THE STANDING SENATE COMMITTEE ON ENERGY, THE ENVIRONMENT AND NATURAL RESOURCES
EVIDENCE
OTTAWA, Thursday, September 28, 2017
The Standing Senate Committee on Energy, the Environment and Natural Resources met this day at 9 a.m. to study the effects of transitioning to a low carbon economy.
Senator Richard Neufeld (Chair) in the chair.
The Chair: Good morning, colleagues, and welcome to this meeting of the Standing Senate Committee on Energy, the Environment and Natural Resources.
My name is Richard Neufeld. I am a senator from British Columbia. I welcome all the people in the room and viewers across the country who may be watching on television or online.
As a reminder to those watching, these hearings are open to the public and available online on the new Senate website at sencanada.ca. All committee-related business can be found online, including past reports, bills and lists of witnesses.
I will now ask senators to introduce themselves. I will begin by introducing the deputy chair, Senator Paul Massicotte from Quebec.
Senator MacDonald: Michael MacDonald, Nova Scotia.
Senator Galvez: Rosa Galvez, Quebec.
Senator Fraser: Joan Fraser, Quebec.
Senator Wetston: Paul Wetston, Toronto, Ontario.
Senator Dean: Tony Dean, Ontario.
Senator Griffin: Diane Griffin, Prince Edward Island.
Senator Seidman: Judith Seidman, Montreal, Quebec.
Senator Patterson: Dennis Patterson, Nunavut.
The Chair: I will introduce our staff, beginning on the left with our clerk Maxime Fortin and on my right the Library of Parliament analysts Marc LeBlanc and Sam Banks.
Colleagues, in March 2016 the Senate mandated our committee to embark on an in-depth study on the effects, challenges and costs of transitioning to a lower carbon economy. The Government of Canada has pledged to reduce our greenhouse gas emissions 30 per cent below 2005 levels by 2030. This is a big undertaking.
Our committee has taken a sector-by-sector approach to this study. We will study five sectors of the Canadian economy that are responsible for over 80 per cent of all greenhouse gas emissions. They are electricity, transportation, oil and gas, emission-intensive trade-exposed industries and buildings.
Our first interim report on the electricity sector was released March 7, and our second one on the transportation sector was released on June 22.
For the forty-ninth meeting on our current study, I am pleased to welcome James Tansey, Executive Director, Centre for Interactive Research on Sustainability, University of British Columbia. Thank you for joining us today. We look forward to your presentation, sir.
James Tansey, Executive Director, Centre for Interactive Research on Sustainability, University of British Columbia, as an individual: Thank you for the opportunity to present to you today. I’m responsible for a program at the University of British Columbia that was built around the concept of the university being a living laboratory for every aspect of sustainability, clean technology and innovation from the way we build and construct our buildings through to how we support staff, faculty and students in engaging with wellness, health and well-being.
For those of you who haven’t been there, the campus is quite unique among campuses in that it is isolated from the rest of the city. We run our own utilities. We do most of our building permitting. We manage most of our own construction. On a busy day we have 60,000 people on the campus: staff, students and faculty. That has given us a unique opportunity to use the infrastructure as a living laboratory for innovation, demonstration and research related to the sustainability agenda.
We have around 14 million square feet of buildings. We emit, in total, around 150,000 tonnes per year. We are the largest transit node in the province as well as the largest non-industrial user of electricity.
When we started this initiative over 15 years ago under the sustainability initiative, before my time at UBC, we focused on what we could do to drive an agenda of improving campus sustainability performance. We focused on being the greenest campus, on reducing emissions and on engaging students.
In the last five years, recognizing that we do function in many ways like a small city, we have transitioned to focusing on that agenda for the future of cities and how we make them in general more sustainable.
I wouldn’t say it is unique to UBC as an opportunity but we do have something distinct, given our geography and given the strength of our commitments to sustainability within the region.
The reason we’re interested in cities, in particular, is that cities are increasingly the powerhouses of the economy. By 2100, 80 per cent of the world’s population will live in cities. In North America roughly 82 per cent of the population live in urban areas. Cities generate around 70 per cent of economy’s GDP and are responsible for 80 per cent of the emissions. We’ve shifted and evolved the concept of the campus as a living lab to recognizing that the campus has many of the challenges the cities of the future will face.
We focus on three areas. We focus on how we build and design buildings. We focus on health, wellness and innovation in those areas, and we focus on how we can support the innovation ecosystem.
Some of the biggest changes and successes in our strategy have been in the last five to eight years. It began by aligning the university’s living laboratory program with some of the big shifts that were being made in the province at the time.
This was an era from 2007 onward when we had aggressive carbon pricing in the province. The price was set to grow to $30 per tonne. In addition, all public sector organizations had to meet a carbon neutrality requirement which effectively meant a carbon price on the campus of $55 a tonne.
Very quickly, we began setting our own targets with respect to those climate change goals, and we started pricing carbon into all of our long-term decisions around buildings and infrastructure.
