Climate Action Portfolio

Table of Contents

1. A Strong Climate Change Plan
2. A Web-Based Public Process
3. Carbon Pricing
4. Plug-In Hybrid Electric Vehicles (PHEVs)
5. Congestion Pricing
6. Pay-As-You-Drive Vehicle Insurance
7. Moratorium on New Projects for Fossil Fuel Production and Declining Cap on Existing Production
8. Shift Incentives From Fossil Fuels to Sustainable Energy
9. Upgrade Buildings for Energy Efficiency at Point of Sale
10. The Merton Rule
11. 100,000 Solar Roofs
12. Advanced Renewable Tariff (“SOC Phase 2”)

1. A Strong Climate Change Plan

Proposed Measure

As well as specific action and policy items, the government should develop a strong over-all plan to address the long-term climate crisis and show how specific policies and actions will contribute to the plan.

The major characteristics of a strong climate change plan are:

1. A clear acknowledgement of the science of climate change.
2. The establishment of short-, medium- and long-term greenhouse gas reduction goals that reflect the most recent science, in particular, that global CO₂ emissions should not be allowed to rise above 450 ppm, so as to minimize the risk of the global mean temperature rising by more than 2º C above the pre-industrial level. Long-term greenhouse gas reduction goals should be in the order of 90% by 2030, and short- and medium- term goals should reflect this.
3. The allocation of goals, responsibilities and actions among all sectors of society, commensurate with the emissions they cause and their relative ability to reduce emissions.
4. Provision for mandatory compliance with greenhouse gas reduction measures, as in the UK.
5. A primary focus on long-term strategic results rather than on “lowest hanging fruit.”
6. Provision for a just transition to a post-carbon world, protecting the needs of labour and disadvantaged people.
7. The rapid phasing out of inconsistent government policies and incentives, such expansion of the fossil fuel industry, meeting transport demands by highway expansion, and offshore oil and gas exploration.
8. The inclusion of measures to address emissions outside BC that are caused by BC’s actions, such as fossil fuel exports, the transport of imported goods, and non-domestic aviation and marine transport.
9. The attachment of a strong price signal to both carbon and non-carbon greenhouse gas emissions.
10. A participatory process to engage the community as a whole in the development and execution of the plan.

Benefits

A strong climate change plan would:

1. Demonstrate leadership and commitment, supporting and channeling the efforts of British Columbians who are unsure of what to do about climate change.
2. Support the development of a national and international global consensus to take effective action.
3. Give clear economic signals to the business and investment community to re-deploy economic efforts toward sustainable activities, thus minimizing stranded investments and continued commitments to harmful activities.

Execution

The government (cabinet) would create the over-all plan and design the public process. Specific elements – sectoral targets, a price on carbon, addressing external greenhouse gas emissions – will require legislation and regulation. Such changes would require a cycle of planning and consultations, but the commitment to carry this out can be made right away. The phasing out of inconsistent policies and incentives may require some changes to regulations.

2. A Web-Based Public Process

Proposed Measure

There is widespread public support for the BC government’s leadership on climate change. There is also a significant desire on the part of many people to participate in the development of a strong Climate Action Plan. Public input is usually collected in three ways: (a) face-to-face meetings with stakeholders and concerned organizations; (b) public open houses and meetings; (c) websites designed to collect the public’s ideas.

In support of (c), the BCSEA recommends the development of a sophisticated website that could maximize the public’s involvement in a solutions-oriented, energetic manner that would be politically safe.

1. Establish an attractively designed website with separate areas for each main heading – Transport, Fossil Fuels, Financial Instruments, Buildings, etc. Create sub-rooms within each sector to facilitate input, eg (under Transport) Transit, Smart Growth, Vehicle Technologies, Cycling, etc, with a moderator in each area to encourage input and frame the discussion. Create a format that encourages input and ensures that people address the issues triggered by policy measures. Create new areas as demand arises.
2. Invite people to make submissions, and encourage on-line discussion and feedback. Invite people to rank ideas using the 5-Star system (as Amazon, YouTube), and to mark their favorites.
3. Invite people to post short video-clips promoting particular solutions, as on YouTube.
4. Invite people to post photos promoting particular solutions, as on Flickr.
5. Invite people to post songs, poems, photos, videos, and posters, and encourage viewers to rank them.
6. Invite people to debate the science of climate change if they want to in another area, where it will not interfere with the website’s core function.
7. Invite people to link to the site through myspace.com, facebook.com, and personal websites.
8. Offer significant prizes for solutions that receive the highest rankings and are judged by an independent panel to be worthy of an award.

