Overcoming barriers: grading potential government measures

Our friends at the Sustainable Prosperity Project have just published a timely report to coincide with the various economic stimulus measures proposed by governments around the world, including our own in Ottawa. Their idea is to tie-in economic stimulus measures with environmental benefits.

The report, titled “Building a Green Economic Stimulus Package for Canada” ranks all kinds of proposed government measures and interventions according to three general tests (and nine different criteria), and then grade up to 23 different interventions and government measures.

The three general tests are:
1. Economic Test: How much economic stimulus will the measure provide to the economy?
2. Environment Test: How much improvement will the measure provide to the environment?
3. Policy Implementation Test: How easily can the measure be implemented throughout the country and how equitable are its impacts?

And the final grades for the 23 measures, following good academic procedures, are shown in the table below.

One can only hope that tomorrow's federal budget will get a passing grade.

Existing emission standards – another barrier to change

A key barrier to innovation and change are existing regulations. Changing regulations to lead to a sustainable society can be an uphill battle. The automotive industry in the US has been lobbying hard to avoid new regulations and standards for higher fuel efficiency and cleaner emissions, and had the support of former President George Bush. But this is about to change.

According to the New York Times today, President Obama will direct federal regulators on Monday to move swiftly on an application by California and 13 other states to set strict automobile emission and fuel efficiency standards, two administration officials said Sunday evening.

The directive makes good on an Obama campaign pledge and signifies a sharp reversal of Bush administration policy. Granting California and the other states the right to regulate tailpipe emissions would be one of the most emphatic actions Mr. Obama could take to quickly put his stamp on environmental policy.

Mr. Obama is expected to direct the Environmental Protection Agency to begin work immediately on granting California a waiver, under the Clean Air Act, which allows the state, a longtime leader in air quality matters, to set standards for automobile emissions stricter than the national rules.

This is likely to be the first of a many initiatives by the Obama admisitration on climate change. Stay tuned.

Barriers to innovation and change: lack of awareness

Anne Murray Choudhary has brought to our attention the following observation on the Ontario Power Authority (OPA). OPA has decided a few years ago that a kilowatt saved is much cheaper than paying for a new kilowatt of installed capacity, and has therefore embarked on an ambitious program to reduce electricity demand. A key challenge they face is to address the lack of consumer awareness, a major barrier to change:

The Conservation Bureau of Ontario, which spearheads OPA’s efforts to reduce electricity, conducted a market research study in 2007 in an effort to evaluate consumers' attitude towards energy conservation. The research objective was to "identify barriers to electricity conservation knowledge and action". The findings by the firm Environics show that --
• Energy (generally) and electricity (specifically) are not salient issues for most Ontario consumers
• There is public awareness of a supply/demand issue in the province, when prompted
• Cost of electricity is not a “hot-button” issue – except in the North
• Concerns emerge about environmental impacts of production and consumption, when prompted - but not the focus of public’s environmental concerns

The Conservation Bureau had also conducted a workshop in 2006 to gather intelligence on barriers from low-income housing residents. The workshop participants identified "Education and Communication", "Small Appliances and Lighting (efficiency)" and "Building Envelop and Systems" as key barriers. The Conservation Bureau's analysis also consists of specific mitigation plans for each barrier included in its workshop report.

So as part of its renewed efforts to educate consumers and communicate at the community level, the Conservation Bureau of Ontario, published in January 2nd, 2009 edition of the Kanata Kourier-Standard, a piece entitled "Conservation Zone" written by Peter Love, Chief Energy Conservation Officer of Ontario. Peter Love gives readers 10 easy steps to save money, and energy, in 2009 as a New Year's Resolution:

"1. Schedule a home energy audit. The auditor can tell you which home energy efficient changes are eligible for provincial and federal grants. Call 1-888-668-4636 and make an appointment today.

2. Install a programmable thermostat in your home. Every degree you drop reduces the heat costs by up to five per cent.

3. Change your furnace filter regularly - dirty filters make the fan work harder. Similarly, a clogged clothes dryer lint trap uses more energy and clothes take longer to dry.

