Former environmental official defends biofuels

A former Ontario official is taking on financial heavyweights in a new report

Duelling biofuel reports paint a very different picture of the impact of biofuel mandates.

Former Ontario environment commissioner Gord Miller is taking on some financial heavyweights in his ongoing defence of government support for biofuels.

In a report called Staying the Course, Miller blasts the Ecofiscal Commission, an economics think-tank, for calling for an end to the federal and provincial biofuel mandates because they’re too costly for the environmental improvement they deliver.

“Ecofiscal’s recommendation would result in more emissions; poorer air quality; increased consumer costs; and shut down clean technology research and development being conducted by the biofuels industry,” Miller said.

“Renewable fuels mandates are critical for transportation emission reductions in the near and longer term. There’s no good argument that this course needs correction. Now is the time to keep a firm grip on the tiller and continue staying the course. Canada must not abandon renewable fuel mandates, the single largest guaranteed source of transportation fuel emission reductions.”

Ecofiscal says carbon pricing will reduce emissions at a lower cost.

When compared with other policies, especially carbon pricing, biofuels are clearly not the most cost-effective approach to reducing GHG emissions, the commission says in its own report, Course Correction.

That report says low-carbon transportation policies are still likely needed to complement emerging carbon pricing policies in Canadian provinces. Biofuels have been costly for consumers and inhibited the development of emerging low-carbon technologies. Decarbonizing the transportation sector will involve many different and competing technologies and the technologies that prove the most effective and economically viable should win the day.

A pan-Canadian carbon price “is the most effective and cost-effective way to achieve Canada’s climate targets. Achieving a broad-based carbon price in Canada will shift the incentives for developing and deploying low-carbon technologies,” Ecofiscal’s report reads.

Among Ecofiscal’s commissioners are Don Drummond, a former associate deputy minister of finance, Chris Ragan, a special adviser of the Finance Department, Glen Hodgson, senior vice-president of the Conference Board of Canada and Mel Cappe, a former chief clerk of the federal Privy Council. On its advisory board is Dominic Barton, head of the global consulting firm of McKinsey & Co. and chair of the advisory committee to Finance Minister Bill Morneau.

Miller says that the economic and environmental case for Canadian biofuel policies and mandates is “quite different” from the negative assessment Ecofiscal presents.

“Biofuel mandates are key to any effective climate policy and should be increased by Canadian governments contrary to Ecofiscal’s recommendations,” he said.

“If the recommendation to phase out renewable fuel mandates was adopted by government, the policy structure shaping the biofuels industry would change profoundly, there would be serious implications to the existing industry and ongoing research into next-generation low-carbon fuels, and there would be negative environmental and economic implications.”

Miller says Ecofiscal made a serious error in concluding that ethanol was too costly an octane source for conventional gasoline. It treated ethanol as a substitute for gasoline.

“Gasoline must be blended to achieve an anti-knock performance standard referred to as octane,” he said. “Producing the required octane with a mixture of petroleum hydrocarbons while meeting pollution standards is expensive.”

As for Ecofiscal’s doubts about biofuels reducing air pollution, Miller says reviews have consistently found “adequate evidence of substantive improvements in air emissions especially at the tailpipe where in urban areas the health effects of poor air quality are most problematic.”

“The first-generation biofuels industries in Canada are now well established and viable in the absence of subsidies, but attempts to launch second-generation biofuels and other advanced fuel technologies are at a critical stage,” he said.

“The liquid transportation fuel retail supply structure is in the control of the fossil petroleum industry that has no reason to support alternative fuels. Shutting down mandatory access to the liquid transportation fuel market seems a sure way to terminate investment in research and development of renewable low-carbon fuels.”

As well, Ecofiscal objects to ongoing public funding of biofuels “while there is no mention of the substantial subsidies, both historic and ongoing, to the fossil petroleum fuel industry,” he said.

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