Natural Resources Committee on March 31st, 2009

[The Chair, Conservative, Leon Benoit]

Good afternoon, everyone.

We have four witnesses from three groups here today.

At about quarter to 5 or so, we will end this portion of the meeting and go to a discussion of future business, a discussion of what the draft of this report might look like, as well as some other issues. This is just a heads-up. I understand we have bells at 5:15, so we want to make sure we leave enough time to handle that.

We have with us today, to continue our study on integrated approaches for providing energy services in Canadian communities, the following: as individuals, Martin Lee-Gosselin, professor at Université Laval and Imperial College London, and Atif Kubursi, professor of economics at McMaster University. From M.K. Jaccard and Associates Inc., we have with us Christopher Bataille, director and business manager, and Robert Joshi, consultant.

Welcome.

We will take the presentations in the order in which they are listed, starting, then, with Martin Lee-Gosselin from the Université Laval and Imperial College.

Go ahead, please.

[Dr. Martin Lee-Gosselin, Professor, Université Laval and Imperial College London, As an Individual]

Good afternoon, everyone.

I would like to start off by saying that I prefer to make my remarks in English this afternoon, in order to speed up the discussions with the other witnesses. However, I would be pleased to answer any questions you have in French.

My name is Martin Lee-Gosselin. I'm recently retired from Laval University, where I hold an honorary appointment. For the period of 2006-2010, I'm also visiting professor at Imperial College, London.

I come to you as one of a panel of researchers today, and I think we will deliver rather different messages from some of those you've heard before. My particular area of work is user behaviour, consumer behaviour, particularly in the context of planning and particularly transport planning. I've also been responsible in the first part of this decade for a large international program of research in 16 universities looking at user behaviour as an input to the simulation of land use, transport, telecommunications, equity, and sustainability relationships.

I'm particularly interested in understanding how people respond to new technologies and policies and deal with unfamiliar situations like energy shortages. Today, all of this comes together in decision support systems, and we address two types of vulnerability: the acute problem of energy supply perturbations, including price perturbations, and the chronic problem of unsustainable development and climate change. I would also mention that I've been involved in the organization of the QUEST workshops.

Now, energy efficiency is a tough one for decision-makers to handle, in part because the scientific evidence, like the community energy systems we're studying, is unfortunately siloed. We had a workshop here, a joint U.K.-Canada workshop, in 2006 to look at the scientific requirements to move integrated urban energy systems ahead. Although I would be happy to supply to you some results of that, they're rather technical; they have to do with data and modelling. I also wanted to mention that this group, some of the brightest minds involved in modelling energy use, said that we, the researchers, are not doing a very good job of telling the story to the decision-makers about what the results mean.

Somewhat in that spirit, I just want to share six thoughts with you, which you may want to dig deeper into if you wish, rather than try to replicate some of the other kinds of testimony you've received.

First, here's a thought on integration itself. The urban world looks pretty seamless to most of the people who live in it. When people are preoccupied with getting access to day care or to shops or health services or employment, the world looks pretty seamless to them, and they don't see the large number of professional interests that unfortunately are not talking to each other very well. But even though it looks fairly seamless to them, they, themselves, have their own silos. They don't see the connection necessarily, for example, between taking a car a short distance to go and buy a loaf of bread and turning down a thermostat. Increasingly, we hope these things will be on the radar in the same way for the consumer.

The second point is that we're often wondering whether communities are going to be willing to look at what happens in their community through an energy or sustainability lens. Probably most people won't do this in the abstract. But one of the things we have learned from research is that when you have multiple innovative opportunities such as are now being offered by energy efficient products and services, there may be an opportunity here to resonate with people who are ripe for change, who are ripe for a shift in the way they live their lives.

One of the things we've learned from longitudinal data is that when people change things, they often change a whole lot of things at once, and indeed there's some delay in changing things that to an external observer look like they ought to have been changed a while ago. So there may be some good news here for creating the kind of environment we're talking about with integrated urban energy systems.

My third point concerns the wisdom of the consumer. When electric cars were pronounced widely as being rejected by the consumer, what was being said was that most people recognized that electric cars, as they existed, particularly in the nineties, were not a very good substitute for conventional heat engine vehicles. They were a lot like microwave ovens, which were originally a flop because people expected they would displace a conventional product. Consumers, in their wisdom, thought of very creative ways to fit those battery electric vehicles, poor as they were, into their lives. We have some research on that from California and France.

