Transportation (2011 GHG Report)
| In May, 2011, the ECO his released third Annual Greenhouse Gas Progress Report. Click here for more information on this report, including videos and communications materials. | |||||
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Contents |
Climate Change Action Plan Initiative
The government’s CCAP Annual Report 2008–09 provided specific reduction estimates for five initiatives that focused on changing vehicle technologies and using cleaner fuels. Two other initiatives were focused on reducing the number of vehicle kilometres travelled (VKT) in the province. Several other transportation-related initiatives were included in the report, but no emissions reductions numbers were provided for these activities. (This information is contained in Table 2.)
In the government’s more recent CCAP Annual Report 2009–2010, the projected emissions reductions associated with transportation-related initiatives have not only been significantly reduced, they have also been presented as an aggregated total (see Table 3). The ECO can only assume that the reduced estimates are a function of revisions that have been made to provincial modeling, as well as a reflection of the economic downturn. Given the magnitude of reductions that are necessary in this sector, these new projections are underwhelming, to say the least.
Secondly, by presenting the projected transportation reductions as an aggregated total, it is virtually impossible to determine what contribution each initiative is projected to make toward the overall total. The ECO is disappointed that the government has chosen to present the data in this much less transparent manner. In the future, the ECO would urge the government to report both initiative and sector-specific totals.
Rather than adding any new tools to the transportation toolkit, this year’s report indicates that the number of tools has actually been reduced. This is disappointing given the challenge that the province faces in reducing emissions from this sector.
| Initiative | 2014 Estimate (Mt) | 2020 Estimate (Mt) |
|---|---|---|
| Conversion to Electric Buses | 0.06 | 0.16 |
| Ontario Bus Replacement Program & Public Transit Commitments | 0.7 | 1.1 |
| Fuel Efficiency Standard (GHG Emissions Standard) – Federal Initiative | 2.24 | 5.45 |
| Green Commercial Vehicle Program/ Anti-Idling Retrofits | 0.02 | 0.02 |
| Heavy Truck Speed Limiters | 0.26 | 0.26 |
| Places to Grow Act – Growth Plan for the Greater Golden Horseshoe | 0.11 | 0.34 |
| The Big Move | 0.14 | 0.77 |
| TOTAL | 3.53 | 8.1 |
| Initiative | 2014 Estimate (Mt) | 2020 Estimate (Mt) |
|---|---|---|
| The Big Move and Growth Plan for the Greater Golden Horseshoe | N/A | N/A |
| Passenger vehicle efficiency regulations (GHG Emissions Standard) – Federal Initiative | N/A | N/A |
| Freight truck speed limiter regulation | N/A | N/A |
| Hybrid buses and Green Commercial Vehicle Program | N/A | N/A |
| TOTAL (as provided) | 0.4 | 3.0 |
| No data available |
Public Transit Initiatives
Two initiatives identified within the CCAP Annual Report 2008–09 to reduce emissions from public transit were a $180.1-million electric bus conversion program and the Ontario Bus Replacement Program (OBRP), in conjunction with other transit funding. The OBRP was put in place in 2002 and allowed municipalities to purchase vehicles with lower GHG emissions. These programs were estimated to account for 0.16 Mt and 1.1 Mt of GHG emissions reductions by 2020 respectively. Along with reducing GHGs, the OBRP was expected to improve frequency and reliability, especially at peak hours.
The challenge, however, is that funding is being reduced and some initiatives may be delayed or cancelled. For example, the 2010 provincial budget cancelled the OBRP, and now funds to replace aging buses will have to come from the same pot of money (the Gas Tax Fund) that already supports municipal transit. Within the most recent report, there is no mention of the OBRP, nor whether any emissions reductions calculations were conducted for this program.
Federal GHG Emissions Standards for Passenger Automobiles and Light Trucks
Since personal vehicles account for about 57 per cent of Ontario’s transportation emissions, strong fuel efficiency standards have the capacity to reduce GHG emissions substantially. In October 2010, the federal government finalized regulations which establish GHG emission standards for new passenger automobiles and light trucks for the 2011 to 2016 model years. At the same time, the federal government signaled its intention to develop more stringent standards for post-2016 models. This initiative is estimated to result in a Canada-wide reduction of 2.5 Mt by 2012. Within Ontario, the provincial government last year projected that this initiative would result in a 2.24 Mt reduction by 2014 and a 5.45 Mt reduction by 2020 – the second largest reductions of all initiatives proposed after phasing out coal use. Given the manner by which projected reductions have been reported this year, it is impossible to determine if this initiative is still viewed as the second largest tool in the toolkit.