Since 2007 the campus footprint has grown by 16 per cent. The campus population has grown by 22 per cent. It has many of the characteristics of a fast-growing city.
At that time, we set goals of 33 per cent emissions reductions by 2015 and 67 per cent reductions by 2020. We managed to meet those 33 per cent reductions goals in 2016 despite a cold winter. We’re on track and have a plan for how we’ll meet a 67 per cent emissions reductions goal by 2020. As I said before, that’s in the context of a population that has grown by 22 per cent. The per capita emissions on campus have reduced by almost 50 per cent through a number of these initiatives.
In addition, we’ve focused on a number of other areas: water, food, energy use, independent of greenhouse gas emissions, waste diversion and transportation. We have been able to achieve a 59 per cent reduction in water use per student since 2000, a 67 per cent overall waste diversion, and a 70 per cent of trips to the campus being made by sustainable transport nodes.
In terms of some of the building highlights, some of the physical infrastructure that we’ve built, the CIRS building, the Centre for Interactive Research on Sustainability, was designed to be a test bed for innovating around new building technologies. It’s the greenest building in North America with the lowest emissions. It is one of the first LEED-certified buildings of its type in the world. It is built using wood in place of steel and concrete as the main infrastructure, the skeleton of the building. It was one of the first building to use glulam and cross-laminated timber on that scale for a four-storey building. It was intended as a test bed and nexus on the campus for all of our sustainability initiatives.
Building on the experience of constructing with wood, we just completed the world’s largest tallwood building. It’s a 58-metre building called Brock Commons. Everything in the building in terms of the core infrastructure is wood. We had to make the elevator shafts out of concrete. They also provide a bit of stability for the building. It’s one of the first demonstrations of being able to build an 18-storey building completely out of wood. It sits on the north end of the campus. It has just opened as student residences, but it probably has some of the best views in the Metro Vancouver region.
Lastly, as an example of some of the projects we’ve taken on, we integrated a bioenergy system into the campus’s infrastructure. This is one of the first experiments really using our capital budget and operating budget to demonstrate new technologies. This is a system that had been selected by GE, a local company called Nexterra, that was using bioenergy to generate heat and power on the campus. Instead of just setting it up as isolated test laboratory or demonstration lab, we integrated it into the campus’s heat and power system. We were able to use low-grade wood waste, primarily cedar waste from cedar mills, to provide about 20 per cent of the campus’s power. It was also an experiment in generating electricity from wood waste.
What we were able to do from a budgeting perspective was to combine capital expenditures we would all be making for the energy infrastructure with innovation funds, the federal SDTC program, western diversification funding, forest innovation funding, and the Innovative Clean Energy Fund in B.C. and with the capital spending and operating budget, and to integrate one of the most innovative energy systems in North America fully into the campus’s infrastructure.
In a sense what we’ve also been able to model is how we can leverage our procurement processes, our capital expenditures at the university level, into clean and sustainable technologies. At the university level, we now continuously look at all of our capital spending, which can be between 150 and $200 million a year on new buildings and infrastructure. For every new piece of infrastructure, we look at those and say, “What kind of leverage can we generate here? What kind of research can we build around those projects?”
We’ve applied with the bioenergy project for CFI funding for an extended lab attached to the bioenergy research facility. We’re also generating new research income and new opportunities leveraging that kind of infrastructure.
That covers the main points I wanted to make. I’d be very happy to take some questions. The future for us as a campus has really been around institutionalizing what were originally project level investments and opportunities into the way that the campus works.
The final point I’d like to make is that while we on campus tend to focus on the expertise of the faculty and the leadership — and there was certainly very strong leadership from the executive level within UBC — we’ve also been very fortunate to be able to attract on the operational side an incredibly strong team of operational professionals who engage with the projects. They are willing to take risks with their careers, to some extent, around these experimental projects. It has allowed us to be able to make and reinforce the claim that we are the most sustainable campus certainly in North America and, I would argue, the most sustainable campus in the world.
Senator Massicotte: Thank you, Mr. Tansey, for your presentation and for sharing your knowledge.
Obviously, your experience has confirmed that with engagement and the proper motivation we can get there. There are solutions to it. I think confirms something we all knew. Tell us a bit more about what advice you would give us or give the Prime Minister if you had two minutes with him. Talk to me about carbon pricing and talk to me about the fact that you used a lot of funds to subsidize your project.
If you did a macro scale Canada-wide, what advice would you give and what must we ensure we don’t do?
Mr. Tansey: We learned early on to make the most of the money we would already be spending and looking for leverage from additional funding. Thinking about the way we spend money on infrastructure on the campus is a good model for funds that government was already spending on maintaining buildings and building new buildings.
Every new building that you don’t build to the most sustainable standards is a 30 to 50-year mistake. Starting from the perspective of every dollar that we spend, which is already allocated for operating budgets and infrastructure, should be scrutinized and evaluated not just from annual budget cycle expenditures but in terms of the lifecycle costs of those expenditures.
