emissions importation tariff equivalent to what would be paid by companies if the products were produced under the EU’s carbon pricing rules under their Emissions Trading System (ETS).

While that may sound simple enough, in practice the EU’s CBAM represents a significant expansion of government involvement with a new layer of bureaucracy. The EU system will require corporate emissions accounting of the direct and indirect emissions of production processes to calculate the embedded emissions. This type of emissions accounting is a central component of climate disclosures like those released by the Canadian Sustainability Standards Board.

Hence, the CBAM isn’t just a tariff: It’s a system for continuous emissions monitoring and verification. Unlike traditional tariffs tied to product value, the CBAM requires companies exporting to the EU to track embedded emissions and submit verified data to secure an EU-accredited verification. Piling complexity atop cost, importers must then file a CBAM declaration, reviewed and certified by an EU regulatory body, before obtaining an import certificate.

This system offers little discernible benefit for the environment. The CBAM ignores broader environmental regulatory efforts, fixating solely on taxation of embedded emissions. For Canadian exporters, Carney’s plan would impose an expensive, intricate web of compliance monitoring, verification and fees accompanied by uncertain administrative penalties.

Hence, any serious pivot to the EU to offset trade restrictions in the U.S. will require a transformation of Canada’s economy, one with a questionable return on investment.  Carney’s plan to diversify and accelerate trade with the EU, whose economies are increasingly shackled with burdensome climate-related policies, ignores the potential of successful trade negotiations with the U.S., India or emerging Asian countries. The U.S., our largest and most significant trading partner, has abandoned the Paris Climate Agreement, ceased defence of its climate-disclosure rule and will undoubtedly be seeking fewer, not more, climate-related tariffs. Meanwhile, despite rulings from the Supreme Court of Canada, Carney has doubled down on his support for the Trudeau governments’ Impact Assessment Act (Bill C-69) and confirmed intentions to proceed with an emissions cap on oil and gas production. Carney’s continuance of the Trudeau governments’ regulatory agenda combined with new, proposed trade policies will take Canada in directions not conducive to future economic growth or to furthering trade agreements with the U.S.

Canadians need to carefully consider whether or not Canada can endure, or afford, Carney’s costly climate vision that risks another “lost Liberal decade” of economic stagnation?

Tammy Nemeth is a U.K.-based strategic energy analyst.

Ron Wallace is an executive fellow of the Canadian Global Affairs Institute and the Canada West Foundation.