Prime Minister Justin Trudeau recently announced the Canadian Infrastructure Bank’s (CIB) new plan to “invest” $10 billion, allegedly to “create jobs and strengthen economic growth”. This plan, he said, would create 60,000 jobs across Canada.
According to the backgrounder that accompanied the Prime Minister’s announcement, the bank’s spending will “accelerate adoption of modern zero-emission bus fleets and reduce greenhouse gases and operating costs over the long term.”
“Financing challenges often limit the development and expansion of clean transit systems. The CIB will address financial barriers faced by bus owners, such as transit authorities, municipalities or school bus operators due to high up-front capital costs of zero-emission buses (ZEBs) and associated charging infrastructure.”
The government’s goal is to have 5,000 zero-emission school and transit buses in Canada over the next five years.
As a generalization, it is difficult to imagine a more wasteful or cost-ineffective way for the federal government to spend money on trying to reduce emissions.
The announcement did not provide any estimate of how much money will be given to subsidize each transit or school bus or to pay for the costs of recharging stations. It also offered no estimate of the quantity of emissions that would be reduced.
According to Statistics Canada, there are about 67,000 motor coaches, school buses and transit buses in Canada, and they consume 784.6 million litres of diesel fuel per year. That equates to about 2.1 megatonnes (Mt) of carbon dioxide equivalent emissions. Canada produced 728 Mt of emissions in 2018. Switching from diesel-powered vehicles to electric vehicles would, according to studies by the U.S. National Renewable Energy Laboratory (NREL), reduce net bus emissions by about one third. So, the actual net reduction in emissions if Canada replaced its entire fleet of diesel buses with electric buses would be 0.7 Mt, or about one one-thousandth of Canada’s emissions. Converting just 5,000 buses would reduce fuel consumption by 19.3 million litres, or 0.16 Mt. The cost per megatonne of emissions avoided is hundreds of times higher than any other measure yet considered.
That is just the beginning of the bad news about this particular plan. The Trudeau government may not have noticed, but the management and operation of transit systems and other bus services are usually the responsibility of local governments, and local governments fall within the jurisdictions of the provinces under Canada’s constitution. Surely the judgment as to how to spend funds on transit should be left to the responsible governments.
The underlying presumption appears to be that there is a compelling need to further subsidize the ways that Canadians commute to and from work. Yet, according to Statistics Canada, 80 per cent of Canadians commute by car, even in the largest cities. The effect of the coronavirus has been to reduce further the number of people who want to travel in crowded transit vehicles and, it strongly appears, to initiate a substantial, possibly permanent, shift of working patterns to more stay-at-home. Investing a billion and a half dollars to reducing emissions from transit is a completely misdirected expenditure.
Nowhere in the world do electric vehicles operate without extremely large government subsidies. The typical ZEB costs $1.2 million or more, three to four times the cost of new diesel powered buses. In some of the cities where electric buses have been introduced as experiments, like Belo Horizonte, Brazil, or Albuquerque, New Mexico, they have had serious operational problems getting up hills with full passenger loads. They get typically around 225 miles per charge in warm weather. One can only imagine how many charges they would need in Canadian winter weather conditions, how broadly dispersed the recharging stations will need to be, or what will be the infrastructure problems associated with locating the recharging stations. The charging stations are expensive – about U.S. $50,000 for a standard depot-based one and two to three times that for longer bus routes, not counting construction costs.
Many of the studies that have been done of the economic viability of electric bus systems assume that the large subsidies currently in place in many countries will continue indefinitely and that there will be major continuing declines in the cost of batteries and recharging systems, so that by the latter part of this decade electric buses will be competitive with diesel-powered alternatives. If that really were true, one wonders by which rationale one would rush ahead now to buy non-economic vehicles that have little or no environmental benefit. Why not, instead, wait a few years?
Someone should ask Trudeau.
About the Author
Robert Lyman is an economist with 27 years’ experience as an analyst, policy advisor and manager in the Canadian federal government, primarily in the areas of energy, transportation, and environmental policy. He was also a diplomat for 10 years. Subsequently he has worked as a private consultant conducting policy research and analysis on energy and transportation issues as a principal for Entrans policy research group. He is a frequent contributor of articles and reports for friends of science, a Calgary-based independent organization concerned about climate change-related issues. He resides in Ottawa, Canada. Full bio.