Post-­‐Paris:  Ontario  June  7,  2016,  Presentation  to  the  Responsible   Investment  Association

Dianne  SaxeEnvironmental  Commissioner

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Overview

� Three  new  laws  since  May  19

� Energy  Use  in  Ontario

� Climate  related  financial  risk

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Three  new  laws  since  May  19

� 172:  Climate  Change  Mitigation  and  Low-­‐Carbon  Economy  Act

� 151:  Waste-­‐Free  Ontario  Act

� 135:  Energy Statute  Law  Amendment  Act

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Climate  Cap  and  Trade

� Climate  Change  Mitigation  and  Low-­‐Carbon  Economy  Act� Legal  requirement  to  cut  GHGs,  from  1990  baseline:

� 15%  by  2020.  � 37%  by  2030.  � 80%  by  2050!  

� Fossil  fuel  costs  to  rise� $1.9  B/year  to  Greenhouse  Gas  Reduction  Account

� To  be  spent  as  per  Action  Plan

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Why  80%?

� IPCC  5  computer  model� Consistent  with  2  degrees?� What’s  not  in  the  model?

� Model  may  be  way  too  optimistic…

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Circular  Economy

� Waste-­‐Free  Ontario  Act� Resource  Recovery  and  Circular  Economy  Act

� Individual  producer  responsibility� All  forms  of  waste,  not  just  packaging� No  more  diversion  monopolies

� Waste  Diversion  Transition  Act� Blue  Box  stranded  assets?

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Energy  

� Energy Statute  Law  Amendment  Act� Amends:

� Green  Energy  Act� Disclosure  of  energy  and  water  use� Access  to  usage  data� Conservation  plans

� Electricity  Act� Long  term  energy  planning

� Ontario  Energy  Board  Act

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Overview

� Three  new  laws

� Energy  Use  in  Ontario

� Climate  related  financial  risk

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Energy  Conservation  and  Efficiency

� eco.on.ca/reports/2016-­‐lets-­‐get-­‐serious/

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80%  fossil  fuel  dependent

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80%  reduction  by  2050?

� Climate  mitigation  is  mostly  about  energy� Reduction  targets  are  total  consumption,  not  per  capita� Population  to  rise  >50%� Reduce  fossil  fuels  from  80%  to  10%  or  less� In  34  years!

� And  we’re  starting  late

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Energy  use  in  Ontario

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• Total  use  f lat  from  2007  to  2014• Energy  use  per  capita  down  7%

Electricity  use  is  down• Use  down  6%  from  2007  (8%  excluding  embedded  gen.),  summer  peak  down  17%• 91%  low  emission

• Our  smallest,  cleanest  major  energy  source

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Transportation  fuel:  use  is  up

• No  dedicated  conservation  funding• Government  targets:  no  action  (10%  Low  Carbon  Fuel  Standard),  or  poor  performance  (land  use;  only  1%  of  the  way  towards  2020  EV  target)

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Natural  gas:  use  is  up

• Twice  as  much  energy  use  as  electricity,  but  1/6  the  conservation  spending  ($66M  in  2014)

• Weather  impact  (e.g.  2014  “polar  vortex”)� Price?

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Policy  bottlenecks

� Fossil  Fuel  Subsidies� Inadequate  data� Lopsided  focus

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End  to  fossil  fuel  subsidies?

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• $628  M  in  Ontario  tax  breaks  for  fossil  fuels  

• $650  B  world

• At  cross-­‐purposes  to  cap  and  trade

• G7  pledge  to  eliminate  by  2025

Transparency

� Poor  energy  use  data� Mandatory  reporting  of  energy  use  for  15,000  buildings  in  the  Broader  Public  Sector  (O.  Reg.  397/11)

� Who  are  the  energy  hogs?

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Admin  &  Storage  Facilities

2,057,002,060   ekWh/yr

Hospitals  &  Emergency  Response  

4,746,486,624  ekWh/yr

Schools,  Universities,  Colleges  and  Libraries

8,548,905,751  ekWh/yr

H2O  &  Sewage1,595,722,106  ekWh/yr

Community,   Sports,  &  Rec  Centres1,774,408,680  

ekWh/yr

Where  energy  is  used  in  the  BPS

Large  variations  in  energy  intensity

� Buildings  with  the  same  function  perform  very  differently…  

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Lopsided  funding

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Transportation:  what  matters  most

� Largest  source  of  emissions  but  toughest  to  tackle� Key  levers:

� Land  use  planning  (reduce  travel  distances)� Transit/shared  transportation   (reduce  vehicle   km  per  person)� Cleaner/more   efficient  vehicles  (reduce  energy/emissions   intensity)

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Overview

� Three  new  laws

� Energy  Use  in  Ontario

� Climate  Related  Financial  Risk

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Which  risks?

� Mitigation� Energy

� Adaptation� Water

� Divesting  from  energy  sector  not  enough

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Getting  ready  for  massive  disruptions

� 100  year  storm  every  10  minutes?

� wildfires� floods� droughts� storms� heat  waves

� Who’s  insurable?

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More  Gradual,  Perhaps

� Sea  level  rise  (what’s  in  danger?)� Coastal  erosion� Loss  of  coral  reefs� Salt  water  intrusion� Loss  of  ice  roads� Heat  and  water  stress� Loss  of  species� Diseases  and  pests� What  will  still  grow?� Uncontrollable  migration?

� When  will  the  Arctic  be  ice  free?

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Climate-­‐Related  Financial  Risk  Disclosure

� Financial  Stability  Board  Task  Force� inadequate  disclosure  of  climate  risk  a  threat  to  world  financial  

system

� Curtis  Ravenel meetings  in  Toronto� Koskie Minsky  opinion  on  fiduciary  duty� Our  letters  to  OSC  and  CAPSA:

� Ontario  needs  to  catch  up

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Conclusions

� Wrenching  shifts  in  the  rules

� Huge  changes  needed  in  energy,  some  already  happening

� Climate-­‐related  financial  risks  in  most  sectors

� Financial  industry  role  in  the  transition?  – be  a  winner,  not  a  victim

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Thanks!

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Dianne  SaxeEnvironmental Commissioner

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