Sustainability in Practice: Use of Economic Instruments in Environment Regulations SCARP Seminar October 31, 2012 Ray Robb Regulation & Enforcement Division Manager MPEP Department Sandra Bicego PacificaBlue Consulting 1

Air Quality and Climate Change Diesel soot threatens: Human Health The Climate 2 2

Metro Vancouver Air Contaminant Cancer Risk

Diesel Soot Health Impacts - Lungs Tiny toxic diesel soot particles penetrate deep into lungs causing: Asthma attacks Reduced lung function Chronic bronchitis Lung Cancer

Diesel Soot Health Impacts - Heart Acute heart attacks Chronic heart disease Soot in lungs causes general inflammatory response Lungs

Diesel Soot & Climate Change Black Diesel Soot absorbs sun’s heat in atmosphere on snow and ice Total soot heating effect nearly equal to carbon dioxide occurs immediately but does not last long Technology to reduce diesel soot available now cost effective Can buy the planet time to address Greenhouse Gases

Diesel Soot Sources – Human Exposure Exposure (gms per lung per day) 7 7

Engine Tier Emission Standards Excellent Emission Standards No Emission Standards Early Emission Standards Moderate Emission Standards >750 hp 8

Diesel Soot (Particulate Matter) Emissions (g per kW-h) 0 1 2 3 4 Engine Tier

Soot Emission Equivalents Tier O Tier 2/3 =

Soot Emission Equivalents Tier O Tier 4 =

Options for Emission Reductions & Fee Reductions/Refunds Retrofit Re-Power Replace/Retire

California Tackles Diesel Emissions + + + =

California Rule Command and Control Fleet Target = (HPi x LFi x Thp) (HPi x LFi) Fleet Emissions Average = (Hi x HPi x LFi x Ei) (Hi x HPi x LFi) In compliance if: Fleet Emission Average < Fleet Target

Fleet Targets soot Joe’s Company Target Joe’s Company Actual Pete’s Company Target g/bhp-hr 2012 2013 2014 2015 2016 2017 2018

California Diesel Rule Varies by company size Varies by sectors Fleet targets Based on fleet engine sizes Change every year or as fleet make-up changes Compliance Estimate fleet emissions (spreadsheets) Numerous exceptions to estimation rules Exemptions, bonuses, special cases Complexity creates demand for many Government staff to explain rules to consultants Consultants to explain rules to industry

California Diesel Rules Start Finish

Metro Vancouver Approach Who do we serve? Fair, Efficient & Effective Rules Minimal impact on model operators Economic Instruments

Engine Tier Emission Standards Excellent Emission Standards No Emission Standards Early Emission Standards Moderate Emission Standards Metro Vancouver Approach focuses on Tier 0 and 1 only >750 hp 19

MV Annual Fee Rates 20

Fee Exemptions, Refunds & Reductions Tier 2 or better Fee Refund 80% of previous 3 years fees if engine is retired from use in Metro Vancouver region or upgraded to Tier 2 or better emission standard Fee Reduction reduce emissions but don’t achieve Tier 2 21

Fees & Refunds Fees Reduce emissions Refund Tier 0 and 1

MV Consultation Approach Clarify goals Identify audience Design consultation process target every aspect to audience Develop communication strategy Plan for consultation event(s) Implement - Provide information and seek input (various means) Report feedback Impact: law, plan, or policy

NRD Consultation Process Focus Groups (paid attendees) Workshops (all invited) Working Groups (select representatives of various sectors) Meetings with various associations, companies Web-based consultation Chief MHO comment on public process

MV Results Law in force January 2012 1,250 Tier 0 engines registered to date Many Tier 0 engines “disappearing” Industry pleased with ease and speed of system Some challenges (or challenging situations) remain Other jurisdictions considering similar model

Other Examples of Economic Instruments: Liquid Waste Problem at Primary Plants (Iona & Lion’s Gate) Limited capacity for BOD (peaks threaten compliance) Fee structure encourages new BOD sources to discharge to primary plants Fee structure does not discourage peak discharges

Liquid Waste (cont’d) Economic Instrument Solution Changed fees to reflect available capacity at local WWTP peak discharges Iona and Lion’s Gate get breathing space Industry puts money where it does most good