As Manitobans prepare for an increase in Hydro rates, a growing recognition it is no longer feasible to maintain a “business as usual” approach to energy consumption has local companies seeking more creative approaches to efficiency.
This could explain why Manitoba Race to Reduce has attracted over 7 million square feet of commercial office space in its first year. The program reduces barriers to energy efficiency, providing participants with benchmarking data and communication tools. Its focus on changing workplace behaviours rather than expensive capital investments also enables smaller businesses to participate.
Since January 2017, landlords and tenants of some of the province’s largest buildings have been working together to change workplace habits with the aim of reducing their collective energy use by at least 10 per cent over four years.
In celebration of participating buildings’ achievements to date, the First Annual Awards for the Race was held on April 19 at the RBC Convention Centre. Emceed by The Winnipeg Chamber of Commerce President & CEO, Loren Remillard, the event was attended by well over 100 landlords, tenants and business and community members.
The Honourable Jim Carr, Canada’s Minister of Natural Resources kicked off the event through a video message before speakers took to the stage to offer energy saving tips and hand out awards.
Artis REIT walked away with three awards, with its 360 Main Street building winning the Largest Energy Reduction and Most Improved Energy Use awards; and its 333 Main Street building winning the Summerhill sponsored Most Improved Energy Use Intensity award.
Colliers International took home the Veolia sponsored award for Largest GHG Emissions Reduction for their efforts at 330 St. Mary Avenue and the award for Most Improved Reduction of GHG Emissions was won by Royal Canadian Properties Limited for the Cargill Building at 240 Graham Avenue.
This was followed by the unveiling of the current collective energy results. To date, 29 participating buildings have collectively reduced their electricity use by 2,661,922 kWh and their natural gas use by 71,321 m³, equaling a total collective energy reduction of 1.55 per cent for 2017.
With three years remaining in the Race, there is still ample opportunity for businesses to sign up, access resources, reduce costs and become a recognized leader in sustainability.
To learn more about Manitoba Race to Reduce, register a building or get involved, visit www.manitobaracetoreduce.ca or email email@example.com.
The Winnipeg Chamber: Are you hopeful?
Scott Vaughan. Yes, and here’s why. Markets are seeing stronger returns in greener, cleaner investments. One example: in 2017, global investments in renewable energy added up to more than US$2 trillion. This market pull is combined with a regulator push, from market regulators and investors counting up their climate risk in the same way as other material risks. And, of course, governments are sending clearer signals that climate change needs to be addressed. There are ongoing debates about how best to do this, but we’ve moved from “if” climate change ought to be addressed to “how.”
WC: There are so many subjects to focus on – sustainable infrastructure, agricultural adaptation, renewables, etc. – how do you and IISD set priorities?
SV: Like any business, IISD adjusts its priorities and chooses its partners based on a clear strategic plan. Some things are harder to predict, like what the White House will do on NAFTA or the World Trade Organization. But other things we can be more certain about.
For example, we do know that U.S.-Canada relations transcend the daily grind of politics. We know that China will remain focused on its current five-year plan, that big investors are looking at longer-term climate risk, that science is clear about the fact that freshwater challenges are magnifying, and that a younger generation sees clear links between values, public policy expectations and consumer loyalty.
WC: A University of Montreal study (2015) shows that while a significant portion of Canadians believe human activity is mostly or partly contributing to climate change, 39 per cent do not. What’s your reaction to holdouts?
SV: To be honest, I’m not sure why we keep taking surveys on an issue as complex as climate change. I’m an economist, but if I’m asked what I think about monetary policy and new Basel loan loss provisions, I’d say, ‘thank goodness for experts.’
Without a doubt there is a divide along political lines. This is magnified in the U.S., where - for instance - 70 per cent of Democrats trust scientists to describe climate change fully, compared to 15 percent of Republicans. Climate change has clearly been a focus of fake news.
The good news in Canada is the gap is narrowing. While the University of Montreal survey showed 39 percent do not believe in climate change, an April 2018 survey shows this number has dropped to around 33 percent of Canadians. Still, the clear majority do. There are strong debates about how to tackle climate change, but that’s the case for other important public policy issues in Canada too, from health care to reconciliation.
WC: Any thoughts on how Canada and the provinces are approaching carbon pricing?
