Environmental Commissioner of Ontario – Annual Greenhouse Gas Progress Report 2013
Introduction
As required by the Environmental
Bill of Rights, 1993, (EBR)
the Environmental Commissioner of Ontario (ECO) reports annually to
the Ontario Legislature on the progress of activities in the province
to reduce greenhouse gas (GHG) emissions. As part of this reporting
requirement, the ECO is to review any annual report on GHG reductions
or climate change published by the government during the year. This
report constitutes the ECO’s 2013 annual report as required by the
EBR.
It includes a brief discussion of the government’s 2012 Climate
Change Action Plan (CCAP) progress report Climate Vision released in
November 2012; too late in the ECO’s review cycle to be included in
our December 2012 annual report.
The ECO has been constantly
challenged in reviewing progress on this file in the context of a
government whose approach is characterized by delayed reporting dates
and lack of content. In addition, the government does not produce its
own data on GHG emission reductions but relies on Environment
Canada’s National Inventory Report (NIR) which is released 16
months after the year of reporting.1
Accordingly, the ECO has
chosen to release this report now, to provide the Legislature with
the most current analysis of the status of Ontario’s GHG emissions
situation. Our next progress report is scheduled for the spring of
2014 and will include a review of any CCAP progress report that is
released this year.
This year’s report is
brief for two reasons. First, our last report, A Question of
Commitment, released in December 2012, provided a comprehensive,
sector-specific overview of the major GHG reduction initiatives
undertaken by the government over the 2011-2012 period. Second, since
the release of that report, there has been limited provincial action
on the climate change policy file and, accordingly, little progress
upon which to report. In part, the lack of provincial government
activity may be due to the prorogation of the Legislature that was
triggered in October 2012 and lasted until January 2013. It is the
ECO’s full expectation that the government will give renewed
attention to this file now that the legislative calendar has resumed.
1 For
example, the most recent National Inventory Report, released in April
2013, includes 2011 data.
In 2007, the provincial government
established three GHG reduction targets:
• 6 per cent below 1990
levels by 2014 (to approximately 166 megatonnes or Mt)2;
• 15 per cent below 1990
levels by 2020 (to approximately 150 Mt); and
• 80 per cent below 1990
levels by 2050 (to approximately 35 Mt).
Review of Climate Vision
Climate Vision provides a broad
overview of government activities in all areas of the economy to
reduce emissions, but provides very little information on the actual
reductions achieved. This information is contained within the
companion technical appendix, which also includes the status of
measures undertaken to adapt to future climate change. The technical
appendix indicates that current efforts are projected to achieve 91
per cent of the reductions necessary to meet the 2014 target. Looking
forward six years, however, projections are less than encouraging, as
the government estimates that all current initiatives (both
provincial and federal) will only achieve 60 per cent of the
reductions required to meet the 2020 target.
Furthermore, Climate
Vision fails to outline a strategy to either close this gap or, for
that matter, to even bend the projected emissions curve downwards.
Instead, with all of the policies and initiatives currently in place,
overall emissions are projected to continue to
rise and, by 2030, to
reach approximately 190 Mt. While the rate of increase is lower than
it would otherwise have been in the absence of any policies, the
trajectory is still upward. This is not the direction in which we
should be heading.
2 The
166 Mt target for 2014 represents a 6 per cent reduction from 177 Mt,
the most recent data for 1990 emissions from Environment Canada’s
2013 National Inventory Report (NIR). Due to Environment
Canada’s
restatement of emissions in its most recent NIR, the 1990 emissions
value of 177 Mt is 1 Mt higher than the 176 Mt value reported in
Environment Canada’s 2012 NIR.
Total Emissions in 2011
In conjunction with the global
recession of 2008-2009, Ontario’s emissions dropped significantly
in 2009 to 166 Mt, the lowest level since 1990. According to the most
recent data, Ontario’s emissions over the past two years have
rebounded and reached 171 Mt in 2011 (see Figure 1). This rebound is
unsurprising, given that the economy has seen modest growth over the
same period, as measured by growth in real gross domestic product
(GDP). Following the same pattern as global trends, Ontario’s real
GDP growth dropped 3.2 per cent in 2009. Since then, it has trended
upwards, and grew by 3 per cent in 2010 and 2.1 per cent in 2011.
