Engagement of External Environmental
Consultant for the Design of a Pilot Project
for Carbon Dioxide (CO2) Emission Trading
The Works and Utilities Committee recommends the adoption of the following report (February 26, 1998) from the
Commissioner of Works and Emergency Services:
Purpose:
(1)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
(2)to assist the Toronto Atmospheric Fund 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 GST. The Energy Conservation Reserve Fund was established in 1994 (By-law No. 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)$30,000.00 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 $5,000.00 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 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 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
$45,000.00.
The Toronto Atmospheric Fund has approved an amount of $10,000.00 in support of this initiative and has requested that
ICLEI submit the proposal to the City in an effort to secure the remaining $35,000.00. 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:
(1)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;
(2)assist in the analysis of the above data;
(3)assist in determining ownership of the Emission Reduction Units related to the above; and
(4)provide guidance in municipal administrative and policy matters in the establishment of the trading framework.
The above services (Items (1) to (4)) provided in-kind by City staff towards the completion of this initiative are estimated
to be valued at $5,000.00. Consequently, ICLEI=s request for $35,000.00 has been revised to $30,000.00.
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 $30,000.00 inclusive of GST 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 $5,000.00 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@