Benefits

1. A web-based approach will maximize public involvement, and encourage the multi-sector involvement that is so critical for success.
2. Tens of thousands will participate, in addition to attendance at Open Houses.
3. Using the 5-Star ranking system, the government can observe which ideas gain public acceptance and which are unpopular in a safe manner, without exposing itself to political risk.
4. Popular ideas and practical ideas can be collected, while impractical ideas can be filtered out.
5. If the website language and design catches the right notes, and if it clearly allows autonomous open debate, it may overcome public cynicism about government and foster a very creative flow of ideas, building the groundwork for subsequent public involvement in reducing emissions.
6. Schools, colleges and businesses can all be involved.

Execution

Climate Action Secretariat – prepare a report, delineating and costing the project.
Cabinet Approval: The use of such a high-profile web-based approach to gather public input.

3. Carbon Pricing

Background

A carbon tax is designed to correct a negative externality. By putting a price on CO₂ emissions from burning fossil fuels, it causes people to seek to reduce their emissions - similar to a tobacco tax. It also sends a clear social and political sign, and shows political leadership. See www.carbontax.org

Sweden introduced its carbon tax in 1991 at 0.25 SEK per kg ($40/tonne), rising in 1997 to 0.36 SEK ($57/tonne). Industry is charged at a 50% rate, and biofuels are exempt. Commercial horticulture, mining, manufacturing, and pulp and paper are exempt for competitive reasons. When it was introduced, Sweden’s energy taxes (among the highest in Europe) were cut by 50% to compensate. Sweden’s Ministry of Environment estimated that CO₂ emissions in 1995 were 15% lower than if it and other energy taxes had not been introduced, and that CO₂ emissions would be 20-25% lower by 2000.1 It led to an increased use of biomass for district heating and by energy producers, but not to the industrial innovations Swedish policy-makers had hoped for.

Norway, Finland, Holland, Denmark, Austria, Germany and Italy have all introduced carbon taxes. The 25-member EU is supporting a carbon tax of $13/tonne, increasing to $33 for 2008-12. Norway’s carbon tax ($50/tonne) caused StatOil to sequestrate the CO₂ emissions from its Sleipner offshore gas field, since it was cheaper than paying the tax. The Danish Ministry of Finance has estimated that their $20 tax led to a 4.6% reduction in CO₂ emissions (A Review of Carbon and Energy Taxes in EU: www.tinyurl.com/2ve2jm).

Proposed Measure

1. Phase in a retail carbon sales tax on all fuels, based on their carbon content, rising to $100/tonne of CO₂ as part of a wider package of climate-related fiscal measures. $100 would add 23 cents to the price of a litre of gas. The UK’s Stern Review estimated the future cost of climate change at $100 per tonne, which provides the basis for this price, but a carbon tax lever can be adjusted and fine-tuned to avoid harsh impacts.
2. Place a similar CO₂ equivalent tax on methane, nitrous oxide and the F gases.
3. To make the new tax revenue neutral, reduce income taxes or PST; increase taxable thresholds; issue an annual flat per capita energy refund; or link the tax to consumer efficiency upgrade programs, where they would see the benefits being returned to them.
4. Produce a monthly fuel surcharge report, and make it mandatory for taxi drivers and truckers to pass the price on to their customers, to avoid competitive pressure to absorb the price increase.