I believe that Canadians will invent new ways of living in the face of energy efficiency opportunities, and we need to catch up with their thinking.

My fourth point is that it's really central to give feedback to people. We need to know how we're doing. The same technologies you've already heard about, which allow for smart grids and peak pricing--and by the way, I'm not just talking about peak electricity pricing, I'm talking about congestion pricing in vehicles--could eventually provide consumers with a one-stop balance sheet that reveals their household's recent and cumulative energy performance and cuts across the rather artificial boundary we have now between building energy use and vehicle energy use. This is particularly true, but not essentially true. It's not necessary that they have vehicles plugged in at home, but that sure would make it more interesting.

It's possible that this sort of information would be far more compelling to consumers than the calculation of payback periods. It could help them choose between different uses of energy. Similarly, communities need a synthesis of such balance sheets to know how they are doing.

My next to last point, and with all respect to one of the members who warned me that I shouldn't be asking for money, here are some priorities that from a decision support perspective I think are the sort of business the federal government should be in.

There are three priorities. First of all, there is a really important federal role that has existed since 1991: to provide a national clearing house of energy end-use data--to monitor it, model it, and to provide evaluation. It draws on university expertise, and in particular I'm thinking of the three data and analysis centres in B.C., Alberta, and Quebec.

Second, there is a need to increase the variety of experiments in integrated community energy systems, the test cases at appropriate scales. Complicated things can only be done on a relatively limited scale if you want to encourage, without getting tied up in institutional problems, the entrepreneurship and creativity of Canadians to take risks, to learn what the errors are, and to help build that narrative about what is worth doing.

Third, I believe the federal government should be providing the conditions for some of the beachhead innovations you've heard about, such as low-carbon vehicles or distributed energy production. I'm not picking those in particular; they're only examples. But that's only if the experience of actual implementation is evaluated as part of an integrated approach. These are not silver bullets. They are potential help in relieving the roadblocks in integrated urban energy efficiency.

To conclude, ladies and gentlemen, I believe we should be in the incubation business. Canadian communities have done this for years with small and medium enterprise. Why can't we use the same model for integrated urban energy systems? The impressive variety of stakeholders who have lined up with the QUEST venture should nurture and interpret and publicize a variety of integrated energy management packages that meet the needs of different sizes of communities and different regions of Canada.

The research community is ready to help. It is a source of innovation--for example, at Imperial College, we have the urban energy systems project, which is trying to develop integrated energy, waste, and other systems. Finally, the researchers are a source of the very evaluation methods without which we will not know whether the initiatives being incubated are of any use.

Thank you.

[The Chair, Conservative, Leon Benoit]

Thank you very much, Professor.

We now move to Atif Kubursi, professor of economics, McMaster University.

[Dr. Atif Kubursi, Professor, Economics, McMaster University, As an Individual]

Thank you, Mr. Chairman.

I also come to you as president of Econometric Research Limited, which is an outfit that specializes in impact analysis, the type of methodology that I'll talk to you about.

We all know that many Canadian communities are known for their dependence on a single, dominant industry and that this activity is often resource-based--mining, forestry, and even sometimes tourism. These communities have typically found it hard when their dominant activity scales down or the price of its products declines: unemployment rises; population declines; families move elsewhere to seek employment; asset prices evaporate; home prices, all of a sudden, are completely depressed; and there are many socio-economic dysfunctions from crimes, family violence, and other things that happen.

These communities really found it very hard, particularly in the seventies and eighties. They had to meet severe challenges that came with some structural breaks in the system from two free trade agreements, from the GST, and from the technological advances that came with the ICTs. They have had to restructure in very difficult circumstances and with very limited resources and capacities.

Today they face even worse situations as the international financial crisis now has migrated to the real economy, and they are basically absorbing incredible costs in terms of a reduction in world trade. These typically are export oriented, lack of access to credit, restricted resource prices, and limited opportunities.

Typically, many communities ignore and dismiss the need for economic renewal when the prices of these resources or economic conditions are good. When the layoffs and difficulties and population losses become the experience, there is increased interest on the part of government--policy-makers, public servants, municipal forces--and the communities in economic renewal and diversification. But this is typically the time when it's extremely difficult to kickstart the economy. Interest increases, but the capacities are at their lowest level, and it's extremely hard to do something about this.