When we saw a $55 per tonne carbon price in B.C., the operational teams at UBC, the finance team under the leadership of the CFO at the time, started doing full lifecycle costing on those buildings and on that infrastructure. That’s really a way of not just presenting a carbon price but also looking at the impact of that over a 10, 20 or 30 years with respect to the investment decision.
The carbon price, on its own, changed our mindset. Our ability to work to get additional layers of funding support from agencies like SDTC allowed us to build partnerships with external commercial partners that we wouldn’t otherwise have been able to build.
A third big factor, even in the presence of the price signal and of additional funding, was that recognizing the leadership and embracing the willingness to take risk around those kinds of government and public expenditures was also very important. It doesn’t necessarily come naturally to public institutions to take risk with this kind of infrastructure.
You could have the financial conditions in place. You could have the funding and financing, but in many ways, unless you create a culture that embraces and supports leadership on these kinds of issues, nothing would have happened.
Senator Massicotte: You profited from or took advantage of the funding that was available to incite this technological perspective. If you remove that, do you have any idea of how significant that component was? If you only had carbon pricing at 55 bucks, what would it have to be to equate?
We are mixing apples and oranges all the time. Most economists would say, “Let the market decide how to most efficiently use its funding and so on.” Do you have any sense there?
Mr. Tansey: For every new piece of construction we do now it still is subject to that test. The bioenergy research and development facility was a demonstration project. With the additional funding that was available, the grant funding from SDTC, ICE and the Western Diversification Program, it still passed a cost benefit analysis from the university’s perspective. However the risk associated with the demonstration project was being subsidized by those funds, which is what they were established to do. They were established for demonstration projects.
All of the other decisions that we make on the campus stand on their own with the carbon price in place. We just looked at our climate action plan. We’ve been looking at a number of different options for how we meet our 67 per cent target. We have incorporated a $55 per tonne carbon price. We’ve incorporated future natural gas prices. We’ve effectively let the different options compete with each other. In those cases, even without the demonstration funds, the decision is heavily tilted toward expanding the bioenergy system and heavily tilted toward ongoing demand side management projects.
You have special projects, the flagship projects like the BRDF, the bioenergy research and development facility, which is a piece of research infrastructure as well as energy infrastructure. That did require those subsidies, but for the normal everyday capital allocation decisions the $55 per tonne carbon price does a lot of work for shifting innovation.
Again, it still requires leadership because from a public sector perspective you are potentially asking people to reduce their energy budget. People like to hold onto their budgets. People don’t like to take risks when in the public sector they don’t get rewarded directly in their salaries for reductions in the energy bill of the university. It still requires, within the public sector for that carbon pricing effect to work, strong leadership by the heads and the financial teams within those organizations.
Senator Griffin: Thank you for being here. It has been really, really interesting. I have been on the UBC campus a number of times. It is a long way from Prince Edward Island, but I have been there. I really like the feel of the campus. Like you say, it’s a city within a city. It is a special feeling.
Has your research shown any differences between boomers and millennials with respect to the influence of the built environment?
Mr. Tansey: I would say our ratings among the student population. UBC has become known for sustainability. That’s one of the things that attract students to our campus as opposed to other campuses. We have a competitive advantage from that perspective.
Most of the other work I do looks at financing mechanisms and socially responsible investing. What we see in those areas is that millennials are 58 per cent more likely to make socially responsible development and socially responsible consumption choices than boomers. There is good evidence to support that.
What we see on the campus is the difference between when I was an undergraduate 20 years ago and now is it’s table stakes. It’s just an expectation from this generation of students that we will have strong recycling programs and alternative energy systems. They don’t necessarily expect that when they come out to UBC their parents will buy them a car. The transit is their default option for travel.
There is definitely a shift in mindset with this generation. They do a pretty good job of holding us accountable to those expectations.
Senator Griffin: I think you said 70 per cent were using sustainable transportation to get to campus. That’s a pretty impressive number.
Mr. Tansey: One of our early innovations was called the U-Pass system which was built into the student fees. The funding of that helped TransLink to expand the bus fleet out to the campus. It required a referendum, and we know referendums can be risky now, among the students to do that. They voted for incorporating the bus pass costs into their student fees, which provided the financial basis for TransLink to invest in extra bus infrastructure. That transformed the number of students travelling to the campus dramatically. It jumped by 20 per cent within the first year of that program.
Senator Griffin: That’s impressive. Thank you.
Senator Seidman: Centre for Interactive Research is an interesting name for a centre. Thank you for sharing the very impressive attempt at institutionalizing a model for sustainability.
I understand that in the case of CIRS, it has inspired the UBC to institutionalize the notion of a sustainability gradient, meaning that new projects on campus should strive to achieve progressively more stringent sustainability goals.
