Ontario Government
in the Dark on Coal Plant Closings:
Shutting Down Coal-fired Power Plants will do more Harm than Good
Release Date: January 31, 2005
Toronto, ON - Ontario’s decision
to close the province’s coal-fired power plants by
2007 will jeopardize economic growth in Ontario, increase
energy costs, and reduce the reliability of the electricity
supply, according to a new paper Pain
Without Gain: Shutting Down Coal-Fired Power Plants Would
Hurt Ontario released today by The Fraser Institute.
There is no question that coal-fired power plants contribute to Ontario’s
air pollution emissions. However, the authors point out that the effect
has often been overstated and that the key question is whether the harm
associated with these emissions exceeds the social and economic benefits
of the electricity they provide. Surprisingly, despite the large potential
impacts of closing the plants, there has been no systematic evaluation
of this question.
Coal-fired power plants operated by the Ontario Power Generation Corporation
account for about 25 percent of Ontario’s electricity supply.
“The ill-advised decision to shut down the plants comes at a time of rising
power consumption in Ontario, high oil and gas prices, and considerable investor
uncertainty regarding generating capacity in Ontario,” says Dr. Kenneth
Green, the Institute’s Director of Risk, Regulation and Environment Studies
and co-author of the paper.
Shutting down the plants will also impose other costs, including job losses
at the plants themselves, a need to rapidly develop replacement capacity,
increased use of higher-cost fuels, and scrapping the installed plants.
“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 fall disproportionately on low-income households,” says
Green.
“Before phasing out the coal-fired plants, the Government of Ontario has
a public duty to exercise due diligence by carefully evaluating the overall welfare
effects of its electricity generation plans.”
Key points:
• Despite the continued operation of coal-fired power plants, air quality
in Ontario is good and much improved since the 1970s.
• Coal-fired power plants play a small role at present in pollution and
smog formation.
• Scientific investigation of links between air pollution and increased
health or mortality risk suggests that air pollution at current levels, including
emissions from coal-fired power plants, is not harming Ontarians’ health.
• Reducing coal-based mercury emissions will have little or no effect on
environmental mercury levels, and mercury at current levels from all sources
is unlikely to represent a source of harm to Ontarians’ health.
• Closing Ontario’s coal plants is not part of Canada’s plan
for implementing the Kyoto Protocol.
Power from coal-fired plants is an abundant, low-cost, and reliable electricity
source. The increased prices for electricity that will result from shutting
the coal-fired plants will cause reductions in household incomes that fall
disproportionately on the poor.
Low-cost, abundant, electricity is a key factor in creating economic growth
and measures that raise costs or restrict electricity supply will have
long-term negative consequences for the economy.
It is a fundamental duty of government to avoid enacting policies that
will make people worse off.
The burden of proof rests on the Government of Ontario to show that its
electricity plan would improve Ontarians’ overall welfare. This could
best be met by setting aside plans to shut the coal plants until a proper
objective benefit-cost analysis has been completed.
Established in 1974, The Fraser Institute
is an independent public policy organization with offices
in Vancouver, Calgary, and Toronto
|