This is why I think integrated energy systems, the kinds you are discussing here, could be seen within this context as some growth poles, where they can create employment opportunities, diversify the economy, garner natural comparative advantages--some areas have more sun or maybe have more wind--and they can slash import bills because most of the energy they typically use does not come from their own perimeters, and they can lay down some strong foundations for upstream or downstream activities.

The challenge here is to identify these opportunities and to see if there exist methodologies, techniques, moulds that will allow you to quantify what these opportunities are, where they are, what impacts they will have, how many jobs they will create, what level of jobs, and the success possibilities these may have. This is part and parcel of what economic impact analysis is all about.

Typically, economists have looked at this in a number of ways, and economic impact analysis is one of many social accounting frameworks that deal with this, but it is different, and in many respects it has its own niche. And it is the niche, I would argue with you this afternoon, that is probably most aligned with the kind of interest you are talking about, where you look at communities and see to what extent you may be able to shore up these communities, create alternative economic activities, and capture some of the natural wealth that may be available to them.

The types of economic analysis have always been at the macro level--this is a general level--but these are probably too aggregate, too broad, too general. They may not be really the appropriate one for the communities.

All of those have really used microeconomic analysis, too small, too partial, too truncated, so that they're not able to situate the energy sector within the total framework of the economy. It's quite dangerous, and I've seen it many times, when people talk about one sector, the energy sector or any other sector, in isolation, independent of the overall economic interactions this sector may have. This community is part of a constellation of communities.

The focus here should really be on a broader interactive system where the energy is seen within the broader economic structure, even the social and environmental structures. It's not separate accounting, but one that can integrate many other accounts. It would also be able to come down to the community level; it does not stand at this general GDP impact or total employment impact. It could look at the income of the community, the prices of homes in the community, the social dysfunctions in the community, and employment opportunities.

It is basically dependent on an accounting framework that Canada has done very well with, called input-output, where the tables are produced with some lag. Hopefully, we can really argue for speeding up the process and maybe going to lower levels, usually at the provincial level. But they can provide a working system that we have used a number of times to fashion and create regional-local activities that capture the interactions among the sectors and communities.

It begins by basically and fundamentally looking at three aspects. One, that independent of the primary importance of activities.... Certainly a pristine environment is good for its own self and protecting the environment is good in itself, but ignoring analysis, especially impact analysis, does not go into valuing these important primary effects. It really says that whenever you use scarce economic resources, there are repercussions and consequences, and that these consequences can be identified and quantified. And they're typically much larger than the initial impact.

If you really look only at the direct, initial consequences, you get a poor, truncated, limited picture. The overall picture that could come from the direct, indirect, and induced--and I'll try to explain this quickly--is typically much larger than the initial effect. If you were to look at that sector alone, not looking at the derivative, secondary ripple effects, you will be limiting your perspective and not capturing the full values that could be created. The impact analysis gives you this ability to go beyond the direct impacts to the total impacts.

Imagine we'll work with you through a production of wind energy. You would need machinery, and machinery needs steel. Steel may not come from the community; it might come from my country in Hamilton, and it may really need energy from other places. It may need plastics from Alberta. It has to really capture all the derivative impacts. Then each time at every level you're producing wages and incomes; people will use them on their favourite beer, maybe in moderation. In that respect, you have to capture all these things. In the final analysis, you would also like to know the contraction of this that remains within the community, and then this is much larger than the initial effects.

The second thing is that when economists come to impact analysis, unfortunately they have come as close as alchemists, trying to create something out of nothing. There is something called the multiplier, and there is nothing more dangerous than the multiplier in the hands of economists and public servants. Everything is multiplied and magnified.

What is necessary and important here is that these multipliers are far fewer than they usually are, but they're still very poor ones. What I would argue with you, what we have really done...and we've just completed a study for the OPA, the Ontario Power Authority, for the conservation office on energy efficiency, and you'll find the net impact. If you use wind energy and don't use fossil fuels, then you have the positive impact of the wind energy, but you have a negative impact of scaling down the use of fossil fuels. The net effect is what really counts.

What's interesting is that with conservation, when you save, these savings don't disappear, don't evaporate. We call them avoided costs, but they can be reinvested in the economy. If the consumers realize them, they may really spend them on general consumption. If businesses were to realize these savings, they could be increased investment.

What is crucial here is to look not at the gross impacts but at the net impacts. What is also quite necessary and important, and seems to be a direct impact of the system, is that you have to look at all these aspects at the same time.

