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The Canadian Energy Centre ( @CDNEnergyCentre) has a report out today on the economic impacts of Canada hitting its 2030 GHG emissions target. The authors make an effort to be transparent and above board. Still, the report is fundamentally misleading https://bit.ly/3j1HV29 (1/8)
To model the economic impacts of Canada hitting its target, they increase Canada’s carbon price beyond the planned $50/tonne by 2022. But, critically, they omit output-based pricing (OBP). OBP is a special type of carbon pricing applied to large emitters across Canada (2/8)
OBP offers a way of reducing the emissions intensity (GHG emissions/unit of output) of large emitters. It provides an incentive for them to get cleaner instead of smaller (see here for an explainer: https://bit.ly/2DHMq1S ) (3/8)
OBP is designed to protect competitiveness. So, when @CDNEnergyCentre chooses not to model it, they of course get larger competitiveness impacts and, consequently, economic costs. They then turn around and misleadingly call these overestimated impacts and costs a floor (4/8)
There’s no indication Canada would drive GHGs down to its 2030 target using an approach that excluded OBP. It's a key part of current federal policy, and AB in fact has *its own* version of it ( @CDNEnergyCentre is actually funded from its proceeds) https://bit.ly/2B2m2ii (5/8)
More credible modeling would consider the impacts of OBP, and it would have been straightforward for @CDNEnergyCentre to do so. The model that they use, @NaviusResearch’s GTECH model, has OBP in it. So, to not model it is a deliberate choice https://bit.ly/309uLHV (6/7)
Modeling OBP as part of the ramped-up carbon pricing approach that the report focuses on would have shown lower economic impacts and greater reductions in the emissions *intensity* of Alberta's economy, supporting things like this from MEG Energy: https://bit.ly/2ZrcQ03 (7/8)
The report presents a flawed analysis and misleading conclusions. @CDNEnergyCentre has the technical chops to do better, and this latest piece is part of a larger pattern that others have observed https://bit.ly/3gZIFmJ . Let’s hope to see better from them in the future (8/8)
