climate action technical advisory committee

REGIONAL DISTRICT OF NANAIMO

CLIMATE ACTION TECHNICAL ADVISORY COMMITTEEAGENDA

Thursday, April 15, 202110:00 A.M.

Held Electronically

This meeting will be recordedPages

1. CALL TO ORDER

2. APPROVAL OF THE AGENDA

3. ADOPTION OF MINUTES

3.1. Climate Action Technical Advisory Committee Meeting - February 18, 2021 2

4. DELEGATIONS

5. CORRESPONDENCE

6. PRESENTATIONS / REPORTS

6.1. Review April 6, 2021 Memorandum 4

6.2. Draft Business Cases 6

6.3. Decision Matrix 38

7. NEXT CATAC MEETING DATE

8. BUSINESS ARISING FROM DELEGATIONS

9. NEW BUSINESS

10. ADJOURNMENT

REGIONAL DISTRICT OF NANAIMO

MINUTES OF THE CLIMATE ACTION TECHNICAL ADVISORY COMMITTEE MEETING

Thursday, February 18, 2021

10:00 A.M. Held Electronically

In Attendance: Director S. McLean Chair Director V. Craig Electoral Area B Director B. Geselbracht City of Nanaimo C. Breen Technical Expert K. Epps Technical Expert D. Grimmer Technical Expert J. MacIsaac Technical Expert J. Mattison Technical Expert W. Wells Technical Expert Regrets: B. Askin Technical Expert Also in Attendance: K. Fowler Mgr. Long Range Planning, Energy &

Sustainability J. Beaubier Climate Change & Resilience Coordinator S. Rosser Recording Secretary

CALL TO ORDER

The Chair called the meeting to order and respectfully acknowledged the Coast Salish Nations on whose traditional territory the meeting took place.

APPROVAL OF THE AGENDA

It was moved and seconded that the agenda be approved as presented.

CARRIED UNANIMOUSLY

ADOPTION OF MINUTES

Climate Action Technical Advisory Committee Meeting - January 21, 2021

It was moved and seconded that the minutes of the Climate Action Technical Advisory Committee meeting held January 21, 2021, be adopted.

CARRIED UNANIMOUSLY

PRESENTATIONS / REPORTS

Review Memorandum

The Chair presented the Memorandum as an overview of the February 18, 2021 agenda.

2

Climate Action Technical Advisory Committee – February 18, 2021

2

Corporate Carbon Neutral Plan Comments

Committee members commented on the proposed Corporate Carbon Neutral Plan. Staff provided information on next steps for Board adoption of the proposed Plan.

Comments on Overall Structure of Priorities

Staff provided information on the Overall Structure of Priorities, summarizing previous member comments. Committee members commented on Priorities for recommendation to the Climate Change Strategy.

Finalise List of Priorities to be Included in Business Case Analyses

Staff provided information on Priorities to be included in the Business Case Analysis. Committee members commented on the list of Priorities for inclusion in the Analysis.

Presentation on Addressing Equity in Climate Adaptation and Mitigation

VIU Masters of Community Planning students, Jeremy Paquin and Aishwarya Pathania, shared a presentation on Addressing Equity in Climate Adaptation and Mitigation in the Regional District of Nanaimo. Committee members commented on the information presented.

Review Business Case Analysis Template

Committee members commented on the Business Case Analysis Template.

NEXT MEETING DATE

Staff commented on upcoming Climate Action Technical Advisory Committee meeting dates set for April 15 and May 19, 2021.

ADJOURNMENT

It was moved and seconded that the meeting be adjourned.

CARRIED UNANIMOUSLY

TIME: 12:08 PM

CHAIR

3

MEMORANDUM

TO: Climate Action Technical Advisory Committee DATE: April 6, 2021 FROM: Kim Fowler – Manager, Long Range Planning, Energy & Sustainability

FILE: n/a

SUBJECT: April 2021 meeting memo

Dear Climate Action Technical Advisory Committee Members, In preparation for the April 15th meeting, the following items are provided with this Memo:

1. Draft Business Cases for Comment 2. High Level Summaries 3. Decision matrix options

A VIU student report on equity in climate action implementation will follow as an addendum next week. For each of the three actions listed below, please complete your review prior to the meeting and bring your comments to the meeting. 1. Draft Business Cases (Agenda Attachments 2-5)

Four draft business cases are presented for member feedback. As a draft, please note some data/analyses are yet to be completed and are presented to obtain general, overall feedback to guide development of subsequent plans. ACTION 1: Please review the draft business cases and provide general feedback on approach of the following:

i) Is the level of detail adequate/too detailed/not detailed enough? ii) What information could be excluded? iii) Is there a category of information missing that you would like to see included?

2. Table of Business Cases – feedback on approach (Table 1 below & Agenda Attachment 6) Members discussed completing an initial high-level assessment for areas where the RDN is already very active (Table 1). High level assessments involved a summary of current activities so that members can better assess whether a more details business case is warranted in the near term. The other business cases are in development and will be complete for review at the next CATAC meeting.

Attachment 1

4

2

ACTION 2: Please review the high-level overview (Attachment 6) of current actions on Wildfire Management, Regional Water Storage and Sea Level Risk and Riverine Flood Risk Assessment. Based on current activities, would you like to see a business case developed for additional action in these areas? Table 1. Proposed analysis level for shortlisted CATAC priorities.

Detailed (new activities) Cursory (already well managed) Accelerated Step Code Implementation Wildfire Management Expanded Support for Household Retrofits Plan for Water Storage Sustainable Procurement Sea Level Rise and Riverine Flood Risk Standards and Policies Review (GHG focus) Improving Local Food Security Protection of Natural Assets through Asset Management Improve understanding Increase Transit Ridership and Electrify Transit Fleet Advocate - Regional Collaboration (VICC-CLP) Advocate – Private Managed Forest Land

3. Decision Matrices (Agenda Attachment 7)

When business cases are complete, priorities will need to be further shortlisted and prioritized. Decision matrices can be effective for objectively evaluating different options.

ACTION 3: Please review Attachment 7 for some potential approaches. At the meeting, we shall discuss options and aim to develop an evaluation approach.

Please contact Kim Fowler at [email protected] or Jessica Beaubier at [email protected] if you have any questions. Thank you.

5

mailto:[email protected]




Draft Business Case - Household Retrofits

Page 1 of 10

CATAC Business Case Support household retrofits

1 Priority Description and Scope This priority recommends the RDN increase supports that will accelerate residential retrofits in the Regional District of Nanaimo electoral areas to reduce residential greenhouse gas emissions. Efforts could include collaboration with regional municipalities.

2 Background and Rationale About 50-80% of our existing buildings will still be operational in 2050 and will still be producing emissions at that time1. Most of these buildings are built to low efficiency standards, equipped with less efficient heating technology and, in the Regional District, more likely to be heated with oil. Building sector emissions will remain high unless existing buildings are retrofitted. Residences in the RDN’s Electoral Areas contribute approximately 45,423 tCO2e per year (residential total for RDN is 304,181 tCO2e if including municipalities). The RDN’s 2013 Community Energy and Emissions Plan requires the following retrofit achievements to reduce built environment emissions by 80% in 2050 (aligning with Provincial climate targets at the time):

• 50% of homes in the RDN meet Energuide 80 (roughly 10% more efficient than a current code-built house, equivalent to Step Code 2) by 2030

• 50% of dwellings meet energy demands using non-fossil sources In BC, switching from oil to electric heat pump heating reduces corresponding emissions by approximately 99% (Table 1 – note this source needs to be cross-checked). Energy efficiency improvements to oil and natural gas heated buildings can also return reasonable emission reductions. Table 1. Average annual greenhouse gas emissions from homes heating by different heating methods, average house, south Vancouver Island.2 (Numbers to be confirmed- heat pump numbers seem very low)

Heating Method Greenhouse gas emissions from heating (tCO2e/year)

Oil heating 6.343 Natural gas heating 3.774 Electric heat pump heating 0.087

1 Pembina report on BC retrofits – 50%, but 80% term is often quoted as general rule of thumb for buildings in 2050 2 CityGreen - Bring it Home for Climate calculations (Saanich)

Attachment 2

6


Page 2 of 10

Large scale retrofit programs often do not provide the support that residents need to implement retrofits and local governments can play key roles by providing outreach, education and more tailored support than is typically provided by utility or provincial-scale programs.

3 Risk statement and consequence of inaction This action mitigates risks associated with low performance housing, which are typically medium impact with a high likelihood of occurrence. They include increasing greenhouse gas emissions from the residential sector, resident exposure to rising energy costs, poor indoor air quality, increased risk of extreme indoor temperatures, and reduced home comfort. If the RDN chooses not to help accelerate household retrofits through increased outreach and incentives, it is less likely that retrofits will occur at the pace required to meaningfully reduce emissions. RDN residents will be left without some of the supports available to residents in other jurisdictions (e.g. District of Saanich, CRD, City of Vancouver). Resilience of existing building stock to climate extremes may be lower and residents will be more vulnerable to rising energy costs.

