Their motion today says they support it.
In recent months there has been a wide range of estimates on the economic impacts of Canadian implementation of the Kyoto protocol. Even in the House we have heard repeated some of the large scale claims from different interest groups on the impact of taking action on climate change. I want to comment on the economics of action and of inaction. I also want to take a step back and comment on all these estimates that are being tossed around.
Probably the single most important point to make is that this work of preparing estimates has been a cooperative effort between the federal government and the provinces for years now. The federal government has worked closely with the provinces on this because the goal is an approach that enables all of Canada to be part of meeting our Kyoto target.
To achieve this goal, a working group of economics and modelling experts from both the federal government and the provinces have worked with specialized economic models operated by the private sector to undertake a comprehensive forecast for Canada. All of this work has been and is being done outside of government by two organizations in the private sector, Informetrica and the Canadian Energy Research Institute. But did they work on their own to do all of this? No, they also worked with experts in those industries that are most concerned about the potential impacts of climate change, such as the oil industry, the chemical producers, manufacturers and so on, to fine tune the model. Every time the policy options have become clearer, the modelling has been updated to reflect the most likely situation.
This is important because all too often some people have been willing to use old information to create scare stories about the potential impacts of Kyoto on Canadian jobs and Canada's economy. For example, the ability that Canada negotiated in 2001 to get credit for the impact of our well managed forests and farmlands on greenhouse gas emissions has an important impact on the modelling results. Old estimates that do not take that into account simply are not as accurate as the new estimates based upon the real world of Kyoto.
Where does all this economic modelling stand right now? What does it tell us? The modelling looks at the impacts on Canada, on individual provinces and territories and on sectors of our economy. In doing all of this, it uses the most current thinking on possible policies that governments could put in place, so it takes into account different ways of addressing greenhouse gas emissions.
The modellers were clear, as economists always have been, that this modelling has its limits. It normally can offer only partial assessments of costs and benefits. It cannot hope to capture the full range of choices and decisions in a complex economy such as Canada's, but here is what they found in general. They compared the general economic impact of Kyoto to what would happen if there were no Kyoto protocol. They estimated that our total gross domestic product by 2010 would be a small amount less than it would have been otherwise, somewhere between four-tenths of 1% less to 1.6% less, depending upon what assumptions we use. This is a modest impact relative to the strong economic growth of 18% that economists expect over this eight year period.
Which is the more likely scenario? There is a pretty strong consensus that the impact probably will be to the low end of the range because the international price of carbon is expected to be around $10 per tonne. The impact on growth will be fairly minimal. We will have a lot of growth, just a modest amount less than we might have had otherwise.
What about jobs? The analysis shows that instead of the roughly 1.32 million new jobs that Canada would gain over the next eight years, we would gain between 1.08 million in a worst case scenario and 1.26 million in the more likely scenario. We must remember that this is not about actually losing jobs. It is about creating slightly fewer than we might have otherwise. This has to be put into perspective. For one thing, the economists only make a small allowance for new job creation in response to Kyoto-generated opportunities and innovation.
More than that, we have to remember how well the Canadian economy has been creating jobs. The Canadian economy generated 427,000 new jobs in the past nine months, so if the economists tell us we might not create 60,000 jobs over eight years, it pales in comparison to what we are creating just because of our economic strength.
We cannot stop with that kind of analysis of the costs. After all, actions to reduce greenhouse gas emissions also typically reduce other atmospheric emissions. The federal-provincial working group of economists estimated the health benefits of clear air due to Kyoto actions at between $150 million and $250 million per year. These come from more smog-free days, fewer cases of respiratory diseases and asthma, and fewer hospital admissions and avoidable deaths. Those are the straight economic impacts. They say nothing about the value of improving the health of our communities, our kids, our seniors and everyone else. Even with that, the models did not try to estimate the impacts of related reductions across all pollutants. The models did not include non-environment related benefits, such as economic and safety benefits from reduced traffic congestion if we can make public transit more attractive.
All of these are the costs and benefits of action, but let us also be clear that inaction has very real costs too. Climate change is expected to lead to more droughts and severe weather events such as floods and intense storms. The scientists who study these issues say that we could see more episodes like the ones we have seen in recent years.
We may remember that droughts in 2001 cost the Canadian economy more than $5 billion. The 1998 ice storm cost Ontario, Quebec and New Brunswick more than $6 billion. The floods in Manitoba and the Saguenay region of Quebec a few years back are other costly examples that we want to avoid through strong action on climate change. These floods will happen more often. For example, between 1900 and 1950 there were two peak flows of the Red River that surpassed the 2,000 cubic metre per second mark. In the next 50 years there were eleven, with the last flood exceeding all of them by a big margin.
Inaction would make it a lot less likely that we could spur innovation in Canada. Many firms in Canada and internationally are already making more efficient use of energy and resources and introducing new processes to cut their GHG emissions. With a national commitment to reach our Kyoto target, we could realistically expect to see more innovation and the creation of more export opportunities for these new technologies and processes. We have already seen this in the past because the history of environmental action shows an enormous capacity for innovation. Costs are typically lower than expected and results come sooner. We saw this on acid raid and on protecting our ozone layer, for example.
The best evidence tells us that while there will likely be some costs of action on Kyoto, they will probably be modest and almost certainly much more so than the claims that some interest groups suggest. Those costs will actually be more in terms of forgone activity, not losses compared to today. But there will be benefits: the benefits of better health, the benefits of innovation and economic benefits as well. All of this pales beside the benefits of taking action to address a challenge that future generations will be glad we did.