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2011 KPIA Response – 6.0 Conclusions and Recommendations

Response of the National Round Table on the Environment and the Economy to its Obligations under the Kyoto Protocol Implementation Act - July 2011

The NRTEE’s analysis of the 2011 KPIA Plan leads to several conclusions.

First, similar to its 2010 Response, the NRTEE considers Environment Canada’s integrated modelling in the Plan to provide a reliable estimate of emissions and emissions reductions attributable to federal programs and policies within the Kyoto period.

Second, the 2011 Plans shows improved transparency in the data and methodologies presented. Assumptions used in the estimation of actual and projected GHG emissions are more explicitly stated. The Plan also shows some improvement in estimates for specific programs such as the ecoENERGY Retrofit Initiative. The improved forecast for this program is linked to an independent program effectiveness evaluation that explored the impact of free-ridership and additionality. This kind of ex-post analysis is a useful approach to improving both forecasting practices and program design and could be applied to other programs.

Third, similar to previous Plans, some estimates for individual measures do not provide sufficient justification for reference case assumptions used in the estimates. The NRTEE’s analysis suggests these assumptions result in overestimates in projected emissions reductions for some individual measures and as a result, inconsistency between the integrated modelling and the measure-by-measure estimates in the Plan. While some differences should be expected, the size of the discrepancy between the integrated modelling and the measure-by-measure projections is likely a result of this issue in some measure-by-measure estimates.

Fourth, as stated in previous Responses, the NRTEE continues to believe there is value in broadening the process of evaluation to longer-term assessments. Over the longer term, similar kinds of transparent processes for comparing expected and actual emissions reduction from government programs and policies can help Canada track its progress as it seeks to achieve its 2020 emissions reductions target. As a step toward greater accountability with respect to longer-term targets, the NRTEE recognizes and applauds the government’s progress in making emissions forecasts to 2020 publicly available.

Figure 3 below shows the KPIA integrated modelling forecasts as well as the government’s 2020 forecasts. Within the Kyoto period, it highlights projected emissions with and without federal programs and policies. The difference between these two trajectories is the projected emissions reductions attributable to federal policies. As the integrated modelling in the Plan indicates, Canada will likely not achieve its Kyoto target through domestic emissions reductions. The figure also highlights the government’s longer-term forecasts, both excluding government policy, and including both federal and provincial measures. As the figure illustrates, Canada will likely not achieve its 2020 emissions reduction target just with the suite of policies and programs currently being implemented.

The NRTEE recognizes the continued improvement in forecasting and transparency in the KPIA Plans. These improvements allow for more effective evaluation of policies and programs. To continue this cycle of improvement, the NRTEE makes the following recommendations:

1. To improve the consistency between the integrated modelling estimates and measure-by-measure estimates of emissions reductions, the NRTEE recommends that consistent, reliable, and substantiated assumptions be used to define the reference case across all estimates. In particular, if the reference case assumption is that none of the mitigating actions would have occurred in the absence of the policy, the Plan should present sufficient evidence to substantiate this assumption. This recommendation applies in particular for the ecoENERGY for Renewable Power, ecoENERGY for Buildings and Houses, ecoENERGY for Industry, and Pulp and Paper Green Transformation programs.
2. To acquire additional evidence regarding the effectiveness of policies and programs, the NRTEE recommends the government implement additional ex-post (after the fact) policy evaluations. Studies like the analysis implemented by NRCan to explore the actual emissions reductions realized from the ecoENERGY Retrofit Initiative can provide valuable insights as to how the policy has performed historically. As existing programs wind down, these insights can be used to improve estimates of likely future reductions, and can also inform future policy design choices by exploring the effectiveness and cost-effectiveness of existing programs.
3. To help Canada continue to be accountable to its emissions reductions objectives, the NRTEE recommends the government continue to broaden its public process for evaluating its climate policies over the long term. The NRTEE applauds the government for publishing its 2020 emissions forecasts in January 2011. The government should continue to publish updated forecasts as it implements new policies and programs and moves toward long-term emissions reductions.
4. To move forward with a coordinated Canadian climate strategy, the NRTEE recommends that consideration be given to how federal, provincial/territorial, and municipal policies can be better coordinated to complement and reinforce current and future efforts. Assessing the effectiveness of provincial/territorial/municipal policies can help highlight the important role of these policies in contributing to Canada’s national emissions reductions objectives and inform future federal action in support.