A Saskatchewan climate policy researchers says some perspective is needed on claims of economic ruin from federal clean energy regulations.
This SAPP wish list includes cancelling the Clean Electricity Regulations, freezing carbon pricing at $65/tonne, exempting electricity from carbon pricing, extending the life of coal plants past the federal phase-out date of 2030, and receiving generous federal funding for electricity projects in Saskatchewan.
It’s interesting to see the contribution each item on the wish list makes to the full picture. To its credit, the tribunal released the third-party policy analysis underlying their report. This work was conducted by experienced climate policy research firm Navius, which lends credibility to the analysis.
On electricity pricing, the Navius analysis shows that the desired subsidies from the federal government make up 39 per cent of the difference between the Saskatchewan policy wish list (SAPP) and the federal policy package.
Will the federal government really agree to pay for half to three-quarters of our electricity investment costs? That seems a stretch, and we should also ask the federal Conservatives where they stand on that matter.
If that cheque isn’t in the mail, then the residential electricity price associated with the provincial plan increases from 22.6 cents/kwh to 23.8 cents/kwh in 2035.
Navius also breaks out the GDP differences between the provincial wish list and federal policies. Their analysis shows that freezing carbon pricing at $65/tonne has the biggest impact on GDP growth. The Clean Electricity Regulation is only responsible for $1.1 billion in cumulative change to GDP between 2025 and 2035.
To put this in perspective, crop insurance payments are estimated at $1.8 billion for 2023 alone, and these payments will go up as climate change worsens.
Which brings us to the crux of the matter. The tribunal has focused on the cost of federal climate policy, without also looking at the benefits. The federal policies do a better job of reducing pollution.
The provincial SAPP policies would result in 5.7 to 8.0 million tonnes more carbon pollution per year by 2035 than the federal policies.
When they were first elected in 2007, the Saskatchewan Party committed to reduce Saskatchewan’s carbon pollution from 81.2 million tonnes per year in 2007 to 55.2 million tonnes by 2020 (32 per cent lower).
In 2022, our emissions were 75.9 million tonnes. We’re nowhere near our targets. The federal policies would get us closer.
Generally, acting on climate change requires us to think about the future. As we switch to electric vehicles, electric heat pumps and zero-carbon electricity, our economy might grow slightly slower. In exchange, we do our part to retain a livable world.
The Navius analysis shows that low-income households in Saskatchewan will be over $3,000 richer by 2035 in both the provincial and federal policy scenarios, but lose out on $6.50 per month ($80/year) if we keep the federal policies and achieve the greater emissions reductions.
Most parents would be willing to make that kind of investment in their kids’ future.
A fair analysis would compare SaskPower’s planned electricity futures with and without the Clean Electricity Regulations. It would also include analysis of the extra flexibility the federal government has proposed since the release of their draft regulations.
Until that analysis is released, it is good to take the headlines about economic ruin with a grain of salt.
Brett Dolter is an associate professor at the University of Regina who researches climate change policy. He has worked as a consultant for SaskPower and Environment and Climate Change Canada, and formerly worked as a policy analyst at the Saskatchewan Ministry of Environment.
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