If you could live in a home that was highly energy efficient, climate resilient, comfortable and healthy for about the same cost as a code-built home and was built to outlast current buildings, would you move in?

All that’s missing to make that a reality for homebuyers is an improved government building code that recognizes how easy – and important – it is to lower household energy bills and provide shelter during extreme weather events. 

Unfortunately, governments around the world have repeatedly failed to deliver, and this cycle of building-code failure is about to continue in Ontario.

During a short and rushed consultation that ended in March, the provincial government released a proposed update to the building code. The latest changes were meant to be based on the model national code released last month. The proposed federal code isn’t the pathway to net-zero it’s hyped to be; it’s an improvement but not there yet. Meanwhile, Ontario’s proposed code is a step backward when it comes to making buildings more energy efficient and resilient in the face of the climate crisis.

A quick code refresher: every five years, the Canadian Commission on Building and Fire Codes, established by the National Research Council of Canada, develops and publishes the model Canadian National Building Code. The federal code is voluntary, but since many provinces lack the ability or desire to develop their own, most adopt some or all of it.

The latest federal model code is a step code, much like that found in British Columbia. This means it’s designed to allow provinces to ratchet up energy performance levels over time to increase efficiency and drive down greenhouse gas emissions. By having steps, it gives the building industry a clear idea of what will come next, performance-wise.

The proposed federal code isn’t the pathway to net-zero it’s hyped to be; it’s an improvement but not there yet.

Rather than adopt the step code, the provincial government in Ontario proposes to opt for the lowest possible efficiency level. For smaller buildings, Ontario will make no improvements in energy efficiency. For larger buildings, the province will put in place a standard that is less efficient on some of the requirements for windows, doors and insulation, making it less stringent than what is in place today. With everything we know about the climate crisis and building solutions, this is not only a wasted opportunity that will end up costing Ontario more in the long run; it will also hurt the province’s long-term competitiveness to attract jobs in the low-carbon economy. Real estate investors in Europe and the United Kingdom are already seeing inefficient buildings suffer a 30% reduction in value, while a robust Canadian energy-efficiency marketplace could add up to $48 billion to GDP.

Worse still, it may come with the collateral damage of those homes and lives when buildings are not able to withstand extreme weather events. For example, buildings with generous insulation, triple-pane windows, air tightness, heat-recovery ventilators and low energy use can support residents during extreme temperatures, like those during the unprecedented heat dome that killed 600 people in B.C. last summer.

Ontario municipalities looking to improve their green-building standards will find that the regressive provincial code stymies their plans. Municipalities use a process called site plan control to develop green building standards, but having more tools, such as a unified robust building code, would drive consistency, predictability and capacity to help transform the market across the province.

Federal code is an improvement but a missed opportunity

Meanwhile, the top step of the new federal code calls for a 60% reduction in energy use over the previous model code, released in 2015. It’s an improvement but not as ambitious as B.C.’s step code, which has limitations but targets a near 90% reduction. There’s plenty of evidence demonstrating that more is possible, with minimal cost increases, but that ambition did not make it into the code. In a world where Canada will have to double its electricity supply to get to net-zero, shouldn’t we look to save energy at every step?

In today’s building stock, including “green buildings,” there is a performance gap between expected and actual energy performance. A low-cost way to close this gap and verify the efficiency level of buildings is by conducting what’s called a blower-door test to see how air-tight they are. With heavy lobbying from the building industry, air-tightness testing was first added to and then pulled from the federal code (and wasn’t added to the Ontario code). 

The federal code also continues to use a “reference building approach,” where energy performance is assessed against a similar hypothetical building – an approach that will continue to exacerbate the performance gap problem. In a net-zero world, where investors are seeking decision-useful climate data, shouldn’t we aim to deliver quantifiable reductions in carbon pollution over the life of the building? Instead, we are expected to just trust the building industry.

Equally troubling is the near complete absence of resiliency measures added to the federal code to protect buildings from high winds, floods, wildfires and more. Incorporating projections about future climate conditions into the codes will reduce the need for costly future retrofits, according to the federal government’s own expert panel on disaster resilience.

Ontario municipalities looking to improve their green-building standards will find that the regressive provincial code stymies their plans.

One major problem: developing Canada’s model code is a conservative and opaque process. 

The Canadian Commission on Building and Fire Codes uses a series of committees composed primarily of members of the building industry to develop the new code. Gaining a seat at the table is near impossible. The commission also receives advice from provinces and territories through a committee that can block virtually anything the code committee wants to move forward.

While the commission may have done good work in the past to ensure the integrity of our buildings, the process is too slow to address the innovative building needs of Canadians during a worsening climate crisis.

If the federal government wants to meet its climate-mitigation and -resilience goals, it needs a stronger code, and it needs provinces and territories to take a step forward, not back. The code-development process needs to be reformed to make it faster, more accountable, transparent and innovative to help solve the climate crisis. 

More ambitious codes will spur jobs and innovation while delivering high-performing buildings that are comfortable and better for your health. If built correctly, they will have the potential to significantly cut carbon pollution while also sheltering us from some of the worst climate-related impacts. Change is needed because the codes belong to the public, not entrenched interests and recalcitrant provinces.

The post Why is Ontario making new buildings less energy efficient? appeared first on Corporate Knights.

In 2019, Berkeley became the first city in the United States to ban gas hookups – the infrastructure needed to connect buildings to the gas network – in new developments. Since then, more than 50 municipalities in California and other states have followed Berkeley’s lead. New York City has become the latest jurisdiction to approve such a natural gas ban, which will come into effect at the end of 2023 for buildings under seven storeys and in 2027 for larger ones.

Some of the country’s most populous cities have taken this step to cut their greenhouse gas emissions, as buildings were responsible for 13% of the United States’ total emissions in 2019, much of that due to the gas that heats them.

But over the last year, Republican-controlled legislatures have sought to pre-emptively stymie similar efforts in their states. Twenty states have passed bills that prohibit cities from banning natural gas infrastructure in new developments. Texas, Florida, Ohio and Arizona are just a few that have successfully imposed these prohibitions on municipalities. State legislatures in Michigan and Pennsylvania are currently considering similar bills.

For decades, the modern Republican Party spurned the idea of centralized government in favour of more regional power. However, that same principle doesn’t seem to apply for municipalities in today’s GOP – at least not when it comes to natural gas.