Mr. Tansey: Yes.
Senator Seidman: Could you tell the committee about that concept? The reason I’m particularly interested in that is because I’d like to look at the comparison between the federal government and university, the use of government buildings and how they might be able to apply the university standards.
Mr. Tansey: To clarify, CIRS is the building that is the centre of the program. The overall initiative is called the USI, the University Sustainability Initiative. That is the campus-wide program combining research and operational decision-making and investment.
In 2010, when we looked across the campus at a range of new opportunities, we set very high targets in a climate action plan for 2015 and 2020. It was hard to avoid the importance or limit the importance of setting those aggressive targets. It held us hostage as a public commitment to achieve those targets. I would say that’s what drives that gradient. Setting those bold and ambitious targets is what drives us to look at other opportunities.
I would look now at what we are doing on the campus in terms of the green building action plan. We are looking at buildings and the neighbourhoods around buildings in trying to understand what we can do to drive innovation at the frontiers of building design and building integration with infrastructure.
That green building action plan sets a framework and standards for potentially the next 20 years of building investment. As part of that process we have an operational team that consults and develops plans and a lot of modelling, but we also want to combine that with global thought leadership on the campus and internationally on what the neighbourhoods and cities of the future will look like and to provide that vision and inspiration.
The second step is thinking beyond the incremental changes and looking at the big potential demographic and technological changes.
The third is institutionalizing that into the way the capital budgets are allocated and operated.
We worked last year for our local MP Joyce Murray, looking at procurement processes and how to improve and make more sustainable the procurement processes based on best practices from around the world.
There are real challenges with the potential conflict in driving strong sustainability goals in everything from building construction to sourcing lighting. The focus and innovation you need there often conflict with the challenges of the procurement process.
In one example we had a company that presented a very strong commitment to a clean technology solution. It was the best technology solution available in the world from the perspective of our team. They effectively brought $20 million of matched funding for a special project to the campus. Then our procurement rules required that we have an open and competitive tender. The company turned around and said, “We can do that, but do you really think that anybody else is going to bring $20 million of funding to the table as part of the procurement process?”
The normal institutionalized decision-making processes in the university, which would be very similar to government procurement, require not necessarily flexibility but a new approach when we are thinking about these demonstration projects. Once they are demonstrated, at scale and competitive, they probably can stand on their own in terms of a full procurement process, but it requires flexibility to really drive the leading technologies into those governments systems.
If we think about the federal government expenditure in Canada being somewhere around 21 per cent of GDP, typically in most OECD countries they have between 35 and 40 per cent of GDP tied to government spending. We don’t tend to think of that as a significant enough economic driver.
From my perspective one of the most important uses of public funds is to rethink procurement and public spending and how that can align with and support the sustainability and innovation agenda. It is a huge amount of funds. We have the ability from a policy perspective to take risk with that. As a buyer in the public service we have the ability to underwrite the next generation of technologies by changing the way we think about procurement.
Senator Seidman: You have led me to the question I was going to ask you in looking at the similarities between the university and the federal government and what their challenges might be with your approach. You’ve identified procurement. Would there be other challenges with that approach?
Mr. Tansey: As I said at the beginning, the big advantage UBC has as a campus is we are an island. We can manage most of our own infrastructure independent of the rest of the city. Most other university campuses are embedded either in the centre of a city or aren’t fully insulated. We have a fairly unique opportunity that will be somewhat more challenging for buildings that are really part of the municipal infrastructure.
We also have a strong partnership with the City of Vancouver, the City of Surrey, Metro Vancouver and BC Hydro. All of those public agencies look to us to demonstrate and test new technologies, but with the ultimate goal of changing the way they manage their own infrastructure.
I wouldn’t say it’s a binary difference. I would say it’s an incremental difference between government at large and the university.
Senator Dean: It is a wonderful success story. Congratulations. We’re delighted that you are here.
Did you achieve this by doing a large number of small things or a small number of large things? I think probably the answer is all of the above. You have mentioned leadership, the approach of building your objectives into the business processes, leadership structure and the strategy of the university. They are absolutely key. It sounds as though you have done that thinking about your demographic at the same time as providing opportunities for people to participate in that on the ground.
Is that fair? Do I have that mix right? What is your reaction?
Mr. Tansey: With the first question, whether it’s small or large, I would say that if you look at the climate action goals it is a mix of both.
The 30 per cent reduction in emissions by 2015 was achieved through three big project areas. One was upgrading a steam system to a hot water system, which created a lot of efficiencies on the campus but also allowed us to move waste heat around the campus. That was a significant innovation. The bioenergy facility was another big, focused initiative that generates power from waste wood, but the third one was a continuous optimization program, which is really focused on continually evaluating and improving the performance of buildings.
One of things that we found is a concept called the performance gap where new green buildings are constructed, designed and specified in terms of their performance. Almost all of them, when they are open, don’t work as well as they’re supposed to. That can be off by orders of magnitude. We found that optimizing and managing the existing infrastructure and continuously evaluating that can also be very significant.