SV: There’s a lot of interest in how Canada is addressing climate change, given our economic mix – from oil and gas, to agriculture, to the Arctic. Given the nature of our confederation, Canada naturally must try different tools – the federal government has roughly 26 different climate mitigation measures in play right now – but also action from provinces and territories, cities and business.
Carbon pricing is textbook ‘first best’ economics. But the real question isn’t the measure, but the level of ambition, and how these different measures stitch together.
There’s an interesting group that has formed in the U.S called the Climate Leadership Council. Their founding board includes notable Republicans – James A. Baker, George P. Shultz, as well as Lawrence Summers, Michael Bloomberg, the late Stephen Hawking, and others. Their approach to climate change is four-fold:
WC: Can you share some of your favourite examples of companies embracing SDGs and profiting?
SV: There are lots. The mining company Vale has mapped its global operations to the Sustainable Development Goals and set out targets most relevant to their goals and corporate values. These range from supporting a new generation of impact benefit agreements with local communities, setting in place clear freshwater management targets, promoting biodiversity and protected areas, installing renewable energy and supporting human rights. Anglo-American is another example.
Big players in global supply chains – think of Apple – have clear targets for renewable energy throughout their supply chain, and a commitment to be carbon-neutral. Ikea has committed to ensuring 100 per cent of its cotton supply is sustainably sourced, and 50 per cent of its wood supplies. Unilever remains a leader in making the SDGs tangible to their operations.
WC: What’s occupying your time and energy these days?
SV: I’m just back from a trip Disney, so I’m recovering from hugging my daughter’s favorite characters and surviving the rides!
IISD is preparing for its next strategic plan. This coincides with marking our 30th anniversary in 2020. One thing that hasn’t changed in three decades is our strong sense of belonging to the Winnipeg community. But like any business, you can only rest on your past accomplishments for about five minutes before you need to look ahead and start planning. So I’m spending time thinking about how IISD can work with U.S. partners in the stunning absence of leadership from the U.S. federal government, how we are and will work in China, how IISD can leverage its current partnerships to show progress is happening and that we can work together.
That’s outside. Inside, making sure younger, talented colleagues have a place that lets them thrive is really important. Today, when we recruit young leaders, they are interviewing old guys like me to test if we can meet their values and expectations.
WC: What can attendees at your May 18 keynote expect to take away from your talk?
SV: Sustainability and low-carbon pathways aren’t a fringe issue any longer; they are now mainstream finance and business realities.
Wanted: Public signals, private capital
Meeting the Sustainable Development Goals and the Paris Agreement’s target of keeping global temperature increase “well below 2 degrees” above pre-industrial levels will require private and public leadership to shift financial flows. Neither government nor the private sector can achieve these ambitious targets without each other, and without relentless pressure from civil society.
In particular, markets need proof and consistent government signals that investing in clean technologies, production methods, products and services will make more money than investing in dirty sectors. That is why countries such as the United Kingdom and France prioritize promoting the recommendations from the high-level Financial Stability Board’s Taskforce on Climate-related Financial Disclosures. And that is why investors also need sustainable asset valuation tools.
Promoting the green
As part of the signalling toolkit, governments can help shape, focus and leverage market action through a new generation of green industrial policy. This so-called renaissance in green industrial policy can, for instance, use government funds to act like venture capital to help kick-start innovative clean technologies and markets.
Mobility is a vivid example in this respect: on the one hand, with the right signals from governments, electric cars have been quickly and firmly claiming ground, not only in the West but also in many developing countries. On the other, Volvo, the formerly Swedish auto manufacturer now owned by Chinese investors, announced that it will sunset all internal combustion engines by 2019.
Electricity generation is another area where markets have seen a dramatic change, prompted by government policies. The cheapest electricity is now from renewable sources, such as wind power at 1.77¢/kWh in Mexico and solar at 3.4¢/kWh in India.
However, a key challenge is aligning public sector leadership with private sector innovation and financing to scale. The October 2017 release of the Organisation for Economic Co-operation and Development's Development Assistance Committee (OECD DAC) High Level Communiqué, including Blending Finance Principles for Unlocking Commercial Finance for the SDGs, is a helpful step in setting out the normative principles to blend or de-risk private sector financing to attract larger pools of private capital. The draft Green Finance Catalyzing Facility of the Asia Development Bank also sets out some operational elements to identify, pool and de-risk low-carbon investments.