Some environmental lawyers say a legal battle may be brewing over these state laws, but municipalities would likely face an uphill battle if they were to challenge them. “Cities are creatures of their states and thus, depending on the powers their states have given to them, are vulnerable to having regulatory power taken from them,” says Georgetown Law professor Sheila Foster.

For decades, the modern Republican Party spurned the idea of centralized government in favour of more regional power. However, that same principle doesn’t seem to apply for municipalities in today’s GOP – at least not when it comes to natural gas.

She adds that the best chance cities would have to bring a lawsuit would be to challenge the legislation under the state, rather than federal, constitution. “Typically, but not always, states have a lot of room to pre-empt their cities in the absence of legal reform (which some are arguing for) that gives cities more power.”

Proponents of these state laws have claimed they will preserve choice for consumers. But environmental advocates argue these measures will make it harder for municipalities to reach their net-zero emissions targets.

Gas lobbying groups have been heavily involved in supporting and sometimes even drafting these state laws, according to S&P Global Market Intelligence. In Pennsylvania, a gas utility, Philadelphia Gas Works, has been “engaged in crafting, and potentially strengthening” a prohibition on gas bans making its way through the state legislature, according to NPR. In an analysis for CNN, think tank InfluenceMap “found high levels of engagement on preemption bills within the power sector, including its key trade associations.”

Not all states have been as acquiescent to the gas lobby. A similar bill failed in North Carolina last year after Democratic Governor Roy Cooper vetoed it. New York Governor Kathy Hochul is making a push for a state-wide ban on gas hookups in new buildings that would come into effect in 2027, with a goal of electrifying two million homes by 2030. The Washington State Legislature is also considering a ban on gas infrastructure for all new residential and commercial real estate.

At the federal level, the government plans to transition its 300,000 buildings to “carbon-pollution-free electricity” by 2032.

Even if municipalities in red states are unable to implement bans on new developments, they can still get to work retrofitting existing building stock, which is a much bigger piece of the net-zero puzzle.

The post A battle brews in U.S. over natural gas bans appeared first on Corporate Knights.

New York City has been requiring building owners to submit information about the energy performance of their buildings for a decade, and this “benchmarking” policy has become gradually more aggressive, beginning with very large structures, then expanding to somewhat smaller buildings, banning the use of heating oil, and finally requiring disclosure. 

“There’s some element of naming and shaming to inspire some action,” observes Chris Halfnight, policy director of the Urban Green Council, a non-profit focused on promoting building sustainability in New York. “Nobody wants to live and work in or own and operate a building that’s getting a D when there are buildings getting As and Bs.”

The premise behind regulated building benchmarking is that it forces asset managers to measure energy performance, which provides them with information they can use to upgrade their systems. While the capital costs of those retrofits aren’t trivial, more energy-efficient buildings have lower operating costs, less exposure to rising energy prices and smaller carbon footprints.

The policy is rooted in the old accountant’s adage about not being able to manage what you don’t measure. But does benchmarking produce results?

In December 2020, after a decade of benchmarking, the results of New York’s policy were impressive: “Over the last 10 years,” according to a summary by the Urban Green Council, “total emissions from roughly 3,200 regularly benchmarked properties fell by about 22.6 percent.” Levels of four major air pollutants related to the use of now banned heating oil fell by 29%.

Those results built on earlier assessments that provided proof of concept. In 2017, the National Electrical Manufacturers Association produced a survey that looked just at NYC. It found that 77% of building owners changed the way they manage their assets because of benchmarking, for example investing in more energy-efficient lighting or calibrating their HVAC systems so they wouldn’t heat and cool simultaneously. The authors cite results from other studies showing that compliance with the bylaws led to an overall 14% reduction in building energy-use intensity (i.e., energy use as a function of size) between 2011 and 2014. 

A Lawrence Berkeley National Laboratory evaluation pointed out that, as of 2016, 24 jurisdictions in the U.S. had benchmarking and transparency (B&T) rules. It found that in 10 of the largest cities in those regions, buildings demonstrated “a 3 to 8 percent reduction in gross energy consumption or energy use intensity over a two- to four-year period of B&T policy implementation.” While the authors cautioned that some of the findings were preliminary, they did note that building owners also made non-energy improvements to their assets – water consumption, for instance – resulting in higher property values and improved productivity for tenants. 

There’s some element of naming and shaming to inspire some action.

-Chris Halfnight, policy director of the Urban Green Council

The cities that have B&T rules aren’t just the usual suspects; they include places like Kansas City, Denver and Orlando, and (red) states like Utah and Ohio. In other words, this approach isn’t just the preserve of cities under Democratic administrations, like NYC or Seattle.

Canada, interestingly, is way behind. British Columbia has a benchmarking program, but it is voluntary, and only a year old. In Ontario, the previous Liberal government passed benchmarking legislation but didn’t bring it into effect. The Tories did enact the law, known as Energy and Water Reporting and Benchmarking (EWRB), but the regulations apply only to buildings over 100,000 square feet and exempt public sector real estate. The regulations will extend to buildings over 50,000 square feet in 2023.

As for the transparency part, the raw data collected under EWRB is released through Ontario’s open data portal. But, unlike many of the U.S. B&T laws, including New York’s, addresses aren’t disclosed, nor has the Ontario government done much with the data it does gather. As one City of Toronto energy official puts it, the information is “not particularly useful.”

Sean Brennan, Urban Green Council’s director of research, says the location data is crucial because it enables policy-makers and researchers to make detailed location-based evaluations of energy consumption patterns in the city, which in turn allows the city to focus its enforcement efforts. 

The transparency, he adds, “helps the public grasp what is going on.” For example, the B&T data has been used to map energy efficiency within the city.

Anecdotally, Brennan says, the subject of a building’s energy-efficiency ratings now comes up in the context of meetings of the occupants of co-ops, or when firms looking to rent office space are reviewing leases and wondering if they’re moving into a healthy building. 

Halfnight points out that B&T policies are not “a mandate to take action … It’s a necessary first step.” What’s clear, however, is that when benchmarking rules force landlords to measure and disclose how they run their assets from an energy-efficiency point of view, many will take the next step because it makes good business sense. 

The emission reduction is the bonus. 

The post What happened when NYC started naming and shaming buildings for bloated footprints appeared first on Corporate Knights.