Green Commercial Vehicle Program/Anti-Idling Retrofits
Launched in November 2008, this $15-million program provided grants to support the purchase of low-GHG-emitting commercial vehicles (i.e., hybrid, electric, propane or natural gas fuelled). As well, grants were also provided to support the purchase of anti-idling technologies (such as accessory power units, cab heaters and cab coolers) for heavy-duty vehicles. Although the program was scheduled to run for four years, the Ministry of Transportation (MTO) has recently stopped accepting applications to the program and all information regarding the program has been removed from MTO’s website.
As well, the disbursements of grants under the alternative fuel vehicle element of the program were less than anticipated due, in large part, to the economic slow-down. Given both of these variables, and until the government releases verified numbers, the ECO assumes that actual reductions from this program will be less than had been estimated.
Heavy Truck Speed Limiters
Through changes made to the Highway Traffic Act, trucks operating in Ontario are required to operate electronic devices that limit maximum speeds to 105 km/hour. This change ensures that heavy trucks do not operate at higher – and less fuel-efficient – speeds. The government projects that the program will save 100 million litres of fuel per year, and 280,000 tonnes of GHGs. The success of this program could be compromised by non-compliance rates which have been quite high in other jurisdictions with similar policies. Preliminary data suggests that
the non-compliance rate in Ontario may be around 13.6 per cent, or about one in seven trucks. While no results have yet been released regarding the GHG reductions associated with this initiative, the reductions will likely be lower than projected if the projected numbers assumed 100 per cent compliance – an issue previously raised by the ECO. The ECO expects that a GHG verification process would take account of the actual compliance rates.
Places to Grow Act, 2005 – Growth Plan for the Greater Golden Horseshoe
The Greater Golden Horseshoe – a region that extends roughly from Niagara Falls to Georgian Bay to Peterborough – is one of the fastest growing regions in North America. Home to approximately two-thirds of the province’s population, it is projected that an additional 3.7 million people will settle in this region by 2031. To cope with the projected population and economic growth over the next few decades, the Ontario government enacted the Places to Grow Act, 2005 to provide a legal and policy framework to facilitate the development and amendment of growth plans for different regions.
The Growth Plan for the Greater Golden Horseshoe (the Plan), the first issued under the Act, represents an overarching framework that prescribes where and how growth will occur in the region until 2031. With a broad vision to curb urban sprawl and its attendant effects (including rising GHG emissions), the Plan directs growth to built-up areas by establishing urban growth centres and intensification corridors.
The Plan includes an intensification target that 40 per cent of new population should be accommodated in built-up areas and 60 per cent accommodated in greenfield areas (undeveloped outer regions and farmland). The Plan thus allows the majority of future growth to be located on previously undeveloped land which exacerbates urban sprawl. The second target is a minimum-density one which establishes a lower threshold of 50 residents and jobs per hectare in greenfield areas. Thirdly, the Plan establishes specific density targets for the identified urban growth centres. Municipal plans were required to reflect compliance with the Plan by 2009, and by 2015, to comply with these intensification targets. While the Plan places a heavy emphasis on public transit, the density target for undeveloped greenfield areas is 50 residents and jobs combined per hectare. It has been calculated that this density would only support 30-minute wait times between buses, which is likely too infrequent to attract a large proportion of commuters.
The government’s recent CCAP Annual Report 2009–2010 is projecting significant growth in the number of passenger vehicles and detached homes between now and 2020. As the ECO believes the Plan’s density targets are not sufficiently ambitious, we remain concerned that the Plan is locking-in a trajectory of emissions growth that is not sustainable.
The Big Move
In November 2008, Metrolinx passed The Big Move, its 25-year, $50-billion Regional Transit Plan (RTP). Focused on the Greater Toronto and Hamilton Area (GTHA) – an area plagued by traffic congestion – the RTP aims to ease congestion and commute times, and reduce harmful transportation-related emissions (including GHGs).