4. Inspect exposed heating ducts and where you feel warm air leaks seal the ducts with special metallic tape. This keeps heat going where you want it.

5. Turn off the lights when you're not using them. Replace old, incandescent bulbs with compact fluorescent light (CFL) bulbs. CFLs use 75 per cent less electricity and lasts longer.

6. Participate in Energy Conservation Week (May 17-23, 2009) and World Wildlife Fund's Earth Hour on March 28, 2009.

7. Pull the plug on your old fridge and call the Great Refrigerator Roundup (1-877-797-9473). Older refrigerators can cost four times as much to run as a newer ENERGYSTAR model.

8. Buy cold-water soap for doing laundry. 85 to 90 per cent of energy used by washing machines goes towards heating the water.

9. Dryers alone account for six per cent of total household energy use in Ontario - use a drying rack indoors or an outdoor clothesline if possible.

10. Install weather stripping and caulking around windows and "sweeps" that seal the bottom of your outside doors. This can cut your heating bill by ten per cent."

Articles like the one in the Kanata Kourier-Standard can be found in many Ontario community papers and illustrate OPA’s continued efforts to increase consumer awareness of the benefits of energy conservation.

(Written by Anne Murray Choudhary, Telfer School of Management)

More on the importance of convenience

Here is another quick comment on inconvenience and barriers to innovation. Murray Hill of Saskatoon writes in today's Ottawa Citizen about a new device, Kill A Watt EZ from P3, that tells you precisely how much electricity your appliance uses and how much it will cost to run.

Having a simple display of how much energy you use at any given time is a very powerful tool to encourage energy conservation and behavior change. But the two barriers he notes are that “the display is it difficult to see unless you use an extension cord, and that it's difficult to find in stores.”

Barriers to innovation and change: the convenience of the right choice

Alain Martin of the Professional Development Institute shared with us how people make choices and change behaviour, and the importance of making sure that the desired change is as “convenient” as possible. He illustrated his point with the vivid example of increasing gasoline efficiency by having car tires properly inflated, and how the lack of convenience made this difficult for many people.

By all measures, one of the easiest ways to save 3-4% and even up to 8% of gasoline for cars and road transportation, is to have tires inflated at the right air pressure (See, for example, John Mahler’s article) But how easy is this to do? How convenient?

First of all let's look at the messaging and public awareness. If society were really serious about saving gasoline through the correct air tire pressure, then it would drive that message to you at every opportunity, just like wearing seat belts, or not drinking and driving. Each time you drive up to a gas station to fill up, you would be reminded to inflate your tires to the appropriate pressure. When you insert your credit card, you would be reminded again. And before you leave, you would be asked whether you did. As it is now, all you are asked whether you want to use air miles, have a car wash, or use any other kind of reward points or promotion. But there is nothing to remind us about air pressure. And it would cost nothing to add that reminder to the many other useless messages that bombard you each time you buy gas.

Moreover, getting the correct air pressure in your tires is not a trivial matter. It’s not easy or convenient. To start with, you need to find a gas station with a working air pump. By my estimate, only one in four or five gas stations in the Ottawa area would qualify. Last month I had to drive ten blocks before I could find a station on Carling and Maitland with a decent air pump. And I remember the manager telling me “Oh yes, they all love me for my pump. They come from all over just to inflate their tires.”

Then you need to measure the right pressure at a given temperature. Trying to decipher those tiny graduations on a pencil extendable gauge in the darkness of a winter evening is challenging at best. Getting an air tight contact between the gauge and the tire valve with your cold bare hands while scraping off the snow, ice and salt is definitely not fun. And the few air pumps that actually have a numerical readout are generally calibrated incorrectly. So if it reads 30 psi, it could mean anywhere from 27 to 32. All very inconvenient.