“We can’t keep trying to do retrofits in the way we were doing them in the 1980s and 1990s and expect to bend this curve,” said Ralph Torrie, head of research at Corporate Knights, at part four of our Earth Index event series tracking the “say–do” gap between Canada’s climate action and targets. Torrie estimates we will need to spend between $14 and $48 billion per year to achieve net-zero buildings by 2035, roughly on par with the $20 to $40 billion spent in Canada each year on routine maintenance and repairs. 

“This cannot be our parents’ retrofit program,” Torrie said.

By 2030, existing Canadian homes will be responsible for 90% of residential emissions, so it won’t be enough to just ban gas hookups in new developments. Decarbonizing this sector will require an unprecedented scale of fuel switching to heat pumps and deep retrofit programs for existing buildings, he added. 

Our general mindset has to change, panellists said. We have to stop thinking that the building industry’s emissions will gradually decline and realize that they must descend down a number of steep steps, said Akua Schatz, vice-president of market engagement and advocacy at the Canada Green Building Council. This will mean taking on an aggressive schedule of deep retrofits rather than depending on constant incremental ones. “You don’t have many chances. So every step matters,” Schatz said. 

We also need to stop thinking of housing affordability and climate compatibility as opposing goals, said Steve Mennill, chief climate officer for Canada Mortgage and Housing Corporation, as deep retrofit programs will be central to bringing down the energy costs of the more than 2.8 million households in Canada that spend a disproportionate amount on energy, and sometimes have to choose between heating their homes and eating. 

This has been particularly apparent in Heiltsuk First Nation in British Columbia, where leaders say an initiative to install heat pumps in homes has reduced residents’ heating costs and brought more energy sovereignty to the community. “It costs less to save a kilowatt than to generate one,” Leona Humchitt, a member of the Heiltsuk Tribal Council, told the panel. The community has installed heat pumps in more than 150 homes and hopes to complete retrofits in all 420 of its residential buildings. 

Climate compatibility

Mennill pointed out that we need different solutions for retrofitting private rental housing, community housing and private homes. He said private rental housing needs greater access to capital, the community housing sector needs greater support through subsidy programs, and we need to look at ways to make these changes more affordable for homeowners. “Right now, your cost of capital as a homeowner, if you’re going to do a retrofit to your house, is basically the same [as] if you’re purchasing a new or existing non-climate-compatible house.” 

Either way, when it comes to retrofitting multi-unit buildings, Mennil says both mitigation and adaptation need to be top of mind. “It’s not sufficient to consider just one or the other,” he told the panel. Reducing a building’s emissions needs to be done in lockstep with preparing it for the rising threat of floods and storms. 

Barriers abound

One of the biggest and most obvious barriers to building owners taking on deep retrofits is asking them to pay for them out of pocket. “This needs to be a public service,” said Julia Langer, CEO of the Atmospheric Fund. Her organization is pushing for a fund to support these kinds of projects. 

Building owners also simply don’t have the technical and financial expertise to carry out deep retrofit projects, which have lots of moving pieces. In an effort to help them navigate this process, the Atmospheric Fund has launched what it calls retrofit accelerators. “If you want to go deep in terms of retrofits, we need to ‘multi-solve.’ We can’t just look at the carbon,” Langer said. “We’ve got to look at social aspects, resilience, [and] financial aspects all together.” 

In commercial real estate, Jamie Gray-Donald, senior vice-president of sustainability at QuadReal Property Group, said it will take more policy certainty from governments and much better data-gathering to rapidly decarbonize the sector. Gray-Donald said that the real estate sector is 20 years behind others when it comes to the type of data it has but that for every dollar invested in energy and carbon data, it’s possible to see a three- or fourfold return. “Once you have really granular stuff, amazing solutions open up,” he said.

Building innovation

While retrofitting existing buildings will make up the largest chunk of decarbonizing the real estate sector, research is underway to make constructing new developments carbon neutral. A Toronto-based start-up called Promise Robotics is working to use robotics and artificial intelligence to reduce the carbon footprint of building new homes. 

And last year, Vancouver-based Nexii Building Solutions became Canada’s fastest company to reach “unicorn status” (when a start-up gains a value of $1 billion.) The company manufactures building panels made with a proprietary material called Nexiite, which it claims will reduce the building process’s carbon emissions by a third and cut energy demand to heat homes by 55%. 

From an energy-source standpoint, Enwave has been working to install what’s called GeoExchange technology in thousands of new homes in North America. This system harnesses thermal energy from the ground to heat homes during the winter and cools air during the summer. 

Catherine Thorn, a senior director of community energy planning at Enwave, noted another major hurdle to decarbonizing Canada’s buildings: builders are still being compensated with rebates for installing carbon-intensive natural gas infrastructure. Thorn said that if the developer isn’t planning to use natural gas, they’ll still be asked to install gas infrastructure and won’t receive any rebate if it isn’t used. “It’s a very big mismatch in incentive in what we’re trying to achieve,” she said. 

Regulate and subsidize it

Governments across the world have varying records on their efforts to decarbonize buildings. The City of New York has upped its ambition on cutting building emissions, with a piece of legislation called Local Law 97. This bill will require most buildings with more than 25,000 square feet to meet standards on both energy efficiency and greenhouse gas emissions by 2024, and stricter limits will be enacted in 2030. Langer said Toronto is exploring the idea. 

On the national level, some G7 countries have introduced robust retrofit subsidy programs. In 2020, the Italian government introduced a 110% subsidy for green retrofits that in turn boosted the country’s gross domestic product by 0.7% last year and created 153,000 jobs. 

Canada, in contrast, has been a laggard in this area. The federal government’s modest retrofit program for homeowners that launched in May – the Canada Greener Homes Grant – has struggled to keep up with demand, having received more than 180,000 applications, according to The Globe and Mail. The program reimburses homeowners for up to $5,000 in retrofits and has processed payment to only 1,227 applicants as of January 18. 

We can’t keep trying to do retrofits in the way we were doing them in the 1980s and 1990s and expect to bend this curve.

-Ralph Torrie, head of research at Corporate Knights

In December, the Prime Minister’s Office released mandate letters to cabinet ministers that signalled that retrofitting buildings would be part of the government’s plans to cut emissions, following similar commitments made during the recent election campaign. 

Schatz said some of the key government commitments to watch in this area will be making the electricity system net-zero by 2035; implementing a national zero-emissions building strategy; creating a net-zero building code by 2024; and launching a National Infrastructure Assessment (an evolving document that will guide Canada’s infrastructure) that includes buildings. 