That does require engagement with faculty and students. Many of the issues around waste management and water use have required behavioural change as much as they have required technological change. Again, when we look at the problem of sustainability from an energy perspective, we tend to think about big energy solutions and hard infrastructure. A significant portion of it is about engagement and behavioural change.
I would say from sort of a leadership perspective is that the sustainability commitment has been embedded as a pillar of UBC for so long. For the last 12 years it has really been under the leadership of the former president, Stephen Toope. It was sort of a centrepiece of UBC’s agenda. That drove recruitment. That allowed us to attract some of the best people on the operational side. It has allowed us to build a bit of a brand around this. As well the CFO’s office at the time really embraced the idea that we should be thinking differently about our budgeting. That was a big opportunity. Without that kind of support, engagement and leadership, we would not have been able to embed it in, not just the special projects but in the everyday decision-making processes.
Senator Dean: I’m taking it from this that this is not only an environmental success story. It sounds to me like a success story in change in publicly funded institution where often we don’t do what you just described. As well as celebrating our successes, it looked for those things that didn’t work as well as we hoped and actually addressed them. It tackled failure where we see failure. I applaud that.
Mr. Tansey: We have the profile of a city but we are not subject to the same kind of electoral cycle and risk aversion as cities are. We have been able to take risks on infrastructure that would have been much harder for the City of New Westminster or the City of Vancouver to do. We don’t have to address issues like NIMBYism to the same extent. We do have a residential population. We do consult with them, but we just have more flexibility in terms of being able to innovate. That has been very powerful as well.
Senator Wetston: Thank you for coming. You have been in Canada long enough for me to ask you this question. You studied at Oxford, obviously, and we all appreciate the important work you are doing on sustainability.
I want to talk about your focus on cities. I think we forget about cities. You used a number of 70 per cent. I will try to ask you this question and perhaps you’ll be able to assist us with your reply. Complex policy issues like sustainability play out in cities. You have a unique situation with your beautiful campus at UBC.
In order for cities to be able to participate in high levels of sustainability, it requires cooperation, collaboration and flexibility from all levels of government. I’m just reading a note here, if you don’t mind. There is a distance between traditional structures of government and constitutional allocations of responsibility and the authority. The new reality of how large-scale public policy problems like environmental sustainability and issues are addressed by different levels of government.
My question to you is: Cities are important. There is a need, I believe, for a somewhat different alignment or governance structure or approach to solving these complex policy problems. Do you have a view on that?
Mr. Tansey: In the Canadian context I think the challenge that cities face is in a sense an issue of ownership. In British Columbia, the cities are really still largely creatures of provincial policy and regulation. Within Metro Vancouver, we look at the opportunities purely from an infrastructure perspective and think there should be stronger collaboration between the cities in transit provision, energy systems and water use. However we have a governance system that in many ways sets the cities against each other. The role in that context of provincial and federal leadership around a city’s agenda is really to give very strong incentives for cities that might otherwise compete to collaborate.
Later this year the Smart Cities Challenge will be launched. That would seem like a great opportunity and a significant budget allocated to initiatives that drive change within cities. If that kind of challenge comes with a condition that there are higher levels of coordination within municipalities, to get them not simply to compete for a limited bucket of resources but to generate stronger partnerships for that shared infrastructure, it is a really powerful intervention.
We are going to face the challenges in cities around issues of affordability in British Columbia. We’ve tended to focus on the issue of affordability as a demand problem, that we have too much demand for our housing. However the blind spot for many of our cities is that it’s actually as much an issue of supply as it is of demand. What we mean by increasing the supply of affordable housing is actually about changing the expectations of our citizens around the large single family homes. Even in Vancouver, which has relatively high density, large parts of the city have this sort of special protected status for large single family homes. If we are to build the cities of the future, we have to be willing to challenge some of those norms and have leadership that says, “Actually, maybe that isn’t exactly the model of the layout of cities of the future.”
There are opportunities to address that. There are some real structural challenges with the way many Canadian cities are set up, particularly the larger cities. We have started to see some signs that leadership in both financial incentives and the government perspective can make a very big difference.
There has been lots of debate on cap and trade versus carbon tax. Senator Wetston: : You’re in a carbon tax environment. Have you thought about that issue?
Mr. Tansey: We had cap and trade legislation in B.C. that ended up being rescinded. From my research it’s really neutral. It is more or less neutral on a technical decision between cap and trade and carbon tax. They both drive carbon price signals into the system. Carbon tax has an advantage in that it’s a fixed price; cap and trade has an advantage in that it is a fixed target.
In almost every jurisdiction where the decision made, it was not made because of the technical merits. In California, cap and trade was chosen because they couldn’t introduce a new tax without a two-thirds majority in the legislature. The EU chose cap and trade because they didn’t have taxation authority. In most cases they’re chosen not because one is superior from a technical perspective but because of political reasons and institutional reasons. I’d be happy with either.
