Coal, Electricity Bills, and a Big Misunderstanding
by AsimSayMo on November 25, 2016 - 9:45pm
Original Article by John Paul Tasker, CBC News: Canada's rejection of coal will clear the air but impact workers and power bills
Energy is a large sector in the Canadian economy, providing thousands of jobs and contributing billions into the national GDP. A large portion of this energy production is through oil, natural gas, and coal. However, due to overwhelming evidence of climate change, and Canada’s disproportionately high contribution to global greenhouse gas emissions, there has been large movements to phase out certain energy producing substances, particularly coal. In Ontario, coal power has already been eradicated, however other provinces, notably Alberta, Saskatchewan, New Brunswick and Nova Scotia, still rely heavily on coal in order to turn their lights on and off, as explained by John Paul Tasker on CBC News.
Federal Environment Minister Catherine McKenna had recently announced that the Liberal government plans to phase out coal-fired electricity by the year 2030 in order to meet the nation’s Paris Agreement target. The four provinces where coal is still a major source of electricity were not thrilled. Coal is cheap, and it makes home owners happy when they receive their electricity bills, but phasing out coal would mean a rapid increase in electricity costs. It would also put roughly 42,000 Canadians at risk of unemployment. Opponents of the move argue that the eradication of coal will have negative effects on the Canadian economy and employment rate, and will stress our electricity bills. What many people in politics and the general public fail to realize however, is that Canada’s current economic condition itself is a bitter taste of the staples trap.
In 2014, Alberta contributed to a whopping 20% of Canada’s GDP, according to Michelle Rempel, conservative MP of Calgary Nose Hill. This is largely due to coal mines, the oil sands, and natural gas reserves. There’s no doubt that Alberta is incredibly rich in natural resources. However, in 2015 the Albertan economy was devastated. Unemployment skyrocketed to 10%, GDP growth dipped into the negatives, and the Albertan economy still remains in poor condition today. What happened to the once flourishing Canadian province? Many people blame the flooding of the oil market from other oil rich nations, but there is a far larger issue at play, one that, oddly enough, is left ignored in the media. Alberta, as well as other provinces that rely on natural resources for their economy, are in a dangerous zone that is known as the staples trap. This essentially means that the economy is so heavily reliant on a particular natural resource, that a sudden shift in the global market value of the resource will have a direct impact on the economy. The only reason why Alberta continues to struggle with employment is because there are few other large sectors in the province’s economy to help it rebound.
Shifting away from coal can incentivize the province, as well as other energy sector provinces, to focus on more modernized sectors. Diversification of the economy can help prevent the staples trap, and would reduce the risk of economic collapses like the one being seen today. Though the increase in electricity costs is unfavourable, it too provides an incentive for Canadians to save more energy. One would argue that Canadians require higher amounts of energy, particularly in the winter when we need to keep our homes warm, but it is also true that Canadians are among the most wasteful in the world in terms of energy, and even food and water. This proposal, along with substantive instruments like carbon pricing that incentivise people to avoid the use of fossil fuels, can potentially make Canada a leader in climate action. As even stated in the article, once the phase out is complete, 90% of Canada’s electricity use would be from renewable and nuclear energy.
Rempel. M. (2016). Michelle standing up to the Liberals and Elizabeth May for Alberta. Canada: YouTube. Retrieved from https://www.youtube.com/watch?v=YJcwKRpQHvg
Tasker. J. P. (2016). Canada's rejection of coal will clear the air but impact workers and power bills. Toronto Star. Retrieved from http://www.cbc.ca/news/politics/canada-coal-country-mckenna-workers-1.3860764