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Financing Retrofits: Show Me the Money!

This post originally appeared on the Carbon Talks blog.

The stereotypical image of the environmentalist as someone who is trying to escape society, go back to nature, build a log cabin in the woods to live off the land, and escape the monstrous and oppressively capitalist economic machine is becoming quickly outdated. As a society, some of us are beginning to accept that the neoliberal notion of progress – by some embraced as the most efficient tool for economic growth, and by others condemned as a noose tightening around the necks of the less fortunate – is not entirely incompatible with the goal of protecting the environment.

That’s not to say that money, and the pursuit of wealth, haven’t been major players in digging us into the hole where we stand now; I’m not sure anyone could argue otherwise with a straight face. But it does suggest that money, and again the pursuit of wealth, may be major players in returning us to the sunshine. This hole is deep, no doubt, and it’s filled with both the spoils and waste of the unfettered pursuit of progress, that ephemeral and elusive goal. However the tool that we used to dig ourselves into this hole, may in fact be not dissimilar to that we must use to dig ourselves out. That tool is simple: appeal to our wallets.

To encourage homeowners to retrofit their homes for energy savings is a daunting task. The up-front costs of home energy retrofits are large, whether that be a new furnace, insulation replacement, or draft-proofing. Anybody who wants to take advantage of the energy savings inherited from such a project must be confident that the investment will pay off. If you own your home, or are confident that you will be in the same house in ten or twenty years, then there’s no question. But if you’re young, unsure about future plans, or simply don’t have the financial stability to make such an investment, then it likely seems too risky.

Current governmental mechanisms, such as ecoENERGY and BC’s LiveSmart, provide grants to homeowners for retrofits, however uptake has been low, conditions for qualifying are stringent, and money for grants is limited. Other existing systems are based on bank loans and other private financing. While some banks are offering “eco-mortgages” and “green loans”, these rely on traditional credit mechanisms that are risky, long-term, and not accessible to low-income earners

This is where governments can step in and implement mechanisms to make the decision easier. In the United States twenty-seven states have adopted a model called Property Assessed Clean Energy (PACE) by which local and municipal governments provide loans to homeowners for retrofits (the 2008 financial crisis has stalled these plans, but many are likely to live again). Critically, these loans are repaid via a property tax assessment. This means that if you sell your house, the loan goes with it – it’s inherited by the buyer.

This system takes the risk out of retrofit projects. A well-planned retrofit can immediately produce energy savings, and by design these savings offset the increased tax payment. The homeowner saves money almost immediately, the value of the property potentially increases, and there is no long term risk.

Up here in Canada, the discussion on PACE-style mechanisms has been quiet but growing. A comprehensive report by the David Suzuki Foundation in 2011 examined the need for a financing mechanism for home energy retrofits similar to PACE. The report concludes that current Local Improvement Change (LIC) mechanisms present in municipalities across the country – designed for public infrastructure such as sidewalks, streetlights, and local parks – could be modified to apply to home retrofits, producing a made-in-Canada approach called Property Assessed Payments for Energy Retrofits (PAPER).

The hurdles in transitioning a LIC-type mechanism to PAPER lay mainly in terms of ensuring municipal governments have the legal and administrative power to make it happen. That is, it’s not so much a question of whether we can make this work, it’s a matter of working out the details.

No matter how we frame our politics, most of us spend at least a few minutes a day worrying about money; in the economic system that we’ve been born into, it inevitably influences the choices we make. In working to promote a low-carbon economy, we should recognize this system, and use it to our advantage. Everyone wants to spend less. With the right mechanisms in place, Canadians will not have to be forced to reduce their energy costs, they’ll do it because it leaves more money in their wallets. As long as those cost savings aren’t channeled toward a new Hummer, then everybody wins.

(Icon photo courtesy of phototouring/Flickr)

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Fuel From Slime: Suspension of Disbelief

The science fiction genre, in literature and film, has always had a difficult time appealing to a mainstream audience. While much of that is to do with poor writing and a focus on technology rather than art, it is also due to something Samuel Coleridge called suspension of disbelief. This is achieved when the writer involves enough of a human element, and enough universal truth, that the fantastical becomes believable. When the artist fails to achieve suspension of disbelief, the audience can’t take the fantasy seriously, and the narrative fails.

Outside of the realm of fiction, alternative energy sources are suffering from a similar challenge. Convincing those who may not have a grasp on the science that we can generate energy from something unexpected requires not only that we present the evidence, but also that we appeal to their imagination. To quote science fiction author and futurist Arthur C. Clarke:

Any sufficiently advanced technology is indistinguishable from magic.

With this in mind, it comes as no surprise that the American public is generally skeptical of efforts to create fuel out of algae. That thick, slimy, green pond scum that made many of us afraid to dip our toes in the lake, is a potentially game-changing source of energy. Soon after US President Obama promoted algae as an alternative energy source at a speech in Miami last month, the Republic presidential nominees launched a series of retaliatory strikes on “President Algae” arguing that his claims of algae as a fuel source were, effectively, science fiction.