Senator Wetston: Thank you very much.
Senator Fraser: I’d like to come back to this 18-storey wooden building. It sounds wonderful. I have a bunch of questions that I will fling at you and then you can tell me how it all hangs together.
When you were doing this, to what extent did you have to develop new techniques and new technologies, and to what extent did you apply stuff that was already known but not being used? To the extent you had to develop new stuff, how much did you do in house and how much did you have outside partners for?
Once it was all done and up and perfect, did you do any assessment about cost, not in terms of what it cost to build that building but in terms of how similar buildings could be built for normal community use? Research projects are one thing but then you do hope that the fruits will flow out.
Mr. Tansey: The precursor to the Brock Commons, which is the 18-storey tallwood building, the CIRS building, was the first building in North America to use glulam and cross-laminate timber at that scale for an office style building. Similar technologies have been used in Europe and are much more common in Europe, but the wood combined with all of the other elements of building was a globally unique building. We tend to focus on some of the hardware, but the technologies, building systems and the design processes for constructing on a sustainable basis are almost as important as the materials that you use in the building.
It’s the combination of those skills that made the original CIRS building unique. For the Brock Commons building, it was tried and tested technologies in terms of how the building is actually put together. It looks like a giant Lego set in some ways. There is a time-lapse video showing the building being built. A truck shows up every day. Everything is unloaded. It is laid out, and by the end of the day you have a new floor in place.
What was innovative there was the scale of the building, the integration of the concrete pillars in the elevator shafts to provide rigidity, but what was really innovative was the scale it was being built at and the willingness to take that type of risk.
What we saw on the supply chain side was innovation in working with the trades who were not familiar with these kinds of buildings, which resulted in the creation of the establishment of a new industrial facility in the province where instead of importing the wood to build the beams, we are now able to build them and prefabricate them off-site within British Columbia. That is an important innovation but there was not a dramatic innovative step with respect to the materials. It was the way that they were pulled together and used in the building.
Senator Fraser: You just went ahead and did it.
Mr. Tansey: Yes, we just went ahead and did it. We have done a lot of experimentation in recent building with prefabricated panels. That is unique and unusual in Canada. It generates a thermally efficient building.
There are some of benefits over and above the building performance. We literally just commissioned and opened the building. We have done a lot of assessment work that has been written up. We have not seen how the building works from a noise perspective because it has only been occupied by students for a few weeks.
On the construction side, one of the big impacts was that instead of building a floor a week, which is what you see in a concrete building, we could build a floor a day. The construction time was 30 per cent of the construction time of a conventional building. That is a huge advantage as cities get more and more congested. Half of the time in downtown Vancouver the congestion is coming from construction projects that are closing off roads. If you can build faster and more effectively, a 30 per cent build time is a big innovation in itself.
Senator Fraser: What is the fire risk in wooden buildings as compared to traditional?
Mr. Tansey: That’s probably the most common question we get asked. The fire risk is the same or better than concrete or steel buildings. The reason is that when there is a high temperature fire, large mass timber forms a charcoal layer around the outside that actually protects the building. If you have a steel and concrete building, as we saw with the Twin Towers, once they get beyond a certain temperature they can have a catastrophic collapse. From fire risk perspective a wood building can actually be superior to a concrete and steel building under some conditions. In Vancouver, it is obviously built to the seismic standards as well. Wood buildings have more flexibility in earthquakes than concrete and steel buildings do.
Senator Galvez: Thank you very much for being here with us today. I heard about a lot of attempts of many universities trying to do what you have done. I’m very happy that you succeeded because, as you said, universities are cities within cities and they are actually the best place to test many things. I am very happy.
I also know of the experiences of Laval University, McGill University and Trinity College in Ireland. They had the same challenges that you faced as well as other ones. This is fantastic. This is proof. It demonstrates that leadership and changing culture in lifecycle analyses are what they promise to be, meaning more efficient.
We have been studying this for many months now and for a lot of my colleagues the main reason in their believing in the success of this is the cost. The fact that you count for your whole life, I think changes the way you understand cost. Most people understand that cost is what you invest today and it is too expensive today. When we look at it, as you mentioned, in 30 years or 50 years then you see that costs can be spread.
Talking in terms of cost, do you consider that your experiment was cost efficient? Also, in your analysis, taking into consideration the carbon market, tell me in the end if you can sell your carbon. Now you have reduced your carbon. Will you be a player in a city where there is a carbon market and will you be able to sell your carbon credits?
Mr. Tansey: Sell the credits, yes. Let me try the first question. We still have a budgetary discipline imposed by a board of directors that wants to make sure it acts in the best interests of the university, so every investment we’ve made has a strong business case. That business case wouldn’t be there without carbon pricing, but it sends a very clear signal into the system that reductions in long-term energy use translate into long-term savings in terms of carbon payment.
