Executive Summary
In 2007, British Columbia (BC) passed the ambitious Climate Change Accountability Act, committing to reducing provincial greenhouse gas (GHG) emissions by 80% below 2007 levels by 20501. Further targets of 30% reduction by 2030 and 60% by 2040 were set as part of the CleanBC climate plan in 2018. To support a renewed effort to reach net zero emissions economy-wide by 2050, the province updated their climate objectives again in 2021, including a sectoral emissions reduction target for buildings and communities of 59-64% below 2007 levels by 20302. However, progress toward these targets has so far been minimal, with emissions from buildings and communities declining by only 9.9% between 2007 and 20203.
The provincial government must take significantly stronger actions to achieve the required decarbonization of the building sector. Retrofitting existing buildings will be the key in this effort since most of the buildings that will be in place by mid-century have already been constructed. Supporting energy-efficient retrofits and fuel-switching is particularly important in residential homes. In addition to emissions reduction, it may aid in combating energy insecurity, which is currently experienced by over a quarter million British Columbians4 — a number that is likely to rise due to increasing costs of living.
This study examined the policies and programs implemented by the public and private sectors, as well as civil society organizations, to promote energy-efficiency retrofits and fuel-switching in residential homes across British Columbia, with a particular focus on effectiveness and equity. We find that while a seemingly large number of policies and programs have been implemented, existing efforts have failed to encourage the rate of retrofits compatible with provincial decarbonization targets. Moreover, these efforts have been insufficient to scale up retrofits in low-income households, rental properties, and non-profit households and to address energy insecurity.
The following summary outlines several shortcomings of existing efforts and identifies policy pathways toward equitable decarbonization of the building sector in British Columbia.
Shortcomings of the existing policies and programs
Existing policies and programs in British Columbia fall short of effectively promoting the necessary rates of energy-efficiency retrofits in residential buildings. This report identified the following shortcomings in the current efforts:
Unpredictable outcomes. Existing policies largely rely on financial incentive programs, such as rebates or low-interest loans. The uptake of these programs is challenging to predict since high-retrofit costs, albeit important, are usually not the sole barrier to retrofitting.
Free ridership. Retrofit incentive programs that are not restricted to low- or moderate-income households tend to suffer from high rates of free ridership, hence undermining the cost-effectiveness and equity of the program.
Limited retrofit drivers in multi-unit residential buildings (MURBS). Large MURBs face challenges accessing capital for energy-efficient retrofits.
Rebates on fossil gas equipment. FortisBC Energy Inc. continues to incentivize fossil gas equipment and connection, which leads to carbon lock-in due to the long lifespan of the equipment.
Continued expansion of fossil gas infrastructure. The BC Utilities Commission continues to approve new connections to fossil gas despite the absence of a clear pathway to sustainably and affordably meet gas demand through low-carbon fuels such as renewable natural gas (RNG).
Insufficient emissions reduction. Between 2007 and 2020, emissions from buildings and communities in British Columbia declined by only 9.9%, which falls far short of the 59-64% reduction target for this sector by 2030. While this target encompasses emissions from both residential and non-residential buildings, the residential sector alone has seen even smaller reductions of only 5% during the same period. The lack of significant and consistent reduction in residential greenhouse gas emissions jeopardizes B.C.’s ability to meet its legislated targets.
The limitations of existing initiatives in effectively promoting energy-efficient retrofits in residential buildings are compounded by a failure to ensure equitable decarbonization of the residential sector. This report identified several shortcomings with regard to equity:
Failure to encourage retrofits in rental properties. Existing incentive programs fail to address the split-incentive problem hampering retrofit uptake in rental properties. This particularly impacts low-income households, who, due to financial constraints, tend to rent older and less energy-efficient properties.
Insufficient funding support for retrofits in non-profit, social, and low-income housing. Financial support for energy-efficient improvements in non-profit, social, and low-income housing is often inadequate to cover the upfront costs of retrofits, which makes it challenging for these providers to afford the necessary investments.
Lock-in of fossil gas systems may exacerbate future energy insecurity. Higher rebate amounts are offered for the installation of fossil gas space and water heating equipment to low-income residents, which may exacerbate energy insecurity as fossil gas heating becomes more expensive due to rising carbon taxes and commodity prices.
Failure to consider equity in climate adaptation. Homes with poor energy efficiency and fossil fuel heating are more vulnerable to extreme heat and poor air quality, leading to disproportionate public health impacts among households that lack the resources to complete retrofits.
Low-ambition policy and a lack of accountability is unjust to equity-deserving groups, developing nations and future generations. Legislated provincial targets may not constitute an equitable contribution to mitigating global climate change under the Paris Agreement. In addition, the province is not on track to achieve its existing emissions reduction targets for the residential sector, with disproportionate impacts to lower-income British Columbians.
Policy pathways
Our review of policies and programs in jurisdictions across North America and Europe has uncovered several best practices for promoting equitable decarbonization of residential buildings, which British Columbia could benefit from. We synthesized these practices into six main policy pathways:
Fossil gas phase-out and zonal electrification. The provincial government must take a proactive approach to phase out fossil gas in the residential sector, including (1) immediately banning incentives on new fossil gas appliances and connections; (2) banning new installations of all fossil gas heating systems, including hybrid heat pumps; (3) requiring FortisBC and BC Hydro to consider electrification as a primary goal of their planning processes and to pursue zonal electrification. These actions will aid in preventing fossil gas lock-in and ensure that limited renewable gas resources will be reserved for hard-to-electrify industrial sectors.