The clock is ticking on the federal government’s pledge to axe emissions by 40% to 45% below 2005 levels by 2030. Since there are just over 400 weeks until that deadline, achieving this goal will involve taking a wrecking ball to Canada’s building emissions, and doing it swiftly. 

“We’ve got to start behaving like this is the emergency we’ve been saying it is,” said Torrie. “We’re out of time.”

The post How to nail down the green renovation revolution appeared first on Corporate Knights.

Canada is committed to spending an unprecedented $85 billion on housing and public transit over the next decade: more than $70 billion to meet critical housing needs through the National Housing Strategy (NHS) and $15 billion for public transit. Together with the $13 billion the federal government has already spent on transit since 2015, this will be the biggest transit investment in Canadian history.

The NHS provides grants, low-cost loans, tools and research to improve housing security and quality for one million Canadians – including building 160,000 new homes. During the election campaign, the Liberals’ Housing Plan called for 1.4 million homes to be built, preserved or repaired, and their proposed $4-billion Housing Policy Accelerator calls for 100,000 new “middle class” homes by 2025. While both the National Housing Strategy and the Liberal Housing Plan note transit-oriented development as a priority, more robust policies and incentives are needed to achieve location efficiency.

And in order to maximize the returns on these investments to address the twin crises of climate change and housing affordability, the federal government must place land use and location at the centre of its housing and carbon-reduction plans. 

All levels of government must also seize this moment for the one-third of Canadians who live in unaffordable dwellings. Improving public and policy-maker understanding of how land use impacts housing affordability and carbon emissions from transportation will be key. 

Housing and transportation account for the vast majority of household carbon emissions. Moves toward net-zero buildings and electric vehicles are essential. But green tech is not enough – we must also drive less. Just as we need deep energy-efficiency retrofits for our buildings, we need to retrofit our cities and suburbs to make them more location efficient. 

Location-efficient, “15-minute” neighbourhoods are designed for pedestrians and include a mix of land uses so that people can safely and conveniently walk to jobs, stores, services and parks. “Smart growth” policies focus new development in 15-minute neighbourhoods and link them together along regional transit corridors and bike networks. People drive half as much in compact, transit-oriented areas because destinations are closer together. Car trips are shorter, more trips are practical on foot, by bike or on public transit – cutting carbon emissions in half.

In the Greater Toronto Area, 81% of home buyers would prefer to live in walkable, transit-friendly neighbourhoods but can’t afford to. Households in location-efficient neighbourhoods can meet their daily needs with one car instead of two, saving $8,000 to $15,000 annually. 

Carbon and household cost savings are among the many economic, community and environmental benefits of smart growth policies – including better health, a higher quality of life, more customers for neighbourhood businesses and protection of habitat and farmland.

This is a win for municipal governments, as well. Smart growth costs billions of dollars less in infrastructure than sprawl because it allows for more people to be served by fewer roads, tracks, pipes and wires. Developers don’t pay for the full costs of the offsite infrastructure required to support new suburban development, and municipal tax coffers are responsible for covering significant operating, maintenance and replacement costs. On the other hand, compact development can produce significantly higher municipal tax revenues. 

Smart growth costs billions of dollars less in infrastructure than sprawl because it allows for more people to be served by fewer roads, tracks, pipes and wires.

For the past 75 years, government policies have incentivized car-oriented, single-family neighbourhoods. Traditional neighbourhoods with bustling sidewalks and active main streets have become expensive because today’s market under-supplies walkability. As this pent-up demand grows, location-efficient housing commands higher prices – and that dynamic drives gentrification of established neighbourhoods that displaces or further disrupts the lives of Black, Indigenous, racialized and low-income communities.

The urgent and obvious solution is to increase the supply of affordable housing in accessible locations, providing a range of “missing middle” multifamily housing to meet diverse economic and social needs. From duplexes and triplexes to mid-rise apartments and secondary suites, this new supply must be affordable to lower-income and middle-income renters and homeowners.

We need to build and retrofit more “15-minute neighbourhoods” where people can access almost everything they need on foot, by bike or by transit. We do that by adding in missing components to existing neighbourhoods – be they sidewalks, shops, housing or parks, and planning new neighbourhoods around transit stations and designing them for pedestrians.

We should also consider ownership and sharing models that save money, cut carbon and improve quality of life. Shared walls in multifamily buildings reduce heating demand, car and bike “sharing” reduce total kilometres driven, and common rooms in apartments and co-housing cut costs and strengthen community.

Here are three steps the next federal government can take to increase the supply of affordable, location-efficient housing:

1. Federal policies must be part of the solution and not the problem. A key step will be for the federal government to apply transportation affordability and location-efficiency lenses to housing and public transit programs to identify conflicts and opportunities for better alignment between the two. This should be supported by increased research funding on location efficiency, such as through the Canada Mortgage and Housing Corporation’s Housing Supply Challenge.

2. Provide technical and financial support to increase municipal capacity to plan, implement and evaluate location-efficient solutions – in coordination with provincial authorities. To do this, the federal government should enhance programs run by the Federation of Canadian Municipalities (FCM) that support land-use planning, active transportation, public transit and sustainable and affordable housing (and FCM should better align them to generate efficiencies and multiple benefits).

The government should also develop planning and evaluation tools to assess the full costs and benefits of different urban development futures, including a Canadian version of the U.S. Housing + Transportation Affordability Index. This calculates total costs of housing plus transportation for specific locations, illuminating the affordability benefits of efficient locations. We must support the development of affordable housing on underutilized public land near transit hubs, develop best-practice guidance on channelling revenues from commercial development to support affordable housing and enhance public space, and develop guidance on how to integrate secondary suites and laneway housing into residential retrofit programs to generate income to support deep efficiency and affordability.

3. Provide financial incentives and establish performance criteria for federally funded projects to deliver transportation and housing affordability and carbon reduction. For example, municipalities that receive federal transit funding should be rewarded for enhancing 15-minute neighbourhoods and for increasing affordable housing. Performance incentives could also be incorporated into infrastructure funding agreements with provincial governments. In early years, municipalities could receive technical support to plan for transit-oriented development, active transport, and affordable housing and be rewarded for performance. Over time, these practices would evolve into the new normal.