4 Jurisdictional Scan, Best Practices Home energy efficiency programs need substantial capital and are generally run by higher levels of government or large utilities however many BC local governments provide ‘top-ups’ of provincial incentives, including the RDN (Table 1). Leading local governments have either implemented strategies that complement larger programs run by higher jurisdictions/ utilities, such as the Capital Regional District and Regional District of Nanaimo, introduced unique financing programs, such as District of Saanich, Province of Nova Scotia and City of Edmonton, or created their own incentive programs with significant external funding, such as the City of Edmonton. The RDN’s Green Building Outreach and Incentive program has supported residents in implementing home energy retrofits for the past 10 years. The program is most effective when it can combine with provincial and federal policies to increase total retrofit incentives and when it is supported by consistent outreach and promotion. The Capital Regional District (CRD) provides a webinar series, peer community and pandemic-friendly virtual home energy assessments. The program is specifically designed to work with the existing provincial program while addressing some of its barriers (e.g., complexity, low levels of direct citizen outreach). https://bringithome4climate.ca Saanich is piloting a property-assessed clean energy (PACE) financing program, which is the first of its kind in British Columbia. PACE and similar financing programs have been successfully implemented in other parts of Canada, including Plessisville, Quebec (FIME program), Toronto (Home Efficiency Loan Program), Nelson (EcoSave -utility financing) and Halifax (SolarCity

7

https://bringithome4climate.ca/

https://bringithome4climate.ca/


Page 3 of 10

Halifax). Alberta has also recently enacted pace-enabling legislation and Edmonton is implementing a 2 year PACE pilot program. By focusing on citizen outreach and education and allowing the province or federal government to bring the bulk of incentive money, local programs can make the retrofit process smoother for residents and increase uptake. Programs that can encourage residents to implement more than one retrofit, and those that focus on transitioning heating from high carbon to low carbon are especially effective at reducing emissions, provided refrigerants are effectively managed in low carbon heating systems (heat pumps). Table 2. Municipal Top-Ups offered for retrofits through CleanBC

Municipality

Electric Heat Pump Space Heating Top-

Up

Electrical Service

Upgrade Top-Up

Electric Heat Pump Water Heater Top-

Up

Window and

Door Top-Up

EnerGuide Pre-Upgrade

Evaluation Top-Up

Conditions Must be converting from fossil fuel space or

water heating system (as applicable) to qualify

No fuel conversion requirements.

RDN $250 $0 $0 $0 $150

City of Vancouver $2,000 Or $6,000 $500 $1,000 $150

City of North Vancouver $2,000 $500 $1,000 $150

City of West Vancouver $2,000 Township of Langley $2,000 $500 $1,000 $50 City of Richmond $150 City of New Westminster $350

Capital Regional District $350 City of Victoria $2,000 $500 District of Saanich $350 $500 $350 $150 District of Central Saanich $350

District of North Saanich $350 $150 City of Nanaimo $350 $500 $350 $150 City of Campbell River $350 $150 Comox Valley Regional District $2,000 $150

Resort Mun. of Whistler $2,000 $500 $1,000 City of Kamloops $150 City of Kelowna $150

8


Page 4 of 10

Municipality

Electric Heat Pump Space Heating Top-

Up

Electrical Service

Upgrade Top-Up

Electric Heat Pump Water Heater Top-

Up

Window and

Door Top-Up

EnerGuide Pre-Upgrade

Evaluation Top-Up

Municipality of North Cowichan $350 $500 $350 $50 $150

5 Alignment with Terms of Reference 5.1 Implementation Timeline The RDN can take immediate action to increase supports for residential retrofits when resources are made available to do so. 5.2 $/GHG Avoided and total GHG avoided There are two elements of cost – direct costs to the RDN for implementation, and total cost for $/tCO2e (broader cost to homeowners). RDN abatement cost is low but abatement cost for homeowners can be high depending on the type and extent of retrofit pursued. Tables below consider straight economic costs only and focus specifically on heat pumps. Shell retrofit costs are approximately $75,000 and GHG reductions are more difficult to calculate so have not been completed yet. These are straight economic costs only and do not consider co-benefits (e.g., benefits of resilient, longer lived homes, which are captured in the cost-benefit analysis section). Projected GHG reductions also do not account for the potential 15% reduction in carbon intensity of the natural gas network required under the provincial Low Carbon Fuel Standard by 2030. GHGs avoided assume that the program focuses on shifting oil and gas heated homes in Electoral Areas over to heat pumps and assumes effective refrigerant management. Retrofit to Step 2 performance of all homes with fossil fuel heating could be added to the analysis.

9


Page 5 of 10

Table 3. Estimated abatement costs for expanded retrofit program (NUMBERS ARE NOT FINAL)

Value Assumptions RDN Incremental Cost to Implement over 10 years

$924,000 (~90K annual budget)

FCM funding assumed at 80%, also assumes FCM covers all loan $ for financing

Estimated tCO2e reduced (20 years cumulative tCO2e)

11,213 2% of oil/nat. gas use retrofit to heat pumps, EA areas. Assumes 20 year lifespan for heat pump.

Abatement (RDN cost only) $/tCO2e $82.40 Program costs only, non-discounted. Abatement cost to homeowner range (heat pump install, prior to end of life, at $8000-15,000, 20 Years)

TBD Assumes increased efficiency of heat pump balances increased $/GJ cost of electricity and that the heat pump is installed prior to end of life of old system.*

*electricity costs are approximately 3x natural gas cost- heat pumps can help make up this difference but don’t always Total GHGs avoided through home retrofits could be around 30,649 tCO2e/year (portion of GHGs attributable to oil and natural gas residential heating in RDN Electoral Areas). Previous utility-scale retrofit programs have had maximum market penetration rates of about 11% (total program life of 10 years and average closer to 3-7%). Market penetration rates are not available for current provincial incentive programs. 2% annual market penetration is assumed for this program. 5.3 Equity Historically many home retrofit programs, including the RDN’s have been accessible only to homeowners with the capital and free time to invest in retrofits. Retrofit programs can however improve equity if properly designed and applied with targeted universalism3 (whereby all residents have access, but program delivery focuses on more vulnerable community members). Properly designed programs can make home energy retrofits accessible to more community members, including renters and lower income homeowners. Particular care needs to be taken when supporting fuel switching (fossil to electric) in low- income houses. Electricity is approximately three times the current cost of natural gas on a per GJ basis and efficiency needs to improve by about 60% to offset that cost difference4 and avoid unnecessary impacts to the electricity grid. This can be done through shell upgrades and/or using heat pumps. 5.4 Co-benefits Home retrofits based on heat pumps only benefit from summer cooling as heat pumps can also function as air conditioning units. Homes retrofits with shell upgrades are better buffered

3 USDN Guidebook on Equitable Clean Energy Program Design for Local Governments and Partners 4 Pembina – Advancing Residential Retrofits in BC (proper referencing to be added)

10


Page 6 of 10

against external temperature swings, improving occupant safety and comfort. The increased use of mechanical ventilation in high performance retrofits also makes it easier for occupants to protect against poor outdoor air quality (e.g., wildfire smoke). Improving support for home energy retrofits will make these benefits available to a greater number and diversity of residents but will depend on whether shell or heat pumps are prioritized. 5.5 Within Local Government authority and sphere of influence While the RDN does not own the assets to be upgraded, control the budget for those upgrades (outside of incentives), or enforce associated regulations, it can set a vision for this activity and does have some influence on policy in this area through advocacy. 5.5.1 Sphere of influence analysis RDN’s total sphere of influence score is 4 for residential GHG emissions. Table 4. Sphere of influence analysis for Accelerated Step Code implementation

Own/Operate? (0-3) Sets or enforces policy/regulations? (0-3)

Controls Budget?* (0-3)

Sets vision? (0-3)

0 – Does not own or operate asset/service

1- Can influence policies, regulation and enforcement

0- no influence over budget for asset/function

3-Sets the vision

5.6 Local economy Improving support for home energy retrofits contributes directly to the local economy as both renovation supplies and vendors/contractors are usually locally sourced. The value of the retrofit market is not currently calculated for the Regional District. The lack of all-in-one deep energy retrofit contractors is a significant barrier to residents wanting to pursue more complex retrofits and developing local vendors in this area will benefit both residents and economy.