Enhanced support for lower-income and rental households. The provincial government must address energy insecurity in low-income households and promote equitable decarbonization of the residential sector. The Utilities Commission Act should be updated to enable and require utilities to dedicate a significant portion of their funds toward energy-efficient programs specifically targeting low-income residents. Low-income households, including income-qualified renters, should be provided with free installation of high-impact energy-saving measures, such as electric heat pumps and insulation.
Energy-efficiency standards and retrofit requirements. To ensure that residential retrofit rates align with provincial decarbonization objectives, mandatory energy efficiency requirements for existing residential homes should be introduced. Initially, this may be achieved by updating the provincial Residential Tenancy Act to mandate rental housing to meet a reduced level of carbon intensity. Eventually, mandatory standards should apply to all existing buildings and should progressively increase until reaching net-zero emissions levels. During the transitionary period, owners of inefficient buildings can be required to pay higher property taxes. These actions should be accompanied by targeted initiatives aiding lower-income residents in meeting the requirements, such as free installation programs for low-carbon upgrades like heat pumps.
Provision of comprehensive one-stop-shop (OSS) services. The provincial government should establish a comprehensive OSS service, administered either by a Crown corporation or an independent third-party organization. OSS should provide informational services, a consolidated rebate application system, and assistance throughout the renovation process. To ensure equitable decarbonization despite limited governmental resources, free-of-charge and all-inclusive OSS services should be provided to low-income households, while higher-income households could receive a lower degree of support or offered the same services for a fee.
Expansion of retrofit financing options for moderate- and high-income households. To support greater retrofit uptake, the provincial government should enable financing options that are attached to a property or a meter. Utilities should be required to offer on-bill tariff programs and Property Assessed Clean Energy (PACE) financing options should be available to homeowners.
District energy expansion. Developing district energy systems can greatly facilitate equitable decarbonization of the building sector in urban areas because of their high energy efficiency, ability to incorporate waste heat sources, and great reliability. While district heating is widespread in Europe, it has not yet gained significant momentum in Canada. To encourage district heating development, the provincial government could require local governments to consider district energy in their planning processes and require buildings undergoing renovation to connect to district heating, if available in the area.
READ THE FULL REPORT – Paving the Way for Equitable Decarbonization of British Columbia’s Residential Homes
Introduction
British Columbia has legislated a greenhouse gas (GHG) emissions reduction target of 40% below 2007 levels by 2030 and 80% by the middle of the century1. To support the achievement of these objectives, in 2021, the provincial government also established an emissions reduction target for individual sectors. For buildings and communities, the target has been set at 59-64% below 2007 levels by 20301. Former BC Premier John Horgan additionally pledged to legislate a “net-zero emissions by 2050” target2, which would require even further emissions reduction from the buildings sector.
With only seven years left before the end of the decade, progress toward these targets has been limited, with emissions from buildings and communities only declining by 9.9% between 2007 and 20203. To ensure the achievement of provincial decarbonization objectives in the coming years, drastic decarbonization of the buildings sector needs to be achieved.
While the provincial government committed to incorporating zero-carbon requirements for new buildings by 20304, the majority of the buildings that will be in place by then, and even by the midcentury, have already been constructed. The Pembina Institute has estimated that even if all new constructions were to be zero-carbon by 2032, it would only contribute a third of the emissions reductions needed from the building sector by mid-century5. Therefore, retrofits of existing buildings will be essential in achieving these targets.
Simultaneously, it is crucial to ensure that policies and programs for the decarbonization of residential buildings do not disproportionally impact disadvantaged population groups and actively contribute to repairing the harms caused by historical, cultural, and institutional injustices. Following these principles, decarbonization of the residential sector must address the issue of energy insecurity, which impacts approximately 250,000 households across British Columbia4, impairing their quality of life and jeopardizing health.
Often, however, low-income residents do not benefit from commonly deployed energy-efficiency and decarbonization policy tools, such as rebates and tax incentives, as they tend to require upfront investments and/or certain levels of income. Furthermore, low-income households often live in rental properties and might lack the agency and future certainty necessary to make energy-efficient improvements. Recognizing these issues, this report aims to:
- Review the main programs and policies supporting energy-efficiency retrofits in British Columbia;
- Assess the effectiveness and equity of these programs and policies;
- Review energy-efficiency policies and programs that have been implemented in other jurisdictions worldwide that can aid in advancing equitable decarbonization of the residential sector;
- Propose provincial-level policy changes that may contribute to equitable decarbonization of the residential sector.
READ THE FULL REPORT – Paving the Way for Equitable Decarbonization of British Columbia’s Residential Homes
Prepared by: Margaryta Pustova, UBC Sustainability Scholar 2022-2023
Prepared for: Dylan Heerema, P.Eng. Senior Policy Advisor Ecotrust Canada
- Climate Change Accountability Act. (2007).
- Ministry of Environment and Climate Change Strategy, Government of British Columbia. Climate action legislation. Government of British Columbia https://www2.gov.bc.ca/gov/content/environment/climate-change/planning-and-action/legislation.
- Government of British Columbia, CleanBC. 2022 Climate Change Accountability Report. https://www2.gov.bc.ca/assets/gov/environment/climate-change/action/cleanbc/2022-ccar/2022_climate_change_accountability_report.pdf (2022).
- Heerema, D. A vision for ending energy poverty in British Columbia. Ecotrust Canada https://ecotrust.ca/priorities/energy/a-vision-for-ending-energy-poverty-in-british-columbia/ (2021).