4.6 Public and Private Sector Implications

The research team concluded that:
“Propane as a transportation fuel is ideally positioned to assist governments and the private sector with their efforts to address environmental issues.”

4.6.1 Canada’s environment continues to face challenges with respect to air quality, water quality, and Greenhouse Gas emissions
Canada’s environment continues to face challenges with respect to air and water quality and Greenhouse Gas emissions, according to the third annual report of environmental sustainability indicators.⁷³ Greenhouse Gas emissions remained at nearly the same level in 2005 as in 2004, but are still significantly above 1990 levels and Canada’s target under the Kyoto Protocol.

Total GHG emissions increased over the 1990 to 2005 period, due to increased economic activity. The indicator results are partly due to the growing Canadian population and economy. Between 1990 and 2005, Canada’s population increased by 17% to 32.3 million. This increase, coupled with economic growth, led to greater resource use and waste production, increased GHG emissions and, in certain cases, more air and water pollution. Increasingly, public and media attention has focused on the environment. Governments and corporations are being forced to review and take steps to improve their environmental performance in general and specifically, to reduce their GHG emissions.

Air quality indicators track measures of Canadians’ exposure to ground level ozone and fine particulate matter during the warm season (April 1 to September 30).⁷⁴ These pollutants are key components of smog and can lead to adverse health effects even at low concentrations in the air. The Canadian Environmental Sustainability Indicators report shows that the ozone exposure indicator has increased by an average of 0.8% per year between 1990 and 2005, translating into an overall increase of about 12% during that 15 year period. The report shows that the ozone exposure indicator increased primarily in Southern Ontario and in Southern Quebec over the period. The indicator level was unchanged in other regions.

4.6.2 Government Incentives target private citizen vehicles
Many of the incentives and initiatives at different government levels are targeted at private citizen’s vehicles (and voters) to encourage purchases of lower consumption gasoline vehicles and hybrids. None of the programs are targeted at light-duty fleets with larger vehicles and higher gasoline consumption patterns. These fleets include police fleets, municipal service trucks and vans, taxis and limousines, courier and delivery vehicles, and service and repair vehicles. Many of these types of vehicles operate in urban centres and contribute significantly to GHG emissions and air pollution.

4.6.3 Federal Government
Recent polls and surveys have placed the environment at the top, or near the top, of voters’ and consumers’ agendas. In the recent Ontario election, although the Green Party did not garner any seats in the Legislature they did receive 8% of the popular vote. The current Canadian Federal Government did not initially have the environment on its agenda of key items to address. Under increased pressure from the public and media, however, the Federal Government has increasingly made the environment a more significant part of its agenda.

To date specific Canadian Federal Government programs include developing emissions regulations, investing in public transportation infrastructure, encouraging the use of public transportation, and offering incentives for low consumption gasoline and/or hybrid vehicles. In addition, the Government has mandated a 5% average renewable content in fuels requirement by 2010. The Federal Government has recently stated that Canada cannot meet the targets set under the Kyoto Accord.

The latest Treasury Board Report for fiscal 2005-06 examined Federal Government compliance with the Alternative Fuels Act. This act took effect April 1, 1997, and requires, where it is cost-effective and operationally feasible, that 75% of the vehicles operated by Federal departments and agencies use alternative transportation fuels. The Treasury Board Report indicated that no alternative-fuel powered vehicles were deemed operationally feasible and costeffective in the Federal fleet at that time.⁷⁵ In fact, usage of alternative fuels in the Federal fleet has declined from historical levels. Propane and natural gas vehicles that were in the Federal fleet have been replaced due to age, and new flex fuel (E85) vehicles have been purchased. It is interesting to note that only 658,872 litres of E85⁷⁶ was purchased in 2005-06, while almost 60,000,000 litres of gasoline and diesel was purchased during the same time period.