6 Technical and logistical feasibility Assessment of technical and logistical feasibility, including opportunities to capitalize on existing activities within the RDN (detailing timing considerations, sequence of implementation), existing external supports, state of relationship with critical stakeholders, strength of jurisdictional power. 6.1.1 Alignment with existing policy and activities Expanding support for home energy retrofits aligns with the Board Strategic goal to be climate leaders and directly supports goals for energy management in the RDN’s Regional Growth Strategy.

11


Page 7 of 10

The RDN continues to run the Green Building Outreach and Incentive Program offering incentives for home retrofits and heating system conversions as well as independent advice to residents pursuing home retrofits. The program is very well positioned to provide increased support for residential retrofits but would need more resources to obtain market penetration rates required for real change. 6.1.2 External supports There are strong current provincial and federal programs to support residential retrofits and administer associated rebates. Home energy retrofits, particularly uptake of electric heat pumps, is a key part of the Province’s CleanBC plan. The Province’s CleanBC Better Homes program is robust and likely to be expanded over the next 4 years. The program provides high-value rebates better aligned with the costs of installation, as well as wrap-around energy coaching services to assist residents applying for rebates. The program also allows local governments to supply rebate top-ups to residents through CleanBC’s one-window approach, taking most of the administrative burden from local governments while still informing residents of local government contributions. This program is expected to continue for the remainder of the current government’s term. Residents frequently need support to navigate the program due to its complexity. The federal government has also recently announced a new $5,000 grant for home energy retrofits, with the program expected to roll out later in 2021. The program will be supported by outreach and policies to increase the number of home energy advisors available to support retrofits. 6.1.3 Funding The majority of funding is delivered through existing provincial and federal retrofit programs directly to consumers. The Federation of Canadian Municipalities offers a Community Efficiency financing program that provides funding for steps from feasibility studies through to full program implementation. The RDN already funds the Green Building Outreach and Incentive program (~25-30K per year for incentives, plus staff time) for the Electoral Areas through the Building Inspection budget. Federal and provincial programs are likely to provide significant rebates for retrofits over the next five years. There are no funding streams to support local government incentives for retrofits (some local governments use CARIP funds -carbon tax rebate funds however the RDN reserves these for corporate emission reductions). 6.1.4 Risks and barriers The RDN has experience running similar programs but PACE/financing is a new area and new funding sources would be required. The lack of current legal ability to implement PACE is a

12


Page 8 of 10

barrier. Local industry has concerns about the ability to deliver retrofits at the scale required and would need to be actively consulted on program delivery. 6.1.5 State of relationship with critical stakeholders Local contractors and vendors, energy advisors and the province are all critical stakeholders in the successful delivery of home energy retrofits. The RDN has completed past outreach with contractors and energy advisors around Step Code, recently completed a partnership with City Green (local sustainability NGO) to understand industry barriers to accelerated retrofit delivery and remains regularly engaged with the Home Performance Stakeholder Council. 6.1.6 Strength of Influence The RDN has a moderate ability to influence retrofits through its power to convene, status as a trusted neutral voice on retrofits, and strength in public outreach. Coordinating with other regional municipalities and local groups will strengthen this influence. 6.1.7 Resource requirements The following rough costs assume the RDN expands outreach, increases incentives, and established a financing program compatible with provincial legislation. Estimated incremental implementation costs over 2022-2027 (10 years) are ~$1,324,000, existing budget for the Green Building Program is not included. This includes research and design of financing programs (e.g. PACE), a dedicated staff member or contracted consultants focused exclusively on retrofits, increased outreach/education (staff or consultant delivered), advertising, and higher incentive top-ups for fossil fuel to heat pump conversions. This assumes loan funds for PACE are contributed by the FCM. Delivering this as a collaborative regional program (serving municipalities as well as EAs) would improve efficiency. A funding source for this added cost would need to be identified. The Drinking Water and Watershed Protection Program is funded through a parcel tax levy and this sustained funding has contributed significantly to its success. A similar approach could potentially be taken for climate action (e.g. Climate Action Service) if there was adequate political support to do so. Table 5. Estimated program implementation costs for expanded retrofit support.

Rough incremental implementation Costs (expanded outreach and incentive program, PACE) 2022-2027 Initial Policy Research and program design (primarily PACE)* One Time Costs

$120,000

Added Staff or Contracted Time on Green Building Outreach -similar to Saanich implementation (industry, community, trades training) (part time -$40,000/yr)

$400,000

Retrofit-Specific Outreach Workshops ($5,000/yr) $50,000 Advertising ($3,000/yr) $30,000 Data Collection, Monitoring and Reporting ($2,000/yr) $20,000

13


Page 9 of 10

Added incentive budget (doubling incentive to $500 for heat pump top ups) (80 heat pumps at $500) $40,000/yr

$400,000

Potential FCM Funding for Financing Studies and Piloting -$96,000 10 Year Total $924,000

Without incentive budget $524,000

6.1.8 Avoided costs Avoided costs – reduced demand for heat refuge as buildings better buffered against temperature swings and have cooling capacity.

7 Cost-benefit analysis (in progress, may be replaced with more qualitative approach)

The analysis below includes avoided costs of retrofit, benefits to human health and resilience, as well as the social value of emission reductions. Discount rate – 1% to better value longer term benefits of resilience and avoided emissions. Table 6. Cost/Benefit Analysis for expanding residential retrofits in the Regional District of Nanaimo (assuming 2% annual market penetration in Electoral Areas).

Benefits Assumptions Total Value Human health (resilience) Economic Value Air quality Avoided energy costs GHGs avoided @ $55/tCO2e* Costs RDN Implementation Costs Homeowner Capital Costs (lifetime)

Homeowner Operational Costs (Lifetime)

Total Outcome (Net Present Value) *Government of Canada estimated social cost of carbon for 2030

8 Alternatives The RDN could continue with its existing Green Building Outreach and Incentive program and not expand support or prepare for home energy financing programs. It could also expand partially (e.g., PACE only) and use part-time resources for program promotion. The program can focus on the promotion of existing provincial and federal programs.

14


Page 10 of 10

9 Summary Expanding support for home energy retrofits can help fill current gaps in the Provincial and Federal programs but significant change would require more resources. The program will be most effective if it specifically supports residents moving from fossil fuel to electric heating. Implementing PACE may help overcome some barriers to retrofit but will be new to the RDN. Careful design would be needed to ensure homeowners are not faced with untenable operating costs if shifting from natural gas to electric heating and equity-centered program design will be required. The program may be more efficient if implemented at a regional scale in cooperation with municipalities (similar to CRD program) and home efficiency financing programs in Nova Scotia.

10 Member comments To be populated by members once the business case analysis is complete and members have had a chance to review.

11 References (formal referencing to be added) Capital Regional District - Bring It Home 4 Climate https://www.crd.bc.ca/about/news/article/2020/08/11/homeowners-can-access-energy-retrofit-support-through-new-climate-program FCM Financing Program https://fcm.ca/sites/default/files/documents/resources/guide/financing-tools-local-climate-action-pcp.pdf Pembina Institute - Advancing building retrofits in BC. https://www.pembina.org/docs/event/netzeroforum-backgrounder-2016.pdf Business Model Innovation to Support Heat Pump Retrofits in Vancouver. UBC. https://www.sustain.ubc.ca/sites/default/files/2019-13_Business%20Model%20Innovation%20to%20Support%20Heat%20Pump%20Retrofits_Nelson_0.pdf USDN Guidebook on Equitable Clean Energy Program Design for Local Governments and Partners https://cuspnetwork.ca/wp-content/uploads/2020/03/USDNEquitableCleanEnergyGuidebookCompressed-2.pdf

15

https://www.crd.bc.ca/about/news/article/2020/08/11/homeowners-can-access-energy-retrofit-support-through-new-climate-program



https://fcm.ca/sites/default/files/documents/resources/guide/financing-tools-local-climate-action-pcp.pdf



https://www.pembina.org/docs/event/netzeroforum-backgrounder-2016.pdf

https://www.pembina.org/docs/event/netzeroforum-backgrounder-2016.pdf

https://www.sustain.ubc.ca/sites/default/files/2019-13_Business%20Model%20Innovation%20to%20Support%20Heat%20Pump%20Retrofits_Nelson_0.pdf




https://cuspnetwork.ca/wp-content/uploads/2020/03/USDNEquitableCleanEnergyGuidebookCompressed-2.pdf



Draft business case – Accelerated Step Code

Page 1 of 8

CATAC Business Case Accelerated Step Code Implementation

1 Priority Description and Scope This priority accelerates the implementation of Step Code beyond the proposed schedule in the BC Building Code to reduce energy demand and greenhouse gas emissions from new buildings in the RDN.