In Ontario, increased
manufacturing output and international exports in the automotive,
machinery and metal sectors have contributed to these economic
increases. Continued moderate economic growth is predicted over the
next three years (1.9 per cent in 2013, 2.3 per cent in 2014 and 2.4
per cent in 2015). Given the current linkage between economic growth
and GHG emissions, a growing economy will result in increased future
emissions. However, the rate of emissions growth will likely be lower
as the economy decarbonizes; over the past five years, the delinking
of economic growth and GHG emissions has reduced Ontario’s GHG
emissions per dollar of GDP from 0.334 Mt/billion dollars of GDP in
2007 to 0.283 Mt/billion dollars of GDP in 2011.
Source:
Environment Canada. (2013) National
Inventory Report – Greenhouse Gas Sources and Sinks in Canada 1990-
2011. Targets
are from Go
Green: Ontario’s Action Plan on Climate Change, August
2007.
A
Note on the Numbers
It is important to note that this
report uses the most up-to-date data as calculated by Environment
Canada. In conducting these calculations, Environment Canada adjusts
yearly emission totals as improvements to inventory methodologies and
updates are developed. For example, according to the 2013 NIR, the
restated total for Ontario’s 2010 emissions is 174 Mt, 3 Mt higher
than was reported in the 2012 NIR. While the ECO accepts that these
restatements are important “to avoid confounding a methodological
change with an actual change in GHG emissions or removals”3,
it nevertheless makes it challenging for the reader to determine the
extent to which government action to influence GHGs is having an
impact.
Greenhouse gas emissions are reported
on a sectoral basis. Figure 2 illustrates the breakdown of emissions
from these six sectors: transportation, industry, buildings,
electricity, agriculture and waste.
3 Environment
Canada, 2013. National
Inventory Report 1990-2011, Greenhouse Gas Sources and Sinks in
Canada, The
Canadian Government’s Submission to the UN Framework Convention on
Climate Change,
Transportation – 58
Mt
At 58 Mt, the transportation sector
continues to be responsible for the largest amount of GHG emissions
in Ontario. Of this amount, more than 45 Mt was from road
transportation alone. Not surprisingly, passenger vehicles remain the
greatest contributor to GHG emissions in the road transportation
sector, even despite recent federal regulatory initiatives to reduce
GHG emissions from light-duty vehicles. The first regulation
established GHG emission standards for 2011 – 2016 model year
light-duty vehicles (i.e., cars, vans and pick-up trucks). In
December 2012, the federal government proposed standards to further
reduce emissions from 2017 – 2025 model year vehicles. The federal
government projects that the average fuel efficiency of new passenger
vehicles will increase by 57 per cent as a function of these
regulations, and these improvements in fuel efficiency will reduce
overall GHG emissions compared to business-as-usual projections.
However, given that the new regulations only took effect in 2011, and
vehicle stocks turn over every 10 – 15 years, the impact of these
regulations will only gradually be reflected in Ontario’s passenger
transportation emission totals over
the next decade or so and
with the added proviso that the fleet size doesn’t expand
substantially.
Freight vehicles represent
a growing segment of transportation-related GHG emissions. To address
this trend, a new federal regulation was issued in February 2013 that
establishes GHG emission standards for new on-road heavy-duty
vehicles for the 2014 – 2018 model years. As with passenger
vehicles, the emissions reduction impact of this regulation will not
be realized for many years to come and is dependent on fleet size.
Along with the fuel
efficiency measures being undertaken by the federal government, a key
tool to reduce passenger vehicle emissions is the expansion of public
transportation options to promote a modal shift from automobiles to
transit. Over the past several years, there has been a growing
concern, driven by severe traffic congestion problems, regarding the
need to move forward with enhanced public transit, particularly in
the Greater Toronto and Hamilton Area. One barrier to progress on
this file has been funding constraints. At the time of writing,
various organizations, such as the Toronto Region Board of Trade and
Civic Action, were devoting significant time and energy to assessing
various funding alternatives.
As well, Metrolinx was
engaged in a consultation process to assist with the development of
its investment strategy – a document scheduled for release by June
2013 that is to propose “revenue generation tools that may be used
by the province or the municipalities”4
to implement Metrolinx’s
regional transportation plan. Much discussion has occurred regarding
the need for bold leadership on this file and the ECO reiterates
these calls. Hard decisions will need to be made, but continuation of
the status quo is no longer an option.
Industry –
49.6 Mt
As shown in Figure 2,
following a nearly 11 Mt drop in industrial emissions between 2008
and 2009 brought on by the recession, GHG emissions from the
industrial sector rebounded nearly 3 Mt by 2011. Despite these
fluctuations, the industrial sector remains
the second largest source
of GHG emission in the province. Therefore, it is extremely important
that the government put in place an emissions reduction policy and
program to address this sector.