Benefits

1. Consumers and industry will seek to reduce their carbon emissions in response to the price signal.
2. Zero and low carbon technologies will receive a market advantage, encouraging the growth of BC’s smart energy technology sector.
3. If Denmark’s 4% factor is right, a $20 tax would reduce BC’s 68 MT by 2.7 MT. If Sweden’s 15% factor is right, a $50 tax would reduce BC’s emissions by 10.2 MT.

Execution

Ministry of Finance – review the impacts of a carbon tax ranging from $50 to $500/tonne.
Commission a Position Paper for public consideration to start an informed debate.
Cabinet – give approval for the serious exploration of carbon pricing in BC.

Footnotes

1) Can eco-taxation be effective in reducing carbon emissions?
See also Economic Instruments in Practice 1: Carbon Tax in Sweden

4. Plug-In Hybrid Electric Vehicles (PHEVs)

Proposed Measure

Plug-in Hybrid Vehicles are being promoted as a breakthrough vehicle technology in the US due to their many benefits (see below). Ford, GM and Toyota have all intimated that they will have a mass production model by 2012. Austin Energy, the City of Austin’s public utility, has created Plug-In Partners to leverage future purchases to encourage a mass market with lower prices. Plug-in America has created a supportive presence. Google’s philanthropic arm, google.org, has invested $11 million to promote the adoption of PHEVs and vehicle-to-grid technology. (See www.pluginpartners.com and www.pluginamerica.org)

To accelerate the future uptake of PHEVs, the BC government could:

1. Place soft advance fleet orders as an indication of support, specifying the types and quantity of vehicles that BC would likely purchase: cars, vans, light duty trucks, heavy trucks.
2. Work with Manitoba, Ontario, Quebec and others to pool fleet buying power, and then hold informal discussions with the key players in advance of announcing an RFP for vehicles equivalent to a PHEV.
3. Announce a future rebate of $5,000 per vehicle for the first 1,000 PHEVs bought in BC, $4,000 for the next 2,000, and $3,000 for the next 10,000 vehicles. (Total cost $43 million over maybe 5 years)
4. Announce that starting in 2012, 1% of the cars sold in BC must be zero CO₂ emission vehicles, rising annually to 100% in 2030.
5. Give prominence to the benefits of PHEVs in the Climate Action Plan.

Benefits

1. PHEVs run on electricity for all local trips within range of the battery, representing 85% of all trips (US data). BC produces 88% green electricity; by 2016 almost 100% of BC’s electricity will be green, producing zero carbon emissions. Transport produces 38% of BC’s GHG, so the province-wide adoption of PHEVs would make a substantial contribution to BC’s GHG reduction targets.
2. By becoming a leader in PHEV promotion and adoption, BC could become a leader for R&D and intellectual property ownership, leveraging our existing advantages in the fuel cell and other sectors to become a global center of excellence in electric drive, exporting this know-how around the world.
3. The transition to PHEVs would make a large contribution to the elimination of air pollution and smog, bringing many health benefits and reduced healthcare costs.
4. Operating a PHEV using BC electricity would reduce driving costs by up to 75%, bringing a substantial financial benefit to all BC drivers and to the BC economy through reduced oil imports.
5. The combination of green electricity and low power prices positions BC to become a global leader in the uptake of the new vehicles if there is substantial government support.

Execution Plan

Ministry of Transport or Environment – Prepare a report on the multiple benefits of PHEVs.
Ministry of Finance: Prepare a costing of PHEV rebates, and net benefits to the BC economy based on differing PHEV uptake scenarios.
Premier’s Office: Work with others for a PHEV to tour BC so that the public can appreciate its benefits.
Areas for Cabinet approval: Commit to a PHEV package as part of the province’s Climate Action Plan.

5. Congestion Pricing

Proposed Measure

The Lower Mainland and the Capital Region both face an increasing problem of road congestion. In the Lower Mainland, the Gateway Program has been initiated as a response, with a $4 billion program of road and bridge building designed to ease congestion and make traffic flow more smoothly.