4.6.4 Ontario Government
While the Federal Government signed the Kyoto Protocol, the Provinces and Territories (collectively “the Provinces”) are essentially responsible for delivering the climate change programs. The Provinces have jurisdiction over important sectors relating to energy and GHG emissions. The Provinces are directly responsible for managing Canada’s natural resources, including oil, natural gas, and coal. The Provinces also have jurisdiction over electricity management. On a related note, Canada’s electricity and oil and gas sectors are responsible for the largest increase in Greenhouse Gas emissions since 1990.

The Provinces also have sole responsibility in regulatory areas such as building codes, which are crucial to improving the energy efficiency of Canada’s residential and commercial building stock. Finally, the Provinces have jurisdiction over Canada’s Municipalities, where much of the on-the-ground emission reductions will have to happen.⁷⁷

The Ontario Government has been developing an environmental agenda.⁷⁸ A Climate Change Plan was delivered for Ontario in August 2007, setting out specific targets for GHG emissions reductions.⁷⁹ The primary focus has been on eliminating coal-fired electricity generation and increasing hydro, wind and nuclear generation. In the transportation sector, incentives have been put into place to encourage hybrid vehicles (this is a popular initiative in many provinces) and lesser incentives remain for propane and natural gas vehicles.

Ontario is also encouraging energy conservation practices. Significant funds are being spent on public transit systems in municipalities within the Golden Horseshoe area, in an effort to improve services and ultimately, to increase ridership. The Province has also set up technology funds to encourage research and development into emerging energy sources to mitigate air pollution and climate change. Incentives are planned to encourage people to switch to greener vehicles80 and plans are underway to introduce special ecogreen licence plates. Road transportation (the fastest growing GHG emissions segment) has not been meaningfully addressed to date, other than the mandate of 5% average ethanol content in gasoline by 2007. The David Suzuki Foundation suggests Ontario residents would be better served with incentives to purchase fuel-efficient vehicles (and fees on gas guzzlers) rather than using ethanol fuels that have little or no climate-change benefits. (A recent David Suzuki Foundation study found that a 10% ethanol-blend would only reduce GHG emissions by 1%).⁸¹

The Ontario Government is also calling on the Federal Government to create a national carbon trading system.⁸² No specific actions have been announced regarding the Ontario Government’s own fleet, other than the Government is installing two E85 fuelling stations for their E85 vehicles.

4.6.5 Municipal Governments
Toronto is recognized as a North American leader on climate change. In 1992, it established the Toronto Atmospheric Fund (TAF). The goal of this fund was to reduce the Municipalities’ GHG emissions 20% by 2005; a goal Toronto is on track to meet. In addition to TAF, the City’s Better Building Partnership funded retrofits of commercial and institutional buildings in order to make them more efficient, while creating considerable employment in the building trades. Energy savings paid back the initial investment.⁸³

Since then, Canada’s next two largest cities have followed Toronto’s lead. The City of Montreal has committed itself to reducing the City’s GHG emissions in line with Kyoto targets. In 2003, Vancouver set up the Cool Vancouver Task Force to reduce emissions from the City’s operations 20% by 2010, and to reduce emissions from the wider Community 6% by 2010.⁸⁴

Transportation is the largest source of GHG emissions in the City of Toronto and vehicles are the largest source of air contaminant emissions in Toronto.⁸⁵ The City’s operations contribute 6% of the Greenhouse Gases emitted from Toronto every year. The remaining 94% of the GHG emissions originate from homes, apartments, commercial businesses, manufacturing plants, and vehicles.⁸⁶ While Canada’s GHG emissions are 27% higher now than in 1990, Toronto’s emissions are only 10% higher now than in 1990. The City has specific plans to make City Hall a showcase of environmental sustainability including energy efficiency retrofits, renewable energy, and a green roof. While the City has no specific plan to deal with their fleet of gasoline vehicles, it has planned to convert all of its diesel-powered vehicles to biodiesel by 2015.

