February 26, 1998
To: Works and Utilities Committee
From: Barry Gutteridge, Commissioner, Works and Emergency Services
Subject: Engagement of External Environmental Consultant for the Design of a Pilot Project for Carbon Dioxide (CO2) Emission Trading
Purpose:
- To design, document and produce an implementation plan for a pilot greenhouse gas (GHG) emission reduction trading project for the new City of Toronto based on emission reductions already achieved by Toronto and Metro over the past seven years; and,
- To assist the Toronto Atmospheric Fund (TAF) in the design and implementation of a communications and consultative strategy to ensure that staff and community partners that will be affected by this new initiative are informed and involved from the outset.
Funding Sources, Financial Implications and Impact Statement:
The cost of the consultant services will be made available from the Energy Conservation Reserve Fund (Fund Code 52-80) inclusive of G.S.T. The Energy Conservation Reserve Fund was established in 1994 (By-law 194-268) to receive any contributions from Municipal Gas and participants in Municipal Gas= City-wide Direct Purchase of Natural Gas program. Contributions from participants would result from the realization of energy cost savings. City Council directed that funds deposited into the Energy Conservation Reserve Fund be used for the provision of benefits to all residents through the funding of projects that reduce harmful environmental emissions.
This pilot GHG project is consistent with the City=s previous commitment to the reduction of CO2 emissions through energy efficiency and conservation and is eligible for funding from the Energy Conservation Reserve Fund.
Recommendations:
It is recommended that:
(1) the City and the Toronto Atmospheric Fund jointly enter into a consultant agreement with the International Council for Local Environmental Initiatives (ICLEI) for the provision of the consulting services described in this report;
(2) $30,000 be made available from the Energy Conservation Reserve Fund (Fund Code 52-80) to pay for the services of the consultant (ICLEI);
(3) an in-kind contribution of City staff costs in the amount of $5,000 be provided in support of this project; and,
(4) the appropriate City Officials be authorized and directed to take the necessary action to give effect thereto.
Council Reference/Background/History:
Not applicable.
Comments and/or Discussion and/or Justification:
The United Nations Conference of the Parties of the Framework Convention on Climate Change, at its third meeting held in Kyoto, Japan on December 12, 1997, gave final approval to the Kyoto Protocol. The Protocol amends the Convention, creating legally binding targets and timetables for greenhouse gas (GHG) emission reductions for the Parties. The Protocol will come into effect when 55 national governments officially approve it. The Canadian government is in strong support of it and is expected to sign the Protocol.
Of interest to the City and the Toronto Atmospheric Fund (TAF), is that the Protocol establishes an international GHG trading system, one that would allow buyers and sellers to trade GHG Emission Reduction Units. In anticipation of the implementation of this trading system, pilot trading arrangements could be developed on a bi-lateral basis particularly between Canada and the USA.
In support of the above, the International Council for Local Environmental Initiatives (ICLEI) recently made a proposal to TAF to design, document and produce an implementation plan for a pilot GHG emission reduction trading project for the new City of Toronto based on emission reductions already achieved by Toronto and Metro over the past seven years; and, to assist TAF to design and implement a communications and consultative strategy to ensure that staff and community partners that will be affected by this new initiative are informed and involved from the outset. The ultimate objective is for Toronto to realize additional financial benefits from its CO2 reduction policies and programs by selling GHG emission reduction credits into the emerging GHG trading market. The proposal indicates that ICLEI would act as the primary consultant, with Torrie Smith & Associates, Ottawa, Ontario, as the sub-consultants. The total fee requested by ICLEI is in the amount of $45,000.
TAF has approved an amount of $10,000 in support of this initiative and has requested that ICLEI submit the proposal to the City in an effort to secure the remaining $35,000. I have received a revised draft proposal from ICLEI dated February 17, 1998 and have discussed the merits of this initiative with ICLEI. Upon review of the draft proposal, I suggest that it would be appropriate for City staff to assist ICLEI and/or ICLEI=s sub-consultant in the following areas during the course of the work contracted:
- Assist in quantifying Toronto=s Emission Reduction Units from various GHG emission reduction projects identified as being eligible for inclusion in the City=s database of initiatives;
- Assist in the analysis of the above data;
- Assist in determining ownership of the Emission Reduction Units related to the above; and,
- Provide guidance in municipal administrative and policy matters in the establishment of the trading framework.
The above services (1-4) provided in-kind by City staff towards the completion of this initiative are estimated to be valued at $5,000. Consequently, ICLEI=s request for $35,000 has been revised to $30,000.
I have consulted with Mr. Philip Jessup of ICLEI and he is in agreement with the foregoing.
Conclusions:
This project is potentially viable and would be consistent with the City=s previous commitment to the reduction of CO2 emissions. I am recommending that $30,000 inclusive of G.S.T. be made available from the Energy Conservation Reserve Fund (Fund Code 52-80) and that an in-kind contribution of City staff costs in the amount of $5,000 be provided in support of this project.
Contact Name and Telephone Number:
Ted Bowering
Acting Director, Environmental Division
City Works Services
Toronto Community Council Area
Phone (416) 392-7763
Fax (416) 392-1456
E-Mail Atbowerin@city.toronto.on.ca@
Barry H. Gutteridge