2 Background and Rationale The BC Energy Step Code is a voluntary energy efficiency standard for new Part 3 and Part 9 Buildings. The Code is comprised of 5 ‘Steps’ of energy efficiency, ranging from energy performance testing/modeling only (Step 1) up to Net-Zero Ready Buildings (Step 5). Local governments can choose which step buildings under their jurisdiction must meet. The RDN has not yet enacted the Step Code.

The Province currently proposes to embed increasing Step Code requirements within the BC Building Code (Figure 1), meaning that all new buildings will have to meet the specified Energy Step requirements. The 2022 Code update will likely be implemented but integration of further steps is much less certain.

Figure 1. Proposed schedule for integration of Step Code energy requirements into the BC Building Code

By accelerating the adoption of the BC Step Energy Step Code, the RDN can increase the number of low energy buildings in the RDN, ideally also reducing emissions.

The Step Code focuses only on energy use; if new houses are built with natural gas or other fossil fuel heating there is a potential for increase in emissions even if the higher levels of Step Code are implemented. Step Code is most effective in reducing emissions in Natural Gas buildings and drives relatively small emission reductions in electric-heat buildings (Figure 2).

Attachment 3

16


Page 2 of 8

To overcome this limitation, local governments are starting to implement Step Code in conjunction with Low Carbon Energy System (LCES) requirements. This structure requires new residences be built to a very high step code level, unless using a low carbon energy system. For example, a home with natural gas heating must meet Step Code 5, whereas a home with electric heating may be built to Step Code 3.

This both encourages selection of lower carbon systems and ensures that homes with higher carbon systems are built as efficiently as possible.

Figure 2. Effect of heating source on greenhouse gas emissions intensity of buildings at different levels of Step Code (medium single family home). COV ZEBP 2020 Bylaw refers to City of Vancouver Zero Emission Building Plan. Source: BC Energy Step Code Metrics Research

3 Risk statement and consequence of inaction If the RDN chooses not to accelerate Step Code implementation (with a Low Carbon Energy System incentive), emissions from the built environment are more likely to increase over the next decade. Failure to accelerate Step Code may result in more residences with higher carbon heating systems, which risk being used for the building’s lifetime.

If EA building starts remain similar, approximately 1500 residences will be built between 2024 and 2031 in a manner that may require them to be retrofit to net zero at significantly higher future cost to homeowners. This number increases if the proposed integration of Step Code into the BC Building Code does not proceed.

17


Page 3 of 8

4 Jurisdictional Scan, Best Practices While over 40 local governments have implemented Step Code, local governments leading in Step Code implementation (Table 1) have also used Low Carbon Energy System Incentives to encourage use of low carbon energy systems. The RDN has not implemented Step Code.

Table 1. Local governments with Low Carbon Energy System (LCES) approaches to Step Code (Part 9 buildings). Other areas have also implemented LCES for multi-family buildings (Part 3). Source: Low Carbon Building Systems in Energy Step Code Requirements

There are a variety of incentivization approaches being used by other local governments to support Step Code implementation, including density bonusing, fast-tracking of permit applications built to higher levels of Step Code and rebates on building permit fees.

The RDN currently offers up to $1000 for very high efficiency new homes built in the Electoral Areas through its Sustainable Development Checklist Rebate. There is a home-size component to the rebate where energy efficiency requirements increase substantially with increasing home size, improving equity to some degree.

5 Alignment with Terms of Reference 5.1 Implementation Timeline Work on accelerating Step Code can begin as soon as direction is made to proceed and supporting resources are made available. It is likely an LCES structured Step Code could be implemented by 2024 though this would have to take into consideration capacity of local building industry to respond.

18


Page 4 of 8

5.2 $/GHG Avoided and total GHG avoided There are two elements of cost – direct costs to the RDN for implementation, and total cost for $/tCO2e (broader cost to homeowners). RDN abatement cost is very low but abatement cost for society is fairly high for Step Code level 4 and 5 homes. These are straight economic costs only and do not consider co-benefits (e.g. benefits of resilient, longer lived homes). Projected GHG reductions also do not account for the potential 15% reduction in carbon intensity of the natural gas network required under the provincial Low Carbon Fuel Standard by 2030.

Table 2. Estimated abatement costs for Accelerated Step Code Implementation with LCES

RDN Incremental Cost to Implement $80,000-$140,000 Estimated maximum tCO2e reduced (20 year)* ~7000 tCO2e Abatement (RDN cost only) ~15 $/tCO2e Abatement cost range per dwelling (Step 5, medium SFH, 20 year system lifetime)

~290-653 $/tCO2e

Abatement cost range per dwelling (Step 5, medium SFH, 20 year system lifetime)

~ 391 - 1,009 $/tCO2e

*assumes building is retrofit to net zero at end of heating system lifespan (assumed at 20 years)

Estimated emission reductions assume annual housing starts are constant with current numbers, that most houses are ‘medium’ size and that an LCES implemented in 2024 drives all homes from hybrid systems to fully electric heating. Emissions reductions will be less if incentives for gas heating are high enough to counteract the incentive to fuel switch. If the Province does not integrate higher levels of Step Code into the BC Building Code then greenhouse gas savings will be substantially higher.

5.3 Equity An acceleration to higher levels of Step Code may increase housing costs in an already unaffordable market with disproportionate impacts on smaller homes. Provincial analysis suggests lower step cost increase are negligible, however an analysis of costing studies suggest initial cost increases of between 5 and 20% for a Step 5 home. Incremental costs may be higher on average for smaller dwellings, suggesting a disproportionate increase in costs for those building smaller homes. Higher costs up front may be somewhat balanced by lower lifetime heating costs however again these effects will have less benefit to smaller homes. This may be balanced with added financial incentives to smaller homes.

Accelerating Step Code may benefit equity by making Net Zero Buildings, and their benefits available to all new building occupants. Currently Net Zero buildings are generally available only to those who have the knowledge to ask for them and the money to pay for them.

Balancing this program with added support for household retrofits equal will help ensure that occupants in older homes will also have opportunities to improve home performance.

5.4 Co-benefits Higher performance homes are better buffered against external temperature swings, improving occupant safety and comfort. Their reliance on mechanical ventilation also makes it easer for occupants

19


Page 5 of 8

to protect against poor outdoor air quality (e.g. wildfire smoke). Accelerating Step Code will make these benefits available to more RDN residents.

Accelerating Step Code permanently increases the value of building stock as the most permanent elements of the building (shell), generally meant to last for multiple generations, are designed and built to very high standards.

5.5 Within Local Government authority and sphere of influence Step Code is designed specifically as a tool for local governments and its implementation is entirely within the RDN’s authority. No other entity can accelerate implementation of Step Code in the Regional District, outside of provincial upgrades to the BC Building code. While the RDN does not own the assets to be upgraded or control the associated budget, it exerts direct control over local Step Code adoption and is responsible for setting related regional vision, including through the Regional Growth Strategy and OCPs.

5.5.1 Sphere of influence analysis Total sphere of influence score is 6.

Table 3. Sphere of influence analysis for Accelerated Step Code implementation


Controls Budget? (0-3)

Sets vision? (0-3)

0 – Does not own or operate asset/service

3- Sets and enforces policies/regulations

0- Has no influence over budget for asset/function

3-Sets the vision

5.6 Local economy Accelerating Step Code will drive local demand for high performance building materials, generating market opportunity for local suppliers and manufacturers. Establishing early expertise and market share will put local suppliers and manufacturers in a more competitive position than if simply following the BC Building Code schedule. Vancouver Economic Commission estimates that Step Code will generate approximately $3.3 billion market for high performance building materials in the lower mainland alone. Estimated value to the local economy is not currently available.

6 Technical and logistical feasibility Assessment of technical and logistical feasibility, including opportunities to capitalize on existing activities within the RDN (detailing timing considerations, sequence of implementation), existing external supports, state of relationship with critical stakeholders, strength of jurisdictional power.

6.1.1 Alignment with existing policy and activities Acceleration of Step Code implementation aligns with the Board Strategic goal to be climate leaders and directly supports goals for green building, energy management, and emission reduction embedded in the RDN’s regional growth strategy and electoral area OCPs.

20


Page 6 of 8

The RDN has run the Green Building Outreach and Incentive Program for the past decade and through it hosts high performance building tours, workshops, and incentive programs to advance high performance building within the RDN. Outreach has included Step Code education and workshops with local builders and building officials and the program is very well positioned to support an accelerated Step Code roll out.

Provincial government resources suggest incentivizing higher levels of Step Code early on rather than requiring them outright. This is to ensure industry has the capacity to respond and can find the most appropriate solutions to meet Step Code requirements. An LCES approach would align with this recommendation.

6.1.2 External supports The provincial government continues extensive consultation and industry outreach on Step Code and provides dedicated support, including funding, for local governments. An active support network of local government staff is available to compare experiences and share both resources and lessons learned, including specifics on LCES approaches.