The time has come to build the homes of tomorrow in a smarter and more equitable way by making location efficiency a top policy and spending priority of the federal government when it comes to climate, housing, transportation and infrastructure. 

Carbon down. Community up.

Steve Winkelman is executive director of the Ottawa Climate Action Fund.

The post Location, location, location: Three ways land use can tackle both the climate and housing crisis appeared first on Corporate Knights.

Time is running out. According to the UN Intergovernmental Panel on Climate Change (IPCC), we must halve our global emissions in the next 10 years and reach net zero emissions by 2050 to avoid widespread catastrophe and human misery. Yet governments and businesses are not keeping up, with many arguing that fighting climate change with sufficient vigour would be detrimental to Canada’s economy and economies around the world. After crunching the numbers, however, it’s clear that there’s significant economic upside to ambitiously transitioning to a low-carbon economy. A bold clean stimulus program would drive demand at scale to deploy a host of decarbonization technologies economy-wide, with significant ripple effects including hundreds of billions of dollars of GDP growth and hundreds of thousands of new jobs, while placing Canadian industry at the forefront of a large growing global market for low-carbon solutions. How much would this cost? A little under 2% of GDP for the next six years.

To illustrate the economic opportunities of various sector-specific climate policies, Corporate Knights worked with industry, government and academic experts to develop The Capital Plan for Clean Prosperity. The plan has been divided into five sectors that have the biggest carbon and economic footprints in Canada: buildings, transportation, electricity, oil and gas, and heavy industry. According to our assessment, greening Canada’s buildings offers the potential for the greatest GDP and job increases. Buildings are also responsible for roughly 12% of Canada’s greenhouse gas emissions (not including their electricity use).

With the federal election underway, a number of parties are suggesting various efforts to green the building sector.

• The Liberal Party is proposing the creation of four funds of $100 million each to attract private capital to retrofit large buildings. The party also wants to help retrofit 1.5 million homes by introducing interest-free loans and providing $5,000 grants for purchases of new zero-carbon homes.[1]
• The NDP has a target to retrofit all housing stock in Canada by 2050 by providing low-interest loans that are repayable through energy savings.[2]
• The Green Party as well promises a massive energy-efficiency retrofit for buildings, financed by a mix of grants and zero-interest loans that can be repaid based on energy savings.[3]
• The Conservatives have presented a Green Homes Tax Credit for homeowners that would incentivize Canadians to renovate their homes with energy-saving products and technologies. This would be a 20% refundable credit on their income tax to finance renovations up to $3,800 per year. The party also says it will establish a retrofit code and a voluntary net-zero building standard.[4]

However, our research shows that these policies, mostly focused on small grants or interest-free loans, are unlikely to drive large-scale adoption.

Instead, under the logic of “what gets funded gets done,” we propose a six-year time-bound clean stimulus program targeted at developers and contractors to fully cover the costs for flood protection (for up to 3% of the existing building stock/year), deep energy retrofits (up to 3% of the existing building stock/year) and electrification (up to 1.5% of the existing stock/year), plus up to 4.5% of overall construction costs for new buildings built to a zero-carbon-ready standard This program would place Canadian industry at the forefront of a large growing global market for low-carbon building solutions.

We conducted extensive calculations based on data from sources including Statistics Canada, the Pembina Institute, the Political Economy Research Institute at the University of Massachusetts and Clean Energy Canada. These calculations demonstrate that with an ambitious clean stimulus program targeting building construction and retrofitting, Canada could:

• raise its GDP between $81 and $314 billion,
• add 154,600 to 183,400 full-time jobs,
• increase tax revenues by $26 to $102 billion,
• drive direct monetary savings of $36 billion from 2020 to 2025,
• and reduce the sector’s emissions from 82 megatonnes (mt) in 2016 to 66 megatonnes (MT) of carbon dioxide equivalent (CO₂e) by 2025 (equivalent to taking 3.6 million cars off the road).

The range in the figures is due to the use of different multipliers from different data sources.

These impressive job and GDP increases would require a significant up-front public investment totalling $78.4 billion over the next six years, which could be administered under a Zero-Carbon Building Fund targeting:

• Public financing to cover the incremental cost of building 50% of new buildings to a zero-carbon energy efficiency standard over the next six years. Total cost: $17.9B
• Public financing for basic flood-protection measures to floodproof 3% of homes with basements in high-risk flood zones every year between 2020 and 2025. Total cost: $11.0B
• Public financing for energy retrofitting 3% of the existing building stock every year between 2020 and 2025. Total cost: $23.4B
• Public financing for electrification of 1.5% of the existing building stock annually from 2020 to 2025. Total cost: $26.1B

Public investment needs

Implementing these four policies would require public financing of $78.4 billion over six years, of which $44.7 billion would be delegated to the residential building sector and $33.7 billion to the commercial building sector. We recommend that the federal government build a Zero-Carbon Building Fund, which would be financed through green bond issuances. The fund would annually allocate funds to eligible contractors and builders to retrofit Canadian homes on a first-come, first-serve basis, with funds disbursed up-front with random audits and minimal bureaucracy. In doing so, the fund would help spur immediate adoption of large-scale retrofits and zero-carbon building construction before new, more stringent building codes kick in in the coming decades. A thriving green building sector in Canada would be created through the clean stimulus. The mid-range of economic growth spurred by this stimulus would generate additional tax revenues that would make it mostly cost-neutral over time for the federal government, while the early-adopter residential and commercial building owners would get a free lunch on energy savings.

Economic and environmental benefits

Job creation: 154,600–183,400

The jobs created with these policies would be new, full-time jobs. Based on our calculations, under these policies 92,000 to 105,000 new jobs would be created in the residential building sector, and 63,000 to 78,000 new jobs would be created in the commercial building sector.

Increase in GDP: $81–$314 billion

The GDP increase between 2020 and 2025 resulting from this clean stimulus could range from $46 to $179 billion for residential buildings and from $35 to $135 billion for commercial buildings. With stronger economic growth through increased GDP, average income levels would go up and unemployment numbers would drop for mostly blue-collar workers in the construction and trades industry.

Energy & heating cost savings: $36 billion

The program of retrofits and greening of new buildings would mean that over a quarter of Canada’s building stock would be zero-carbon ready by the close of 2025. Along the way, this would put a total of $36 billion back in the pockets of homeowners and renters that would otherwise be spent on heating and cooling leaky buildings, not to mention savings from avoided basement flooding from the 1.1 million homes that would have been flood-proofed by then. Home retrofits and higher environmental standards for new buildings will also improve comfort levels so that homes are less prone to overheating in summer and cold drafts in winter. These energy and heating cost savings would offset nearly half of the $78 billion incremental green investment.

