By David Boyd
07-06-04
Canada could really learn a thing or two from the Calgary Flames about using energy efficiently. The Flames have relied for success on the strategic use of energy (along with some superb goaltending). Canada, on the other hand, has a terrible record of wasting energy, an approach that is costing our economy billions of dollars and damaging our environment.
According to the World Economic Forum, Canada ranks dead last among the world's
18 wealthiest nations in energy efficiency. "Energy efficiency"
measures the amount of energy required to produce a fixed amount of economic
output or Gross Domestic Product (GDP). Among the nations of the Organization
for Economic Co-operation and Development (OECD), Canada is 28th out of 29,
lagging behind nations like Mexico, Poland, and Portugal.
Although we perceive ourselves, as an industrialized 21st-century society, to be technologically advanced, scientists calculate that the overall energy efficiency of the Canadian and American economies is about 10 %. In other words, 90 % of the energy generated is wasted.
Light bulbs are a classic example, as only 8 % of the energy consumed by a
regular bulb is used to produce light while the rest produces heat.
The costs of Canada's energy inefficiency are high, opening a Pandora's box of environmental problems. Inefficiency contributes to the air pollution that kills more Canadians than homicides annually, to our Faustian bargain with nuclear energy, and to the greenhouse gas emissions that cause climate change.
On the economic side, we are recklessly wasting energy, the way Canada's
sponsorship program squandered taxpayers' money. Energy inefficiency costs us
money, reduces our competitiveness in global markets, strains aging
infrastructure, and makes us more vulnerable to energy price shocks.
Why is Canada's record on energy efficiency so awful? The leading excuses are
our vast size and cold climate. While Canada's size is a challenge, the US and
other large nations are more energy-efficient. Climate is also a red herring, as
cold Nordic nations like Sweden, Norway, and Finland are far more
energy-efficient.
There are several key reasons for our dismal record.
First, energy is so cheap in Canada that there is scarcely any incentive to
conserve. In contrast, Europe is much more efficient because gasoline and energy
cost three to four times as much as in Canada. Despite warnings from economists
and environmentalists, Canada stubbornly continues to subsidize both the
production and the consumption of energy.
Taxpayers have forked over billions to the nuclear, oil, gas, and coal industries. Consumers have reaped bonanzas in the form of ill-conceived home heating rebates. Our energy prices fail to reflect the health and environmental costs of air pollution, climate change, and habitat destruction.
A second problem is that Canada depends mainly on ineffective voluntary programs
to increase energy efficiency. For example, the overall fuel efficiency of the
motor vehicle fleet is worse today than it was in 1982, when manufacturers
persuaded the federal government to rely on a voluntary agreement instead of
regulations. In fact, a 1912 Model T Ford could get up to 35 miles per gallon of
gas, surpassing the fuel efficiency of all but one model in Ford's 2003 vehicle
line-up.
Similarly, the voluntary R2000 energy-efficiency standard for homes has been around for 20 years, yet only 1 % of new homes are built to this standard, despite the fact that it produces homes with better indoor air quality, lower utility bills, and higher resale value.
In contrast to these failed voluntary approaches, there is one beacon of
progress in Canada: the federal Energy Efficiency Act passed in 1992. About 30
products, from refrigerators to small motors, have been mandated by law to
increase their efficiency. Contrary to the initial objections from manufacturers
about higher costs and unproven technology, the law is widely regarded as
successful.
There is hope to be found in the fact thatCanada's energy efficiency has increased by 21 % since 1980. However, many OECD nations experienced greater gains than Canada over the same period, including the US, the UK, Denmark, Germany, Norway, and Sweden. More importantly, despite efficiency gains, total energy consumption in Canada increased 20 % between 1980 and 1997 because of our growing population and economic growth.
An optimist would observe that we have vast room for improvement. For Canada to
move forward, governments need to implement smart efficiency policies. Canada
should shift taxes from employment to energy as a number of European nations
have done. Canada should have mandatory energy-efficiency standards for all
appliances, vehicles, homes, commercial buildings, space-heating systems, and
new power-generating facilities.
Canada could subsidize energy-efficiency audits of businesses, and require the implementation of all actions with a payback period of five years or less (equal to a 20-% return on investment), as done in Denmark. Canada could expand the existing energy-efficiency retrofit programs for residential, government, and commercial buildings.
Toronto's Better Building Partnership has retrofitted more than 450 buildings,
reduced building operating costs by $ 19 mm, eliminated 132,000 tons of carbon
dioxide emissions annually, and created about 3,800 construction jobs.
Energy-efficiency is a subject where there is a clear convergence of interests between economists and environmentalists. It saves money and results in cleaner air -- a dream come true for politicians seeking win-win solutions. It would also help Canada meet its Kyoto targets. In one of his leadership speeches on route to becoming Prime Minister, Paul Martin called on Canada to become the most energy-efficient nation in the world. In light of our dismal performance to date, this represents a gargantuan challenge.
Such a goal is akin to transforming the Calgary Flames from perennial doormats
into Stanley Cup champions. As the Flames have demonstrated, this is an
ambitious but not impossible task. If our next prime minister is willing to show
the same kind of leadership and work ethic as Jarome Iginla, and invest the
requisite resources, he could make it happen.
David R. Boyd is an environmental lawyer, professor, and author of Unnatural
Law: Rethinking Canadian Environmental Law and Policy.
Source: The Globe and Mail