Other local governments are acting on Step Code, including Nanaimo, though Nanaimo has taken an incentivization (density bonus) approach to incentivize higher step levels and has not taken an LCES approach.

6.1.3 Funding The Province, through BC Hydro, has made Step Code implementation funding available in the past. Funding has largely shifted towards incentives focused on homebuilders (up to 9K for Step 3, 11K for Step 4 and 15K for Step 5, assuming all-electric construction). However specific calls for funding should be monitored. Funding in general will likely become less available as higher levels of Step Code are standardized into the BC Building Code and become an expectation.

6.1.4 Risks and barriers The local building community will require significant upskilling to successfully deliver buildings at higher levels of Step Code, particularly on an accelerated basis. Builders and trades need to learn and employ new methods at a skilled level, as even small errors can significantly compromise home performance. Local builders are already at maximum capacity and have difficulty finding skilled workers, let alone those with experience in higher performance building.

An accelerated Step Code implementation increases the risk that local builders would be required to deliver buildings they do not have the skills to deliver. This can likely be managed if the building community is provided adequate advance warning of any proposed Step Code implementation and significant effort made to provide local upskilling and training opportunities.

This risk is lower if Step Code acceleration is implemented in hand with a lower-Step LCES pathway option as builders will have the option to simply build to code.

Any proposal to accelerate Step Code would require consultation and coordination with local stakeholders to identify and address key barriers.

21


Page 7 of 8

6.1.5 State of relationship with critical stakeholders The local building industry will be critical to the success of an accelerated Step Code roll out. The RDN works with the Home Builders Association to run workshops and consult on relevant topics and has a positive working relationship.

6.1.6 Strength of Influence The RDN has strong ability to influence policy in this area however changes would only apply to new construction in the RDN’s electoral areas (excludes Nanaimo, Lantzville, Qualicum, Parksville).

6.1.7 Resource Requirements The following costs assume that Step Code is implemented with an LCE requiring high carbon heating systems to meet Step 4 in 2024 and Step 5 in 2027, with other heating systems only needing to meet BC Building Code requirements. This compares to the Base Case where the RDN tracks building code requirements only

Estimated incremental program implementation costs over 2022-2024 are ~$115,000, this recognizes that many of the costs would be incurred with predicted changes to the BCBC but that the RDN may have to provide additional training/outreach to achieve an advance schedule. This includes research to support appropriate policy, training support for building officials in higher levels of Step Code and added staff time in the first years of implementation.

Rough implementation Costs (2024 LCES and 2027 LCES accelerated schedule) Initial Policy Research (setting appropriate GHG/m2/yr targets) 15,000 Staff Training (Building Officials) 5,000 Added Staff Time (Building Officials) 45,000 Outreach with Building Groups 5,000 Outreach with local building program (VIU) 5,000 Cost of Local Training sessions (4 years) 40,000 $115,000

6.1.8 Avoided costs Most avoided costs are held by the consumer through avoided future retrofit (est. $75,000 to Step 3, upwards of $150K for Step 5).

7 Cost-benefit analysis (to be completed) Analysis for the City of Vancouver suggests that Step Code implementations have net negative financial value for individual homeowners, however these are straight costs only and do not include benefits of improved health and resilience, nor the deferred costs of shell or energy system retrofits that would likely be required of higher carbon homes built to lower steps. The analysis below includes avoided costs of retrofit, benefits to human health and resilience, as well as the social value of emission reduction.

(Discount rate will be 1% to better value longer term benefits of resilience and avoided emissions)

22


Page 8 of 8

Benefits Assumptions Total Value Human health (resilience) Avoided cost of retrofit $75,000 Avoided energy costs (Vancouver report) GHGs avoided @ $55/tCO2e* 7,000 tCO2e Costs RDN Implementation Costs Homeowner Capital Costs (total)

Homeowner Operational Costs (total)

Total Outcome (NPV) *Government of Canada estimated social cost of carbon for 2030

8 Alternatives The RDN could go simply follow the proposed Building Code upgrades. As the integration of higher Step Code levels into the BCBS is less certain, the RDN could also commit to the proposed BCBS implementation schedule, even if the province does not implement the proposed changes.

9 Summary Accelerating Step Code will have strongest GHG reduction benefit if completed using a Low Carbon Energy System incentive structure (e.g. Step 4 LCES in 2024, Step 5 LCES in 2027). Preliminary analyses suggest a maximum 20 year reduction of ~7,000 tCO2e over baseline code upgrades, primarily driven by LCES-driven fuel switching. Incremental implementation costs to the RDN are estimated at ~$100,000 over 2022-2027 (RDN cost of $14/tCO2e). An LCES approach may result in about 1800 homes built at a somewhat higher incremental construction cost than base code requirements. This incremental cost is likely smaller than future costs of retrofit.

10 Member comments To be populated by members once the business case analysis is complete and members have had a chance to review.

11 References (to be properly referenced) http://energystepcode.ca/app/uploads/sites/257/2019/11/BC-Energy-Step-Code-Costing-Studies-Analysis-Rev1.pdf

http://energystepcode.ca/app/uploads/sites/257/2019/11/BC-Step-Code-GHGI-Report_Nov-2019.pdf

https://www.rdh.com/wp-content/uploads/2017/07/ASHRAE-2013-Net-Zero-Building-Enclosure-Retrofits-for-Houses.pdf

http://publications.gc.ca/collections/collection_2016/eccc/En14-202-2016-eng.pdf

23

http://energystepcode.ca/app/uploads/sites/257/2019/11/BC-Energy-Step-Code-Costing-Studies-Analysis-Rev1.pdf










Draft Busines Case - Standards and Policy Review

Page 1 of 6

CATAC Business Case Review of Land Use Planning/Zoning bylaws

Engineer Standards and Corporate Policy

1 Priority Scope and Description CATAC proposes the review of land use planning/zoning bylaws and engineer standards to identify and remove barriers to climate adaptation and mitigation and GHG emissions reductions.

2 Background and Rationale Local governments in BC have control of over 50% of the province’s GHG emissions, and municipalities own and operate 60% of all infrastructure throughout the country. Decisions made at the local government level are long-lasting and directly affect how easy it is for residents to make low-carbon choices. Local government decisions determine ease of car-free movement, palatability of high density living (via access to quality communal greenspace), and waste disposal options, which together comprise the majority of regional community emissions. Policies also influence corporate prioritization of climate action and

3 Risk statement and consequence of inaction The risk and impact that existing policies increase emissions and reduce resiliency are both high. If the RDN chooses not to review standards and policies for climate related barriers, it risks a business as usual approach with sustained increases in emissions and much higher future mitigation costs. Development patterns influence resident choices for decades and are very expensive to address after the fact.

4 Jurisdictional Scan, Best Practices Policy reviews are a common practice among local governments and done to evaluate, update and ensure that policies are reflective of best practices and most relevant data. The Pembina Institute conducted a policy review for the Corporation of Delta and provides an example of what barriers can exist in current policy.

Reviews completed with a single-lens approach (e.g., climate only) risk low acceptance of recommendations. Implementing a triple-bottom-line (financial, social, environmental) review of major policies can help balance competing priorities for the regional district, however the policy reviews must be completed with clear goals agreed to by the Board.

Additional resources to be added to this section

Attachment 4

24


Page 2 of 6

Table 1: Potential Barriers to climate action identified within Corporation of Delta Planning Policies.

5 5 Alignment with Terms of Reference 5.1 Implementation Timeline The RDN’s regional growth strategy and bylaw 500 are both currently under review, including for climate change impacts. Additional policies could be reviewed as soon as resources are made available, and direction given to proceed. Average review timeline is between 2 months to 3 years, depending on the scope of the review and scale of policy.

5.2 $/GHG Avoided and total GHG avoided Emissions are difficult to quantify through policy changes but identifying and removing barriers can reduce emissions costs across departments and services provided and have long lasting impacts on community emissions via resident choices. Total GHG emissions avoided though this activity are likely very high.

The Insurance Bureau of Canada estimates that every $1 invested in climate action now will give $3-$5 in future local government savings so it is likely that $/GHG avoided is negative (i.e., reducing GHGs through policy review brings savings to the RDN).

5.3 Equity Equity impacts will depend on what policies/standards are reviewed. Taking an equity-centered approach to all reviews will be essential as all higher-level policy changes have very high potential to impact equity. Reviewing policies from a triple bottom line perspective will help improve equity while also addressing climate change mitigation and adaptation priorities.

