Economics and the mid-life crisis have much in common: Both dwell on foregone opportunities

C'est la vie; c'est la guerre; c'est la pomme de terre . . . . . . . . . . . . . email: jpalmer at uwo dot ca

. . . . . . . . . . .Richard Posner should be awarded the next Nobel Prize in Economics . . . . . . . . . . . .

Thursday, February 24, 2005

What's Wrong with Coal-Fired
Electricity Generation?

Columnist Rory Leishman has recently taken on the Ontario Clean Air Alliance and the McGuinty Provincial Liberal gubmnt. The Liberals are closing down Ontario's coal-fired generating stations, based on incomplete and quite possibly incorrect evidence that they are seriously harming the environment.

McKitrick, Green and Schwartz[in a study for the Fraser Institute] challenge the methodology used to compute [the] estimates of death by air pollution. In the Toronto case, they argue that if the model used by the health board were applied to the much higher levels of air pollution in the 1960s, "it would attribute at least half and, in one case, more than 100 per cent, of monthly deaths in Toronto to air pollution."

On the basis of Environment Canada data and alternative epidemiological studies, the Fraser experts conclude: "Air pollution in Ontario has been successfully reduced under existing regulations and is generally much lower than 30 years ago. Current evidence does not provide consistent support for the claim that levels of air pollution are a significant source of risk for death or disease."

What about global warming? According to the OCAA, Ontario's coal plants account for "approximately 20 per cent of Ontario's greenhouse-gas emissions (causing climate change)."

The Fraser authors counter that coal-fired plants in Ontario are responsible for only "about one-10th of one per cent of global greenhouse-gas emissions and shutting them down will not make a perceptible difference." Besides, Ontario would have to compensate for the loss of coal-fired power in the short-term by importing more electricity from coal-fired plants in the industrial U.S. Northeast.

As the Fraser study itself says,
Surprisingly, despite the large potential impacts of closing the plants, there has been no systematic evaluation of whether this action will confer net benefits on Ontarians. There is no question that coal-fired power plants contribute to Ontario's air pollution emissions. The question is whether the harm associated with these emissions exceed the social and economic benefits of the electricity they provide. Our review of the evidence suggests that the coal-fired plants have a relatively small environmental impact and that closing them will have large, adverse economic consequences that will fall disproportionately on low-income households.
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