Energy – Expense or Revenue Ledger?

As we begin the cap and trade system in Ontario this new year, 20 Ontario Chambers of Commerce have stepped up on cue, to ask the province to delay its implementation for a year. This is ironic coming 20 years after the devastating Saguenay flood of 1996. Since then we’ve had the 2016 Fort MacMurray wildfire ($3.7 billion damages), 2013 Southern Alberta floods ($1.72 billion damages), and 1996 eastern Ice Storm ($1.49 billion damages). That’s just a sampling of the “Top 10 most costly disasters in Canadian history”. Do you still think we are immune? Toronto made the list of “Five Canadian communities threatened by climate change now.” (CBC Radio) In the next 30 to 40 years, the number of rainy days in the city is expected to double, and the thunderstorms will become more extreme.”

I think most Ontarians understand the danger posed by climate change. Cap and Trade involves costs for the economy, but for the smart and nimble it offers opportunity too. These contrarian Captains of Commerce should realize greater danger lies in doing nothing. Speaking of doing nothing, I wonder if members of these 20 Chambers of Commerce have at least prepared a contingency plan for major climate disruption and an estimate of their potential losses. Have they conducted an energy audit of their companies to understand where their energy dollars are going? Have they researched any strategies to reduce energy use? Do they have an officer in charge of lower carbon strategies? Or are they being swept along by events rather than demonstrating leadership? 

In its first year, Ontario cap and trade is expected to reduce carbon emissions by 3.9 megatonnes or 20% of a targeted 18.7 megatonnes. (The government claims another 9.8 megatonnes of reductions will occur through “other initiatives”. The program will raise $1.9 billion/year to be dedicated to emissions reduction measures.

That’s almost a quarter billion dollars raised per quarter for climate action. The biggest public concern I’ve heard is skepticism about how the money will be used. With almost $500 million being collected each quarter, the Ontario government should do itself a favour and pledge to provide the greatest degree of transparency in the use of these funds. Ideally this would consist of a quarterly accounting of projects, in-progress and completed, together with documentation of funds not yet allocated, allocated and disbursed. I’m sure other international jurisdictions would watch this process intently too for validation of the carbon cap and trade concept. Ontarians no longer have the patience or trust to wait a year or more for a report and analysis of performance and achievements. Environmental justice doesn’t just need to be done, it needs to be seen to be done.

Some countries are further along the path in developing effective energy strategies. I’ve found some interesting developments in the U.K. Those Ontario Chambers of Commerce might want to read “Energy efficiency: Forging the path from compliance to competitive edge”, (EDIE.net, December 2016):

“A recent benchmarking survey carried out by edie in association with energy company, E.ON, has painted the scene as to how UK companies are now interacting with energy. The survey covered five tiers of the energy efficiency performance ‘pyramid’, with companies ranking themselves as ‘Compliant’, ‘Knowledgeable’, ‘More efficient’, ‘Self-sufficient’ and ‘Generating revenue’ when it comes to the current state of their energy management processes.

Let’s pause here for a moment and think about that. How would you rate the company you work for on that pyramid? Now back to the U.K.:

“More than 70% of the survey’s respondents placed themselves at the ‘Self-sufficient’ stage of the pyramid, while 44% claimed that their organisation – which ranged from SMEs to businesses with more than 5,000 employees – is now generating revenue from energy efficiency.”

“Analysis from the Carbon Trust suggests that a business with an average energy spend (£1.8m) and average reductions identified through ESOS [Energy Savings Opportunity Scheme] would be in line for savings of £360,000 … Usually, after manpower, energy is the biggest single annual cost for all our customers, and is therefore a priority, and if you get energy efficiency right you will see the benefits.”

Here in Ontario we have a long way to go – the challenges are great, the opportunities are huge and the rewards are out there. We need the government to act quickly and strategically but we need greater public trust to motivate businesses and individuals to act now. The millions of individual choices, that will be made over the next year, will be watched intently by those who want us to succeed … or fail.

Advertisements