Current Practice Potential Barriers

Official Community Plan (OCP) • Limited areas designated for mixed-use – should be increased

• Could add air quality and climate change policies

Zoning Bylaw • Change definition of floor space ratio (FSR) to allow for thicker insulation walls without penalty

• Parking space requirements (reduces walkability and greenspace, incentivizes car ownership)

• Density caps make it difficult to build neighborhoods that support district energy systems

• Minimum size for dwelling units makes higher density challenging

• Lack of existing support for alternative housing types • No guidance for distributed energy systems

25


Page 3 of 6

5.4 Co-benefits Removing GHG barriers can ensure that reductions occur across departments and services, and create agency for plans, zoning, policies that promote compact communities, complete urban design, and expansion and accessibility to public and active transit options. All of which aim to make communities healthier, safer, and more accessible.

5.5 Within local government authority and sphere of influence The RDN has control over when and how it chooses to initiate bylaw and policy reviews, and what plans, policies, and standards it chooses to review. The RDN can consult with affected member municipalities, First Nations, and electoral area representatives throughout the review process.

5.5.1 Sphere of influence analysis The RDN’s sphere of influence over emission sources affected by a policy/standards review



Sets vision? (0-3)

2 – Owns/operates some of the affected GHG sources


2 -has some influence over budget (RDN GHG sources only)

3-Sets the vision

5.6 Local Economy Impacts to local economy are difficult to define. Managing policy reviews through a triple bottom line approach can reduce risks that policy reviews will have unanticipated economic impacts.

6 Technical and logistical feasibility Assessment of technical and logistical feasibility, including opportunities to capitalize on existing activities within the RDN (detailing timing considerations, sequence of implementation), existing external supports, state of relationship with critical stakeholders, strength of jurisdictional power.

6.1.1 Alignment with existing policy and activities Initiating a policy review builds upon the current reviews of Bylaw 500 and the Regional Growth Strategy, both of which have been approved for review. Identifying and removing barriers in current bylaws, policies and plans align with the Region’s goals of becoming Net Zero emitters and promoting environmental stewardship.

There is interdepartmental support in enhancing GHG reduction strategies and strengthening plans, policies, and standards if resources are provided to staff to conduct the work. Some GHG reductions strategies, measuring and reporting tools currently exist throughout the RDN, and identifying and removing barriers will help deliver better results.

6.1.2 External Supports External supports exist at the provincial level, with the government providing numerous toolkits and resources to help guide local governments reduce GHGs. The provincial government has set mandatory provincial greenhouse gas reduction targets, which will prompt provincial support for community

26


Page 4 of 6

actions. The Local Government Act also directs governments to include targets, policies and actions that will reduce GHGs in their Regional Growth Strategies.

There are numerous consultant and NGO resources available to support local governments in reviewing policies and standards.

6.1.3 Funding No external funding exists for policy reviews, and costs will be calculated by staff time, costs, and resource estimates. External consulting may be required depending on scope of review process.

6.1.4 Risks and barriers Policy and bylaw reviews can be costly and time consuming, taking away from other staff duties (e.g. application reviews, program implementation). A lack of clear goals can make the review process more difficult and risk policy changes that have poor acceptance or act counter to other local government objectives.

Reviews may require community consultation, and pandemic conditions may make it more difficult for vulnerable communities who may be affected by climate action and policy changes to engage.

6.1.5 State of relationship with critical stakeholders Critical stakeholders will vary depending on policy being reviewed and would need to be assessed on a policy-by-policy basis.

6.1.6 Strength of Influence The RDN, through its elected officials and electorate, has very strong ability to influence action in this area as it owns the policies in question and has jurisdictional authority to update.

6.1.7 Resource Requirements Estimated policy review costs are based on both an internal review, and cost for an external consultant. Both fees are dependent on time and scope (focused or full review) of review and capacity required from internal staff (FTE/PTE). Table 3 provides estimated costs, time and resources need to conduct either a focused or full review. Example provided is taken from the Regional Growth Strategy Review Staff Report, 2019.

Table 2: Staff Resources, Timeline, Cost for RGS Review.

Option #1 (focused review) Option #2 (full review) Timeline 2018-2020 2019 to 2021/early 2022 Staff Resources (numbers refer to expected workload, 0.5= half of workload/time required.)

0.1 Manager, planning 0.4 Senior Planner 0.5 Planner

0.3 Manager, Planning 0.5 Senior Planner 0.5 Planner Technical support from consultants

Costs ($CDN) 0.5 Planner ($50, 115) Consultant ($75,000)

0.5 Planner ($50, 115) Consultant ($100,000 to $150,000)

An additional 0.5 FTE Planner is required for both options for the duration of the review (2 years) and is required to manage climate change (actions 1.2 & 1.3) as part of workload. The estimate cost is $50,114 annually for 0.5 of their work time.

27


Page 5 of 6

Table 3: Bylaw 500 Review Budget.

Item Amount Consulting Fees- Planning, Document Design, Graphics Support $100,000 Public Consultation- Venues and Advertising $5,000 Meeting Supplies Promotional Materials $1,500 Public Hearing- Up to two Public Hearings $3,000

Total $109,500

6.1.8 Avoided costs Most avoided costs will come through future savings. Every $1 spent now on climate action will save 3-$5 in future savings.

7 Cost-benefit analysis (To be Completed) Cost-benefit will depend on the extent that barriers are identified and ability to implement policies and plans on the ground level, and the tools and capacity to monitor and report progress. A cost-benefit analysis is difficult to determine at this stage but will become more identifiable as barriers are removed and progress made. Assumed benefits and factors are listed below. Nation-wide, the benefits of proactive climate change outweigh the costs at a 6:1 ratio.

Table 4: Cost-Benefit Analysis of reviewing documents to identify and remove barriers to GHG reductions and climate adaptation/mitigation.

Assumptions/Factors Value Benefits Human health (resilience) Promote development of active transit options

and compact/complete village centres, reduced particulate matter released in atmosphere.

Environmental stewardship Preservation of air, land, and water quality (Goal 2.0- Environmental Stewardship), enhanced capability of reaching goal of becoming a Net Zero emitter.

Economic development Promote innovation among RDN and services, invest now for future savings ($1 now saves 3-$5 in the future)

Social Utilizing of equity lens in review process, ensures climate action does not negatively affect communities. Ensures that vulnerable communities are considered. Policies and plans influence how residents address personal GHG reductions (walking, access to transit, housing options, access to other services).

Costs Staff time and cost ($) Per policy reviewed 0.1-0.5 fulltime employee

($10,000-$50,000 annually)

28


Page 6 of 6

Consulting fees $65,000- $100,000 annually

Total Outcome

8 Alternatives The RDN could continue amend policies and bylaws on an ad-hoc basis. Multiple, single-lens amendments could lead to confusion and redundancy.

9 Summary A comprehensive review process of the RDN’s policies, plans, standards, and bylaws is an opportunity to identify existing barriers that are preventing full GHG reduction potential. Policies and plans that influence land use decisions have long lasting impacts that can be costly to reverse or change and influence how residents can address their own GHG reductions (walking, access to public transit, housing options). Every $1 dollar invested in climate action now will have a future savings cost of 3-5$ in climate adaption, damages, and repairs.

10 Member Comments To be populated by member once the business case analysis is complete and members have had a chance to review.

11 References BC, Government of (2021). Retrieved from https://www2.gov.bc.ca/gov/content/environment/climate-change/local-governments

Insurance Bureau of Canada (2019). Retrieved from http://www.ibc.ca/sk/resources/media-centre/media-releases/new-report-shows-urgent-need-for-climate-adaptation-investment

Keller, Greg (10 March 2020). Staff Report, Bylaw 500 Review and Update Project Terms of Reference.

Nanaimo, Region of (2021). Green Bylaw Amendments. Retrieved from https://www.rdn.bc.ca/green-bylaw-amendments

Pembina Institute (2008). Strategies to Reduce Energy Use and Emission from New Buildings in Delta. Retrieved from

Schile, Jamai (8 October 2019). Staff Report, Regional Growth Strategy Review- Options for Proceeding.

29

https://www2.gov.bc.ca/gov/content/environment/climate-change/local-governments



http://www.ibc.ca/sk/resources/media-centre/media-releases/new-report-shows-urgent-need-for-climate-adaptation-investment



https://www.rdn.bc.ca/green-bylaw-amendments



Draft Business Case – Sustainable Procurement

Page 1 of 6

CATAC Business Case Sustainable Procurement

1 Priority Description and Scope To adopt a sustainable procurement policy to reduce carbon emissions (embodied and primary) from RDN capital and services.

This would involve assessing the RDN’s current approach to sustainable procurement against best practices and, if needed, implementing a new policy that would apply to all products and services procured by the RDN (ranging from office supplies to contracted waste haulage and large facilities).