The history of attempts to solve congestion by building new roads, however, shows that the objective is rarely attained. In Victoria, the Island Highway expansion of the early 1990s, designed to end the Colwood Crawl, made it easier for people to commute longer distances, causing the problem to return in greater degree in less than ten years. The Gateway Program is almost guaranteed to have similar results, leading to more vehicle use, more sprawl, more congestion, and increased greenhouse gas emissions. As such, it is a contradictory impulse within the province’s larger plan to reduce BC’s GHGs.

Congestion charges have been used with considerable success to relieve congestion in London, Singapore, and Stockholm. London’s charge of £8 per entry has caused a 20% reduction in traffic and greenhouse gas emissions. Stockholm’s trial program, with a charge of $1.25 to $2.50 per trip, also led to a 20% reduction in traffic, and around $1 million a day in daily revenues. The scheme is being made permanent in August 2007. Fees are gathered by ANPR – Automated Number Plate Recognition.

The BCSEA’s proposal is that the Gateway Program be modified to replace road and bridge building with road pricing on the major entry points to Vancouver. Road pricing could also be used on the Malahat for entry into Victoria.

Benefits

1. Congestion would be relieved.
2. Vehicle traffic would fall by up to 20%, bringing a parallel fall in greenhouse gas emissions.
3. Most of the planned $4 billion planned investment could be saved.
4. The income from road pricing could be used to finance a major expansion of transit, bus-rapid transit, luxury long-distance coaches and safe cycling lanes.
5. Air quality would improve, and the stress to residents from noise and traffic would diminish.

Execution Plan

Ministry of Transport – commission an independent report into the costs and benefits of congestion pricing for the Lower Mainland, including the impacts on greenhouse gas emissions and air pollution.
Areas for Cabinet approval:
Apply a freeze to all Gateway Program projects until the congestion pricing report has been completed and considered as a serious alternative.

Resources

Road Pricing, Congestion Pricing, Value Pricing, Toll Roads and HOT Lanes by Todd Litman, Victoria Transport Policy Institute, 2007.

6. Pay-As-You-Drive Vehicle Insurance

Proposed Measure

With Pay-As-You-Drive (PAYD, also known as Distance-Based Insurance) pricing, a vehicle’s insurance premiums and registration fees are based directly on its annual mileage. Existing rating factors are incorporated so that higher-risk motorists pay more per kilometre than lower-risk drivers. For example, a $500 annual premium becomes 2.5¢ per km; a $2,000 annual premium becomes 10¢ per km.

Since private vehicle insurance and registration fees average about $1,500 per vehicle-year and the drivers travel about 20,000 kilometers a year, the PAYD fee would average about 7.5¢ per vehicle-km overall, equivalent to a 75¢ a litre increase in fuel prices. This is not a new fee – it is simply a different way to pay an existing fee. Based on standard transportation price elasticity values this should reduce affected vehicles’ annual mileage by 10-15%.

PAYD has been tried with successful results. In Houston, Texas, the Progressive Insurance Company saved consumers an average 25% compared to traditional auto insurance; in the UK, 5,000 people are trialing PAYD through Norwich Union Insurance. In Ontario, Aviva Canada is using the Autograph recording device to track speed, distance and time of day, and over 1,000 drivers are achieving discounts averaging over 20%.

Benefits

1. Reduces per capita fuel consumption and greenhouse gas emissions.
2. Reduces crash risk to all road users by giving motorists, particularly higher risk drivers, a new financial incentive to reduce their mileage and therefore accident exposure.
3. Reduces traffic congestion, parking congestion, and roadway costs.
4. Increases fairness, by making the premiums better reflect the insurance claim costs of each individual vehicle.
5. Increases insurance affordability by giving motorists a new opportunity to save money, allowing motorists to choose the insurance price structure that best meets their needs.
6. Benefits lower-income households, because they tend to drive their vehicles less than average.

