The sobering lesson of Ontario’s green energy experiment

Ontario’s experiment with green energy via the Green Energy and Green Economy Act has not had the rosy effects the McGuinty-Wynne governments said it would: electricity prices up dramatically, promised jobs did not materialize, and all this has had “modest” environmental benefits, says Michael Trebilcock in a report released by the C.D. Howe Institute today.
Mr. Trebilcock’s language is somewhat reserved compared to what he said at the time when the Green Energy Act was passed. Then he remarked, “This combination of irresponsibility and venality has produced a lethal brew of policies.”
Focus on electricity is out of proportion with other areas of the economy in need of closer scrutiny, such as transportation – Michael Trebilcock

With the enactment of the Green Energy and Green Economy Act (Green Energy Act) in 2009, the Ontario government committed ratepayers to massive subsidization of various forms of renewable energy, especially wind power and solar energy, along with the phasing out of coalfired generation in the province – a goal achieved in 2014. In the eight years since the initiation of these policies, what tentative assessment can we make of their impact? Such a review is especially important in light of recent commitments by the federal government and most provinces to adopt a minimum carbon tax (or its equivalent) across Canada and to provide a variety of subsidies to users of low-emission technology.

Any evaluation of the impact of Ontario’s green energy policies to date should focus on three factors: i) the costs of renewable energy; ii) the environmental impact of these policies; and iii) their impact on employment in the province. On the evidence to date, these policies have had a dramatic impact on electricity costs in the province, but they have generated very limited environmental benefits and have had a negligible to negative effect on economic growth and employment. In short, the current Ontario green energy policies have run up against Pielke’s iron law of climate change: when citizens are faced with a major trade-off between the economy and the environment, the former will almost always prevail (Pielke 2010). Ontario’s experience shows that, rather than an extensive reliance on technology or activity-specific subsidies, the best approach by far is a carbon tax (or its cap-and-trade equivalent) that is technology-, activity-, and revenue-neutral.

Environmental Effects

About 60 percent of Ontario’s current generation capacity is already accounted for by low-emission hydro or nuclear-generated electricity, with the balance provided by natural-gas generation and to a lesser extent by renewables. Wind power and solar energy, because of their intermittency and unpredictability, require back-up generation, especially during peak-load capacity, and that has generally entailed the construction of natural-gas plants. In Ontario, the phasing out of coal-fired generation has likewise led to the construction of more natural-gas– fired generation.

The electricity sector’s share of greenhouse gas emissions in Ontario in 2012 was only about 9 percent of total emissions, compared to the transportation sector with 34 percent and the industrial sector with 30 percent (Ontario, Auditor General 2015), meaning that further environmental gains in the electricity sector are inherently limited.4 In any event, this impact needs to be compared to other alternatives, such as further enhancing transmission connections and expanding power purchase agreements with neighbouring jurisdictions, in particular Quebec and Manitoba, which have substantial clean hydroelectric resources. More generally, developing a competitively structured capacity market in Ontario may be a preferable long-term alternative strategy (Goulding 2013).

The focus on electricity is out of proportion with the areas of the economy that are most in need of closer scrutiny, such as transportation. Although the industrial sector accounts for the largest share of energy use in Canada,5 the growth in use in the transportation sector outpaced all other sectors between 1990 and 2013 with a 43 percent growth, compared to 7 percent in the residential sector, 30 percent in the industrial sector, and 23 percent in the commercial sector (Natural Resources Canada 2016).

Read the news release and link to the full report here.

What's your reaction?


  • Francis
    Posted August 15, 2017 12:15 pm 0Likes

    Thank you for doing what you do and for bringing this report to light.
    The one major problem with this report is that it rests on the false premise that we need to reduce emissions of carbon dioxide. There is no scientific evidence that increasing carbon dioxide content in the atmosphere has any deleterious impacts. And there is scientific evidence that increased levels of carbon dioxide in the atmosphere result not from human activity but from increased temperatures which are the result of natural phenomena (e.g. solar activity).
    Setting the above point aside, this is still an important and useful report as it sets out how several Ontario Liberal governments have lied to and cheated us.

    • Sommer
      Posted August 18, 2017 10:54 am 0Likes

      Thank you Francis. I urge everyone not to set the subject of the “false premise” that demonizes carbon dioxide, aside. This was the rationale given relentlessly by this government and their media, that ignited the paralyzing fear that caused people to believe that rural residents had to become collateral damage to industrial scale wind experimentation.

    • Barbara
      Posted August 18, 2017 9:45 pm 0Likes

      Transportation and buildings are part of the U.N. agenda.

  • Barbara
    Posted August 15, 2017 4:13 pm 0Likes

    Canada has a UN agenda in place. Perhaps not all of the UN agenda is in place yet ?
    Now Canadians can live with this agenda and pay for it.
    This is not to criticize this Report on the “green energy experiment”.
    Results can often take years to become evident.

  • Notinduttondunwich
    Posted August 17, 2017 7:56 pm 0Likes
  • Notinduttondunwich
    Posted August 17, 2017 8:00 pm 0Likes

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