In January 2013, the
Ministry of the Environment posted a policy proposal on the
Environmental Registry seeking stakeholder input on a discussion
paper related to the design and development of an industrial GHG
reduction strategy, with a proposed reduction target of five per cent
over five years. This paper joins two earlier discussion papers
(posted as proposal notices on the Registry in December 2008 and May
2009) focused on developing a cap-and-trade system for Ontario.
4 Section
32.1, Metrolinx Act, 2006.
Buildings
– 31.7 Mt
Buildings represent the third largest
source of GHGs after transportation and industry. In 2010, Ontario
added 60,433 dwelling units to its housing stock and, in 2011,
another 67,821 units. Despite a growth in dwelling units that has
averaged 62,000 units per year over the 2009 to 2011 period,
emissions from the sector have remained relatively constant.
Efficiency improvements made during the 2006 Ontario Building Code
(OBC) review cycle no doubt contributed to keeping emissions
associated with the use of natural gas for space and water heating
constant while the number of dwelling units increased.
The ECO has previously
noted that Ontario’s microFIT program has created a perverse
incentive that represents a key barrier to reducing GHGs from
buildings. The program provides financial incentives for solar
photovoltaic (PV) electricity generation to the exclusion of solar
thermal systems for heating water. As the overwhelming majority of
buildings in Ontario rely on natural gas for water heating, the
opportunity to reduce these emissions is being lost. The ECO has
recommended that the government address this shortcoming by amending
the solar PV tariff so as not to compete with the financial and GHG
reduction benefits of installing solar thermal systems.
In November 2012, the OBC
was amended to make the consideration of GHG emissions an explicit
objective of the OBC. This has contributed to making the OBC one of
the more progressive building and construction codes in North
America. The ECO applauds
this development and,
given the direct link between natural gas consumption and the release
of GHGs noted above, reiterates our position that the OBC needs to be
reviewed more frequently than the current five-year cycle; a shorter
review period would help to ensure that improvements in building
technology, assembly, and heating, ventilation and air conditioning
equipment – as well as renewables – can be accommodated in the
Code to accelerate the adoption of energy efficiency improvements and
reduce GHG emissions.
Electricity
– 14.8 Mt
Emissions from electricity generation
decreased from almost 20 Mt in 2010 to just under 15 Mt in 2011.
However, these amounts (sourced from the 2013 NIR) do not represent
all emissions from electricity generation in the province. As the ECO
has previously noted, electricity sector emissions, as reported in
the NIR, only include emissions from utility electricity generation
and do not include emissions resulting from non-utility (industrial)
generators (NUGs) that rely primarily on natural gas.
One troubling aspect of
the non-utility generation in Ontario is that much of the electricity
is generated during periods when it is not needed. The power purchase
agreements of many of these generators allow them to sell to the grid
at their discretion. So, during periods of surplus baseload
generation we are often unnecessarily producing about 1,000 MW of
non-utility gas-fired generation with the ensuing GHG emissions.
In the past, Environment
Canada has not provided electricity GHG emissions broken down by fuel
type in its NIR reports. The ECO is pleased to see, therefore, that
this information was provided in this year’s report. Between 2010
and 2011, emissions
associated with coal use
dropped by nearly two-thirds (from 12.1 Mt to 4.1 Mt). The recent
announcement that Ontario will stop burning coal at two of its
largest coal-fired electricity generating stations – in Nanticoke
and Lambton – by the end of December 2013 (a year ahead of
schedule) means that only a smaller coal-fired plant in Thunder Bay
will remain in operation, scheduled to stop burning coal by the end
of 2014.
The phase out of
coal-fired generation puts the electricity sector on track to achieve
the emissions reductions envisaged in Ontario’s Long-Term Energy
Plan (LTEP) over the short term. However, the most recent NIR data
show that emissions from burning natural gas for utility electricity
generation have increased by nearly 44 per cent (from 7.4 Mt to 10.6
Mt) between 2010 and 2011. According to the Ontario Power Authority
(OPA), gas generation will serve as a swing resource going forward
and will play a large role in maintaining the balance between supply
and demand, especially during the period of nuclear plant
refurbishment expected around 2020/21.