According to some modelers, of all current provincial transportation policies The Big Move has the greatest potential to reduce GHG emissions over the long term (25 years) by both decreasing VKT and increasing transit use. The key barrier to full implementation of The Big Move, however, is a lack of adequate and secure funding by all levels of government. Over the first 15 years, $30 billion in capital costs is required, with a subsequent $20 billion over the next 10. Three phases of funding were outlined, with the first phase fully funded by the 2008 provincial budget. The second phase, which began in 2009, was to rely significantly on $11.5 billion committed through the province’s MoveOntario 2020 initiative. A further $6 billion was requested from the federal government to ensure completion of projects out to 2018. The 2010 provincial budget, however, delayed at least $4 billion of these monies, thus putting the schedule for some projects in doubt and highlighting the critical need for dedicated long-term revenue sources.
With a view to expanding possible revenue sources, Metrolinx is exploring new and innovative funding mechanisms and is to report to the province, by 2013, with recommendations to close the 2016–2033 investment gap. The ECO remains of the opinion that the delivery date for this report should be accelerated. As well, the ECO sees an urgent need for the province to begin a public dialogue exploring potential revenue tools. This is precisely the type of dialogue that the province can initiate to better prepare itself for the implementation of proposals put forward by Metrolinx.
Initiatives Under Consideration
According to the CCAP Annual Report 2008–09, several other transportation initiatives had been under consideration by the provincial government. Below is a discussion of some of these initiatives. Disappointingly, no mention was made of any of these initiatives in the government’s April 2011 CCAP report.
High-Speed Rail
Over the past five decades, vehicle and air traffic volumes along the Quebec City – Windsor corridor have increased dramatically with GHG emissions increasing in lockstep. Recognizing the need to address these issues, the Ontario and Quebec governments announced in January 2008 a one-year study of the feasibility of developing a high-speed rail (HSR) system linking Toronto, Ottawa and Montreal. The federal government subsequently became a joint partner and, in February 2009, the three governments commissioned a $3-million joint study to update previous studies on the feasibility of high-speed passenger rail in the 1,200 kilometre Quebec City – Windsor corridor.
Despite MTO indications in November 2010 that the report would be publicly released in a “timely manner”, no results are yet available. While the lack of an updated study makes it difficult to draw any firm conclusions, a similar study in 1995 concluded that a HSR system would reduce transport-related CO2 emissions in the corridor 24 per cent by 2025. This result is, however, highly dependent upon the technology ultimately employed (diesel versus electric) and assumptions made around modal shift percentages.
While the costs associated with developing HSR may initially appear prohibitive, from an environmental perspective HSR is an obvious choice given that such trains require significantly less energy than either an airplane or automobile on a per passenger basis. In light of the significant potential reductions in vehicle transportation fuel and GHG emissions (not to mention reduced public health costs, travel times, congestion and traffic accidents), the ECO agrees with the Martin Prosperity Institute that it is “hard to envision this region in 2021, without any ‘high-order’ transit or ‘express service’ linking the major regions.” Accordingly, the ECO strongly encourages the Ontario government to expedite the release of the study currently under way. Contained within this study, the ECO fully expects to see an analysis not only regarding the economic costs associated with such a project, but also a fully updated analysis of the environmental, health and safety benefits that would accrue from the development of a high-speed rail corridor.
Low-Carbon Fuel Standard
There are several technologically feasible low-carbon fuels which, if more widely employed in the province, would reduce transportation-related GHG emissions. One policy tool the Ontario government has been exploring to achieve this is a low-carbon fuel standard (LCFS). An LCFS requires fuel suppliers to reduce the average fuel carbon intensity to meet a defined GHG emissions benchmark. All emissions associated with the production of the fuel – extraction, refining, transportation, and consumption – are included. Those suppliers who reduce the carbon content of their fuels below the standard would receive credits that they could sell to other suppliers. Given that an LCFS caps average emissions intensity and allows suppliers to ‘trade’ credits, an LCFS operates in a fashion which is analogous to a cap-and-trade program, albeit within a single-sector.