China is uniquely placed to demonstrate how to integrate public sector finance with private market innovation in building a systematic approach to scale up green finance. Today, green bonds have reached an estimated USD 95 billion, with China being the largest issuer. While this is a tiny fraction of total bond market liquidity, green bonds in China represent one part of an ambitious systematic approach to building a green financial system that includes banking regulations, insurance, the stock market and other key actors. The potential to align China’s leadership in green finance within the G20 Green Finance Study Group to the Belt and Road Initiative has the potential to amplify green development.
Demoting the brown
Spearheaded by Canada and the United Kingdom, the Powering Past Coal Alliance (PPCA), unites 25 founding governments in phasing out coal. The goal is “to accelerate clean growth and climate protection through the phase-out of… existing traditional coal power” and place “a moratorium on any new traditional coal power stations.” With the PPCA launch seen as a “political watershed,” the emerging sense in the markets is that coal is on the wrong side of history, and even though it is clear in countries such as China and India, the transition away from coal will take much longer than in Canada or the United Kingdom.
But the jury is still out on whether oil and gas will be sun-setting in the same way as coal anytime soon. Norway is an interesting litmus text in this respect. The Norwegian Sovereign Fund, which, at USD 1 trillion, is the largest in the world, started divesting from coal in 2015. Divestment from coal has improved the fund’s financial performance, its managers say. In the same vein, in November 2017, the Norwegian Central Bank announced its recommendation for the fund’s divestment from oil and gas. The recommendation, which has already sent a strong signal to financial markets, relies on the similar —purely economic— assessment that the value of oil and gas assets would experience a permanent decline in coming years.
However, even Norway faces a dilemma about its future energy choices. Statoil, its government-owned company, still continues massive investments in oil and gas exploration and production and the government itself directly subsidizes coal extraction in Svalbard.
By contrast, an integral climate leadership example in this respect comes from France, which has announced a plan to stop granting new exploration permits next year as it seeks to end all oil and gas production by 2040. Although France does not have significant hydrocarbon extraction at present, its new legislation would not only put an end to its domestic debate on shale gas development, but it would also set an important precedent—a G7 country acting on the recognition that carbon pricing and other demand-side policies alone are not enough to respond to the climate challenge.
For governments, giving the right signals to markets is also not only about regulating them, but also about removing subsidies to fossil fuel production (around USD 100 billion per year) and consumption (around USD 260 billion in 2016) as well as stopping public finance to oil, gas and coal projects domestically and overseas. These subsidies artificially lower the cost of fossil fuel energy, leading to its wasteful consumption and, as a result, more emissions. Phase-out and reallocation of fossil fuel subsidies is a low-hanging fruit for financing climate action and implementing the Sustainable Development Goals. Instead of requiring financing, like many other sustainable development policies, fossil fuel subsidy reform could free up hundreds of billions of dollars for supporting health, education, renewable energy and a just transition of workers from brown to green jobs.
For the Earth to remain a safe place for us to live, the leadership bar has to rise much faster than the global temperature.
The following piece was written by Phil Gass for International Institute for Sustainable Development April 17, 2018
“Fossil fuels are so much cheaper than renewable energy!”
“Renewable energy destabilizes the electricity grid!”
“Carbon pricing is just a way for a government to place a tax on everything!”
Chances are, if you have stumbled upon this blog post, you have also stumbled upon some of these statements. Perhaps in local media, or over dinner table conversation, or in a tweet with the hashtag #FakeNews.
This blog post breaks down four common myths about renewable energy and carbon pricing. Feel free to use these facts next time someone tells you that coal is the future or that carbon pricing is just a hoax invented to increase your taxes.
Facts are facts and, as you will learn, the truth is that renewable energy is cheap and effective and that carbon pricing is a smart way to control pollution and promote the shift to a strong, low-carbon economy.
Myth 1: Renewables cost more than fossil fuels
You have likely heard this one before—some version of a statement that natural gas and coal are so cheap that renewables don’t make sense and will only cause us to pay more for our energy.
This may have been true a decade ago, but not anymore. The cost of global renewables, (especially solar power) is plummeting (Figure 1) to the point where they now are on par with each other. Meanwhile, the cost of coal power is increasing around the world, as carbon pricing places a true cost on the pollution and health impacts from burning coal.
Furthermore, the fossil fuel sector’s dirty secret is that it is massively subsidized, which is part of the reason why fossil fuels are cheap. In Canada alone, over CAD $3 billion in subsidies support the production of oil and gas (Figure 2). Without these subsidies, the true cost of fossil fuels is actually much higher. What’s worse: these subsidies are paid with public money coming out of your pocket that could be better used to support clean energy, hospitals, schools, or just given back to you in lower taxes.
