OTTAWA - Consumers are unlikely to notice a significant rise in costs as a result of the climate plan announced this week, economists say.
But they also doubt the plan will achieve the targets stated - stabilization of greenhouse gas emissions by 2012 and a 20 per cent cut by 2020.
Philippe Crabbe, a University of Ottawa economist, laughed when asked about the likely impact on consumers, suggesting the plan is so weak that the impact will be negligible. "I wouldn't worry," he said.
Environment Canada estimates the cost at 0.5 per cent of GDP, or $8 billion, in the most costly year. The department says the estimate is based on economic modelling but did not give details.
Crabbe was skeptical that in-depth analysis has been done. "There's no evidence there was a complete study of the plan."
He was particularly critical of a provision that will allow large polluters to avoid cutting emissions by contributing to a technology fund at a rate of $15 a tonne.
He said there is a consensus among experts that a price of at least $30 is required to force emissions cuts and set the stage for a trading system, which the government says it wants.
"If you can get out of the game by just paying $15 into the tech fund, why would you buy a permit?"
David Keith, an environmental economist at the University of Calgary, said there would be an impact on consumer prices if industry were really required to achieve the targets stated in the plan, but said he doesn't think the targets will be achieved.
"If they were really going to meet the emissions targets they set, yes, it would be noticeable. Given what they've actually implemented, not so clear.
"It will be hard for them to get the emissions reductions they say because people will buy their way out at $15 a tonne."
Chris Green, an economist at McGill University, said he found it difficult to comment on the possible impact on consumer prices because he finds the plan confusing.
He said he does not understand how the targets in the plan can be achieved.
"My questions about this is, at what rate can you force these changes even with the best efforts?
"It's one thing for people to stand up there and say we need to do something by a given date. Its another thing to say, effectively, how fast can you do it?"
Achieving the targets will require major investments in long-term projects such as carbon pipelines, coal gasification and nuclear plants, he noted.
He said he would much prefer a carbon tax, set low but gradually rising, to targets which may or may not be met.
Crabbe said most developed countries are spending about one per cent of GDP to cut emissions. "Half of one per cent is totally inadequate in my opinion."
Environment Minister John Baird has said that the new regulations may raise the cost of a new car by $300.
But John Bennett of Climate for Change said that is the estimate for a car built to stringent California standards, and Canada will likely harmonize with weaker U.S. federal standards.
Bennett suggested the impact on consumers will be insignificant.
