Danny Lam is an independent consultant on greenhouse gas-mitigation strategies. He graduated with a master's degree in civil and environmental engineering from the University of Waterloo in 2014. Maurice Dusseault is a professor of earth sciences, University of Waterloo.
Ontario's Climate Change Action Plan (CCAP) will spend $7-billion to reduce greenhouse gas emissions by 2021. If that proves to be the ultimate cost of the program, it might be a bargain. But like its predecessor, the Ontario Green Energy Program (Green Energy Act), its costs are largely hidden.
Recall how the Green Energy Act (GEA) is funded by electricity surcharges rather than a provincial budget line item. Ontario's Auditor-General estimated that Ontarians will pay $170-billion extra for electricity between 2006 and 2032. This $6.8-billion a year represents 4 per cent to 5 per cent of provincial government revenue, or about 1 per cent of provincial gross domestic product.
The proposed CCAP risks repeating these errors by hard-wiring Ontarians' choices as "good" versus "evil," and by burying the true costs of climate change mitigation.
Under CCAP, "good" is electricity. The plan prioritizes "geothermal" energy, "air heat pump" systems, "solar panels" and vehicles that run off electricity. Electricity is so good that electric cars will be subsidized by $14,000 rebates a car and $1,000 a house to install home chargers, the purchases of electric school buses, waiving of HST and the installation of government-mandated free charging stations on new buildings and at government institutions.
But this isn't about just any electricity. It's about grid electricity administered by Ontario's Independent Electricity System Operator and provided mainly by Hydro One and affiliates that are now in severe surplus after the GEA resulted in some of the highest electricity rates in North America. The plan identifies other products as having "good" characteristics, such as "renewable" liquid biofuels such as ethanol and biodiesel, and gas from agricultural and waste products that will be imposed on the market through "renewable" fuel mandates.
Remarkably, CCAP-funded program activities apparently will not be dynamically, continuously and publicly evaluated in terms of the metric that truly matters: the per-tonne cost to reduce GHG emissions. There is an estimate of each line item cost and the amount of GHG reduction expected from the program. But such static, a priori assessments are notoriously uncertain.
For example, the GEA never delivered on its promised "green" jobs, but it did deliver the costs to Ontarians. Those arbitrary choices of "good" options of grid electricity and "renewable" fuel mandates are not likely to yield the best GHG reduction value for money. There is no discussion, let alone appropriate metrics, to assess the true life cycle for GHG emissions from the favoured options.
Electric cars are expensive to manufacture, and assembling critical components such as batteries and motors, or extracting rare-earth materials, emits considerable GHGs. Also, if charged during the peak hours when Ontario generates electricity from natural gas, electric vehicles indirectly emit GHGs. Arbitrarily favouring electric vehicles obscures these critical issues that are revealed by life cycle GHG emissions analysis.
Substantial as they are, it is not clear that the inducements offered will be enough to entice consumers from conventional or hybrid liquid-fuelled cars. Would a consumer accept a car that cannot be driven to remote areas of Ontario or out of province, where charging stations will not be found? Would a consumer accept the inconvenience of being stranded during vehicle charging?
Longer term, it's improbable that grid electricity for vehicles will remain free for long. Perhaps the more important question is to ask how much regular electricity rates will have to rise to pay for all these mandates.
The province can do better by simply creating a level playing field for all competing technologies to play a part in reducing GHGs, rather than picking what appear to be winners and defending the status quo distribution and generation systems. Legislation cannot respond rapidly to changes in the competitive and technological landscape of today's world as we rapidly sort through various options for best effect at modest costs to move toward a zero-net-carbon future.