December 3, 2001

Ottawa details $425 million worth of projects to cut GHG emissions by 24 megatonnes

The federal government last week announced 28 specific climate change projects and initiatives worth a total of over $425 million. Environment Minister David Anderson and Natural Resources Canada Minister Ralph Goodale said these activities will reduce Canada's greenhouse gas (GHG) emissions by more than 23.7 megatonnes by 2010. Funding for the initiatives will come from the $1.1 billion commitments made by the government in the 2000 budget and the Action Plan 2000 on Climate Change announced in October 2000 (ELW October 13, 2000).

The various activities are spread among designated sectors, such as transportation, industry, energy technology, buildings, international activities, and agriculture. Projects and initiatives (with funding allocations) of special interest to business and industry include the following.

Transportation

Transportation is the largest source of GHG emissions, contributing about a quarter of Canada's total emissions. In this sector, emissions are growing rapidly and without further action, they could be 32% above 1990 levels by 2010. A $3 million allocation has been made for the Future Fuels program, whose goal is a four-fold increase in the supply and use of ethanol produced from biomass such as plant fibre, corn and other grains. This could result in 25% of Canada's total gasoline supply containing 10% ethanol. The program also provides for contingent loan guarantees to boost ethanol fuel production.

Energy Technology

While energy use by industry and consumers accounts for most GHG emissions, the production of energy from fossil fuels is also a significant source of emissions. This section addresses emission resulting from electricity generation and oil and natural gas production. Activities from these two sectors together account for 35% of Canada's GHG emissions.

Last week's allocations included $19 million for the Climate Change Technology and Innovation Program. Its purpose is to accelerate the development of cost-effective GHG mitigation technologies, build the intellectual foundation for long-term technological advances, and build R & D alliances and partnerships.

Additionally, $25 million has been earmarked for the CO2 Capture and Storage Initiative. This is aimed at demonstrating and commercializing new technologies for capturing CO2, treating it and then transporting it for storage underground. This will provide an important solution for dealing with large quantities of CO2 generated in the course of oil, natural gas and electricity production.

This section also includes the Technology Early Action Measures (TEAM) initiative, part of the Climate Change Action Fund. The CCAF, introduced in 1998, was extended under the 2000 budget through to the 2003-04 fiscal year). TEAM provides support on a cost-shared basis for the demonstration and deployment of technology projects to reduce GHG emissions.

Industry

The industrial sector accounts for approximately 17% of Canada's GHG emissions. Emissions from this sector have been stable since 1990, reflecting major productivity gains and investments in new energy-efficient machinery and equipment.

The Canadian Industry Program for Energy Conservation (CIPEC) has contributed significantly to this achievement: the industry organization has already reduced emissions among its members to 2% below 1990 levels. With a new allocation of $2.5 million, CIPEC will be expanded to include the electricity generation, construction, forestry, and upstream oil and gas sectors.

This is one of six cross-cutting measures for industry. The other five include the following:

1. Emissions Benchmarking Studies: This program will help companies assess their energy efficiency and GHG emissions performance relative to comparable operations.

2. Improved Tracking and Reporting of Energy Efficiency and Emission Trends: This will entail improvements to the industrial portion of the National Energy Use Database, which will encourage industry to pursue climate change-related activities and help the federal government pinpoint promising areas for emissions reductions.

3.The Industrial Energy Innovators Initiative program will be extended and enhanced to help companies and individual organizations better deal with barriers to energy efficiency and emissions management programs.

4.Supporting Energy-efficiency Audits: Financial assistance and guidance will be provided to companies to conduct on-site industrial audits to determine energy efficiency opportunities.

5.Awareness Building: This will target small- and medium-sized enterprises to make them aware of the benefits of reducing GHG emissions. Tools such as customized energy management workshops, technical support, guidebooks and videos will provided to help SMEs achieve reductions.

Other industry-oriented programs include:

The Industrial Buildings Incentive Program, aimed at increasing the energy efficiency of new manufacturing and industrial buildings by modifying owners' expectations regarding energy performance and the response of designers to those expectations.

Renewable Energy Deployment Initiative (REDI) for Industry: The existing REDI program stimulates market demand among business, federal, institutional and municipal organizations for commercially reliable, cost-effective renewable energy systems for space and water heating and cooling. REDI for Industry will extend the program to industrial organizations.

Energy Ratings System for Industry: Energy managers, procurement and financial officers and plant engineers will be encouraged to use energy performance information and consider energy efficiency when buying energy-using equipment.

Buildings

Buildings, including residential, commercial and institutional, generate 10% of Canada's GHG emissions through the burning of fossil fuels to generate heat. The buildings sector also contributes indirectly to GHG emissions through electricity consumption, such as lighting and power for workplaces.

A $30-million allocation for the Commercial/Institutional Buildings Retrofit Initiative will make information, advice, training, incentives and other tools available to encourage commercial and institutional organizations to carry out retrofit projects to reduce energy consumption and GHG emissions.

The Energy Efficient Housing Initiative has been allocated $35 million. Building on the success of the EnerGuide for Houses program, it promotes the construction and purchase of R-2000 homes. It offers increased support in northern and remote communities, including the ability to link homeowners with qualified renovators, leading to future GHG reductions.

International

Recognizing that climate change is a global phenomenon, the government intends to supplement its domestic programs and efforts by supporting the private sector in maximizing export opportunities and pursuing cost effective emission reduction projects abroad. Such measures would complement technology transfer to the developing world and economies-in-transition, and promote sustainable economic growth. Moreover, under the Kyoto Protocol, emission reductions achieved in other countries as a result of Canadian projects will earn "credits" which will help Canada meet its Kyoto commitment.

To this end, the government has allocated $25.25 million to the Clean Development Mechanism/Joint Implementation (CDM/JI) Office. The CDM/JI Office was established to facilitate Canadian participation in these mechanisms. The funding will expand the Office's activities to support Canadian companies' active pursuit of GHG credits through project investments in other countries. The Office also works to create other benefits from projects including increased penetration in new markets, transfer of Canadian technologies and increased business for Canadian companies providing environmental services, leading to significant GHG reductions in the future.

Another international program, the Canadian International Technology Initiative (CITI), will develop climate change technology transfer projects overseas, facilitate market opportunities for Canadian companies and build a base for future international technology marketing activities. It will also help build partnerships with other countries to reduce emissions through the Clean Development Mechanism and Joint Implementation projects.

Full details on these and other initiatives may be viewed on the federal government's Climate Change Web site, www.climatechange.gc.ca.

Table of Contents  | Top of Page

Ecolog Network