Even when we first built the bioenergy research facility we were looking at natural gas prices around $9 a gigajoule. Those natural gas prices have fallen to closer to $5 a gigajoule. Now, when we do that evaluation, even with the lower natural gas prices the bioenergy projects at UBC still look more competitive over the long term.
The advantage we have with our buildings is that we are both the developer and the owner of the buildings. That’s an important difference between us and the way most commercial real estate is developed. We have a long-term incentive. We can spend more money upfront on a building if we know the operating costs will be lower with a carbon price in place. Whereas a commercial developer might say, “Let’s get the best quality that we can and sell the building on because we have no incentives around the utility bills and the operating cost.”
The federal government is similar in that it either controls a lot of buildings and pays the utility bills for a lot of buildings as well as being the developer. It is a good application of what we call a lifecycle costing approach to these projects. All of our projects have to pass that business case test. All of them involve a higher upfront cost and lower operating costs. In the original modelling for the CIRS building, I think the capital costs were something like 15 per cent higher, but we recovered that over a 30-year period with lower operating costs.
We also recovered that over 30 years because we introduced innovations in the way the walls and the floors were built. The building was built in a much more modular fashion. Something like 30 per cent of the emissions and costs from the building are from the retrofitting of the building over its lifetime. We built it in a way that was modular and allowed the walls and the offices to be moved at a lower cost and a much lower carbon footprint than stripping out drywall and stud and losing all of the embedded energy within that.
Some of it is just the heating and lighting. Some of it is just thinking more creatively about how the buildings are finished and commissioned. They all have to pass that test in terms of the cost benefit analysis. They wouldn’t pass that test without the carbon price. I would argue, partly in response to your earlier question, that the challenge we have with carbon pricing in general is all of the evidence suggests it is the lowest cost pathway to emissions reductions on a societal scale. That’s as opposed to feed-in tariffs, subsidies for alternative energy, cash for clunkers, subsidies for electric cars, and all the other policy opportunities we have.
The paradox with carbon pricing, whether it’s cap and trade or a carbon tax, is that it’s also the least popular mechanism. You have cost efficiency on one hand by pushing a price signal into the market, but you also have resistance from a political perspective. There are differences in orders of magnitude. A carbon price can have a huge amount of effect at $50 a tonne, while subsidies of solar panels on roofs and cash for clunkers programs can cost $1,000 a tonne from a whole range of different studies.
We have this tradeoff between how to make things politically palatable so that we bring our constituents and citizens along with us, but how do we do it in a way that doesn’t bankrupt us or cost us more money than it should in the process of reaching those goals.
Again, that takes some of the courage and leadership we saw in B.C. in 2007 and 2008 when the carbon tax was introduced with almost no consultation at the time. We have seen similar moves from the federal government now to say $50 a tonne is the target for 2022. That’s an affordable target. B.C. has already shown that it is affordable, with the fastest growing economy in Canada. You can do these things, particularly if you adjust with other revenue neutrality aspects.
On your question about the carbon trading piece, in the way the regulations are set up in B.C. the credits we generate from the emissions reductions aren’t tradeable because they are driven by the carbon price. Our incentive to do it is not the money we get from selling the credits, but the money we save by not paying the $55 a tonne tax. In that case they’re not tradeable. There are lots of other trade examples in B.C. under the provincial carbon neutrality program but that doesn’t work for UBC.
Senator MacDonald: Thank you for being here. Both Senator Fraser and Senator Galvez touched upon something I want to speak to, and that’s the sordid subject of money or cost.
The total cost for your CIRS building was $35 million. Construction costs were $24 million, so there’s an $11 million gap there that is non-construction. That seems to me to be a high number. Can you elaborate on that and what constituted the $11 million in non-construction costs?
Mr. Tansey: We had the original support of a $11 million grant from the Canadian Foundation for Innovation. We applied for that in 2000 and were funded in that year for the project. The balance of the construction costs were funded from UBC’s capital budget. It has the biggest classroom in the campus integrated into the building so we combined innovation funding from CFI with our own capital budget and a number of sources of provincial funding to share some of the costs around a project where we were taking some risk.
It cost more than a market building would have cost but in almost all the research we’ve seen on transitions to clean technology, the early demonstration projects around those interventions require some kind of public subsidy until they get to a scale where the supporting industries can generate the hardware, materials and infrastructure at a market price. It’s very difficult to do it without that and that’s true across almost any technology. It was true across electric vehicles in the early days. It has been true for almost every building technology. The early adopters require some sort of support to build the market. Once the market is built with a carbon price signal they should stand on their own.
Senator MacDonald: Do you have any estimate of what the cost of the building would have been had it been built by more conventional methods?
Mr. Tansey: I’ll double-check the numbers and get back to you, but I think the capital cost was about a 15 per cent premium on a LEED gold building, which is what we would have been required to build in the first place. The operating costs were significantly lower because of the way we built the building, so on a lifecycle costing basis it washed out basically.