2 Background and Rationale The RDN procures approximately $82 million/year in services and products, ranging from equipment purchases to professional services. Traditional purchasing focuses exclusively on quality and price, ignoring environmental and social impacts of products/services and failing to account for total lifecycle cost of ownership. This can lead to purchases that ultimately cost taxpayers more and negatively impact other local government objectives (e.g., community wellbeing). By integrating social and environmental objectives directly into procurement decisions, buyers create market incentive for suppliers to improve the environmental (e.g., greenhouse gas intensity) and social (e.g., living wages) performance of their goods and services. This can lower the cost of more sustainable options through economy of scale and make these products more accessible to other buyers, further reducing regional GHG emissions.

Sustainable procurement also inserts broader corporate policy objectives directly at the point when such policies usually fail (when it is time to pay for things). By requiring incentivization of these policies within procurement and allowing staff/board to select options that cost more up front but have positive social and environmental benefits, the RDN’s broader objectives are more likely to be achieved, and at a lower overall cost to society.

Sustainable procurement policies can reduce emissions by requiring or prioritizing:

• electric-only technologies (e.g. fleet electrification requirements) • products meet specific standards (e.g. UBC-Forest Stewardship Council certified wood/paper) • low-emission supply chains (e.g. Translink purchase of 100% Green Power Certificates) • more efficient combustion technologies (e.g. City of Nanaimo – REALice technology)

Properly designed and implemented, it would help reduce the RDN’s direct and indirect (supply chain/embodied) emissions in acquisitions ranging from the type of paper used in RDN printers to the GHG-intensity of materials used in facility construction (e.g. concrete vs wood), and the efficiency standard or fuel type used in contracted waste haulage.

3 Risk statement and consequence of inaction Climate-related risks for sustainable procurement overall are medium and very high likelihood. Failure to include sustainable measures in procurement (criteria, policy, code of conduct, etc.) risks the RDN

Attachment 5

30


Page 2 of 6

awarding $82 million per year in contracts to suppliers with no or limited consideration of potential GHG impacts. It also increases the RDN’s risk of procuring goods and services that have higher total cost of ownership, require future retrofit, and/or have hidden costs to the RDN due to their impact on environmental or social wellbeing. Local suppliers may not be incentivized to innovate and may fall behind the sustainability curve.

4 Jurisdictional Scan, Best Practices Organizations at all levels (municipal, regional, provincial, federal, university) have adopted sustainable procurement policies and programs and it is becoming core practice for local governments, including Island communities. It is however implemented with varying degrees of effectiveness.

Agencies leading in sustainable procurement used dedicated Strategies and Action Plans for Sustainable Procurement, Sustainable Purchasing Policies (e.g. City of Nanaimo), Supplier Codes of Conduct (e.g., City of Calgary), Supply Chain Analysis for Risk, Opportunity and Innovation (e.g. City of Victoria), and support implementation by adding sustainability requirements to staff job descriptions (e.g. Government of Canada) and supporting staff with effective training and implementation tools (e.g. UBC). Continuous improvement approaches (monitoring and reporting, re-evaluation – e.g., City of Nanaimo) are also recommended under ISO standards (Sustainable Procurement 20400:2017).

Leading sustainable procurement focuses on product lifecycle (cradle to cradle) impacts and favour products/services that support local, circular economies.

Policy does not necessarily force change – RFPs issued by the Canadian Government, whose policy meets many of best practices listed above (including cradle-to-cradle principles and incorporation of sustainable procurement into management job descriptions) have only superficial integration of sustainability objectives (Da Ponte et al., 2020.) as is likely the case for many other organisations. It is difficult to find reliable statistics on the effectiveness of sustainable procurement policies in practice.

Implementing sustainable procurement can be very challenging as it is difficult to overcome innate human aversion to higher upfront costs. To be worthwhile, sustainable procurement initiatives need to be backed up with genuine organizational commitment, including cultural acceptance of potentially higher up-front costs and dedicated staff resources. Without the following attributes, social procurement may have only superficial impacts:

1. Support staff and Board understanding of sustainability impacts of decisions – this requires adequate resourcing (staff, tools, time, training) for implementation

2. Use goals and management systems to monitor and report on implementation 3. Clearly describe material areas of impact in RFPs, in a way that allows bidders to respond,

including having minimum thresholds for RFP qualification. 4. Impactful integration requires 10-20% allocation in scoring where scoring is disclosed 5. Require wholistic total cost of ownership in each RFP process where it makes sense to do so,

and provide tools for consistent costing of less tangible public benefits (e.g. social cost of carbon for GHG emissions).

31


Page 3 of 6

5 Alignment with Terms of Reference 5.1 Implementation Timeline The RDN can implement this action within two years if supporting resources are made available.

5.2 $/GHG avoided and total GHG avoided • The RDN has a $82 million/yr spend on goods and services. The RDN’s Scope 3 (indirect emissions)

are not currently quantified. Emission reductions through public transit (e.g. electrification), energy acquisition (e.g. biofuels), and equipment efficiency will be most evident.

• Strong sustainable procurement policy may increase up-front costs of goods and services however these added costs can be balanced by reduced social, environmental and lifetime cost of ownership.

• As local governments commonly bear externalized costs, it is likely that GHG reductions through sustainable procurement would result in overall cost savings for the RDN.

5.3 Equity This action has high potential to improve social equity in the RDN. Equity is a core tenet of sustainable procurement policy (people, planet, profit) and when properly implemented improves staff and vendor use of equity practices (e.g. livable wages, employment or business opportunities for marginalized populations). As with environmental objectives, impact is contingent on effective implementation.

5.4 Co-benefits Key co-benefits include:

• RDN may have improved success in federal funding calls (Climate Lens) • Improved regional environment and community wellbeing • Reduced pollution released in region’s air and water. • More efficient use of region’s natural resources. • Reduced export of impacts to other jurisdictions • Improved regional resiliency • Improved overall value of goods and services

5.5 Within local government authority and sphere of influence Implementing sustainable procurement is entirely within the RDN’s sphere of influence.

5.5.1 Sphere of influence analysis The RDN’s sphere of influence score for sustainable procurement is 12/12.



Sets vision? (0-3)

3 –Owns or operates asset/service


3- Controls budget for asset/function

3-Sets the vision

5.6 Local economy Sustainable procurement can benefit local economies, particularly if it prioritizes local goods and services. Local suppliers frequently have lower supply chain emissions and may be better equipped to address local equity goals. The broader market will benefit from workforce development and greater

32


Page 4 of 6

availability of sustainable products. Local suppliers will have lower likelihood of falling behind the sustainability curve. Local suppliers may however struggle to meet specific standards (e.g. Forest Stewardship Council) due to expense and complexity of certifications, which may make larger external suppliers more competitive.

6 Technical and logistical feasibility The review of existing procurement policies and potential implementation of new policies is feasible but to be worthwhile needs to be supported by organisational commitment to implementation, and willingness to accept higher up-front costs.

6.1.1 Alignment with existing policy and activities Staff have proposed establishing a stand-alone social procurement policy informed by Board goals for environment and equity, currently under development in cooperation with an external consultant. The RDN already has some procurement policies focused specifically on reducing greenhouse gas emissions, including the Green Building Policy, Wood First Policy, Green Housekeeping Policy, and the Plug-in Hybrid Vehicle Policy. The policies have been in place since 2010 but routinely fail at implementation due to the higher up-front costs of more sustainable options, and in some cases lack of suitable products. Some policies (e.g. lifecycle costing) are proposed in the Corporate Carbon Neutral plan to help overcome some of these barriers.

6.1.2 Existing external activities/supports There is an extensive body of knowledge and numerous peer networks available to support social procurement.

Many suppliers are also used to including sustainability or equity considerations as more organizations now require them in RFPs. Increased demand for sustainable products/services is driving more product diversity, voluntary carbon disclosure and 3rd party verification.

The Federal Government’s Climate lens, a mandatory component of many funding applications, requires projects to demonstrate how they mitigate climate impacts and also demands the type of analyses required by effective sustainable procurement.

6.1.3 Funding No ready sources of funding for implementing sustainable procurement were identified.

6.1.4 Risks and barriers Implementing effective sustainable procurement policy carries some risk to the RDN through potential increases in up-front costs. Sole focus on increased up-front costs is also the single biggest barrier to successful implementation.

6.1.5 State of relationship with critical stakeholders Critical stakeholders include existing suppliers and main user groups (both internal and external). (To be completed)

33


Page 5 of 6

6.1.6 Strength of influence The RDN has capacity to act on Sustainable Procurement and through social procurement can influence supply chain and use emissions for approximately 82 million dollars/year of goods and services.

6.1.7 Resource Requirements The RDN purchasing department will need increased capacity, education, and resources to implement a sustainable procurement program. Departmental staff will also need guidance on what standards, certifications, and requirements to include in specific RFPs. Some of this guidance can be provided through the Energy and Sustainability group while some will need to be sourced externally.