Execution

ICBC: Implement a pilot project using odometer-based PAYD insurance and registration fees. Calculate the per-kilometre fees by dividing the current premiums and registration fees by the average annual mileage of each vehicle group (typically about 20,000 annual kilometre). Collect mileage data by means of an odometer audit performed at the beginning and end of the policy term, using third parties such as Aircare inspection stations and vehicle service stations to record odometer readings and check for signs of tampering. The pilot should include at least 1,000 volunteers the first year, doubling in size every year until PAYD pricing is available to all BC motorists, unless an unsolvable problem is encountered. The pilot could include variations such as monthly self-reported mileage and billing, verified by annual odometer audits.
Cabinet: Require ICBC to implement a PAYD vehicle pricing pilot project.

Resources

Distance-Based Vehicle Insurance as a TDM Strategy, by Todd Litman

7. Moratorium on New Projects for Fossil Fuel Production and Declining Cap on Existing Production

Proposed Measures

New fossil fuel production projects should be prevented by a moratorium. Existing fossil fuel production should be capped at present levels, and the cap should decline, initially by 2% each year, increasing to achieve a 90% to 95% decline in production by 2030 (as determined by the over-all long-term greenhouse gas reduction goal). The cap would be allocated among producers in proportion to present production and would be tradable. The schedule of reductions would be published in advance, and the cap would be enforced by placing a prohibitive royalty (500% above the normal rate) on excess production.

An alternative would be to allow production above the cap, to the extent that the greenhouse gas emissions (including production, transport and end use) were addressed by capture and storage, and Kyoto-compliant offsets. This approach would be sub-optimal, as it would encourage continued research and investment in fossil fuel production, when society’s resources would be better directed toward more sustainable solutions.

Benefits and Issues

These are radical proposals, to address an urgent situation. These policies would:

1. Directly reduce harmful effects by reducing the amount of fossil fuels produced and used.
2. Augment and ensure the effectiveness of carbon pricing and other greenhouse gas reduction measures implemented by government.
3. Send a clear, consistent signal to business and society, to help all sectors plan for a transition away from fossil fuel use and adapt to the change.
4. Strengthen national and international efforts to co-operate in greenhouse gas reductions.

BC currently receives some $1.8 billion in fossil fuel royalties, in a budget with total revenues of about $40 billion. There might be a slight initial decline in revenues – or they might rise, if rising fuel prices created opportunities for higher royalties. The rate of decline of the cap could be shaped to minimize the disruption of the transition. Elimination of fossil fuel royalties would reduce total revenues by about 5%. This would have to be addressed in the context of many social and economic changes, while moving toward sustainable energy use. These changes would create opportunities for new revenue streams: for example, non-depleting renewable energy production. A more efficient deployment of society’s resources should yield savings, such as lower fuel expenditures, that could result in more resources becoming available to meet society’s common needs.

It may be attractive, in lieu of a moratorium, to allow new projects if they capture and store emissions (supposing this is practical). As discussed above, this would not optimally signal the best direction for society’s efforts. If this were to be proposed, it should include all greenhouse gas emissions (production, transport and end use). BC’s fossil fuel exports cause some 100 million tonnes of CO₂ (eq) emissions from their end use (excluding transport).

Execution

Cabinet could enact a moratorium as an executive order or policy statement. Some change may be needed in the acts regulating the fossil fuel industry. Imposing a declining cap would require regulatory changes to royalties and possibly some minor legislative changes.

8. Shift Incentives From Fossil Fuels to Sustainable Energy

Proposed Measure

Government should shift incentives from fossil fuel industries to sustainable energy industries and prioritize capital investments that will provide long-term support to our society and economy. Government should eliminate incentives to fossil fuel production, as part of a general shift away from dependence on fossil fuels.

There are obvious benefits to the province’s balance sheet and program spending from the $1.8 billion in revenues from fossil fuel royalties. However there are also critical reasons for changing:

• Fossil fuels are the main driver of climate change, as well as causing air pollution and environmental disruption. 20% of BC’s greenhouse gas emissions come from the fossil fuel industry, and an additional 100 megatonnes of CO₂ equivalent from exported end-use emissions.
• The continual development new and increasingly expensive fossil fuel resources inappropriately co-opts society’s scarce capital.
• BC’s once-only fossil fuels resources are being liquidated to meet the running costs of the province. When they are gone, they will leave us with little useful accumulation of capital or resources with which to support ourselves in the future. We need a more sustainable approach to long-term planning.

