It’s official—Ontario’s coal phase-out was all for nothing

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Appeared in the Financial Post, January 17, 2017

The federal Liberal government plans to impose a national coal phase-out, based on the same faulty arguments used in Ontario, namely that such a move will yield significant environmental benefits and reduce health-care costs. One problem—those arguments never made sense, and now with the Ontario phase-out complete, we can verify not only that they were invalid but that the Ontario government knew it.

Together with Fraser Institute economist Elmira Aliakbari, I just published a study on the coal phase-out in Ontario and its effects on air pollution over the 2002-2014 interval. Our expectation was that we would find very little evidence for pollution reductions associated with eliminating coal. This expectation arose from two considerations.

First, ample data at the time showed that coal use had little effect on Ontario air quality. Environment Canada’s emissions inventories showed that the Ontario power generation sector was responsible for only a tiny fraction (about one per cent) of provincial particulate emissions, a common measure of air pollution.

Further, a study by the province in 2005 showed that a majority of local particulates originated from U.S. sources. Another study done for the province predicted that eliminating coal would have extremely small effects on urban particulate levels. Taken together these reports provided a credible basis for predicting that a coal phase-out would only have a small effect on our air quality. They also showed, based on the results of retrofits then underway at the power plants, that the same air quality improvements could be obtained at a fraction of the cost by installing scrubbers on the smokestacks, rather than shutting the coal-fired plants down.

Second, the government’s claims about the health effects of phasing out coal were highly implausible. It stated (and continues to assert) that coal plant emissions cost the province more than $3 billion annually in health-care costs. But this was at a time when the total provincial health-care budget was only about $35 billion annually. In other words, they claimed that nearly one-tenth of all health-care spending was due to illnesses and mortality arising from power plants that, again, were responsible for only about one per cent of annual particulate emissions. That would imply that all emissions sources together caused an annual health-care burden many times larger than the entire health-care budget. It should have been obvious at the time that this was not remotely true.

Dr. Aliakbari and I analysed data for the cities of Hamilton, Toronto and Ottawa over the 2002-2014 interval. Our statistical model allowed us to isolate the effects of declining Ontario coal use compared to changing emissions from other Canadian and U.S. sources and effects due to weather. In line with our expectations and the prior evidence, we found that phasing out coal was responsible for only very small changes in Ontario air pollution levels.

In fact, the reduction in fine particulates associated with declining coal use was likely a bit larger than the 2005 studies had forecast, but were still very small and, in Hamilton and Toronto, statistically insignificant. The coal phase-out had no apparent effect on nitrogen oxide (NOx) levels, which instead were significantly improved by declining NOx emissions in the U.S. We found the elimination of coal was associated with a significant reduction on Ontario ozone levels. However, this was offset by increased emissions from natural gas power plants, such that per-terawatt (a unit of energy), trading gas for coal yields slightly higher net ozone levels.

We did not look at greenhouse gases because they are not local air pollutants, only matter on a global level, and emissions could be offset by purchasing credits anywhere in the world. The climate issue was, and remains, a red herring in the discussion about the costs and benefits of eliminating coal.

Ontario is suffering a crisis of high and rising electricity costs that’s causing real, long-lasting damage to households and businesses. The province insists the pain is worth it because of the environmental improvements. The numbers show otherwise. Phasing out coal had almost no effect on Ontario’s air pollution levels—and the government at Queen’s Park knew this was likely to be the case. It has all been for nothing.

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