A properly designed LCFS can significantly reduce life-cycle GHG emissions and encourage the production of lower-carbon alternatives such as advanced biofuels and electric and natural gas vehicles. According to independent analysis conducted for the ECO, GHG emissions reductions from a rigorously-designed Ontario LCFS could be in the order of 1.2 Mt by 2020, climbing to 6.4 Mt by 2025, based on a 2015 introduction date. A properly designed system must consider who the regulated party is, how land use change is included, interaction with other policies, the baseline year, and what life-cycle GHG values to use for each fuel source. Ideally, an LCFS is accompanied by other complementary measures such as vehicle efficiency standards, strong investments in public transit and measures to restrict urban sprawl.
Several jurisdictions, including California, British Columbia and the European Union, have implemented or are considering various forms of an LCFS. In May 2007, Ontario signed a Memorandum of Understanding with California to co-ordinate policy development on an LCFS that would require a 10 per cent reduction in carbon emissions from transportation fuels by 2020. While the government indicated in its CCAP Annual Report 2008–09 that it would provide additional detail on the proposed treatment of upstream fuels, no such information was contained within its most recent report.
Electrification of GO Trains
After a year-long study, the Metrolinx Board recommended in January 2011 to electrify portions of the GO Transit rail network with priority given to the two busiest routes – Lakeshore and Georgetown, beginning with the link between Union Station and Pearson International Airport. With regard to GHG emissions, the study concluded that “electrifying the entire network would deliver a 94% reduction in GO Transit’s future GHG emissions.” This is a significant contribution, especially in light of other corresponding local air quality improvements that result from reduced diesel consumption. As such, the ECO encourages that electrification be implemented as soon as feasible.
Potential Tools for the Toolkit
Consumer Incentives
Environmental fiscal policies, such as taxes and financial incentives, can encourage the purchase of low-carbon vehicles. A feebate is a particular type of financial incentive that lowers the purchase price of more fuel-efficient vehicles and increases the purchase price of less fuel-efficient vehicles, relative to a specified benchmark. In general, feebate systems are designed to be revenue-neutral with the funds collected in fees roughly equal to the amount paid out in rebates.
Other incentive options include tax credits and rebates for more efficient vehicles (without the corresponding penalties on the less fuel-efficient vehicles). Non-financial incentives, such as access to high occupancy vehicle lanes or to preferred parking spaces, can also encourage the use of more efficient vehicles.
Until recently, Ontario had a feebate system in place comprised of three measures. The first was the Tax for Fuel Conservation (TFC) that applied to newly-purchased fuel-inefficient vehicles such as passenger vehicles using six or more litres, or sport utility vehicles using eight or more litres of fuel per 100 kilometres of highway driving. A companion measure was the Tax Credit for Fuel Conservation (TCFC), which provided up to $100 to purchasers of new passenger cars that use less than 6 litres of gasoline or diesel fuel per 100 kilometres of highway driving. The final measure was in the form of a rebate that was available to either purchase new, or convert used, vehicles that operated on an alternative fuel. The rebates ranged from $750 for a propane vehicle, to $2,000 for a hybrid electric vehicle delivered after March 2006.
As part of the harmonization of the provincial sales tax with the federal goods and services tax in 2010 each of these measures ended. This was a deliberate choice, not an inevitable consequence of harmonization, as the Ontario government instituted point-of-sale rebates for the provincial portion of the Harmonized Sales Tax for several other product categories. The government claimed that ending both the TFC and TCFC would “save businesses and consumers approximately $35 million per year.” While such financial savings may be important, the lack of a corresponding analysis of the GHG reductions that these programs could deliver concerns the ECO.
Other jurisdictions, for example, have had success using similar incentives. In France, a similar program introduced in 2008 resulted in a 3 per cent improvement in the fuel economy of new vehicles. As well, analysis conducted for the California Air Resource Board concluded that a moderate feebate system could lead to a 3 per cent decrease in GHG emissions per kilometre for new vehicle purchases in the period 2011 to 2025.