Increased tax revenues: $26–$102 billion

 With the implementation of this clean stimulus for buildings, all levels of government combined could increase their tax revenues by $15 to $58 billion as a result of incremental growth spurred by the residential buildings sector stimulus and $11 to $44 billion in the commercial buildings sector. Increased tax revenues at the mid-range of expected GDP growth spurred by the clean stimulus would mean that this program would mostly pay for itself over time.

Emissions: 20% reduction in the building sector 

Currently, buildings represent 12% of Canada’s total greenhouse gas emissions (not counting the GHGs associated with electricity consumption). When examining the sector’s emissions today, the clean stimulus targeting the four recommended areas could reduce emissions from 82 mt of CO₂e emissions[5] today to 66 mt of CO₂e in 2025. This would be the equivalent of taking 3.6 million cars off the road for a year. Together, these policies would achieve nearly 10% of the emission reductions needed to fulfill Canada’s 2030 commitments under the Paris Agreement by 2025.[6]

It’s clear that this clean stimulus for the building sector could bring significant economic, social and environmental benefits for hundreds of thousands of Canadians while helping the country adhere to our international climate pledges that are designed to safeguard the planet for future generations.

Several Canadian organizations, including the Government of Canada, Clean Energy Canada, Energy Efficiency Canada, Pembina Institute and Smart Prosperity Institute, have explored the economic implications of investing in the low-carbon economy. Similarly, they found sizeable economic benefits (job creation, GDP growth, energy savings etc.) associated with a similar scale of investment across the sectors included in the Capital Plan for Clean Prosperity

Corporate Knights is committed to providing the public and decision makers with information about the intersection of business, environment and society. Learn more about the rest of our Capital Plan for Clean Prosperity addressing transport, electricity, oil and gas , and heavy industry on our website. You can find an overview of the plan here.

* Driven by clean stimulus.

** The wide range for the GDP estimate results from application of multipliers with varying degrees of conservatism.

*** Resulting from reduced energy costs.

“Carbon dioxide equivalent” or “CO2e” is a term for describing different greenhouse gases in a common unit. For any quantity and type of greenhouse gas, CO2e signifies the amount of CO2 which would have the equivalent global warming impact.

[1] https://2019.liberal.ca/wp-content/uploads/sites/292/2019/09/Forward-A-real-plan-for-the-middle-class.pdf

[2] https://action.ndp.ca/page/-/2019/Q2/2019-06-19_Commitments-Doc_EN.pdf

[3] https://www.greenparty.ca/sites/default/files/platform_2019_web_update_oct_6.pdf

[4] https://www.conservative.ca/cpc/andrew-scheers-climate-plan/

[6] https://www.pbo-dpb.gc.ca/en/blog/news/closing-gap-carbon-pricing-paris-target

The post Capital Plan for Clean Prosperity: Greening buildings would turbocharge Canada’s GDP appeared first on Corporate Knights.

The field of heritage preservation is shifting its attention from protecting old buildings to preserving the vibrancy of communities and responding to contemporary challenges, such as climate change.

And this is attracting a younger crowd of professionals and activists to the field who are interested in sustainability and culture, says Shannon Clayton, a junior architect at ERA Architects Inc. and co-founder of the Architecture Conservancy of Ontario (ACO) Next-Gen program.

“The greenest brick is the one that is already in the wall” has become a slogan for those who know how much energy and labor has already gone into existing buildings, says Clayton.

Heritage buildings were built during a time when energy was not as abundant and designers had to think about conserving heat in the winter and keeping buildings cool in the summer, all without using the mechanical systems that we rely on today, she says.

But the benefits of older buildings go beyond the natural light and floor-to-ceiling windows that many people desire in their homes and office buildings. Heritage communities also tend to be walkable and human-scale because they were built during a time when people were not dependent on cars and buildings were a lot smaller, says Clayton.

This, she says, is also good for small businesses that rely on foot traffic.

Until recently, heritage preservation has been focused on the practice of protecting and restoring buildings. It required years of technical experience, for example, to know what kind of mortar mixture would work well with different materials, says Sharon Hong, a heritage planner at ERA Architects.

But in the last few years, there has been a shift away from thinking about heritage as physical artifacts to a living and evolving thing, says Hong.

Heritage preservation is now about protecting communities that have had many years to mature and accumulate meaning—places where people can say, “culture happened here,” says Hong.

By expanding their definition of heritage preservation, Toronto Heritage has been able to draw in younger people with broader interests, says Karen Carter, Executive Director of Toronto Heritage, a charitable agency of the City of Toronto.

The ACO has also decided to do something about its aging demographic by launching a program called ACO NextGen, which helps young people connect with experienced professionals and hosts design charettes for students and young professionals.

Having young people participate in heritage preservation is refreshing, says Clayton. “The ACO is starting to value our little group…. They want to have younger members and fresh ideas. They want the organization to last.”

Most importantly, says Carter, it is important for young people to understand the history of their communities so that they can make informed decisions about the future.

“If you don’t take care of the identity of your city, it gets lost. And if young people don’t participate in creating that identity, they can’t own it,” says Clayton.

The post How heritage helps the planet appeared first on Corporate Knights.

Yet after finding that energy costs were increasing by more than $350,000 per year, Thompson launched a $2 million energy efficiency campaign in 2008 by replacing light bulbs, generators, pumps and other devices with more efficient ones. Along with retrofits of existing buildings, sustainable design elements were incorporated into new LEED (Leadership in Energy and Environmental Design) certified buildings.

Savings from the retrofit now add up to $1.2 million annually,,

Encouraged by the rapid return on investment, Thompson began to explore the idea of Gundersen shifting towards generation of it’s own energy. It is now on track to become one of the only energy-independent health care systems in the United States, by the end of 2014, through a mix of wind, solar, biogas and hydrokinetic power. Annual returns on energy investments are expected to run between $3 million and $5 million. Becoming energy independent isn’t just about saving money, Thompson insists. It’s about improving the health of the communities that Gundersen serves. Sixty-two per cent of Wisconsin’s energy is generated by coal power, causing respiratory and other problems. “We’re health care providers – you cant tell me we shouldn’t take responsibility for that,” says Thompson. The White House honoured him as a “Champion of Change” last year for his visionary work in the area of environmental stewardship for health care organizations.

