Thank you.
I've been a professor at Simon Fraser University, in Vancouver, since 1986. My specialty is sustainable energy systems and energy system modelling, especially energy economy models that try to assess the costs of mitigating or reducing various externalities or other damages from energy systems, be they greenhouse gases or other kinds of emissions, even land use impacts, and so on.
I've been a professor for twenty years at the school, but I did take a five-year leave of absence in the mid-1990s to be chair and CEO of the British Columbia Utilities Commission. Also, I've been involved in various international organizations. In the 1990s, I spent time as a member of the Intergovernmental Panel on Climate Change, which produced the second assessment report. For a long time I was a member of the China Council, which is a group of seven international experts who advise senior levels of the Chinese government on sustainable energy systems. All those kinds of experiences of an applied nature and energy system modelling are what back up the research and work that I've done.
In the period from 1998 to 2000, my energy research group and consulting arm were commissioned by the national climate change process to be one of the few teams that were doing energy economic system modelling in an effort to see how we could reach the Kyoto targets. The analysis we did looked at all different kinds of actions, like technology choices, behavioural change, and so on. We looked at capital stock turnover, or how long it takes for new technologies to penetrate the marketplace. We ran the targets for Kyoto in our models and produced the information that then went into the national report that accompanied all of that process.
What our research found was that for Canada to achieve its Kyoto target, you would need immediately a carbon tax of $150 per tonne of CO2. In fact, initially we said $120, but that was because we had been given some information that was not reliable about transportation behaviour. When we adjusted within half a year of the model, it came out at $150 per tonne. That would be a tax implemented immediately. We've also calculated the different effects on energy costs and so on.
What was frustrating to me as a researcher and consultant was that the government, from there, took our results about the reductions in greenhouse gases, but didn't take the policies required to make that happen. Instead, it opted primarily for voluntary policies of information programs and subsidies, which, according to our analysis, simply will not provide or motivate the technological and behavioural change required for significant reductions in greenhouse gas emissions. Here, we are talking about significant reductions, because Canada is on a trajectory with drivers like population and economic growth that exceed most OECD countries. We're a rich energy country, and that also is very different from most of our OECD partners.
So you have these drivers going up, and we had them in our model. We said right away that this was a signal that you're going to have to have very strong policy immediately if you're serious about this, but that simply was not what happened. The policies that followed were ones that would have very little effect, according to independent experts basically anywhere among the top researchers that I know—people from Harvard, Stanford, Cambridge, and so on, with whom I've worked a lot on these kinds of issues.
That policy was not implemented, and that motivated me to go away and write my own book about this. It's called The Cost of Climate Policy. So at least I have it down for posterity that I basically predicted that Canadian emissions would continue to rise even with the policies we were putting in place.
I believe you were going to distribute.... Does everyone have that? Basically, there's your listing of the various policies that have been implemented over time. They are strongly characterized by information and a little bit of subsidies. Those are not the kinds of policies that will turn the ship around when it comes to reducing greenhouse gas emissions.
I have only a couple more comments here in my introduction. From early on I've been astounded sometimes at the people who say we should do nothing about climate change because we're not 100% certain that we're affecting the climate. That's not how we make decisions in our society and it never has been. There is a risk there. The experts are telling us there's a risk there. We can do a proper analysis that tells us the actions we can take immediately and over a longer timeframe.
My conclusion in 1995, 1998, and today is that we should have strong policies implemented immediately that are modest at first but provide a signal over time of a graduated intensity. The only policies that will work to reduce greenhouse gas emissions are ones that put a financial penalty or a regulatory constraint on the use of the atmosphere as a free waste receptacle. There is no way to worm yourself around that obligation. The evidence of the past ten years in policies implemented and experiences in Europe and elsewhere, not just Canada, are bearing this out very clearly. When I talk to experts around the world who are independent of political parties and so on, they're unanimous on the kinds of policies that are needed.
We spend more time talking about, if you used a carbon tax, how would it be--very small initially. But it would give the kind of signal Bob says his company needs for investments that they know will provide a fair playing field for them and their competitors. Then they can communicate to their customers what that cost effect will be. You spoke in millions of dollars, but I always want to talk in cents per kilowatt hour; the number is a lot smaller then. When I do surveys of people, they're kind of interested in a quarter of a cent a kilowatt hour over ten or fifteen years. They're willing to pay that for these gradual reductions.
That's the policy framework there. We know policies are available to us. People have done a lot of work on these. The United Kingdom is implementing a lot of these policies. They have a carbon levy, although it's not uniform. They're part of the cap-and-trade system in Europe now. They have tightening efficiency regulations, and they have some subsidies in the case of low-income housing and so on. So all of the policy is starting to come into place.
The general message I want to close with is first of all in terms of the costs of Canada trying to achieve Kyoto, and I have some numbers here. They're very similar to the ones Bob was just talking about. But if we have three or perhaps four parties in Parliament today that really want to do something about the climate change issue, this is the time right now to put together some kind of legislation that sets a regulatory constraint or a financial penalty that starts tomorrow and is graduated to climb over time. I think we're quite desperate for something like that.
Thank you.