You can buy a digital air pressure gauge at Canadian Tire, but generally it's tricky to get an airtight seal with the tire valve so that the gauge can measure the pressure correctly. And who knows what the minimum wage gas station attendant will actually pump at your full service gas station. You’re lucky if they wash your windshield without leaving a streak.

To add insult to injury, some automated pumps will actually charge you $.25 or more to pump air into your tires with no indication whatsoever that the resulting air pressure will be correct.

Now if we are really serious about lowering gasoline consumption, it should be easy to keep our tires inflated at the right level all the time.

But it isn’t. So it’s not surprising that while 3 out of 4 Canadians wash their car every month, only one in seven will check their tire pressure in that same period. According to a recent survey of the Rubber Association of Canada, 70% of cars on the road were found to have incorrect pressure in their tires.

Imagine what ease and convenience might look like. Each time you buy gas, a green flashing reminds you to check your air pressure (in addition to reminding you about the inevitable car wash, air miles, etc.). Gas pumps are easily accessible, well-lit, with valves that fit properly, and easy readouts. Tire pressures are easy to check. And pumps are well-maintained and calibrated at all times. And it would probably cost only a few thousand dollars investment per station to have such pumps.

Let’s go further. Imagine that manufacturers now have dependable factory installed sensors inside your cars, with a warning light for over or under inflation. The built-in pressure gauge on your dashboard is as reliable as the speedometer or tachometer. As you pump the air, it pings when you reach the right pressure for the given road condition, outside temperature or type of driving you intend to do.

Now that would be convenient! And it would be so easy in such an environment to change behaviour.

But there signs of hope. US regulations require all cars below 10,000lbs to have systems that notify the driver if tire pressure drops more than 25% below the rated pressure. Europe is considering stronger measures as part of GHG emission reductions. And some luxury cars such as the Cadillac SRX have tire pressure monitors to the nearest psi (or so they claim).

We are finally moving in the right direction of convenience.

Barriers to Innovation and Change: The NRTEE report on Commercial Buildings Energy Efficiency

The National Round Table on the Environment and the Economy published today its long-awaited report on energy efficiency in the commercial sector.

Titled "Geared for Change" the report, which is the result of a partnership with Sustainable Technology Development Canada, presents a comprehensive analysis of the energy use of the commercial building sector Canada and its CO2 emissions, its fragmentation and complexity, as well as a particularly thorough analysis of barriers to the adoption of energy-efficient technologies in that sector.

In our ongoing quest to explore barriers to achieving sustainability, we reproduce in its entirety the summary of these barriers, which can be found in Table 4 on page 29 and 30 of the report:


Barriers to Energy Efficiency Technology Adoption in the Commercial Building Sector

Risk Management
• Market, technical, and financial risk
• Level of positive external/personal recognition for “doing the right thing” by installing the efficiency measure(s)
• Level of perceived risk that the efficient product may not perform as promised

Information Gaps
• Lack of complete data and information
• Lack of public understanding of infrastructure needs and resource constraints, i.e. the functionality, cost, drivers and challenges are unknown to the public
• Skills and labour shortage in the construction industry
• Lack of training resources (time, available education, funding) for building operators, inspectors, and trades
• Lack of interdisciplinary programs to promote integrated design processes between
universities and colleges
• Low awareness of available products and services
• Availability of installation and inspection services
• Low awareness of benefits: cost and co-benefit
• Required technical ability to assess the options
• Consumer preferences that do not value energy efficiency
• Existence of a viable infrastructure of trade allies

Value Chain and Principal-agent Relationship
• Level to which the incentives of the agent charged with purchasing the efficiency measures align with those of the person(s) that would benefit

First-mover Disadvantage
• Lack of enabling tools and techniques to facilitate market adoption of sustainable energy solutions
• Need to foster acceleration of advanced technologies
• Lack of performance monitoring of technology systems
• Access to appropriate financing
• Size of required energy efficiency investment vs. asset base
• Payback ratio – actual vs. required
• Level of effort/hassle required to become informed, select products, choose contractor(s), and install