But if we can ignore the politics of the issue for now, and focus on the science, then it’s clean that this is not as much of a ridiculous idea as some would argue. While the technology remains in its infancy, algae has the potential to produce ten times more energy per hectare than traditional biofuel crops such as corn or soybeans. Further, the land used for algae production can be arid, brackish, or otherwise unfit for agriculture, ensuring that any land lost to algae production doesn’t impact food supply. As with all biofuels, the carbon that’s released when it’s burned is offset by the carbon that it absorbs as it’s grown. Combined with energy-efficient transportation and infrastructure, algae biofuel could make up part of a varied and balanced low-carbon energy system.

The algae biofuel cycle
The algae biofuel cycle

Algae really is an amazing little plant. It has been used for centuries as a fertilizer, it’s edible and nutritious, has been made into biodegradable plastics, and has also been used as a natural pigment. Up to forty percent of the oxygen you’re breathing at this moment was produced by algae floating in our oceans. On top of this, it grows quickly, so harvest times are significantly shorter than traditional biofuel crops. If it’s so easy to grow and harvest, what’s holding us back?

The risks to algae-fuel production are real, especially when dealing with bio-engineered strains. Such algae, if it escaped into the natural environment, could run the risk of seriously disrupting and damaging the natural environment, though some scientists argue this risk is minimal as such strains would be uncompetitive against natural algae.

It also has a long way to go economically. Prohibitive costs of production given current oil prices, and lack of public support mean that we’re still many years away from filling up our tanks with green gas. But to pretend that it’s an impossibility, or that it’s purely within the realm of science fiction, does a discredit to those scientists, engineers, and investors who are looking to make it a reality. When the algae fuel marketing campaign heats up in the next decade or so, it will do well to take heed of Coleridge and suspension of disbelief. Make us believe it’s possible, make us believe it’s real, and we’ll have confidence that flying an airliner across the Pacific powered on green slime is not magic, it’s technology.

(Icon photo courtesy of BioShark Technology, biofuel cycle graphic courtesy of refuellingthefuture.yolasite.com)

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Green Building Materials, and the Evolution of Normal

For the first few years of my life, I lived in a brick house and as far as I was concerned, all houses were made of brick. When I was six years old, our family moved to a wooden-frame house and I discovered that houses could also be made from wood. Eventually we settled into a modern concrete house, and I slowly began to understand that a house is defined by its function, not how it’s built. However if I suggested that a house could be made out of paper, or a car could be made out of hemp-fiber, you may think I’m dreaming. We have a natural tendency to define and limit what we consider to be normal, and it takes imaginative minds and innovators to break those preconceptions.

Despite the idea that the twenty-first century is seeing a green building revolution, many traditional building materials were inherently green, as most homes were built with locally sourced materials without energy intensive manufacturing methods. Mud brick, adobe or cob, cut stone, and timber have all been used for thousands of years around the world. It was a desire for increasingly large, dense, durable, and architecturally unique structures in the twentieth century that led to the development of modern and energy-intensive building materials such as steel, concrete, and glass.

While it is unlikely that we will start building our homes and offices out of quarried stone again, there have been significant advances in incorporating recycled material into modern buildings. For the average consumer, however, it is the choices that can be made inside the house that will matter most. From counter tops and paint, to wallboard and tiling, there are many options for reducing our carbon footprint.

A green building material is defined by a number of characteristics: a certain percentage of recycled content, renewable and locally sourced raw materials, an energy efficient manufacturing process, and a durable and long-lasting final product. Even packaging, marketing displays, and choice of transportation can be factors. Examples of green products include:

  • Wood flooring made from bamboo, a durable wood that grows rapidly, ensuring sustainable production
  • Counter tops made from 50-100% post-consumer recycled paper mixed with resin can have the same strength, durability, and look as quarried stone
  • Paint that is certified as low-VOC (volatile organic compounds) releases fewer chemical compounds into the environment
  • Recycled gypsum, the natural material often used in wallboard, can be added to new wallboard products, avoiding the need for further energy-intensive resource extraction
  • Glass tiles can be made of pre- and post-consumer materials, including manufacturing scrap, and glass bottles
Recycled glass tiles
Recycled glass tiles

The challenge is making these kinds of products normal – that is, when the average consumer decides to renovate, the choice of product should be green by default. Shifting to this way of thinking has been hampered by the most common criticism of green building practices: an assumed cost premium, however this is an oversimplification. As manufacturers, suppliers, and contractors become more knowledgeable about and comfortable with green materials, demand will increase and initial costs will inevitably fall. Combined with the long-term energy efficiency savings of green buildings, the net cost savings are undeniable. The role of the consumer in driving demand is crucial, and awareness of our options is the first step.

