A Climate Plan That Would Net Us $12 Billion

Cut emissions. Save money. What are we waiting for?

100 MW wind farm in North Stormont, immediately south of Ottawa

Financing climate action

There is A LOT of misinformation about Energy Evolution, the City of Ottawa’s climate change plan.

Critics call it a $32 billion plan, or maybe $57 billion, and how can the city possibly afford that!

It’s the sort of language we hear from climate defeatists — people who give up before they even try to find solutions.

So let me explain the financials of Energy Evolution in terms everyone can understand. This is a plan that can save us a ton of money.

Corporate and community emissions

Energy Evolution is a plan to get carbon emissions in Ottawa — both by City Hall and by all residents, businesses and organizations — to net zero by 2050. In fact, City Hall gets there by 2040.

It’s a plan that will enable all of us — individuals, organizations, governments — to be part of a systemic solution across Ottawa for mitigating climate change.

$32 billion in costs

The Plan requires investments over 30 years of $32 billion (counted in today’s dollars). But these are NOT just investments by City Hall. They include spending by everyone: City Hall, businesses, landlords, households, utilities, ...

(The Plan has been around for a few years and the numbers could use a refresh, but they still reliably explain the opportunity.)

For example, the investment plan includes landlords retrofitting their apartment buildings. The federal government setting up a district energy system. City Hall diverting waste from landfills. Ottawa Hydro building new generating capacity. You buying an electric vehicle.

Energy Evolution is the sum of investments required in a city of 1 million people. Of course it’s a big number. But that a meaningless number until we put it into context.

$44 billion in benefits

By making these investments, we reduce greenhouse gas emissions to net zero. The people of Ottawa do their part in keeping the planet habitable for future generations.

But we also end up saving a lot of money.

The Plan generates $44 billion in savings and new revenue over 30 years.

EVs are cheaper to operate than gas-powered cars. Retrofitted building save on heating bills. Methane emissions from landfills can be captured and sold as natural gas.

$6 billion in savings for the City budget

Turning specifically to the City of Ottawa financials, the Plan is an opportunity to create significant savings for the taxpayer.

The Plan requires City Hall to spend $2.5 billion over 30 years.

(When Energy Evolution was released in 2020, it assumed the City taking on the full costs of new transit expansion — such as the full $5 billion cost for Light Rail Transit Phase 3. Since any transit expansion would be cost-shared with federal and provincial governments, and since LRT3 looks unlikely anytime soon, I have removed both the costs and benefits associated with expanded transit from the model.)

With that $2.5 billion investment, City Hall could create over $6 billion in savings and new revenue.

To put that into annual City Budget terms, City Hall would spend, on average over 30 years, about $80m a year to reduce its corporate emissions. In return, City Hall will generate roughly $200m a year in savings through these investments.

$80m to generate $200m in savings. Every year. What are we waiting for?

$200 a year windfall per household

Climate action is also financially advantageous for households.

Energy Evolution assumes spending by households on climate action averaging about $900 a year and which generate savings of about $1,100 a year.

Surely a City Hall that cares about affordability would put at the top of its to do list anything that could create a $200 annual windfall for each Ottawa household for each of the next 30 years.

So why the inaction?

Given the scale of opportunity, why has there been so little climate action by either the Watson or Sutcliffe administrations?

There are three potential reasons.

First, it may come down to a poor sales pitch. Skeptics love to point to a big price tag, while neglecting to mention the payback. And those misperceptions are not being corrected.

Second, it’s unclear if the Mayor and many council members would ideologically be willing to take the actions required by the Plan. For example, would Council be ready to allow wind power in Ottawa, as our neighbouring municipality North Stormont is already doing?

Or third, with climate action, we incur the costs now and benefit from the savings over many years to come. “Sacrifice now for gain later” takes a level of commitment that hasn’t been on display in Ottawa in recent years.

Leaving money on the table

It’s time for our local government to move on the defining issue of our lives.

Ottawa should implement the Energy Evolution climate plan to reduce our carbon emissions. Or to not leave $12 billion of our money on the table.

Leadership of such a broad plan city-wide plan can only happen by the municipal government. Will Ottawa Council lead, or will they give up without really trying?

Over the few weeks, I’ll look at the specific actions required by City Hall to put our climate plan into action. The question is whether this City Council is ideologically prepared to do what needs to be done?