From the Canadian Energy Centre

By Will Gibson

Study finds legislation’s massive cost outweighs any environmental benefit

The negative economic impact of Canada’s proposed oil and gas emissions cap will be much larger than previously projected, warns a study by the Center for North American Prosperity and Security (CNAPS).

The report concluded that the cost of the emissions cap far exceeds any benefit from emissions reduction within Canada, and it could push global emissions higher instead of lower.

Based on findings this March by the Office of the Parliamentary Budget Officer (PBO), CNAPS pegs the cost of the cap to be up to $289,000 per tonne of reduced emissions.

That’s more than 3,600 times the cost of the $80-per-tonne federal carbon tax eliminated this spring.

The proposed cap has already chilled investment as Canada’s policymakers look to “nation-building” projects to strengthen the economy, said lead author Heather Exner-Pirot.

“Why would any proponent invest in Canada with this hanging over it? That’s why no other country is talking about an emissions cap on its energy sector,” said Exner-Pirot, director of energy, natural resources and environment at the Macdonald-Laurier Institute.

Federal policy has also stifled discussion of these issues, she said. Two of the CNAPS study’s co-authors withdrew their names based on legal advice related to the government’s controversial “anti-greenwashing” legislation.

“Legitimate debate should not be stifled in Canada on this or any government policy,” said Exner-Pirot.

“Canadians deserve open public dialogue, especially on policies of this economic magnitude.”

Carbon leakage

To better understand the impact of the cap, CNAPS researchers expanded the PBO’s estimates to reflect impacts beyond Canada’s borders.

“The problem is something called carbon leakage. We know that while some regions have reduced their emissions, other jurisdictions have increased their emissions,” said Exner-Pirot.

“Western Europe, for example, has de-industrialized but emissions in China are [going up like] a hockey stick, so all it’s done is move factories and plants from Europe to China along with the emissions.”

Similarly, the Canadian oil and gas production cut by the cap will be replaced in global markets by other producers, she said. There is no reason to assume capping oil and gas emissions in Canada will affect global demand.

The federal budget office assumed the legislation would reduce emissions by 7.1 million tonnes. CNAPS researchers applied that exclusively to Canada’s oil sands.

Here’s the catch: on average, oil sands crude is only about 1 to 3 percent more carbon-intensive than the average crude oil used globally (with some facilities emitting less than the global average).

So, instead of the cap reducing world emissions by 7.1 million tonnes, the real cut would be only 1 to 3 percent of that total, or about 71,000 to 213,000 tonnes worldwide.

In that case, using the PBO’s estimate of a $20.5 billion cost for the cap in 2032, the price of carbon is equivalent to $96,000 to $289,000 per tonne.

Economic pain with no environmental gain

Exner-Pirot said doing the same math with Canada’s “conventional” or non-oil sands production makes the situation “absurd.”

That’s because Canadian conventional oil and natural gas have lower emissions intensity than global averages. So reducing that production would actually increase global emissions, resulting in an infinite price per tonne of carbon.

“This proposal creates economic pain with no environmental gain,” said Samantha Dagres, spokesperson for the Montreal Economic Institute.

“By capping emissions here, you are signalling to investors that Canada isn’t interested in investment. Production will move to jurisdictions with poorer environmental standards as well as bad records on human rights.”

There’s growing awareness about the importance of the energy sector to Canada’s prosperity, she said.

“The public has shown a real appetite for Canada to become an energy superpower. That’s why a June poll found 73 per cent of Canadians, including 59 per cent in Quebec, support pipelines.”

Industries need Canadian energy

Dennis Darby, CEO of Canadian Manufacturers & Exporters (CME), warns the cap threatens Canada’s broader economic interests due to its outsized impact beyond the energy sector.

“Our industries run on Canadian energy. Canada should not unnecessarily hamstring itself relative to our competitors in the rest of the world,” said Darby.

CME represents firms responsible for over 80 per cent of Canada’s manufacturing output and 90 per cent of its exports.

Rather than the cap legislation, the Ottawa-based organization wants the federal government to offer incentives for sectors to reduce their emissions.

“We strongly believe in the carrot approach and see the market pushing our members to get cleaner,” said Darby.

From the Daily Caller News Foundation

By Bonner Cohen

“We will not approve wind or farmer destroying Solar,” said President Trump in an Aug. 20 post on Truth Social.  “The days of stupidity are over in the USA!!!”