The role that natural gas
is projected to play, and the contribution it will make towards
Ontario’s electricity GHG emissions profile, is illustrated in
three different emissions trajectories developed by the OPA and
released this year. As shown in the projections in Figure 3, GHGs
emitted in 2030 could range from as low as 4 Mt to as high as 16 Mt,
depending on the amount of electricity generated through the use of
natural gas.
By contrast, the LTEP,
developed by the Ministry of Energy (ENG) in 2010, projected that GHG
emissions from the electricity sector will be on the low end of this
range – around 5 Mt by 2030.
The OPA data is three
years more recent than the LTEP and this may explain the greater
ranges noted by the OPA. In this context, the ECO is encouraged that
ENG plans to update the LTEP which should close this discrepancy.
However, the government must do everything in its power to ensure
that the future restructuring of the electricity sector is undertaken
in such a way to prevent the high usage of natural gas implicit in
the OPA’s upper emissions scenario. Much of this will depend on the
timing and extent of the refurbishment of Ontario’s nuclear
facilities.
Nevertheless, this
situation argues strongly for better alignment and planning between
the OPA and ENG on the one hand, as well as closer co-ordination
between power system planning and the development and roll-out of a
revised and comprehensive GHG reduction plan. The recently announced
intention by the government to update the LTEP presents a perfect
opportunity for this much needed co-ordination and alignment on
energy planning and climate change mitigation.
Agriculture
– 9.6 Mt
Similar to other years,
emissions from the agricultural sector continued to remain relatively
constant, with a slight drop to 9.6 Mt. As the ECO indicated in our
2012 Greenhouse Gas Progress Report, the current voluntary approach
employed by the government is likely to be insufficient to drive the
changes necessary to reduce emissions from this sector.
Waste –
6.8 Mt
With just a 0.8 Mt increase from 1990
to 2011, emissions from the waste sector over the past 20 years have
remained essentially flat. Nevertheless, almost 90 per cent of waste
emissions are due to methane releases from landfill sites and this
continues to be an area of major concern for the ECO. As discussed in
our 2012 Greenhouse Gas Progress Report, given concerns related to
the accuracy of estimated methane capture rates and the
implications of a higher
warming potential for methane, the ECO questions whether landfills
may actually be emitting twice the amount of emissions than are being
reported. In light of this concern, the ECO is currently reviewing
the emissions data records from the 31 landfill sites that are
subject to the landfill gas reporting requirements of O. Reg. 347 –
General Waste Management, made under the Environmental
Protection Act. The ECO will
comment on our findings in a future report.
ECO
Comment
Over the past several years there has
been a lack of bold leadership on climate change mitigation policy in
Ontario. In light of this, the ECO is pleased to see a renewed effort
to engage industrial stakeholders in the development of an emissions
reduction program and was encouraged to see MOE release a discussion
paper on the development of an industrial GHG reduction strategy.
However, the proposed reduction target in this strategy of five per
cent over five years amounts to only about 2.5 Mt. This is only a
small contribution to the 21 Mt of GHG reductions needed to achieve
the 2020 target. With less than seven years to reach 150 Mt, the ECO
believes that a much more aggressive effort to reduce the growth in
industrial emissions is required. As the ECO has indicated
repeatedly, this effort must include a market mechanism that puts a
clear and transparent price on carbon emissions to help support the
transition to a low-carbon economy.
As mentioned above,
according to the government, while growth in emissions is easing,
they are still projected to increase to 190 Mt by 2030. This is due
in part to an increased reliance on natural gas-fired generation in
the electricity sector as nuclear plants undergo refurbishment. While
not a complete solution to this challenge, the ECO would encourage
the Ministry of Energy to work with the Ministry of the Environment
to assess the ability of pricing signals, demand response, energy
storage, and combined heat and power systems to shift electricity
usage away from carbon-intensive peaking generation, and estimate the
contribution this could make to meeting Ontario’s GHG targets.
Ontario’s continued predicted growth in GHG emissions is hard to
reconcile with the government’s goal to reduce emissions to 150 Mt
by 2020 and to 35 Mt by 2050. Much more needs to be done to close
this gap. In the absence of a renewed effort, the government is
failing our future. The window of opportunity to meet a 450 parts-per
million world and to limit the rise in global temperatures to no more
than 2°C is closing rapidly. Ontario needs to get out ahead of these
developments. In particular, Ontario’s electricity sector has been
significantly decarbonized, representing an excellent source of
low-carbon electricity to reduce emissions in other sectors such as
transportation.
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