Senator MacDonald: In the terms of the new technologies and methodologies used in the building, how transferable are they around Canada? Vancouver and the Lower Mainland have their own unique micro climate that I don’t think is replicated anywhere else in the country. Are those technologies transferable around the country?
Mr. Tansey: I would say the majority are. The thermal properties of the building are comparable with most buildings in Canada. The issue with the cross-laminated timber and glulam timber would be the ability to transport the materials and wood there because it is slightly more complicated than concrete to move around.
I would say it is more about the supply chain than the suitability of those construction materials for the rest of Canada. There is no reason why you couldn’t build the 18-metre wood building in Manitoba, Ottawa or anywhere else in Canada.
Senator MacDonald: Has there been any follow-up with other jurisdictions to take the technology you have established in the buildings? Are they building any results with these?
Mr. Tansey: We have had lots of visitors to the campus from around the world almost on a weekly basis to look at the demonstration projects we have built there. When the CIRS building was built it was the first innovation of its type in North America. We have built almost all of the subsequent buildings. The Life Sciences building, the Earth and Ocean Sciences building and the Brock Commons building all used the same wood structure that was tested in the CIRS building and the BRDF.
We have had a lot of interest across Canada in how we can replicate those kinds of designs and a very strong engagement with the architectural, engineering and design communities in the province. There has even been very strong interest recently from China, which doesn’t generally like to build wood buildings.
Part of the delegation from B.C. promoting wood products uses these buildings as demonstration projects. We certainly get a lot of attention internationally from other campuses and jurisdictions in touring the campus and understanding what we have been able to do there.
We are very open about our failures and the elements of the system that don’t work. We built a solar aquatics laboratory into the building that was intended to clean all of the waste water that came out of the building. It has been an interesting experiment. It is still a laboratory but it doesn’t work at the scale of the building. We needed to test that and try it out but we wouldn’t do that one again in that way.
The Chair: Thank you. We’ve reached ten o’clock. There is another committee that will start in here but before we go I would like to ask you a question.
British Columbia had a wood first policy for all public buildings if it was feasible to do that. That’s part of what drove the decision to build what they did at UBC. For 2010 at the Olympics there were a number of buildings and a huge one in Richmond built because of the wood first policy. That was never tried before. That’s direction from government, not saying you have to but please look at it.
Another thing I would like to ask you about, professor, is your procurement. You touched upon it a little bit, unless I misunderstood you. Do you look at procuring things for buildings and all that kind of stuff in places that are actually as conscious about greenhouse gas emissions as you are?
Mr. Tansey: We produced a report last year looking at leadership in procurement processes around the world exactly for that reason to try to understand how we could improve our own procurement processes. We had produced it for the Honourable Joyce Murray to show how you design and improve procurement process in a way that supports the sustainability agenda.
You can still maintain the requirements of competitiveness and open tendering within those kinds of processes at large, but it does require exceptions for the leading technologies you might want to introduce. You have to have the flexibility to be able to take risks with a portion of the procurement budget to integrate social or environmental factors. We have to be comfortable with doing that. The procurement people don’t necessarily love it, but we have to be comfortable making exceptions if we really want to test and demonstrate these ideas.
My central view in all of this is that the problems we face in addressing climate change as a challenge and sustainability as a challenge isn’t technological. Most of the technologies we need have been developed in some form, at least for the next 10 to 15 years. The challenges are often more institutional. It’s public perception of bioenergy, which is perceived to be dirty but is actually as clean as natural gas. It’s public perception of wood buildings and of transit systems.
It’s the social acceptability of new forms of building. The City of Vancouver is mandating passive houses as a standard, as a comparison. That will change the way that houses look and that will probably be as big a barrier to acceptability as the technological barriers in building passive houses.
The technology side is important, but as we think about using procurement it’s money that government is already spending. If we can use that better to support the agenda, it can have billions of dollars of impact every single year.
The Chair: Thank you. I asked that question because something came to mind. We visited the Dofasco steel mill in Hamilton. As I remember they told us that one tonne of steel at Dofasco produces is one tonne of greenhouse gas emissions. If you buy it from Asia, it’s three tonnes per tonne. It will be interesting for me with the federal government looking at reducing greenhouse gases. With the procurement for bridges and buildings, they will spend billions on all kinds of infrastructure. Will they say that they use the cleanest and the best, or will they continue to use the worst? That part will be interesting.
Mr. Tansey: It will come to the point where with building technologies the embedded emissions in the buildings could end up being more significant than the emissions from operating the buildings. That lifecycle costing approach asks exactly that kind of question. If there are three tonnes of emissions in each tonne of steel, we should either be thinking about alternatives to steel or at least sourcing the best steel that we can from an emissions perspective.
The Chair: Thank you very much. It has been very interesting. We appreciate your time.
(The committee adjourned.)