Trump’s remarks came six weeks after enactment of his One Big Beautiful Bill terminated tax credits for wind and solar projects by the end of 2027.

The Trump administration has also issued a stop-work order for the Revolution Wind project, an industrial-scale offshore wind project 12 miles off the Rhode Island coast that was 80 percent completed.  This was followed by an Aug. 29 announcement by the Department of Transportation that it was cutting around $679 million in federal funding for 12 offshore wind farms in 11 states, calling the projects “wasteful.”

Sending an unmistakable message to investors to avoid risking their capital on no-longer-fashionable green energy, the Department of Agriculture (USDA) is pulling the plug on a slew of funding programs for wind and solar power.

“Our prime farmland should not be wasted and replaced with green new deal subsidized solar panels,” said Agriculture Secretary Brooke Rollins on a visit to Tennessee in late August.  “We are no longer allowing businesses to use your taxpayer dollars to fund solar projects on prime American farmland, and we will no longer allow solar panels manufactured by foreign adversaries to be used in our USDA-funded projects.”

The White House is putting the squeeze on an industry that can ill-afford to lose the privileges it has enjoyed for so many years. Acknowledging the hesitancy of investors to fund green-energy projects with the looming phaseout of federal subsidies, James Holmes, CEO of Solx, a solar module manufacturer, told The Washington Post, “We’re seeing some paralysis in decision-making in the developer world right now.”  He added, “There’s been a pretty significant hit to our industry, but we’ll get through it.”

That may not be easy.  According to SolarInsure, a firm that tracks the commercial performance of the domestic solar industry, over 100 solar companies declared bankruptcy or shut down in 2024—a year before the second Trump administration started turning the screws on the industry.

As wind and solar companies confront an increasingly unfavorable commercial and political climate, green energy is also taking a hit from its global financial support network.

The United Nations-backed Net Zero Banking Alliance (NZBA) “has suspended activities, following the departure of numerous financial institutions from its ranks amid political pressure from the Trump administration,” The Wall Street Journal reported.  Established in 2021, the NZBA’s 120 banks in 40 countries were a formidable element in global decarbonization schemes, which included support for wind and solar power.  Among the U.S. banks that headed for the exits in the aftermath of Trump’s election were JP Morgan, Citi, and Morgan Stanley.  They have been joined more recently by European heavyweights HSBC, Barclays, and UBS.

Wind and solar power require a lot of upfront capital, and investors may be having second thoughts about placing their bets on what looks like a losing horse.

“Wind and solar energy are dilute, intermittent, fragile, surface-intensive, transmission-extensive, and government-dependent,” notes Robert Bradley, founder and CEO of the Institute for Energy Research.

Given these inherent disadvantages of wind and solar power, it’s no surprise that the Department of Agriculture is throttling the flow of taxpayer money to solar projects.  The USDA’s mission is to “provide leadership on food, agriculture, food, natural resources, rural development, nutrition, and related issues….” It is not to help prop up an industry whose best days are behind it.

Effective immediately, wind and solar projects will no longer be eligible for USDA Rural Development Business and Industry (B&I) Guaranteed Loan Program. A second USDA energy-related guaranteed loan program, known by the acronym REAP, will henceforth require that wind and solar installations on farms and ranches be “right-sized for their facilities.”

If project applications include ground-mounted solar photovoltaic systems larger than 50 kilowatts or such systems that “cannot document historical energy usage,” they will not be eligible for REAP.

Ending Misallocation Of Resources

“For too long, Washington bureaucrats and foreign adversaries have tried to dictate how we use our land and our resources,” said Republican Rep. Harriot Hagermann of Wyoming.  “Taxpayers should never be forced to bankroll green new deal scams that destroy our farmland and undermine our food security.”

Hagermann’s citing of “foreign adversaries” is a clear reference to China, which is by far the world’s leading manufacturer of solar panels, according to the International Energy Agency.

According to a USDA study from 2024, 424,000 acres of rural land were home to wind turbines and solar arrays in 2020.  While this – outdated – figure represents less than 0.05 percent of the nearly 900 million acres of farmland in the U.S., the prospect of ever-increasing amounts of farmland being taken out of full-time food production to support part-time energy was enough to persuade USDA that a change of course was in order.

Bonner Russell Cohen, Ph. D., is a senior policy analyst with the Committee for a Constructive Tomorrow (CFACT).