Unfortunately many champions of low-carbon initiatives who decorate their homes with niche green products are derided as elitist, but this characterization ignores the fact that the use of green materials and technology benefits everyone, through increased energy efficiency, lower emissions, and local economic growth. Regardless of your politics, the drive to a low-carbon, cost-effective, and efficient economy starts at home. The first step can be as small as choosing your brand of paint.

(Feature photo courtesy of Viahouse.com, glass tiles photo courtesy of Interstyle Ceramic and Glass)

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The Enbridge Northern Gateway Pipeline: What We Don’t Know

This post originally appeared on the Carbon Talks blog

Debate over the approval of the Enbridge Northern Gateway pipeline is continuing to polarize Canadians. However the list of unresolved issues and conflicting information means that I’m not even sure what to believe. Will this project benefit the economy as Enbridge and the Federal Government suggest? Will First Nations groups ever approve the plan? Are oil tankers even legally allowed to sail off the BC coast? The more I read, the more I realize what we don’t know about the pipeline far outweighs what we do.

In a January 2012 poll by Abacus Data, Canadians almost equally supported or opposed the project at 38% and 29% respectively. Quebec led the charge in lack of support at only 23%, while BC is the province most opposed to the project at 36%. Unsurprisingly, the project has clear support from residents of Alberta.

Chris-Pipeline1
Canadian support and opposition to the Northern Gateway Pipeline

In sifting through the details of the poll, we can see that those who support the pipeline do so for the potential economic benefits, while those who oppose it do so on environmental grounds. But for me, it’s the grey area in between that betrays this issue – what about those people who simply have no opinion at all?

It is this not-insignificant proportion of Canadians who are undecided that define the pipeline project. With so much conflicting information, how can I know whether to support, oppose, or even care?

For her own part, Canadian economist, and former Executive Director of VanCity Community Foundation, Robyn Allan has argued that the economic assumptions underlying support for the pipeline are fatally flawed. In her January 2012 report “An Economic Assessment of the Northern Gateway”, Allan states that “Northern Gateway represents an inflationary price shock which will have a negative and prolonged impact on the Canadian economy …” Essentially, she says that what economic benefit that will be seen will be limited to the oil companies themselves. The following graph, prepared by Natural Resources Canada, clearly show that oil prices have a direct effect on gasoline – and that affects all of us, regardless of whether we drive a car or not.

Comparison of crude oil and gasoline prices 2001-2009
Comparison of crude oil and gasoline prices 2001-2009

Ms. Allan’s views were presumably unwelcome in the energy sector; I can only assume it affected the National Energy Board’s refusal to grant her status to intervene at a hearing on Enbridge’s application. But then who to believe? Will the pipeline be an economic boom for Canada, or only benefit oil companies?

Then there’s the continuing issue of First Nation land rights. The fact is, virtually none of the 50 First Nations groups who have been offered equity in the project have agreed – though a deal was made between Gitxsan Chief Elmer Derrick and Enbridge, the decision seems to have been made unilaterally, and opposition among his community is incredibly strong. Though nobody can say with certainty what will happen in the coming year, it seems likely to me at least that negotiations will reach a stalemate. While some First Nations will perhaps yield to pressure and financial rewards, others will not. At the end of the day, there are only so many routes the pipeline can take, and avoiding traditional lands may be simply impossible. What are the realistic chances of ever reaching an agreement with all parties?

BC tanker routes
BC tanker routes

A final issue that is causing confusion among Canadians is the status of a moratorium on oil tanker traffic off British Columbia’s coast. For almost forty years, some Canadians believe there has been a de facto ban on tanker traffic sailing through Dixon Entrance, the Hecate Strait, and Queen Charlotte Sound. Yet in December 2009, the Canadian government stated their position, supported by the BC Chamber of Commerce, that “there is presently no moratorium on tanker traffic in the coast waters of British Columbia.” While the Prime Minister has compared coastal BC to Newfoundland where tanker traffic is allowed, Elizabeth May of the Green Party strongly disagrees, describing the BC coastline as “extremely sensitive to oil spills because of its physical features.” Again, who to believe? Do we have a moratorium, based on provincial-federal agreement, or do we not, due to lack of legislation? Is it safe for tankers to transit the BC coast?

With so much uncertainty over such a large scale project, perhaps it’s best to shift our focus elsewhere. Reducing energy usage, retrofitting our buildings, expanding public transportation, and stimulating a green economy – these are things that are already underway, things we can overwhelmingly agree upon. The oil can wait, until we know where everybody stands.

(Pipeline photo courtesy Bill & Vicky Tracey/Flickr, polling data courtesy of Abacus Data, oil and gas prices courtesy of Natural Resources Canada, tanker map courtesy of Living Ocean Society)