Myth 2: Renewables will destabilize the electricity grid
This argument holds that if there are too many intermittent renewables on the grid, utilities will be unable to meet demand—for example, during peak times, if the wind doesn’t blow or the sun doesn’t shine.
While it is true that renewable energy is intermittent, the more you build across a wider area, the better your odds are of getting strong average production. The sun is always shining somewhere, and the wind is always blowing somewhere. Besides, there are also battery technologies to store energy, as well as more predictable renewables such as hydropower, where water can be held back to support times of peak production, and biomass, where as long as you secure supply, you can always keep the lights on. Hydroelectric systems dominate energy storage capacity worldwide.
Myth 3: Carbon pricing doesn’t work
This myth takes one of two forms: either 1) carbon pricing doesn’t reduce emissions at all, or; 2) it only reduces emissions if a carbon price is several hundred dollars per tonne.
Quite simply, this is wrong.
Multiple academic studies show carbon pricing does work, even at relatively low levels. Several of these studies have looked at the carbon tax in British Columbia, Canada, and shown marked improvement in per capita fuel consumption and reduction in greenhouse gasses since the carbon price came in (Elgie and McClay , Rivers and Schaufele , Duke University ). In addition, the performance of the province’s economy has outpaced the Canadian average since the carbon price came in, further busting the myth of the "job-killing carbon tax."
Besides, saying we shouldn’t implement a carbon tax just because it will only be a low rate and have a small initial impact is akin to saying “I have to train for a marathon, so there is no point in running a 5k.” We have to start somewhere.
Myth 4: A carbon tax is just another tax on everything
The misconception here is that a carbon tax will just make everything more expensive.
The truth is that a carbon tax is a progressive tax, and an avoidable one at that. You can avoid or reduce paying a carbon price by driving less or buying a more fuel-efficient vehicle or keeping your thermostat at 19°C instead of 23°C.
In many jurisdictions, such as British Columbia and Alberta, residents have benefitted from associated tax rebates and reductions to the point that the average person actually pays less tax than they did before the carbon tax came into place, and, as mentioned above, they can now control how much they pay.
In British Columbia, the government lowered income tax rates to offset the impact of the carbon tax. You can avoid a carbon tax by buying less gasoline—you can’t avoid paying your income tax. Finally, a carbon price also focuses on raising prices on things that are bad (pollution) and can make things that are good (income, jobs, renewable energy) more affordable, depending on how the revenue is spent.
On March 12, the provincial government tabled the 2018 Budget, highlighted by record deficit reduction, a restocking of the Fiscal Stabilization Fund (aka the Rainy Day Fund), strategic and responsible social investments, strong measures to support small business and a series of milestone taxation measures, in particular the introduction of the provincial carbon price. Many of these measures are consistent with changes long advocated by your Winnipeg Chamber.
Overall, The Winnipeg Chamber of Commerce gives the budget a grade of B- (with a B+ in economics and a C- in environmental studies).
Positive Business Tax Changes
The Chamber will continue to work with government on their carbon pricing policy. There is still time to support our trade exposed sectors and provide additional accounting clarity.
Taken as a whole, Budget 2018 delivered a sound fiscal blueprint and positions Manitoba well on its road to fiscal recovery.
JULY 28, 2017, WINNIPEG – Manitoba business leaders and the Honourable Catherine McKenna, Minister of Environment and Climate Change, left a wide-ranging, positive conversation on effective action against climate change Wednesday with a focus on the business opportunities of a greener economy.
“Our government knows that the environment and the economy go hand in hand, which is why we have committed to addressing climate change while creating the right conditions to grow the economy and create good middle class jobs,” said Minister McKenna. “It was inspiring to meet so many Winnipeg businesses keen to take advantage of the huge opportunity stemming from climate action. I look forward to working with Chambers of Commerce, with the Manitoba government and with innovative businesses like the ones I met this week to make sure that Canada takes full advantage of the opportunities are being created by a shift towards cleaner forms of energy, innovative technology, and sustainable investment values.”
The Winnipeg Chamber of Commerce has unequivocally stated inaction on climate change is not an option. Loren Remillard, President and CEO of The Winnipeg Chamber, appreciated Minister McKenna’s open and forthright engagement with local business leaders regarding a multi-faceted approach to effective climate change action.