Cultural change

With health care budgets under perpetual strain and climate change set to impose further pressure on the system throughout North America, U.S. hospital networks are beginning to adopt wide-ranging sustainability measures on everything from waste reduction to energy savings. Despite patient care remaining (understandably) front of the mind for most hospital administrators, facilities are discovering that sustainability and patient care are not mutually exclusive.

The U.S Department of Energy estimates that American health care facilities spend $8.8 billion per year on energy, maintaining buildings that have more than 2.5 times the energy intensity of average commercial offices. A recent report in the Journal of the American Medical Association calculated that the health care sector was responsible for 8 per cent of U.S. green house gas emissions. Hospitals also produce a sizeable amount of waste, measured by the U.S. Environmental Protection Agency at roughly 7,000 tons a day per hospital. Up to $10 billion is spent on disposal annually throughout the industry.

Coordinated efforts to curtail the environmental footprint of the health care industry began in the mid-1990’s, when Gary Cohen founded the organization Health Care Without Harm (HCWH). After an EPA report pegged on-site medical waste incinerators as the largest source of noxious dioxin emissions, he launched a successful campaign tjat resulted in over 90 per cent of hospital incinerators being shuttered by 2006. Medical products containing mercury were also phased out after they were found to be a potent source of pollution in landfills.

“Back in 1997, health care people such as myself had no idea we were contributing in this way to such a toxic problem,” says Kathy Gerwig, environmental stewardship officer at integrated managed care consortium Kaiser Permanente. Under her leadership, the Oakland, California-based company has evolved into a leading proponent of sustainability in the industry.

A number of related organizations have now joined HCWH in advocating for reform, including Greenfield Health Center and the Center for Health Design. These non-profits, working with Kaiser Permanente and 11 other health systems representing 490 hospitals across the nation formed the Healthier Hospitals Initiative (HHI) in 2012. Working to provide resources, facilitate dialogue between hospitals and encourage disclosure within the sector, it has already grown to encompass 900 hospitals.

Replacing waste

HHI and HCWH recently commissioned a survey of nine leading sustainability-minded hospitals and health systems to help take stock of the savings captured. If the policies adopted at these institutions were expanded nationwide, the study concluded that savings of $5.4 billion in five years and up to $15 billion in 10 years could be achieved. “It increasingly appears that going green not only benefits health and the environment, but saves money, which meets the Triple Aim of hospital quality improvements,” wrote Susan Kaplan, study author and director of the Health Care Research Collaborative.

After labor, supply chain costs remain the second-largest expense for hospitals. Comprising close to one-third of a hospital’s budget, most products will eventually end up as waste. One of the main challenges comes from regulated medical waste (RMW). Although RMW only comprises 15-20 per cent of the overall waste stream at hospitals, it can cost six to 10 times as much to dispose of. For HCWH’s Cohen, discussions about cutting waste in the health industry tend to focus instead on unnecessary treatments and bureaucracy, “but priorities are beginning to shift,” he says.

Educating hospital staff on what exactly constitutes RMW has proven to be the first step. Placing non-contaminated waste such as diapers, tissue papers and batteries in with RMW waste can balloon disposal costs as much as 5o per cent. Inova Health System, based in Falls Church, Virginia, eliminated one million tons of waste over 14 months from it’s RMW stream following a successful employee education program. That amounted to savings over $250,000 a year.

Amending procurement policy is another necessary step. In 2012, Johnson & Johnson surveyed purchasing managers and executives at 257 hospitals in the U.S., Italy, Germany and Brazil. Fifty-four per cent of hospitals responded that eco-friendly attribute are “extremely important” in their purchasing decisions.

Health systems often work together through group purchasing organizations to reduce costs. The goal, says Gerwig, is to create enough demand for products that are easily reusable, recyclable and free of toxics that it becomes the industry norm.

More research is emerging on the negative health effects of certain chemicals used in many medical devices. Kaiser made a decision in 2012 to eliminate intravenous bags and tubing that contain significant amounts of PVCs and DEHP from its supply chain. PVC creates dioxin during manufacturing, while DHEP is thought to result in reproductive complications.

Single use medical devices make up a sizeable portion of both supply chain costs and waste generated, leading more health systems to consider reusing them after being properly cleaned and sterilized. A U.S. Government Accountability Office report in 2008 found this practice to be entirely safe, as it already involved greater regulatory insight. More than half of all hospitals now divert some medical devices for reprocessing, with industry estimates placing the potential savings at $2 billion per year if replicated across the country.

Energy efficiency

The other pillar of hospital sustainability involves a reduction in electricity costs as exemplified by the Gundersen Health System. A green building construction boom has led to more than 250 new healthcare buildings achieving LEED certification with the LEED for Healthcare system being introduced by the U.S. Green Building Council in 2011. Seventy-five of those new builds are hospitals. Organizations like Gundersen and Kaiser have mandated that going forward, all new buildings in its network be certified as LEED Gold or higher.

While new green facilities and efforts to establish energy self sufficiency are important, the greatest opportunities lie in orchestrating energy retrofits of existing buildings. The National Renewable Energy Laboratory’s “Advanced Energy Retrofit Guide for Healthcare Facilities,” published last November, identified potential savings of 10 to 32 percent across the board, depending on facility and regional climate.

Gunderson Health System’s retrofit involved exchanging existing steam traps with sturdier and more efficient models, replacing older lighting systems, swapping out it’s chiller and installing more efficient prepackaged gas burners. It took under two years to recoup its initial investment

The post Emergency: Code Green appeared first on Corporate Knights.

Rand makes clear he doesn’t think we have to boil to death. “The good news is that we can solve the climate problem,” he writes. “The capital we need sits in our pension funds and money markets, the policy tools to unlock it are well understood and emerging innovations are fully capable of powering our civilization.”

Yet the fossil fuel party keeps rockin’ in the face of the risks, challenges and opportunities. The vested interests, the captains of industry, the politicians are all “paid very well to continue doing what they do.” They hire pseudo-experts to confuse and deny. They claim change is natural and we have nothing to do with it. They claim that it is simple fraud. They claim that other issues should have priority.

