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Geared for Change: Energy Efficiency in Canada’s Commercial Building Sector – Research

Sustainable Development Technology Canada (SDTC) and the NRT have collaborated to conduct research and recommend a long-term policy framework with specific steps for advancing energy efficiency in Canada’s commercial buildings. Original scenario modelling was done to consider realistic policy solutions.

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Canada’s commercial building sector is a significant energy user and producer of carbon emissions. It accounts for 14% of end-use energy consumption and 13% of the country’s carbon emissions. Energy efficient technologies exist that could reduce costs to businesses and consumers while reducing the environmental impact of this major economic sector. But these technologies are not being taken up, with the result that energy use and carbon emissions continue to grow.

Climate policy makers need to consider not just long-term national greenhouse gas (GHG) reduction targets, but specific policies and actions on a sector-by-sector basis to get the deep emission reductions already set by the Government of Canada. To be successful in reducing GHG emissions and helping to address climate change, Canada must move from national-level policy approaches to detailed sectoral policy pathways. As each sector of the Canadian economy contributes its own unique share of national emissions, adopting such an approach will help identify the issues, characteristics, and barriers that must be addressed to implement sustainable and effective climate policy plans.

For the first time, such a sectoral approach has been undertaken. The National Round Table on the Environment and the Economy (NRTEE) and Sustainable Development Technology Canada (SDTC) collaborated to develop a viable carbon emission and energy efficiency policy pathway for use in the commercial buildings sector by federal government decision makers. It addresses specific technology adoption barriers that prevent energy efficiency technologies from being instituted, tests the feasibility of applying specific emission reduction target sets to one sector of the Canadian economy and how they can be attained, and recommends focused policy instruments to achieve them. This report sets the stage for the collaborative research project undertaken by the two organizations, linking NRTEE’s policy advisory role and convening power with SDTC’s proven “clean tech” expertise and market knowledge.

The research and analysis feeding this report is based on four major components:

1. Stakeholder Consultation: An Expert Advisory Committee met three times during the course of the project to review research, test findings, and provide advice on the project objectives and recommendations. Individual stakeholder consultations were also used to inform the process. Among those, the Real Property Association of Canada (REALpac) convened a group of commercial real estate investors to provide recommendations and comments to the NRTEE and SDTC in July 2008.

2. Data Collection: Data was compiled from a number of sources including NRCan, Statistics Canada, SDTC, and a range of Canadian and international publications. They were used to develop assumptions about the anticipated policy impacts on energy efficiency in commercial buildings for the economic modelling component of the report.

3. Literature Reviews: Research was commissioned to examine best practices in energy efficiency policy evaluation, along with international trends in energy efficiency policy for buildings. The findings were derived from a review of government reports and statistics, reports from industry associations, academic papers, and recent media articles.

4. Economic Modelling: Stakeholder consultations and literature reviews were used to develop a list of policy options for original economic modelling. The purpose of the modelling was to forecast expected impacts of the policies on energy efficiency technology deployment in Canada’s commercial buildings under four scenarios:

  • The effects of a carbon price on the sector; 
  • The effects of the recommended policy measures on the sector;
  • The combined effects of the carbon price and the policy measures; and,
  • The combined effects of the carbon price and sector-wide performance regulations .

The purpose of this study is to provide federal level policymakers with a time-sequenced policy pathway and implementation framework for increasing energy efficiency in Canada’s commercial building sector. More specifically, the key project objectives are threefold:

  • Identify technology adoption barriers that have led to a gap in energy efficiency technology deployment in the commercial building sector.
  • Recommend policy options that will increase investment in, and adoption of, energy efficient technologies in the commercial buildings sector.
  • Create a time-sequenced pathway for federal policies to address identified barriers in the commercial building sector in an economic and environmentally efficient manner.