The Cost of Bill C-288 to Canadian Families and Business

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Chart 1: World Energy Consumption, 2003-2030

World energy demand by selected region from 2003 projected to 2030.

Key information

• World energy demand is expected to increase significantly over the next 20 years.
• About 70% of this increase is accounted for by developing countries.
• Energy demand of non-OECD countries is expected to surpass levels of the OECD soon after 2010, and continue to rise steadily.
• Energy demand by OECD countries grows slower.  Europe's energy demand is almost stable out to 2030.

Chart 2: World Carbon Dioxide Emissions by Region, 1990-2030

World carbon dioxide emissions by selected region from 1990 projected to 2030.

Key information

• Emissions from developing countries are projected to surpass total OECD emissions between 2010 and 2015, growing by about 3.4% annually out to 2030.
• By comparison, emissions from OECD countries are projected to grow by 1.1% annually over the same period.

Chart 3: GHG Emissions by Region and Selected Countries, 1990 and 2004

Greenhouse gas emissions by selected regions and countries in 1990 and 2004.

Key information

• Shows the progress of various countries and regions in curbing the growth of greenhouse gas emissions since 1990, the baseline year used in the targets set by the Kyoto Protocol.
• The greatest GHG emissions increase over this period was in the developing Asian nations, primarily China and India, where emissions grew by some 67% from 1990 to 2004.
• The European Community stabilized their GHG emissions from 1990 to 2004.
• The US and Australia, both of which did not ratify the Kyoto Protocol, have seen significant emissions increases.
• Canada's emissions are about the same level as the UK's, and less than both Germany and Japan.  However, they have grown steadily since 1990, more so than any of the other developed countries shown in the chart.

Chart 4: Canada's GHG Emissions by Source, 1990-2004

Primary sources of Canada's greenhouse gas emissions from 1990 to 2004.

Key information

• Fossil fuel production and consumption account for over 80% of Canada's GHG emissions, with emissions increasing by about 30% between 1990 and 2004.
• Stationary fossil fuel combustion accounts for 47% of Canada's total GHG emissions, followed by transportation sources at 25%.
• Industrial process emissions and agriculture each account for about 7% of Canada's total emissions in 2004.

Chart 5: Provincial GHG Emission Levels, 2004

Provincial greenhouse gas emissions in 2004 and growth since 1990.

Key information

• Alberta (32%) and Ontario (28%) have the highest emission levels.  This directly corresponds to population levels and primary industry.
• Quebec, Saskatchewan and British Columbia are also large emitters.
• Alberta's emissions increased 43% from 1990 to 2004, while Ontario and Saskatchewan saw growth in their emissions of 17% over this same period. 

Chart 6: Canada's GHG Emissions, Projected to 2012

Canada's projected level of greenhouse gas emissions over the Kyoto period relative to Canada's Kyoto target.

Key information

• Canada's Kyoto target level of emissions is 563 megatonnes on average per year between 2008 and 2012.
• Canada's Kyoto “gap” is projected to be on average about 260 megatonnes per year over the Kyoto period.  This is about 33% of the projected average emissions level over the same period.

Chart 7: Emissions Reductions

Projected emissions reductions from the policy scenario from 2008 to 2012

Key information

• 25% of Canada's emissions reductions would be international credit purchases
• 75% would be domestic reductions resulting from the carbon tax.
• Canada would be short of its Kyoto target in 2008 and 2009, and would exceed its target in 2011 and 2012, such that the average annual reduction over the five year period equalled roughly 260 megatonnes.

Chart 8: Impact on GDP Growth

Canada's projected GDP under the policy scenario and under the business-as-usual scenario from 2005 to 2012.

Key information

• GDP would initially decline by more than 6.5% relative to current projections in 2008, falling to a level about 4.2% below that of 2007.
• The chart indicates that GDP would not recover to 2007 levels until about 2010.
• The impacts depicted do not incorporate a likely monetary policy and nominal exchange rate response that might mitigate some of the impact (represented by the dashed line).

Chart 9: Energy Trade Impacts

Change in Canada's net exports of energy commodities from 2008 to 2012 relative to the projected business-as-usual levels.

Key information

• Net exports of oil and natural gas show large decreases, particularly in the early years, relative to projected levels.
• Net exports of coal would increase slightly relative to projected levels as a result of the policy.
• Some increase in net exports of electricity would result from the policy.

Chart 10: Energy Price Increases

Increases in consumer energy prices from 2008 to 2012 relative to projected business-as-usual prices.

Key information

• All fossil fuel energy will be more expensive.
• Natural gas prices would be more than double projected levels, as a result of the carbon tax.
• Electricity prices increase by about 50% by 2012 as a result of the expense of paying a carbon tax or purchasing emission credits that are passed on the to the retail customers.
• Transportation fuels (gasoline and diesel) would increase by roughly 60% relative to projected levels as a result of the carbon tax.  Both fuel prices would increase by more than 50 cents per litre.

Chart 1: The Analytic Approach

Simplified depiction of the analytical framework used to analyse the economic impacts of meeting Bill C-288. 

Key information

• The analytic process operates by first modeling the policy package in ENERGY 2020.  In this phase of the analysis industrial targets and carbon charges are directly evaluated for their emissions and financial impacts.
• The estimates of the incremental investments, energy costs and savings, and implied GHG emissions charges become inputs to the macroeconomic model (The Informetrica Model) that estimates the GDP, employment, trade, government finance and other measures of economic performance.
• The impacts are fully diffused across energy markets and the economy via a feedback mechanism between the two models.