“Local business acknowledges climate change is real. As such, we have a responsibility, as part of a collective effort, to meet head-on the defining challenge of our age,” said Remillard. “The enthusiasm Minister McKenna showed for the actions Manitoba companies have already taken – as well as the unique advantages Manitoba has when it comes to a clean energy grid – was extremely encouraging and provides a solid foundation for industry’s important role in tackling climate change.”
Click to read the full Winnipeg Chamber carbon price policy.
About The Winnipeg Chamber of Commerce
The Winnipeg Chamber of Commerce, founded in 1873, is the largest organization representing the voice of business in Winnipeg. Our mission is to foster an environment in which Winnipeg business can prosper.
This article first appeared in the Winnipeg Free Press on June 26, 2017.
Climate change is real. Continued debate as to this fact is counterproductive and diminishes our available window for action. What remains open for discussion – or should be open – is how Manitoba, as part of national and international efforts, contributes our responsible share to the solution.
In 2015, over 190 countries signed the Paris Climate Agreement to slow the rise in global temperature. Subsequently, the federal government initiated The Pan-Canadian Framework on Clean Growth and Climate Change. The framework sets a Canadian greenhouse gas (GHG) emissions target of 30 per cent below 2005 levels by 2030.
Further, the federal government announced a price on carbon. Starting in 2018, the price of carbon will be $10 per tonne of C02, and rise by $10 a year up until 2022. That means by 2022 carbon emissions will cost $50 a tonne.
The federal government has been unequivocal – carbon pricing is coming, but provinces are able to design their own pricing system. The Winnipeg Chamber of Commerce believes strongly in a “made in Manitoba” system; one-size-fits-all solutions rarely work in a country as diverse as Canada.
Details on the Manitoba system have been scant, but anything put in place must ensure our businesses stay competitive with other jurisdictions. There’s much truth, perhaps an inconvenient one, in the old adage, ‘don’t throw out the baby with the bath water.’
The US federal government has been clear it will not put a price on carbon any time soon. Acting without regard to the fact our business community’s largest competitors will not face emissions penalties is illogical at best, destructive at worst.
However, the federal government has been adamant a price is coming. The train’s left the station; we can either stand on the tracks in defiance or build the track ahead to determine where it goes. It is incumbent upon the federal government, who put the train in motion, to allow Manitoba latitude to do just that.
To ensure our carbon price lets local business remain competitive – particularly in the face of American policy – independent data on the effects of different carbon pricing levels on the economy must be made publicly available. For example, if data shows a price above $30 a tonne damages our local or provincial economy significantly, then the carbon price simply cannot rise above that.
A clear correlation needs to be shown on how implementing a carbon price has reduced greenhouse gas emissions. If we put a price in place and emissions continue to rise, what have we accomplished? A review mechanism needs to be put in place to determine if a carbon price has been successful in reducing emissions and at what cost to jobs, growth and community prosperity.
A carbon price will potentially raise hundreds of millions of dollars in provincial revenue. How we ‘recycle’ these revenues will spell the difference between Manitoba seizing the green economy opportunity or making a bad situation worse.
It is imperative this revenue not go to debt or deficit financing. All revenues collected need to support what the carbon price is intended to do: reduce emissions and promote the green economy.
A carbon price will particularly affect manufacturing, transportation and agriculture industries. They’ll need to be offered transitional supports. Likewise, support needs to be set aside for low income Manitobans who are least able to adapt to any new costs.
Other revenue from the carbon price must go toward investments in innovative technologies that will reduce emissions. For example, a $25,000 investment in energy efficiency technologies in a semi-truck can reduce that truck’s fuel intake by 22 per cent a year: the equivalent of taking more than seven cars off the road.
As well investments should be made to support the acceleration of Manitoba’s green economy. We have green energy and clean-tech advantages over other jurisdictions, and revenues from a carbon price can position Manitoba as a global green energy superpower.
The introduction of a carbon price also presents an opportunity for the province to step back and look at our entire taxation ecosystem. That system has not been reviewed in 17 years, and our code has become riddled with inconsistencies. With a possible PST cut coming, now is the time for an independent commission to provide recommendations on how to make our entire taxation system more competitive, fair and efficient.
Climate change is real. The urgency to respond with effective, immediate action is real. The need to act without damaging the livelihoods of Manitobans is equally real and requires a realistic framework to achieve enduring success.