Suppose you want to build a new energy system. There are capital expenditures. There'd be new, incremental capital that did not exist before. You have to look at this opportunity cost, such that if you don't invest here, could you invest it someplace else in the community or in other places? You have to look at operational and maintenance costs. You have to look at the avoided costs. And you have to also look at what we call “induced investments”. The fact that you create some energy base may, itself, be a lure for others to capitalize on this available supply downstream and upstream.

Thank you.

[The Chair, Conservative, Leon Benoit]

Thank you very much, Professor.

Now I'll go to the last group, M.K. Jaccard and Associates. We have Christopher Bataille, who I believe is going to make the presentation. You have up to 10 minutes.

Go ahead, please.

[Dr. Christopher Bataille, Director, M.K. Jaccard and Associates Inc.]

Thank you very much for the opportunity to speak here today.

Just for clarity's sake, you should have a briefing note from us as well as a set of slides, with green sides on them. I'll be speaking to those. I'm kind of used to PowerPoint and may use it as a crutch, but what can I do? Does everyone have them? Okay.

Just by way of general introduction, I'm the director of M.K. Jaccard and Associates. It's an energy policy consulting firm based in Vancouver. It's a private consulting arm of a research group out of SFU run by Dr. Mark Jaccard. We do any manner of policy associated with energy use and its impacts, so we look at local air quality, energy use, and energy supply. Our bread and butter for the last five to ten years has been climate policy analysis.

Does everybody have those pieces? Okay, I'll just not worry about them.

One of our main tools in all of this--and if you're familiar with the climate policy debate, you may have heard of it--is the CIMS hybrid technology simulation model, which has been used by NRCan, the national climate change process, EC, and the national round table for its recent Getting to 2050 work, in which they advocate carbon pricing for the Canadian economy.

Besides the federal government, we've also done work for the provinces of B.C., Alberta, Saskatchewan, Ontario, and Nova Scotia, and we've also been looking at doing work for the cities. We just completed work for the City of Vancouver, and we're looking at other municipalities right now. So we've looked at the entire breadth of jurisdictions in Canada. And it's mainly for climate policy issues.

So that is MKJA. And just so you know, I wear two hats. I have a position at the university, but 80% of my time is spent working as a private consultant.

Just for some general context here--and everyone around the table is going to know this--Canada's targets for reduction in our greenhouse gas are 20% below 2006 levels by 2020 and 60% to 70% by 2050. Kyoto was 6% below 1990. Our actual performance on GHGs has been an increase of 22% over 1990. So we've been going in exactly the wrong direction in all but the last couple of years. Emissions have just started coming down a bit.

In terms of the urban picture with respect to GHGs, the personal transport, commercial buildings, and residential emissions constitute about 40% of emissions, and that's including upstream natural gas processing and upstream production of electricity. If you include a bit of light industry—the urban light industry and urban freight transport—we're looking at about 60% of emissions coming out of our cities, one way or the other.

The other thing is that Canada's population is expected to increase, and most of that increase is going to end up in our cities. So a big part of the whole GHG issue is basically an urban issue, one way or the other, along with all our other urban issues. That gets me to the scope for integrated urban energy systems.

The overarching question with integrated urban energy systems was, what if we could densify our cities, drive less, use transit, and walk more? In other words, all our daily destinations would be brought closer together: work, school, the nursery, shopping, what have you. You would bring our buildings closer together so that we could link them, so that energy could be used, reused, and used again. You would start out with really high-quality energy being burnt once, and then the energy would cascade as heat through several buildings, instead of having a natural gas furnace burning in every one of those buildings.

Also, we would think of buildings as energy producers as well as consumers, using passive and active solar, and waste as fuel. Then, in order to take maximum advantage of this network of small and large energy users and consumers, we would utilize a smart grid that acts more like a web than the one-way flow of energy we're used to. We have a big energy production facility in one place and we pipe all the energy to the consumers. Instead, what we would have is an active web that's looking for the cleanest, cheapest, and most reliable power at all times.

That's the overarching vision, and it has a lot of people excited. The question is how much it has by way of policy and engineering legs.

MKJA was contracted by the QUEST group, the Quality Urban Energy System of Tomorrow, to do a scoping study to see whether there is some way we could lock down some of the quantitative potential in this. What are the megatonnes of emissions that could be attached to reducing emissions here? Are there effective policies that we could implement in order to reduce those emissions?

We did this in a two-part way, and it's shown on the top slide here. First we took a look at a literature review of what's already been done, trying not to reinvent the wheel. The second stage was a quantitative analysis using our simulation model.

