Home / Governance / The NRTEE’s Response to its obligations under the Kyoto Protocol Implementation Act / 2011 Response of the NRTEE to its Obligations under the Kyoto Protocol Implementation Act / 2011 KPIA Response – 3.0 The 2011 Plan

2011 KPIA Response – 3.0 The 2011 Plan

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

Overall, while some elements of the 2011 KPIA Plan are different from the 2010 Plan, the broad approach to estimating emissions reductions is unchanged. The 2011 Plan first presents projected emissions reductions from individual policies or programs, as developed by the department responsible for the measure. It also presents an overall projection from the full suite of measures; Environment Canada develops this estimate using an integrated modelling framework. [4]  The Plan uses this integrated modelling to assess Canada’s expected compliance with the Kyoto Protocol.

The 2011 integrated modelling is very similar to that used in 2010, with only small changes in assumptions leading to corresponding small changes in the estimated emissions reductions, as illustrated in Table 1. [5]

Changes include the following:

• The 2011 Plan uses updated macro-economic assumptions to reflect new information and trends in oil and gas prices and economic growth in the integrated modelling forecasts. As the Plan states, “the short-term economic outlook underlying the emissions reference case is grounded in the GDP growth forecast in Budget 2011.” [ii]  Similarly, while the 2010 Plan relied on oil and gas projections from Natural Resources Canada, the 2011 Plan uses more recent projections from the National Energy Board (NEB).
• The 2011 Plan includes additional sensitivity analysis using the integrated modelling framework. The 2010 Plan included one alternative scenario that explored the implications of higher energy prices and higher economic growth. The 2011 Plan explores uncertainty in both energy prices and consumer responsiveness to government policies, and reports the highest and lowest emissions scenarios that result under different combinations of assumptions for these two drivers.

*estimated historical (“actual”) emissions reductions

The 2011 Plan also updates some measure-by-measure forecasts, as illustrated in Table 2, omits some programs that had been discussed in previous plans, and introduces one new program. Key changes to the estimates of emissions reductions for specific policies and programs include the following:

• The 2011 Plan includes updated methodology with additional detail in the appendix A describing how emissions reductions were estimated for each measure. Most notably, assumptions regarding the reference case (what would have occurred had the measure not been implemented) are specified clearly for each measure. Additional details such as emissions factors for renewable fuels used to estimate reductions under the regulations for renewable fuel contact are also included in the 2011 methodologies.
• The 2011 Plan focuses exclusively on measures that lead to quantifiable emissions reductions during the Kyoto period. As a result, the 2011 Plan omits several programs discussed in previous Plans such as the Clean Energy Fund, which the 2010 Plan explored, but did not attribute any emissions reductions during the Kyoto period to the measure.
• The 2011 now Plan includes estimates of expected emissions reductions from the new Pulp and Paper Green Transformation Program, a program that supports innovation and environmentally friendly investments in pulp and paper mills in Canada. New data was available from this measure as mills signed funding agreements under the program for emissions reductions projects.

*estimated historical (“actual”) emissions reductions

Finally, other key changes in the structure and presentation of Plan include the following:

• The 2011 Plan is more explicit in providing information specifically required under the KPIA for the assessment of each individual program or policy. For each measure assessed, the Plan includes additional information under the following headings: Description of measure — KPIA Section 5 (1) (a); Date measure has or will come into effect — KPIA Section 5 (1) (b) (ii); Greenhouse gas emission reductions –—KPIA Section 5 (1) (b) (ii); Implementation status and activities for the previous calendar year –—KPIA Sections 5 (1) (e) and 5 (1) (f).
• The 2011 Plan no longer includes expenditure data for any policies or programs. The 2010 Plan had included information on the costs of some programs. For example, the 2010 Plan stated, “the ecoENERGY for Buildings and Houses program is investing $60 million over 4 years.” [iii]  While the ecoENERGY for Buildings and Houses program is unchanged for 2011, this statement does not appear in the 2011 Plan.

__________________________________

[ii] Canada, 2011a, p. 36.

[iii]iii Canada, 2010a. p. 15

[4]In the 2008 Plan, the Government introduced its integrated modelling framework for the purposes of the KPIA. The modelling is undertaken using Environment Canada’s Energy-Economy-Environment Model for Canada, or E3MC. Under this approach, all policies are modelled together in the E3MC model, which simulates the supply, price, and demand for all fuels and also includes macroeconomic effects. Free-ridership, additionality, and interaction effects are addressed through integrated modelling.

[5]Note that as stated in the Plan, unlike expected overall emissions levels (i.e., expected future GHG Inventories), actual emissions reductions can only be estimated, not measured, because they are relative to a hypothetical reference case or business-as-usual scenario.