Market Price Signals
• Energy pricing at levels that do not integrate externalities associated with the whole lifecycle (full-cost accounting)
• Energy pricing signals that do not reflect real-time costs

Institutional and Regulatory
• Codes, standards, and permitting processes that prohibit implementation of innovative energy efficiency technologies
• Constitutional jurisdiction for buildings includes all levels of government and results in different standards across the country
• Lack of long-term policy development due to short-term political agendas
• Limited horizontal cooperation/coordination to integrate policies and implementation
• Disconnect between longevity of infrastructure and short-term horizons on crucial decisions, such as budget allocations for maintenance and rehabilitation and rate structures
• Insurance industry acceptable practice, standards or levels of infrastructure service may lead to liability perceptions for professional designers, municipalities, developers

Barriers to innovation and change: Ontario Power Authority and "interval metering"

As part of our ongoing exploration of barriers to sustainability, here is an interesting snippet from the ongoing efforts of Ontario Power Authority. OPA has embarked on an ambitious effort of conservation and demand management to reduce the horrendous costs and environmental impacts of bringing on new generating capacity. In the process, they commissioned a number of studies on consumer behavior in the various client sectors. Here is one study that identified very clear barriers to energy conservation, targeted at clients that use "interval metering", or pay for their electricity consumption on an hourly basis at a variable price which fluctuates throughout the day according to supply and demand. Price ‘spikes’ can happen at any time during the day for a wide range of reasons. These clients tend to be larger commercial or industrial clients.

The theory goes that clients will schedule their operations to the time of day when there is a lower price, and avoid times with peak price. But in practice, as revealed in the course of the meeting in 2007 with interval meter customers, there are a number of real barriers to make this work properly. As the meeting notes show,

“...the barriers evolved into both ‘macro barriers’ and ‘micro barriers’:

Macro barriers: those broader issues that fall within the scope of policy makers, regulators and program administrators. Most interval meter customers find these barriers to be complex, confusing and beyond their ability to affect. They preferred to have the confidence that a ‘system’ is working efficiently on their behalf without requiring an understanding of the specific issues. This confidence would be achieved by ensuring that a transparent system is in place which would weigh the true costs and benefits of energy efficiency against supply options.
Micro barriers: those issues faced by customers at the facility level. These barriers exist as a result of “too few resources chasing too many projects” (resources were considered to include people and funding). Overcoming these barriers requires a range of solutions, including assistance from conservation and demand management (CDM) programs that are developed in response to their challenges i.e., incentives, tools, etc. and presented in the ‘customer language’ "

These barriers were specifically identified by "interval metering" customers, but in fact have elements that are much broader than that as we will see in our continued exploration.

Barriers to innovation and change: the “greening” of city of Toronto

Thank you to Stewart Elgie for pointing our attention to Moira Welsh’s December story in the Toronto Star on “Toronto’s green report card”

This story neatly illustrates not only some quantitative sustainable goals set by Toronto Mayor David Miller, but also evaluates the city’s performance on these goals, and in the process – which is highly pertinent to our study “Making it happen” - identifies a number of barriers to change.

Clean air: 30% lower GHGs by 2020 and 0 smog days
Barriers: budget cuts and delays, delays in approvals, planning and building,e.g. bike lanes.

Less waste: 70% waste diversion by 2010
Barriers: Collecting and processing organic waste and recycling it generates 20,000 tonnes of plastic bag containers. The capacity of the Toronto organic processing plants was exceeded requiring shipping to other facilities in Quebec which uses 1000 diesel fuelled trucks. New plants being considered will not have the capacity to process all organics, especially from apartment buildings.

Clean Water: “Blue flag” designation for Toronto’s 14 beaches (i.e. open 80% of time)
Barriers: need to further reduce burden on city sewers in “wet” years, and have targetted homes disconnect downspouts from sewer system to reduce sewage overflowing.

Setting sustainability and environmental targets (4): Masdar city in Abu Dhabi

Also in the December 6 2008 Economist is an up-date on the most ambitious sustainable project in the world today: Masdar city in Abu Dhabi.