(a) Government should rapidly phase out all fossil fuel incentives (currently $263 million per year), including subsidized road building and reduced-rate royalty regimes. Government should also implement carbon pricing to begin incorporating the climate-related costs of fossil fuels. This will signal to industry that it should re-deploy its capital and change its strategic thinking, and to consumers that our use of fossil fuels should be restricted.

(b) Government should initiate the principle of investing in the long-term future and shifting away from fossil fuels. It should plan and budget for continuing investments into greenhouse gas reductions and sustainable energies. The Stern review, prepared for the UK by the former chief economist of the World Bank, suggested that an investment of 1% of the gross domestic product could stabilize atmospheric greenhouse gases and hopefully prevent a 20% decline in wealth. 1% of BC’s current budget is $400 million, a tenth of the recently announced budget surplus. Government should initially commit to allocating about this amount for investment into greenhouse gas reductions and long-term sustainable energy projects and systems, with the goal that these will replace our existing fossil fuel energy systems. Planning and co-ordination will be needed to ensure that business and industry can absorb such investments and deliver optimum results.

(c) A “Climate Solutions Heritage Fund,” endowed from fossil fuel royalties, might usefully serve to concretize the sense that the fossil fuel resource is once-only capital resource, and should be applied to creating lasting wealth and sustainable energy systems.

Execution

• Ministry of Finance - address the fiscal implications, including the identification of incentives that stimulate greenhouse gas emissions and the assessment of a Climate Solutions Heritage Fund.
• MEMPR and/or Premier’s office - develop the plan for investment in sustainable energy, with input from the Ministry of Advanced Education regarding skills training strategies.
• Cabinet - provide over-all direction through a policy statement and budgetary commitment.

9. Upgrade Buildings for Energy Efficiency at Point of Sale

Proposed Measure

A commitment to introduce a Green Building Code was made in the Throne Speech, and is being developed through the office of Housing and Construction Standards. An equally important challenge is how to make BC’s existing building stock more energy efficient.

In 1982, San Francisco introduced a Residential Energy Conservation Ordinance (RECO), under which a seller, before transfer of title can occur, must have an energy inspection verifying that all applicable conservation applications have been installed to meet or exceed California’s Title 24 Energy Codes.

Sellers are not required to spend more than 1% of the purchase price or assessed value, and buyers and sellers may negotiate the responsibility for the upgrade, as long as the changes are made within 180 days of transfer of title. RECO’s mild regulatory approach has been successfully normalized in the Bay Areas housing market, and has been highly effective at reaching older housing stock and marginal elements of the private rental market. Using RECO, since 1987 Berkeley (pop’n 104,000) has reduced its residential energy consumption by 13%, saving 5,098 tons of CO₂ a year, saving households up to $450 a year on their energy with payback in two years.

To accelerate the energy efficiency upgrading of BC’s existing building stock, the BC government could:

• Phase in a province-wide RECO, making the energy/water efficiency aspects of the Green Building Code mandatory for all residential and commercial buildings upon sale, transfer, or renovation exceeding a total permit value of $20,000. Start in CRD, GVRD, FVRD, Nanaimo, Kelowna, and Kamloops.
• Make the RECO performance-based as well as prescriptive, allowing the use of EnerGuide as a tool.
• Match all federal ecoENERGY grants, as in Ontario, where (eg) the installation of a ground-source heat pump earns a grant of $7,000. Do not limit the investment to 1% of the assessed value (as above)
• Extend the PST exemption on alternative energy equipment to equipment associated with an upgrade.
• Create a loan guarantee fund enabling private financial institutions to offer energy upgrade loans.
• Empower BC Hydro to issue energy upgrade loans.

Benefits

• Greenhouse gas emissions associated with buildings would be steadily reduced.
• BC businesses offering building efficiency technologies and services would expand to meet the demand,
• Home-owners and landlords would feel supported in the process of upgrading, and enjoy lower energy bills following the upgrade.
• Businesses would have lower ongoing fuel costs, allowing them to be more successful in the market.
• The RECO itself carries no cost to government.