Building a comprehensive program will require consultation with current vendors, suppliers, purchasing staff, council, and consultants.

The City of Nanaimo added an additional buyer to increase staff capacity ($103, 019/yr).

Table 1. Projected costs for implementation and operation of sustainable procurement (Table to be completed)

Policy Development Policy Implementation FTE hrs (core staff) 160 hours (4 weeks) Ongoing (1 FTE) -

$103,019 Other Staff time (stakeholders)

Additional capital or service cost

Total Estimated Cost

6.1.8 Avoided Costs Sustainable procurement results in more efficient facilities, avoiding future cost of retrofit and reducing energy costs. Sustainable procurement

7 Cost-benefit analysis (to be completed) Table 2. Cost Benefit analysis table for Social Procurement at the RDN

Benefits Assumptions Total Value Resident wellbeing Value to local economy Retained dollars and resources (circular economy)

Improved air quality Avoided energy/ownership costs GHGs avoided @ $55/tCO2e* Costs RDN Implementation Costs RDN Operational Costs (incremental)

Total Outcome (Net Present Value)

34


Page 6 of 6

8 Alternatives The RDN could continue with existing approaches to procurement, implementing more sustainable procurement options where funding allows. This approach has had moderate success in reducing direct emissions.

9 Summary The RDN is already reviewing options for sustainable procurement with a consultant and proposes a stand-along policy informed by the Board’s social and environmental objectives. When released, the proposed policy could be reviewed against best practices, and gaps identified for future improvement. Approaches proposed in the RDN’s corporate carbon neutral plan (e.g., requirement for total cost of ownership accounting and triple bottom line assessment) may help address current barriers to effective implementation.

10 References (to be properly referenced) https://corostrandberg.com/wp-content/uploads/2017/09/sustainable-procurement-best-practice-framework.pdf

https://www.iso.org/standard/63026.html

https://www.mdpi.com/2071-1050/12/14/5550/htm

https://www.iisd.org/system/files/publications/life_cycle_costing.pdf?q=sites/default/files/publications/life_cycle_costing.pdf

https://www.researchgate.net/publication/264824033_Sustainable_procurement_Human_rights_and_greenhouse_gas_emissions

11 Member Comments

35

https://corostrandberg.com/wp-content/uploads/2017/09/sustainable-procurement-best-practice-framework.pdf



https://www.iso.org/standard/63026.htm

https://www.iso.org/standard/63026.htm









Draft – Overview of Existing RDN Activities

Page 1 of 2

1 Wildfire Management 1.1 Overview of Current Activities The Regional District of Nanaimo provides Emergency Response and Planning services throughout the RDN Electoral Areas, including Wildfire Prevention and Management.

Comprehensive wildfire management includes planning and resourcing of:

1. Wildfire prevention, particularly for urban interface fires – Community Wildfire Protection Plans have been developed for all communities in the Electoral Areas of the Regional District and funding has just been received to update all plans for Wildfire Resiliency. This plan update will be extensive and the RDN has added staff to support the process. Existing plans had not been updated for over a decade and there was little public reporting on progress. New plans will be used as a basis for future bylaw development, stakeholder engagement and public outreach. It is unclear if regular progress reporting will be part of plan implementation. Fuel management prescriptions are also developed for priority park areas as funding allows.

2. Wildfire response - managed by local fire departments and supported by province. Strengthened by Emergency Management Agreement between the RDN, Parksville, Nanaimo, Qualicum Beach, Snuneymuxw, Nanoose and Qualicum First Nations to allow sharing of resources and coordinated efforts.

3. Emergency Evacuation Route Planning – increased fire risk prompted the RDN to complete evacuation route planning for Area E (Nanoose) in 2020. Funding has also just been received for evacuation route planning for Area B (Gabriola), to be completed 2021/2022. Additional evacuation routes will be developed for other areas as funding allows.

The program is addressing key areas for risk mitigation and has funding to address most outstanding areas – CATAC could suggest support for regular public reporting on implementation of plan activities (e.g., via web site portal) and accelerated creation of evacuation route plans for other electoral areas.

2 Regional Water Storage 2.1 Overview of Current Activities The Regional District of Nanaimo, through the Drinking Water and Watershed Protection Program (DWWP) takes a comprehensive approach to sustainable water resources in the RDN. The updated DWWP plan does not specifically identify storage but evaluates water supply and demand to identify potential shortfalls, promoting aquifer protection and sustainable supply management. The program supports disaggregated, ‘soft’ water storage (e.g. rainwater harvesting, improved soils), aquifer health (groundwater storage) and promotes a cross-jurisdictional watershed management approach (source protection). It does not currently focus on engineered water storage facilities.

Attachment 6

36

Draft – Overview of Existing RDN Activities

Page 2 of 2

The program is mature, comprehensive and well-resourced. Storage-related activities (e.g., development of water budgets and expansion of decentralized storage via rainwater harvesting and aquifer protection) could likely be accelerated if additional funding was made available to do so.

3 Sea Level Rise and Riverine Flood Risk 3.1 Overview of Current Activities The RDN has completed sea level rise and risk assessments and when maps are finalized, will determine how to integrate results into policy, provided resources are available to do so. Riverine flood risk mapping is also underway and will likewise be integrated into policy when complete and provided resources are available to do so. The work is governed by an inter-departmental working group to ensure that results are useful for all relevant RDN interests (emergency services, planning, GIS, etc.). The work could be further supported as there is no formal funding for future integration work, reviews, improvements or updates. Creation of an associated adaptation strategy is a logical next step and could benefit from CATAC support.

37

Attachment 7

Sample Decision-Making Approaches Business plans will be updated so that results can easily feed into selected decision-making approaches.

1 Weighted, calculation-based incorporating triple bottom line values Selection criteria are drawn from across the Triple Bottom Line (people, planet, profit) are selected and weighted according to relative importance (determined by group consensus), each of the three areas has 1/3rd of total value. Different options are then scored for how well they address each criterion. This approach can incorporate diverse values as it accepts both quantitative (e.g. GHGs) and qualitative factors (e.g. human wellbeing). An example of this approach from the City of Port Coquitlam is attached.

Environmental Social Fiscal Results E1 E2 S1 S2 F1 F2 Weight (0-1) 0.5 0.5 0.25 0.75 0.3 0.7 Option A Score (1-5) 1 4 5 2 2 3 =1*(0.5) + 4*(0.5) +

5*(0.25) + 2*(0.75) + 2*(0.3) + 3*(0.7)

Option B 2 3 1 1 4 4 Option C Option D Etc.

Potential Selection Criteria Include:

1. Each term of reference • Equity • $/GHG reduced (RDN) • Within RDN Jurisdiction • Co-benefits to LG (could be separate criteria)

2. Value to local economy 3. Total GHGs reduced 4. Likelihood of effectiveness (feasibility)

5. Additional elements of equity (e.g., poverty reduction, opportunities for vulnerable populations)

6. Human Health and Wellbeing 7. Ease of using alternative transportation 8. Recreation opportunities 9. Addresses energy poverty/affordability 10. Etc.

38

Attachment 7

1.1 Potential TBL, Calculation-based References for Review Port Coquitlam Sustainability Checklist https://www.fraserbasin.bc.ca/_Library/SPC_Documents/4_1_f_CL_PortCoquitlam_Sustainability_Checklist2040.pdf

Saskatoon Triple Bottom Line Decision making tool overview: https://pub-saskatoon.escribemeetings.com/filestream.ashx?DocumentId=99509 Sample spreadsheet http://www.sustainabilitymakescents.com/downloads/kim_fowler-tbl-budget-spreadsheet.doc.zip

2 Other Approaches suggested by CATAC members 1. Prioritize based on sense of urgency (perhaps formal risk basis?)

a. provide a recommended timeline for implementation of all actions 2. Prioritize based on discussion and consensus (used to establish current shortlist)

39

https://www.fraserbasin.bc.ca/_Library/SPC_Documents/4_1_f_CL_PortCoquitlam_Sustainability_Checklist2040.pdf

https://www.fraserbasin.bc.ca/_Library/SPC_Documents/4_1_f_CL_PortCoquitlam_Sustainability_Checklist2040.pdf

https://pub-saskatoon.escribemeetings.com/filestream.ashx?DocumentId=99509

https://pub-saskatoon.escribemeetings.com/filestream.ashx?DocumentId=99509

http://www.sustainabilitymakescents.com/downloads/kim_fowler-tbl-budget-spreadsheet.doc.zip

http://www.sustainabilitymakescents.com/downloads/kim_fowler-tbl-budget-spreadsheet.doc.zip