Rand explains why people so easily “rest blissfully in denial.” He distinguishes between “active” and “passive” deniers. Active deniers, he explains, are those who don’t actually believe what they are saying when they go on about it all being a left-wing plot to create a new world government. Passive deniers are similar to those who lived through the cold war years – they suffer from the “psychic numbing” of living under the constant threat of nuclear destruction, so they simply put the issue out of their minds.

“There are lots of reasons for passive denial,” he writes. “It’s not unreasonable. We may feel powerless or overwhelmed. We might want to avoid feelings of guilt. We are afraid of what it means for our children.”

Rand proposes a way to change the conversation and suggests that we take advantage of our cognitive biases, put on a happy face, and promote “a brave new world of clean energy abundance and sustainable economic growth.” The trouble is, everyone kind of likes things the way they are, with their cars and their granite counters their plane flights. Party on. But as notes, “The best parties are often followed by the worst hangovers, and the fossil fuel party has been a great one.”

Indeed it has. Unfortunately, we keep doing everything we can to postpone that hangover, thanks to hair-of-the-dog innovations like fracking and arctic drilling aimed at squeezing those last bits of hydrocarbons out of rocks and seabeds. Yet Rand says we have to cut our carbon emissions by 80 per cent by 2030. “It’s a massive affair. Replacing it in a generation – which we must do if we are to avoid catastrophic climate disruption – is daunting.” To do so, he proposes an energy moon shot – “a publicly directed new low-carbon energy mission that unlocks the engineering, industrial and financial might of the global market economy.”

It’s a huge job, writes Rand. Indeed, it’s much more ambitious in scope than the original moon shot. “The energy moon shot is a multi-stakeholder effort. Everyone rows in the same direction. Science sets the goal. Government provides the right policy support. Industry’s job is to get us there, not obfuscate the science or lobby against the policy. Industrialists, financiers, and captains of industry contribute to the debate and start by saying, ‘We get it, we’re on it.’”

This 21st century moon shot would include a serious carbon tax, next-generation nuclear (breeder reactors), carbon capture and enhanced geothermal systems that tap the heat of the earth 10 kilometres down. That’s big stuff requiring big engineering, reflecting Rand’s own bias as an optimistic engineer.

Then there is the low hanging fruit that you pick by fixing buildings. Rand did it himself with his own Planet Traveller hotel in Toronto, cutting its carbon footprint by three-quarters. The irony here is that having a planet of travellers comes with a much larger carbon footprint, and as Rand writes, “we’ll never go without long distance air travel… it’s part of the glue that makes us a global community.”

So we’re left with the belief that we can all live in a brave new world, all row in the same direction, and at the same time we can get captains of industry to say “we’re on it!” Rand is truly convinced we can avoid the hangover.

But the unanswered question remains: Will we?

The post Waking the frog appeared first on Corporate Knights.

Yes, celebration is in order. However, a sizable gap remains between this decline in emissions and the GHG reduction targets set by many cities, provinces and states. Toronto, for example, aims to lower its emissions to 30 per cent below 1990 levels by 2020. Closing the coal plants got the city about a quarter of the way to that goal.

In addition to decarbonizing their electricity supply, communities across North America also need to dramatically improve levels of energy efficiency and reduce energy demand if they are to meet ambitious reduction targets. In urban centres, roughly half of the GHG emissions are associated with the energy used to heat, cool and run buildings. Making large structures – condominiums, office towers, institutions and apartment buildings – more energy efficient is the fastest and most cost effective means of addressing climate change.

As they say in the accounting profession, you can’t manage what you don’t measure. That’s why energy reporting is critical to driving down energy (and water) consumption and realizing sustainable, energy efficient cities. Benchmarking, data collection and monitoring – all captured in an energy reporting policy – is emerging as one of the most effective tools to reduce energy consumption on a massive scale. Indeed, throughout Europe and across the U.S., policies have been rolled out mandating that building owners and managers monitor and report their energy consumption levels.

In the U.S., New York City, Chicago, Boston, Philadelphia and San Francisco are among the cities that have implemented such programs. Similar policies, often referred to as an energy reporting requirement (ERR), are being explored in Canada by cities such as Vancouver and Toronto.

Through an ERR, owners and managers of commercial and multi-unit buildings are required to report the annual amount of energy used by their building to an independent third party, usually a government body. In this way, baseline energy consumption for individual buildings is established, as is a baseline for the overall energy consumption of a city’s building stock. Local government agencies can then aggregate emissions information and send back useful data to owners and managers about how their building is performing relative to similar buildings. The data also helps identify local trends in energy consumption and informs the design of effective conservation programs.

By itself, an ERR is not the silver bullet to the problem of climate change. But it is a highly effective approach when used in combination with supporting instruments. Analysis of both voluntary and mandatory energy reporting programs shows that tracking energy consumption and comparing performance among similar buildings leads to an average 2 to 3 per cent improvement in annual energy efficiency rates. Through an ERR, this potential could be applied citywide to generate a significant reduction in energy use. Reductions could possibly be greater still if the reporting requirement is implemented simultaneously with other programs such as conservation demand management initiatives and financial incentives that support energy efficiency retrofits and equipment purchases.

The value proposition of an ERR is multisided, with benefits for consumers, building owners, utilities and the planet. Owners can use superior energy performance ratings to promote their buildings as more desirable and better managed. Operating costs are lowered since less money is spent on energy use. U.S. studies have shown that buildings with green status benefit from higher sale prices, rental rates and occupancy rates compared to non-green labelled buildings. On the other side of the equation, tenants, lessees and buyers can use publicly available information about a building’s energy efficiency to inform real estate decisions in much the same way consumers can compare fuel efficiency rates when buying a car, understanding that the energy performance will affect long-term operating costs.

Over time, the data generated from an ERR will provide a wealth of analytical opportunities for city planners, utilities and academics – and even private app inventors. Collectively, these analyses will inform the programs, policies and infrastructure needed at neighbourhood and district levels to achieve a truly sustainable energy system and meet an ambitious 2050 target of 80 per cent emissions reductions.

As we strive to create energy efficient cities, municipalities should look to energy reporting requirements as one of the first steps to lowering energy consumption on a substantial scale and addressing the dangerous consequences of climate change. Ontario has said good-bye to King Coal. Now it’s time to say good-bye to energy waste in buildings and power up efficiencies instead.

The post Benchmarking matters appeared first on Corporate Knights.