With the literature review, we found that on top of energy efficiency and fuel switching—and it's generally agreed that carbon pricing is the most effective way to get really effective reductions from the efficiency of fuel switching—strong and effective policy to induce densification in our cities and integration of the energy system could reduce our urban emissions by 40%-plus; this is in the 10- to 20-year timeframe. If you were trying to go for an absolute maximum, it could be up to 90%, if you completely linked up the energy system in the urban centre.

That's coming from the literature. How useful is it in Canada? What does it count as, in emissions?

We then took the CIMS model, which doesn't do this energy integration stuff all that well because it's non-spatial, and ran a carbon price up to $200 a tonne—which is the maximum, basically, that anybody's expecting to see, because it's seen as the global backstop price for cleaning up all of electricity and running everything on electricity—and then looked at what emissions are left in the urban centres.

If you apply the literature review amount that we found, that 40%, what does it turn into in megatonnes? It turns into a 2020 reduction of about 65 megatonnes. Canada's current emissions are just over 700 megatonnes, so this would be a little under 10% of our net emissions.

When you run that $200-per-tonne carbon charge, we don't get to our targets. We don't get to it with $200 a tonne, but if you add this densification integration policy on top of the $200 a tonne, we no longer have to buy international permits. The 65 megatonnes at $100 a tonne amounts to $6.5 billion a year that we don't have to purchase from somebody else, if we're trying to effectively meet a target in 2020. Or you could use a mix of cheap permits and a mixture of densification integration policy in order to bring in these cost solutions. However, this doesn't come for free. That 65 megatonnes is not something we're going to wish into existence. A fancy PR campaign is not going to make people drive half as much as they do and buy energy efficient everything and move into dense urban condos. You need effective policy to do this.

To get that 40%, you have to halt the geographic expansion of our cities—you have to stop sprawling. Then you identify densification nodes and corridors and provide reliable, safe, fast, and timely transit within those corridors. You change your land use zoning, your property taxation, and your site design permitting to reflect the new urban form you're trying to build.

Our current property taxation system works exactly opposite. If you're trying to densify our cities, it's working exactly opposite. As you go out into sprawled communities, people are paying only an average of the increment on sewers, water pipes, and electricity infrastructure. You should be making them pay for every additional amount. In the dense corridors, you should be paying less tax per unit than you'd pay on the edge, but we're all paying the average. Apply full costs in externality pricing on energy, water, and waste, and implement some form of demand and supply planning and policy for water, waste, and energy services to make this new urban structure work.

That was phase one that we did for QUEST. You cannot hang large government policy on a scoping study like this. Given that there seemed to be some potential here, QUEST asked us to look at a work plan for something more quantitative, with more foundation to it. We proposed to take the best of the various disciplines involved—policy, economics, land use, transport, waste—and build it up into a credible national study that could be used to support this kind of policy.

The problem is, you're asking academics and experts who hardly ever work together to work together. Believe it or not, transport modellers rarely talk to land use planners or climate change economists. For some reason, this is what occurs. So the idea was to bring the best of all this together in one study.

The method we suggested—and this is just a proposed work plan—was to use the CIMS model and the energy technology simulation model as the integrating template. As you reduce electricity and natural gas in our cities, you want to know how much emissions are reduced in the natural gas fields and by electricity producers.

But instead of using literature values to actually get that densification happening in the cities and to get the energy integration, we used specialized land use transport and energy models in order to build three archetypes—a small, medium, and large city under three different scenarios: (1) a reference case where we continue to build our cities as we have continued to do with sprawling suburbs on the edges; (2) raising of technology standards, where you make the technologies as sufficient as possible, and this would be in conjunction with some form of carbon price; (3) adopting moderate and aggressive policies that promote densification energy integration, so you can see what's happening. QUEST is trying to get up enough support to make this happen.

First and foremost, the urban form is a public policy choice. It doesn't just happen; we choose it. We choose it with our municipal zoning. We choose it with our urban planning. We choose it with the provincial acts that govern how our municipalities run. We choose it with how we use our federal infrastructure funds when we're leveraging new roads, transit projects, what have you. It's a public policy choice. In other words, we can choose sprawling car-orientated cities or we can choose dense, walkable, and safe cities. This is something that's in the hands of policy makers.

