ARE WE DESIGNING PROGRAMS FOR CARBON NEUTRALITY?
Currently, there are a few programs in Alberta focused on catalyzing energy efficiency and small scale renewables while reducing greenhouse gas emissions. More are on the way. The federal government announced support programs including: an up to $5,000 rebate per home for energy efficiency improvements; and a $40,000 interest free loan for homeowners to undertake energy efficiency retrofits. Edmonton, and other Alberta communities, will soon launch the Clean Energy Improvement Program (CEIP). CEIP is a mechanism for homeowners and businesses to access financing for energy efficiency retrofits and renewable energy installations and repay that financing through the property tax bill. On the surface, it looks like these programs are putting us on the right track to reach our climate goals.
But, do these programs facilitate the deep and rapid emissions reductions required to achieve carbon neutrality? The majority of these programs are based on a paradigm of incrementalism, one linked to a philosophy that sees energy efficiency as a resource versus a climate positive intervention. This minor nuance could be easily dismissed; however, the reality is much more complex. Although energy efficiency is inherently part of the climate change solution, the goal of creating a carbon neutral society by mid century does not readily align with many of these conventional interventions. We need to talk about this realization as the urgency associated with solving the climate crisis truly sets in.
Historically the underlying intent of most energy efficiency programs is to delay or avoid utility system infrastructure upgrades to keep rates low for the rate payer. In these programs, a financial incentive is provided for an individual or business to reduce their energy use, thereby reducing demand. This reduced demand translates into “new” capacity that the utility would not have otherwise had thereby reducing the need to expand the overall system. All things being equal, the financial incentives provided to you and me and the businesses collectively are lower (often much lower) than the cost of the needed expansion or upgrade to the overall utility system. It sounds like it makes a lot of sense in the context of responsible utility system management, but does this translate into a meaningful approach to tackle the climate crisis?
The short answer is no. This approach, referred to as resource acquisition, was never meant to address climate change. Although emissions reductions are often realized as a result of resource acquisition programs, systemic change is not considered at all. Many of us practitioners in the field know this, but we still continue to fall into the trap of designing programs in this manner because the metrics we are held to are historically derived from these resource acquisition style programs. We are pressured to pursue the lowest dollar per tonne measures by many stakeholders and policy makers. They themselves are led to believe that continuing this tried and true approach is coincident with a logical pathway to carbon neutrality. What happened? We took a program design methodology created for a very specific purpose (energy efficiency to support responsible utility system management) and applied it directly to the climate solution space (emissions reductions and socio-economic transformation). It just doesn’t work.
At Alberta Ecotrust, the Climate Innovation Fund is focused on meeting Canada’s 2030 and 2050 carbon reduction targets. Our approach is reliant on creating systemic change and establishing the conditions for success for our economy and society to transition to carbon neutrality in a prosperous and equitable manner. Put another way, our interventions are designed to facilitate socio-economic transformation at a systems level as opposed to simply procuring energy and emissions reductions at the lowest cost.
Socio-economic transformation programs are often criticized for not being economically efficient. Organizations like ours who design these less conventional programs can be accused of not investing their dollars wisely when they create support programs that exceed a preconceived dollar per tonne threshold. Investment in innovation that can lead to leapfrogging and disruption, to some, seems misaligned with financial prudency. However, history shows, although measurable emissions reductions are achieved through resource acquisition, pursuing only the most economically achievable measures does not lead to systemic change. If we continue to do only this, we will never realize the change we seek because the programs are not designed to do that. Resource acquisition programs are inherently incremental in nature which can actually lock in business as usual rather than facilitate transformation. To be clear, there is value in resource acquisition programs. They make a lot of sense in the context of responsible utility system management. But, we absolutely must stop modelling all of our climate change programming on these types of programs if we are to ever reach our desired outcome.
Resource acquisition and socio-economic transformation are fundamentally different. It’s difficult to attain both outcomes if those differences are not reconciled. All program providers, funders, and government policy makers have a choice in front of them. It is imperative we start to talk about this and design programs, incentive mechanisms, and resource plans accordingly. Do we want to truly tackle climate change? If we do, then we need to stop equating the achievement of carbon neutrality with incremental improvements in energy efficiency. If we don’t get smarter quickly and acknowledge this issue soon, we will continue to develop and launch programs that fail to achieve our climate goals. For instance, we can recalibrate programs like the soon to be launched CEIP so they are designed to facilitate whole building retrofits and any retrofits undertaken to be contextualized within a clear road map to the achievement of net zero. We can ensure future rebates are aligned with measures that do not result in carbon lock-in while measurably advancing the goal of carbon neutrality as opposed to simply reducing a percentage of a building’s energy use. It can be done, if we design the programs with a clear, climate focused, intent in mind.
Learn about our new Climate Innovation Fund Grant Program. Join us for the last webinar in our information session series on Wednesday, June 16 from 10 to 11 am MST on the focus area Decarbonization and Renewable Energy.