ECON371/UBCO2024WT1/NewsWiki/group1week8
Article:
https://www.cbc.ca/news/canada/montreal/natural-renewable-gas-quebec-1.7386759
Problem:
Quebec's provincial government has announced a plan to phase out fossil-fuel-based heating in homes by 2040. Different parties have spoken about the potential gains and deficits from this decision.
Prof: The problem is the need to reduce GHG emissions. This article explores one policy that may help contribute to reducing GHG emissions generated by burning fossil fuels for heating.
Summary:
Quebec’s plan to ban fossil-fuel natural gas heating by 2040 is targetting reduced greenhouse gas emissions but it faces challenges like high costs for renewable natural gas, limited supply, and an increasingly strained electricity grid. Renewable gas currently makes up only 2% of Énergir’s supply, the primary distributor for Quebec’s energy, and is far more expensive than fossil fuels. Despite criticism about the already problematic energy supply issues, the government encourages a shift to electric heating and has committed $900 million under its 2030 Green Economy Plan to ease the transition. Environmental groups support the plan but are worried about the province relying on dual-energy systems, which could delay the full switch to renewable energy sources.
Economic concepts:
- Externalities: The unintended side effects of economic activity that affect third parties who are not directly involved in the transaction. Carbon emissions have negative externalities; a common example is air pollution, which negatively affects society.
- Market-Based Regulation: Policy instruments that use markets, price, and other economic variables to provide incentives for polluters to reduce or eliminate negative environmental externalities.
Application of concepts:
- Externalities: Quebec's plan addresses the negative externalities of carbon emissions. Fossil fuel use in heating generates pollution that creats environmental costs not accounted for in market prices and causes potential health problems in the surrounding population. Transitioning to renewable natural gas and promoting electric heating allows the government to combat these costs by creating more opportunity for more sustainable sources of energy and banning the harmful, currently used practice. This shift benefits society by reducing pollution, although it places logistical pressures on energy providers. Prof: The externality here is the damage that comes from climate change. GHG emissions are the cause of climate change, and the impacts of climate change are borne by people all over the planet.
- Market-based Regulation: The ban shows market-based regulation by using policy mechanisms encourage sustainable energy adoption. Under the 2030 Green Economy Plan, the government has allocated $900 million for energy efficiency initiatives. By prioritizing renewable gasses and promoting electric heating, Quebec is creating market conditions that favour clean energy. These measures encourage innovation in renewable infrastructure while gradually phasing out reliance on fossil fuels. Prof: The article speaks about a ban on fossil fuels for home heating. This is a command and control policy, not an incentive based policy. The only incentive role would be as a technology forcing standard.
Conclusion:
Quebec's plan to ban fossil-fuel-based natural gas heating shows a commitment to reducing greenhouse gas emissions and lower negative externalities, this will require investments in renewable energy infrastructure. Market-based regulation in order to focus on expanding renewable natural gas production and managing electricity demand is needed to see the plan succeed.