In 2006 Abu Dhabi's development agency unveiled the Masdar Initiative, to pursue "solutions to some of mankind's most pressing issues: energy security, climate change and truly sustainable human development". The initiative consists of a research institute to develop environmental technologies, an investment arm to commercialise and deploy them, and an eco-city to house these two outfits and to serve as a test-bed for their ideas. All this, it is hoped, will turn Abu Dhabi into the Silicon Valley of clean technology, where green-minded academics, entrepreneurs and financiers will rub shoulders.

Some specs:

• Seed funding from Abu Dhabi: $15 billion
• Partners for the research institute: Massachusetts Institute of Technology
• Partners for commercialization: Credit suisse ($100 million), British Petroleum, Rio Tinto
• Anticipated population: 40,000 residents
• Strategic focus of technologies: no green house gases and no waste through next generation solar power, desalination, “personal rapid transit”. In fact, the city is expected to export 2% of its energy.

This is a refreshing change from other United Arab Emirate energy-guzzling mega-projects, such as the Dubai Ski resort built in 2005, the Abu Dhabi Formula 1 racetrack, or the proposed project to create an air contitioned beach in Dubai, as reported yesterday in the New York Times.

Barriers to innovation and change: wind power and the pace of technology development (2).

In its December 6 2008 “Technology Quarterly”, the Economist has a case study on the history of wind power and how far it’s come.

Technology deployment is never instantaneous. It takes time to improve the technology and it takes more time to deploy the technology.

As the authors say “The basic idea is ancient, but its modern incarnation adds many new high-tech twists”. Here are some highlights from the Economist article:

Improved technology and design
- Danish model with three-bladed horizontal-axis, upwind machine becomes broadly accepted in early 1980s, over vertical axis “egg beater” and two-blade horizontal axis models.
- Improved knowledge of impact of fluctuating winds (wind gusts) on turbine structure and gear boxes lead to variable pitch of blades, variable speeds and better control systems.
- Optimization of machines and weight reduction achieved through mathematical models – components become lighter, machines are scaled up.
- Move to larger “off-shore” ocean-based machines, e.g. 7.5MW. Total installed off-shore capacity expected to reach 8 GW by 2012.
- Efforts are ongoing to improve gear boxes, or eliminate them entirely with a “direct drive” system.
- At 50% efficiency – i.e. % of kinetic energy extracted from wind, today’s machines are coming close to maximum theoretical efficiency limit of 59%.

Increased capacity of wind machines
- In the 1980’s, after the first OPEC crisis, windfarms began sprouting in California, thanks to generous incentives.
- Rotor diameters were about 15 metres with production capacity in the tens of kilowatts.
- Today rotor diameters reach 100 meters, with capacity 30 to 50 times larger.

Lower Costs
Generating costs have dropped from 30 cents a kilowatt hour in the 1980s down to approximately 10 cents in 2007.

Exponential rate of technology deployment
In 2007, wind power produced 1% electricity globally, and is expected to reach 2.7% in 2012, and 6% by 2017.
In Europe, in 2007 wind contributed:
- 20% of Denmark’s electricity (the country has had an ambition R&D program since mid 1970s and is the world leader in the field),
- 10% for Spain, and
- 7% for Germany.
- In 2007, Germany accounted for almost one quarter (23.7%) of the world’s installed windpower; and
- the US was at 18%. By comparison, in the 1980s, California was the world leader and held 90% of the world’s installed wind capacity.
- China has been doubling its wind capacity every year since 2004.

Barriers to innovation and change
- Need for better transmission lines to integrate windpower into grid and capacity to absorb fluctuations
- Dependency on subsidies makes industry vulnerable to sudden cut-off (at least until some form of carbon tax is in place), e.g. abrupt halt of California’s industry when subsidies were cut in mid-1980s.
- NIMBY – resistance from consumers who don’t like the noise or cluttered horizon, and are worried about danger to birds.

These barriers are very siumilar to Margaret Wente's article last year (see our earlier Post)