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Green Energy Act: Ontario government still sees no evil

Ross R. McKitrick and Kenneth P. Green — Toronto Sun — April 27, 2013

Earlier this month the Fraser Institute published a report sharply critical of one of the flagship policies of the Ontario government, the Green Energy Act (GEA). We found the Act is costing Ontario over $5 billion annually but yields negligible environmental benefits, and that equivalent or greater benefits could have been achieved using conventional pollution control measures at less than one-tenth the cost.

We also found that, due in large part to the GEA, Ontario is going from having some of the cheapest electricity in North America to having some of the most expensive. This will increase industry operating costs and cut the rate of return to investment in mining and manufacturing by between 13 and 30%, further weakening key economic sectors and threatening long term job losses. And we pointed out that the choice to pursue wind power under the GEA was a particularly bad idea, as wind power generation is almost perfectly out of phase with energy consumption in Ontario, resulting in the dumping of surplus wind energy into the U.S. market at a loss of some $200 million annually.

Shortly after its release our report was cited during a debate in the Ontario legislature on the GEA. Ontario Energy Minister Bob Chiarelli dismissed it out of hand, saying: “The Fraser Institute report recommends that we go back to coal. They claim that coal is clean, and they’re recommending we go back to coal.” That was the justification for shutting his eyes to the disaster that GEA policy has created.

Even if what the minister said were true, it would in no way be an adequate response to our findings. Ontario has lost a quarter of a million manufacturing jobs in the past decade. And it has thrown away its longstanding competitive advantage in electricity prices for the sake of minuscule environmental benefits that could have been achieved in other ways at a fraction of the cost.

And the minister’s response is disconnected from reality. Ontario has always used coal for at least some of its electricity. So do many Canadian provinces, most U.S. states, most of Europe, China and all the other jurisdictions our exporters compete against. Even Germany, which Ontario claims to be copying in its green energy strategy, opened two new coal-fired power plants last year, will open six more this year, and plans six more after that. Ontario is ready to price our manufacturing sector out of business based on an ideologically-driven energy strategy at odds with all our major trading partners.  Continue reading, here….

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