Enhancing Sustainable Economic Development with Low-Impact Renewable Energy Clean Air Renewable Energy Coalition Andrew Pape-Salmon, Pembina Institute Mark Rudolph, Rudolph and Associates Enhancing Sustainable Economic Development with Low-Impact Renewable Energy Clean Air Renewable Energy Coalition Andrew Pape-Salmon, Pembina Institute Mark Rudolph, Rudolph and Associates

Why Renewable Energy Makes Sense Energy source diversification Technology advancement of renewables New capital investment Regional creation of jobs Improved air quality and related benefits Greenhouse gas reductions  enhance Canada’s efforts to participate in the 21 st century global energy economy Massive energy resource potential in Canada

Explosive growth in investment in low-impact renewables (30%/yr+ for wind and solar PV) Strong commitment from governments to growth  Denmark: 20% of electricity by 2003, 50% in 2020  Spain: 12% of electricity by 2010  Germany, UK, Netherlands: 10% of energy by 2010 International competitors ahead of Canada in terms of policy, production and export of technology and services Investors targeting leading policy regimes Explosive growth in investment in low-impact renewables (30%/yr+ for wind and solar PV) Strong commitment from governments to growth  Denmark: 20% of electricity by 2003, 50% in 2020  Spain: 12% of electricity by 2010  Germany, UK, Netherlands: 10% of energy by 2010 International competitors ahead of Canada in terms of policy, production and export of technology and services Investors targeting leading policy regimes Renewable Energy Worldwide

Wind Energy Capacity

Barriers to Renewable Energy Investment in Canada Low electricity prices Little market recognition of environmental and social benefits of renewables  financial “gap” on supply side Low consumer engagement and awareness  financial “gap” for retail and marketing Canadian incentives significantly lower than U.S. and other trade partners Low electricity prices Little market recognition of environmental and social benefits of renewables  financial “gap” on supply side Low consumer engagement and awareness  financial “gap” for retail and marketing Canadian incentives significantly lower than U.S. and other trade partners

Response to Barriers: Business - NGO partnerships Growing convergence of interests Aligned concept of sustainable development Collaborative approaches to environmental, economic and social issues Opportunity for new partnerships between business and NGOs Clean Air Renewable Energy Coalition formed December, 2002 Opportunity for new partnerships between business and NGOs Clean Air Renewable Energy Coalition formed December, 2002

Members: Axor BC Hydro BP Canada Energy Company Benign Energy Canada Inc. Dofasco Enbridge Federation of Canadian Municipalities Friends of the Earth Members: Axor BC Hydro BP Canada Energy Company Benign Energy Canada Inc. Dofasco Enbridge Federation of Canadian Municipalities Friends of the Earth Clean Air Renewable Energy Coalition Who we are International Institute for Sustainable Development Ontario Power Generation Inc. Pembina Institute Pollution Probe Shell Canada Limited Suncor Energy Toronto Environmental Alliance Toronto Hydro International Institute for Sustainable Development Ontario Power Generation Inc. Pembina Institute Pollution Probe Shell Canada Limited Suncor Energy Toronto Environmental Alliance Toronto Hydro

Jointly identified desired policy changes:  2000/01: new tax incentives for renewable energy supply and demand  2001/02: comprehensive package of measures to compliment the WPPI, CRCE, MIP Tested proposed changes with prospective partners to ensure alignment between energy companies and environmental NGOs Pursued active dialogue with all levels of government, delivered coordinated messages to key government bodies Jointly identified desired policy changes:  2000/01: new tax incentives for renewable energy supply and demand  2001/02: comprehensive package of measures to compliment the WPPI, CRCE, MIP Tested proposed changes with prospective partners to ensure alignment between energy companies and environmental NGOs Pursued active dialogue with all levels of government, delivered coordinated messages to key government bodies Developing and Implementing our Strategy Clean Air Renewable Energy Coalition

Importance of the right partners Importance of broad-based advocacy Importance of targeted and focused messages Importance of evolutionary change Importance of the right partners Importance of broad-based advocacy Importance of targeted and focused messages Importance of evolutionary change Multi-stakeholder partnerships – lessons learned Sustainability is not a solitary pursuit – it’s a collaborative effort Clean Air Renewable Energy Coalition

Establish Renewable Energy Target for Canada  Establish national “certificates” trading system to equalize costs across Canada and provide flexibility  Example: 10% target by 2012 would result in emission reductions of 32 Mt, or 13% of Canada’s Kyoto gap Increase the Wind Power Production Incentive to be competitive with US levels  Level the playing field in North America – currently U.S. Production Tax Credit worth 2.7¢/kWh after tax, WPPI only $0.67 ¢/kWh, assuming 33% marginal tax rate Establish Renewable Energy Target for Canada  Establish national “certificates” trading system to equalize costs across Canada and provide flexibility  Example: 10% target by 2012 would result in emission reductions of 32 Mt, or 13% of Canada’s Kyoto gap Increase the Wind Power Production Incentive to be competitive with US levels  Level the playing field in North America – currently U.S. Production Tax Credit worth 2.7¢/kWh after tax, WPPI only $0.67 ¢/kWh, assuming 33% marginal tax rate Recommendations to Government Clean Air Renewable Energy Coalition

Establish Production Incentives for other Resources (solar PV, low-impact hydropower, low-emission biomass, tidal and wave power) Work with Provinces and Territories to Establish Complimentary Mechanisms to Support Target  Renewable portfolio standards  System benefits charges and investment programs Establish Production Incentives for other Resources (solar PV, low-impact hydropower, low-emission biomass, tidal and wave power) Work with Provinces and Territories to Establish Complimentary Mechanisms to Support Target  Renewable portfolio standards  System benefits charges and investment programs Recommendations to Government Clean Air Renewable Energy Coalition

Expand Market Incentive Program to $30m/yr to support broader-based consumer rebate and education plans  Expand beyond pilot project status  Extend deadline to 2012 Identify a Meaningful Role for Renewable Energy in Canada’s Climate Change Strategy Develop Wind Energy Resource Mapping and Measurement Program across Canada Expand Market Incentive Program to $30m/yr to support broader-based consumer rebate and education plans  Expand beyond pilot project status  Extend deadline to 2012 Identify a Meaningful Role for Renewable Energy in Canada’s Climate Change Strategy Develop Wind Energy Resource Mapping and Measurement Program across Canada Recommendations to Government Clean Air Renewable Energy Coalition