Despite a promise to introduce a range of incentives to encourage people to shift toward greener vehicles the only incentives now offered are with regard to electric vehicles. To assist with achieving its goal of having one out of every 20 vehicles in Ontario powered electrically by 2020, the government now offers rebates of $5,000 and $8,500 towards the purchase of plug-in hybrid and battery-electric vehicles. Further electric vehicle incentives include the privilege of accessing high occupancy vehicle lanes on provincial highways and access to public recharging facilities at GO stations and Ontario government parking lots.
With the recent introduction of the federal GHG emissions standards, the Ontario government should re-examine financial incentives for highly fuel-efficient gasoline and diesel vehicles. While performance-based standards, such as the federal GHG emissions requirements, force the adoption of newer technologies, they provide no incentive for vehicle manufacturers to exceed minimum requirements. By combining the synergies of the federal performance standard with a properly designed incentive policy to push continuous improvement, policymakers can enhance overall environmental effectiveness. While Ontario’s former feebate program (as embodied by the TFC and TCFC) lacked strong incentives to substantially alter consumer behavior it can serve as a foundation upon which to improve future policies.
Road Pricing
Road pricing is an umbrella term referring to user fees charged for roads and road facilities. Various schemes exist and several pricing systems have been proposed or implemented in other jurisdictions. For many reasons, the ECO continues to believe that the government needs to seriously consider introducing similar road pricing systems in Ontario. Not only could revenues be generated for the expansion of public transit, a number of road pricing options have the dual effect of also reducing VKTs (and therefore GHG emissions) by serving as a disincentive to driving while reducing road congestion.
The GTHA’s reliance on single-passenger vehicle trips is one of the highest among global cities and is projected to increase with 1.4 million additional vehicles by 2031. In order to curb rising transportation emissions, Ontario must fundamentally shift the manner by which people and goods move around. There appears to be two broad choices: (1) accept increasing GHG emissions from passenger vehicles; or (2) implement price signals that will alter driver behaviour.
While technical and public acceptance hurdles may exist, the ECO does not believe these to be insurmountable. The ECO believes it is incumbent upon the government to begin funding research into possible alternatives. A consultation process should be held to analyze the strength of the perceived barriers and to determine possible ways forward. Lessons can be gleaned from other jurisdictions, and a pilot project that is relevant for the Ontario context can be implemented to determine viability. Simply ignoring road pricing’s potential for GHG reductions does not reflect leadership.
Commuter Choice Incentives
At present there are a number of programs in the province designed to provide commuters with alternatives to travelling in single-passenger vehicles. One such program is Smart Commute, an initiative in the GTHA that helps commuters explore alternative commuting options such as carpooling, cycling and transit. As well, the provincial government provides grants to municipalities through its Transportation Demand Management Municipal Grant Program. While these programs should be supported and expanded, the ECO would encourage the government to explore other transportation demand management tools and incentives to help reduce emissions from commuter transportation. For example, some jurisdictions have begun to explore options such as ‘live-where-you-work’ mortgages and ‘pay-as-you-drive’ insurance.
The former is based on the idea that if households spend less than average on travel costs, because residents live in a location where private vehicles are not required to commute to work, then they can afford mortgage payments that are higher than otherwise would be available under conventional mortgage lending practices. Given that homes in areas adequately serviced by public transit generally are more costly, such mortgages would assist with home purchases in these areas. Such mortgages have been estimated to reduce household VKT between 15 and 50 per cent.
The second option is premised on the fact that the greater the amount of travel associated with a vehicle, the greater is the likelihood that it will be involved in a costly accident. Unlike conventional insurance which charges a flat-fee, a pay-as-you-drive approach would establish a clear link between distance driven and costs incurred and help to moderate travel demand and distance travelled. In the U.S., researchers have estimated that an additional insurance charge of US$0.07 per mile could result in an eight per cent reduction in VKT (along with a two per cent reduction in CO2 emissions and a four per cent reduction in oil consumption).
While pay-as-you-drive pricing would be implemented by individual insurance companies, regulatory barriers may exist. Accordingly, an analysis focusing on the Ontario context is required to determine what policy incentives or regulations can support its implementation. As such, the ECO is encouraged to note that pay-as-you-drive insurance has been recommended by the Western Climate Initiative as an initiative that is worthy of further evaluation due to the complementary role it may play to a cap-and-trade program.
