Representatives of British Columbia's public sector say money spent on carbon offsets that subsidize energy-efficiency programs of private companies such as TimberWest, Canfor, Interfor, Kruger Products should be reinvested back into their operations

VANCOUVER, B.C. , July 11, 2011 () – Public institutions such as schools and hospitals spent $18.2 million last year buying carbon offsets to compensate for greenhouse gas emissions -money that subsidized energy-efficiency programs of big industry rather than being reinvested in energy projects within the public sector.

Among the private corporations that benefited from such offset expenditures: Lafarge cement; forest companies Canfor, Interfor and TimberWest; natural gas company Encana; and Kruger Products, a manufacturer of toilet paper and related products. They earned the right to sell offsets to the public sector based on energy-saving initiatives.

The $18.2-million expenditure is the result of a provincial policy requiring public sector facilities to be carbon neutral starting in 2010. The program is designed to encourage energy-efficiency initiatives, forcing institutions to buy carbon offsets for their emissions through the Pacific Carbon Trust, a Crown corporation.

B.C.'s public sector produced 814,149 tonnes of emissions in 2010, 84,367 of which were exempt from offsetting, including emissions from schools and transit buses.

While public institutions say they support steps to improve energy efficiency, they assert that their money should be pumped back into their own facilities.

Lee Gavel, chief facilities officer for Simon Fraser University, said the $444,452 SFU spent on carbon offsets last year could have been used for research on fuel-efficient technologies or capital projects to reduce carbon emissions.

"We agree with the intent of the regulations to drive, through economic means, efforts toward greenhouse gas reduction," he said, noting SFU recently received a $4.7-million grant to produce heat and hot water from construction wood waste. "But we'd appreciate the opportunity to reinvest those funds to projects on the ground."

The University of B.C. topped the list of public facilities, spending $1.5 million on offsets.

Nancy Knight, UBC's associate vice-president of campus and community planning, said she can only guess that the sheer size of the post-secondary institution is to blame for its position on the list. The campus has 14 million square feet of academic floor space and 8,500 students living on site, she noted.

UBC's goal is to reduce 2007 greenhouse gas emissions by 33 per cent by 2015 through measures such as switching its energy system from steam to hot water and construction of a biomass plant.

Knight noted that the Research Universities' Council of B.C. has asked the province to allow carbon offset funds to be reinvested in the various institutions.

Environment Minister Terry Lake said talks are underway with the Pacific Carbon Trust on how offset funds might be returned to public institutions such as schools.

While "people don't like the thought of public money going to help big organizations," Lake noted that companies such as Encana also generate revenue for the province that goes back into funding health and education.

Non-profits such as the Nature Conservancy of B.C. have also benefited from selling carbon offsets as a result of carbon sequestered in a Kootenay property that was not clearcut.

Lake noted the province invested $75 million over the past three years to help public institutions become more energy efficient and kick-start the carbon-neutral program.

"Let's be careful to not lose sight of our goals -to reduce our greenhouse gas emissions," he added.

Scott MacDonald, chief executive officer of the Pacific Carbon Trust, said carbon credits are certified only for energy-efficiency projects "above and beyond your business as usual," undertaken since November 2007, adding that "on average, the offset revenue represents five per cent of the total capital expenditure."

In one case, he said Interfor was burning waste wood on a pile behind its Adams Lake lumber mill and trucking in liquefied natural gas to heat its lumber kiln. The company invested in a system whereby the waste wood fuels a furnace that heats the kiln and mill, nullifying the need for liquefied natural gas.

MacDonald said policy prevents him from saying how much Interfor or any other company has been paid for its offsets. Pacific Carbon Trust sells offsets at $25 per tonne of emissions to the public sector.

Ian Bruce, climate change specialist with the David Suzuki Foundation, agreed that B.C. has been a leader in the carbon-neutral field, but said it is time to take a critical look at the program.

Institutions such as schools and hospitals are dependent on provincial funding and lack the ability to generate new revenue for retrofits, he noted. They should have the option of pumping money now spent on offsets back into improving their facilities.

Bruce noted that the B.C. Carbon Tax covers about two-thirds of industrial emissions, but not "process emissions" such as venting in the oilpatch "where there is no incentive to reduce their own pollution."

Rob Fleming, NDP environment critic, said it is wrong for hospitals struggling to fund operations and schools to maintain class sizes to be subsidizing big industry.

The NDP would like to see a model by which money from offsets would be applied regionally to public sector projects where the need for energy upgrades is greatest.

Health authorities around B.C. spent $5.4 million on offsets. This included the Vancouver Coastal Health Authority spending $1.1 million, the Interior Health Authority $965,891, Fraser Health Authority $933,720, and Vancouver Island Health Authority $812,514.

B.C. school districts spent $4.4 million. This included Surrey spending $496,892, Vancouver $406,094, Coquitlam $233,545, Richmond $182,387, and Prince George $164,333.

Crown corporations spent $2.3 million, including BC Hydro $749,345, BC Housing $663,988, and ICBC $511,600.

Post-secondary institutions spent $3.7 million, including the University of Victoria $388,647, BCIT 246,184, University of Northern B.C. in Prince George $142,198, and Thompson Rivers University in Kamloops $103,310.

More than 100 municipalities across B.C. have volunteered to have carbon neutral operations by 2012 in the Climate Action Charter signed in 2007.

PAYING FOR POLLUTION

Public sector institutions are required to buy carbon offsets to compensate for their emissions. Here are the figures for 2010

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