Many municipalities have adopted environmental agendas but major municipalities in Ontario such as Toronto, Ottawa and Hamilton face significant fiscal issues. While there have been divisive debates in the City of Toronto on budget and fiscal issues including new taxes to residents, City Council voted unanimously (37-0) on July 16th, 2007 in favour of a plan that aims to cut Greenhouse Gases in the city by 6% by 2012, 30% by 2020 and by a full 80% by 2050. The Plan goes beyond the Kyoto Protocol targets.

4.6.6 Private Sector
Ever increasingly, companies are being held accountable for their environmental footprint. Shareholders are asking for reporting on environmental performance and on how corporations are handling climate change. Corporations are adjusting slowly to the increased scrutiny on environmental issues. Just 88, of Canada’s top 200 companies by market capitalization, provided details to a worldwide survey of how their corporations are tackling climate change.⁸⁷ Investor pressure for this information is growing. Thirty Canadian institutional investors, including all of the major Canadian banks, are now signatories to the Carbon Disclosure Project (CDP). The CDP asks companies 10 questions on subjects ranging from emission reduction strategies to the impact of changing weather patterns on operations, in an attempt to highlight climate change-related risks and opportunities.

The Canadian Council of Chief Executives has recognized that achieving sustainable development and dealing with climate change issues is the most fundamental challenge facing the world today.⁸⁸ Canada’s business leaders are committed to addressing the challenges of sustainable development and in particular, climate change, and have issued a policy declaration. The Council also believes that Canada has the potential to be an environmental superpower. The Council has highlighted five points:

• Canada needs a national plan of action, one that sees governments, industry and consumers working together effectively toward shared goals;
• The core of this plan must focus on investment in the new technologies that can strengthen Canada’s economic future while improving the environment at home and abroad;
• Targets are an important spur to action, but they must be framed in a way that both encourages and enables Canadian enterprises to increase investment in new technologies;
• Governments must consider carefully the most effective ways to harness market forces through price signals to businesses and consumers alike; and
• Canada’s own environmental performance must enable us to champion credibly an inclusive global approach that can win the participation of all major emitters of Greenhouse Gases and pollutants.⁸⁹

4.6.7 Consumers
A recent study conducted in the United States and United Kingdom confirms that consumers are very interested in the efforts companies are expending to address climate change. The survey indicated consumers believe that governments should play the lead role in helping reduce climate change and that, following closely, business should be significantly involved. Consumers felt the involvement of individuals and non-government organizations were less important to reducing climate change than government and business. Furthermore, the study revealed that people currently rate non-government organizations as first in playing a major role in dealing with climate change.⁹⁰ The study also concluded that there is a substantial opportunity for brands to engage consumers in tackling climate change, for the good of the brand, the consumer and the planet. More people have actively selected a brand for its good environmental practices than have avoided a brand for its bad ones.

Embracing environmental leadership can lead to increased brand awareness and potentially lead to market share advances. The best recognized brands for their environmental leadership in the transportation segment are Toyota (the market leader for hybrid vehicles) and BP (a leading fuels provider – beyond petroleum).⁹¹ With the public’s heightened awareness, governments and business will have to take a more active role in dealing with climate change and the perception of consumers. Alternative transportation fuels programs including propane can be highly visible and can lead to improved brand awareness and favourable public perception from good environmental practices.

4.6.8 Responding to the Challenge
The environmental concerns and issues swirling in the Canadian public and private sector are complex and inter-related. Organizations in all sectors, in an effort to improve their environmental footprints, are reviewing the status quo, developing action plans, and implementing programs. Current technology, potential technology, multiple opportunities for improvement, multiple stakeholders, and many other factors, help to shape an organization’s environmental strategy.

Propane as a transportation fuel is ideally positioned to assist governments and the private sector with their efforts to address environmental issues. Propane as a transportation fuel is ready for implementation immediately; offers air quality improvements; GHG emissions reductions; lower fleet operating costs; the security of an abundant Canadian supply; the availability of refuelling infrastructure; and, the opportunity for export of Canadian technology into the North American marketplace.