Execution Plan

Actions by staff:

• Building and Safety Policy Branch: Study Berkeley’s RECO, and prepare recommendations for Cabinet

Areas for Cabinet approval:

• Agreement in principle that this approach should be supported
• Empower BC Hydro to issue energy upgrade loans

Resources

www.ci.berkeley.ca.us/sustainable/residents/ResSidebar/RECO.html
www.nycclimatesummit.com/casestudies/building/bldg_berkeley.html

10. The Merton Rule

Proposed Measure

It is estimated that up to a third of the buildings that will be in use in BC in 2030 have not yet been built. Local governments are ideally placed to promote low carbon buildings and distributed renewable heat and power.

The BC Government should encourage local governments to enact bylaws requiring that new developments above 10,000 ft2 or 10 residential units must reduce expected energy consumption by 10% through the incorporation of renewable energy equipment. This policy, known as the “Merton Rule,” was introduced in the UK by the London Borough of Merton in 2003, and has since become national UK policy, creating a market for renewable energy estimated at $3bn annually. The policy promotes energy efficiency as well as renewables because more efficient buildings will need a smaller renewable energy installation to meet the 10% requirement1.

The additional upfront costs of the renewable energy technologies (the experience in the UK is that the cost increment is 2-3%) are passed on to the building occupier, who benefits from the reduced energy bills.

Benefits

• Strong growth and job creation in clean power and heat sector
• Provides incentive for both energy efficiency and renewable energy
• Upfront cost of renewable energy technologies wrapped up in mortgage
• Promotes innovation and least-cost low carbon technologies
• Contributes to a resilient distributed heat and power system

Execution Plan

Actions by staff (Building Policy Branch):

Study options for creating a BC Merton Rule and prepare recommendations for cabinet.

Areas for Cabinet approval:

Approve need for greater local government powers to promote renewable energy and low carbon buildings.

Notes

1 The discussion from a recent workshop considering the Merton rule in BC can be viewed here: http://www.communityenergy.bc.ca/resources-introduction/empowering-commu...

11. 100,000 Solar Roofs

Proposed Measure

The technical potential for solar energy in BC is high: BC has more solar radiation than Germany and Austria, two of the world’s leaders. The government should plan to achieve 7,000 rooftop solar installations by the 2010 Olympics, and 100,000 solar roofs by 2020. This would transform the market, so that government intervention would no longer be needed. The long-term goal should be 1.5 million solar roofs in BC, providing 10,000 GWh/y of PV energy and 4,000 GWh/y equivalent savings from solar heated water. A Task Team sponsored by the Ministers of Environment and EMPR is presently working on a Strategy and Action Plan for 100,000 Solar Roofs in BC, with suggested targets of 10,000 solar roofs by 2012 and 100,000 roofs by 2020.

A two-stream action program is recommended, focusing on (1) solar hot water acceleration and (2) photovoltaic acceleration, based on declining incentives, regulations and a strong public education initiative. Incentives could include rebates toward the system cost and/or a feed-in tariff, both declining with time as the market develops and solar prices fall. There could be higher subsidies for remote locations, first nations communities and low-income housing. The cost to the taxpayer/ratepayer would be approximately $30 - $325M1 over 13 years (up to $250M for photovoltaic and $30M - $75M for solar hot water).

Phased in regulations would include: (1) Solar regulations in the BC Green Building Code requiring the installation of solar energy systems on new construction and large retrofits through a phased approach beginning in 2010; (2) The requirement for solar installation when a property is sold; (3) Municipal by-laws requiring solar for new construction; and/or utility hook-up requirements for new construction to include solar installations.

