Ottawa’s City Council recently approved a Climate Change Master Plan that describes how it will pursue its goal of eliminating the use of oil and natural gas, and the energy services provided by them, by 2050. This note will provide an overview of its major measures and their potential consequences and discuss the financial implications for residents and taxpayers.
Through its use of zoning and the issuance of building permits, the city plans to prescribe the mix of new residential buildings in Ottawa. By 2046, it would be: singles (31%); doubles (4%); row houses (37%); and apartments (28%). The mix of residences that home buyers would prefer apparently does not enter into the City’s considerations.
As part of the other building-related measures, the City will also “scale up” the rate of retrofits to 98% of all buildings by 2040. By 2050 it will have 415,000 heat pumps installed in low-rise residential buildings by 2050 and 146,000 heat pumps installed in apartment buildings, and have 73% of the heat load of commercial buildings served by heat pumps. These changes would come at significant cost, and so far it is not clear who would bear it – the private owners or the taxpayer.
The City proposes to change the way electricity is generated in Ottawa. It also plans greatly to expand the role, responsibility and budget of Ottawa Hydro, the local electricity distribution utility, essentially taking over many functions now performed by the provincial electrical utilities. For example, it will increase Ottawa’s production of residential solar PV equipment to almost five times today’s level by 2050. It will also convert 80% of existing commercial buildings to be heated and cooled by district energy, 80% of apartments to be heated and cooled by district energy, and 15% of residential buildings to be heated and cooled by district energy by 2050, with 100% of the heating provided by geothermal energy. Finally, the city will increase Ottawa’s wind-generated electricity production capacity to 1609 MW by 2030 and 3218 MW by 2050. The current cost of installing a wind turbine is conservatively estimated to be about $2,500 per kW. So, the capital cost of 1609 MW would be over $4 billion and the cost of adding 3218 MW would be over $8 billion.
The city plans to completely electrify the personal and commercial vehicle fleet, the municipal vehicle fleet and the rapid transit system by 2050. As part of this effort, it will ensure that electric vehicles replace 90% of internal combustion engine (ICE) vehicles by 2030 and 100% by 2040. It will also ensure that 40% of heavy duty trucks owned and operated in Ottawa are “zero emission” by 2030 and 100% are by 2050. Further, it will ensure that 100% of the transit fleet is zero emission by 2030. All-electric buses have much-reduced performance and reliability in cold-weather conditions.
The city will achieve many of its objectives through the use of urban planning, zoning and regulatory instruments; through significant expenditures on infrastructure and vehicles; and through the use of its taxation powers.
The financial analysis in the plan offers an “order of magnitude” estimate of what implementing it would cost the City and its residents over the period from 2020 to 2050. The analysis projects that the cumulative community-wide expenditure from 2020 to 2050 will total $52.6 billion, with a present value of $29.7 billion. All of this is above and beyond the expenditures that are currently underway or planned. The analysis states that the returns from this investment will be $87.7 billion (unexplained) but only $12.4 billion when discounted to 2020 dollars. There is no analysis of the costs per tonne of carbon dioxide emissions avoided. In other words, there is no way based on the consultant’s analysis to know whether the proposed expenditures are cost effective compared to other options, or make sense in terms of the alleged value of the emission reductions.
The plan includes suggestions for several additional taxes and fees that could be imposed on city residents. Notably, the plan envisages the collection of $1.3 billion from road tolls, 392 million from congestion charges and $234 million from increased development charges.
To place these projected expenditures and revenues in context, the City of Ottawa Budget for the 2021 fiscal year anticipates the spending of $4.3 billion. The proposed Climate Plan expenditures thus would increase that total by 37%.
Underpinning the climate plan are a series of assumptions about the likely preferences and behavior of the people who live in Ottawa. Notably, the City Council seems to believe that the people of Ottawa want to live in an ever-more-dense city, that they welcome reduced car use, that they prefer transit over personal vehicles, that they have no objection to significantly-increased costs of vehicles, and that they would welcome much higher taxes.
The background documents note that annual GHG emissions in Ottawa are about five million tonnes of carbon dioxide equivalent, or 0.7% of Canada’s total. Canada’s total emissions, in turn, are about 1.6% of global emissions.
Due to lack of media coverage, there has been little opposition to the new plan. People may only begin to react after the more onerous measures take effect.
About the Author
ROBERT LYMAN is an economist with 27 years’ experience as an analyst, policy advisor and manager in the Canadian federal government, primarily in the areas of energy, transportation, and environmental policy. He was also a diplomat for 10 years. Subsequently he has worked as a private consultant conducting policy research and analysis on energy and transportation issues as a principal for Entrans Policy Research Group. He is a frequent contributor of articles and reports for Friends of Science, a Calgary-based independent organization concerned about climate change-related issues. He resides in Ottawa, Canada. Full bio.
Ottawa Climate Action Fund Launch – Hosted by Diana Fox Carney