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Fraser Institute: keep your lights on 24/7, it grows the economy!

The Fraser Institute is encouraging people and businesses to burn through as much energy as possible to grow Canada’s economy. That appears to be the main takeaway from a new study released Thursday by the right-wing think tank. The report examines the long-term relationship between economic growth, energy availability and energy consumption. “Energy use and economic output grow together […]

The Fraser Institute is encouraging people and businesses to burn through as much energy as possible to grow Canada’s economy.

That appears to be the main takeaway from a new study released Thursday by the right-wing think tank. The report examines the long-term relationship between economic growth, energy availability and energy consumption.

“Energy use and economic output grow together over time, and the evidence shows that if you limit energy use you damage future economic growth prospects,” said study co-author Ross McKitrick, Institute senior fellow and economics professor at the University of Guelph.

The study, Energy Abundance and Economic Growth, notes that since “evidence from around the world indicates that energy use triggers growth and is not simply a by-product of growth,” governments should stop bringing in policies to encourage a decrease in energy use. 

“It’s obvious — energy drives economic growth. Yet policy-makers across Canada continue to treat energy consumption as a bad thing, and act as though cutting energy use is an end in itself. They need to understand the long-term costs of this thinking,” McKitrick said.

The study lists renewable energy mandates, conservation mandates and strict appliance standards as examples of bad public policy. 

The problem? A recent article from Canadian Energy Systems Analysis Research contradicts the report, suggesting that Canada has actually seen GDP growth become uncoupled from fuel and electricity growth since 1996. The authors say this is due to “a dramatic increase in the productivity of fuel and electricity use in the domestic economy.”

So if the Fraser Institute is recommending against conservation mandates, they’re proposing a dramatic decrease in energy productivity and to reverse the trend of more GDP growth per unit of energy use in Canada. That’s a celebration of energy waste, which is not only uneconomic, but bad for the environment.

And if the Institute is so concerned with energy abundance, why aren’t they talking about the cheapest way to achieve more supply: energy efficiency? 

Or discussing ways to reduce the cost of the most abundant source of energy in the world: solar. There is of course an abundance of other clean sources too.
 
Photo: gsfcUsed under a Creative Commons BY 2.0 licence.

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