NCPA - National Center for Policy Analysis

High Costs of Kyoto

February 3, 2003

The federal government of Canada believes compliance with the Kyoto Protocol may help that country achieve draconian reductions in energy use at a low cost -- or even at a profit.

But as more pragmatic research from the private sector and academia indicates, ratification will provide little benefit and likely lead to real and wrenching negative economic impacts on Canadians, says researcher Kenneth Green.

First, consider the science behind the proclaimed benefits.

  • Canada ratified the treaty by citing such groups as the United Nation's Intergovernmental Panel on Climate Change; but other scientists in both Canada and the United States have shown that the threat of global warming is overstated and warming may be beneficial.
  • The science of greenhouse gas reductions suggests implementing the Kyoto Protocol is largely a waste of effort because on a global basis, Canada only emits about two percent of the gases accused of causing global warming.

Second, consider the cost.

  • Canadian research economists estimate implementation of the treaty could reduce Canada's gross domestic product 3 percent, cost the average Canadian family four percent of its annual disposable income and cause energy prices to rise substantially.

Some economists predict ratification of the treaty will cause electricity costs to rise up to 85 percent in some Canadian provinces. Natural gas prices could rise 40 to 90 percent; and the after-tax price of gasoline, 50 percent.

Source: Kenneth Green, "Kyoto Krazy," Fraser Forum, January 2003, Fraser Institute.


Browse more articles on Environment Issues