Benefits

• Solar energy could contribute significantly to meeting BC’s energy needs, through photovoltaic generation and reduction in the need to heat water. Distributed solar energy reduces the need for transmission infrastructure and electricity imports.
• BC is home to leading Canadian solar companies. A strong provincial market will support their success, including exports. The industry could generate 4,000 jobs and direct economic benefits of $2 billion2 by 2020.
• Solar energy could reduce diesel and gasoline generator use in remote communities and natural gas use across the province, reducing greenhouse gas emissions and improving air quality.
• Solar energy could contribute to the Energy Plan goals: that all new and existing electricity production in BC have net zero GHG emissions by 2016; that 50% of new demand should be met through conservation (via solar hot water load displacement); and that 90% of BC electricity should be clean and green by 2016.
• Solar energy could help make government buildings carbon neutral by 2010.
• Solar energy contributes diversity to the electricity grid, complementing energies with different load shapes.

Execution

MEMPR: Develop a detailed implementation plan, based on the 100,000 Solar Roofs Strategy and Action Plan. Building and Safety Policy Branch: Include mandatory solar-ready construction in the first phase of the Green Building Code, and further solar obligations in later versions of the code.

Cabinet: Commit to a 100,000 Solar Roofs Program, to long-term funding (until 2020) and to regulations to implement the program.

Notes

1 Detailed cost models have not yet been developed and will be part of a detailed technical paper being prepared by the Task Team.
2 Based on Industry Estimates

12. Advanced Renewable Tariff (“SOC Phase 2”)

Proposed Measure

The government should adopt the Advanced Renewable Tariff (“ART,” a.k.a. “Feed Law”) as a strategic instrument to ensure the adoption of appropriate renewable electricity generation resources. ART might eventually replace the tender process. Initially it would supplement tendering by targeting specific appropriate technologies and by supporting smaller-scale, more localized projects. An independent expert panel sets technology-specific prices. The price is guaranteed for 15 - 20 years, to return capital costs. The price is adjusted periodically to ensure the number of projects coming on line reflects policy aims.

The government should prepare a “Phase 2” to its current SOC program. This should be integrated with BC Hydro’s net metering system and should be extended to all areas of BC. Specific technology targets:

1. Photovoltaic generation at the residential (3 kW) and small commercial (10 – 100 kW) levels, perhaps including IPP commercial generation. Solar energy can be installed right at the loads.
2. Solar hot water, aimed at residences, commercial buildings and swimming pools. Solar power is a very efficient way to heat water. The main barrier is initial costs. Policy can help this.
3. Small and medium scale wind energy close to load centres. BC’s best wind resources may be in remote areas, but there should also be good opportunities near load centres. Wind is generally grid-synergistic, with high generation in the winter months, when loads are high and hydro reservoirs are relatively low.
4. Ground source energy (with heat pump technology). This can be used in residences and commercial buildings, right at the loads. Appropriate heat metering would need to be developed.
5. Tidal and wave power are pre-commercial technologies. BC has large identified resources.

Benefits and Issues

Markets do not adequately signal key benefits of sustainable energy: (1) greenhouse-gas-free generation (already addressed in the government’s Energy Plan); (2) technological diversity and grid synergies; (3) and local generation. Policy-driven technology choices are needed to ensure that society makes the right energy choices in the short time-frame that we have to address climate crisis.

Regarding technical diversity and grid synergies, BC Hydro’s tender process and the proposed Standing Offer Contract (“SOC”) will likely attract disproportionate numbers of hydro-electric projects, because they are relatively cheap. This could retard the development of other resources, such as wind and sea energy, that are also needed to solve the energy equation. As well, too many hydro projects will cause grid inefficiencies because they peak in the season when there is least need for their power.

Local, distributed generation can be encouraged through ARTs, reducing line losses and creating a generally more robust system.

ARTs have been successfully deployed to “kick-start” renewable energy industries around the world. Denmark, Germany and Spain have developed major wind industries; Germany and Japan have become leaders in solar photovoltaic generation. While reducing dependence on fossil fuels, these countries have generated employment and diversified their economies. BC has a significant solar industry and potential to develop other renewable energy industries.

Execution

MEMPR would develop technology-specific goals. Government would create the independent expert panel.

Revisions to the Utilities Commission Act would be required to co-ordinate policy treatment of the ART and to extend it to other utilities in BC.