Second, densification and integrated multi-stage use of energy between industry, buildings, and residences can reduce greenhouse gases, local air pollutants, and energy use all at once. If you do it right, it will also improve urban livability.

As I said, the issue is multi-jurisdictional. Municipalities have a big role to play here, but they're governed by the provincial acts that govern the rules. And then the federal government has a role to play here, in terms of how it leverages infrastructure funds.

Finally, as the other experts were saying at the table, we lack complete tools for assessing integrated approaches. But phase two is a movement in that direction.

I guess my concluding remarks are that we have some of the best resources in the world here in Canada, in terms of urban planning, energy management, waste water management, and what have you. We basically have all the tools to guide the coming infrastructure rebuild in a sound direction for the long term—for the next 50 to 100 years, not just to get out of the recessionary hole we happen to find ourselves in right now.

That's it. Thank you.

[The Chair, Conservative, Leon Benoit]

Thank you very much.

Thank you to all of you for your presentations.

We'll go now to questions, starting with Mr. Regan, for up to seven minutes.

[Geoff Regan, Liberal, Halifax West, NS]

Thank you very much, Mr. Chairman.

Let me begin by thanking all the witnesses for coming here to share your wisdom with us today. I'm sure we all appreciate it. It's good to have a chance to have a discussion with you.

In the government's budget, it announced $1 billion to establish a clean energy fund. The Deputy Minister of Natural Resources was here, I guess about a month and a half ago, and she seemed to indicate that something in the range of three-quarters, or more, of that money would be targeted toward setting carbon capture and sequestration. Then whatever was left would be for other things.

What's your view of this determination or distribution of resources?

[The Chair, Conservative, Leon Benoit]

Whom is that question for, Mr. Regan?

[Geoff Regan, Liberal, Halifax West, NS]

I'd like each group to respond.

[The Chair, Conservative, Leon Benoit]

Okay.

Mr. Lee-Gosselin, are you ready?

[Dr. Martin Lee-Gosselin]

I don't consider that I'm qualified to give a detailed answer to that question. In the competition for resources, I would certainly hope that a substantial percentage of those resources would be applied to the urban setting, rather than to CCS. That would be my preference.

[The Chair, Conservative, Leon Benoit]

Thank you, Professor.

Professor Kubursi.

[Dr. Atif Kubursi]

Thank you.

The issue here is what are the alternatives? How does one judge alternative A versus alternative B? Resources are limited, and if you use them in one employment, then you have to look at what you lose if you were to use them someplace else. This is crucial, particularly at this moment. There are overriding concerns that we shouldn't recreate the past. This is a time in which the crisis is providing us an opportunity to re-evaluate and to be quite specific about what our objectives are. What sort of future are we trying to create? The concern here is about the extent to which we can avoid replicating the past and give a chance to a sustainable economy to emerge, and to see to what extent we can exploit the conversions of the environment and the economy.

There are always aspects of this where people think the economy and the environment are at odds. Actually, the trade-offs are really limited, and it's really a question of “both or neither”. The issue is to see what you are ultimately getting at the margin, in terms of employment—when unemployment is rising very quickly—and what you are getting for this employment, in terms of the environment, climate change, and the clean living we would all like to see.

[The Chair, Conservative, Leon Benoit]

Mr. Bataille, go ahead.

[Dr. Christopher Bataille]

Just to begin, the depth of our targets is such that we need to do absolutely everything. We're going to need CCS. We're going to have to decarbonize our energy supply system. But we also need to address the consumption side of the economy.

Now, if you have $1 billion, you obviously have to parcel it one way or the other. But I would set dual priorities. Yes, you do need to apply it to CCS.

In some ways, this stuff is something we know how to do. So it's more of a policy question when it comes to cleaning up our urban centres. It's a matter of taking the policy initiative to do it, whereas CCS is still on the cusp of being a viable technology; all the bits are there, but it's going to need some proving.

But there are efforts around the world to do that. We are one of many doing it. In some ways, we should almost be in partnership with other projects to do that, and share our efforts, for example, with the Norwegians, the Americans, and everyone else.

[Geoff Regan, Liberal, Halifax West, NS]

I wonder, then, if you would all agree that in fact there's enough funding already targeted at developing integrated energy systems. We haven't heard that elsewhere. Is that what I'm hearing, or not? Is there enough funding already targeted by the federal government toward developing integrated energy systems?

[Dr. Christopher Bataille]

I don't know if it's so much funding as it's a matter of policy effort. CCS has definitely risen to the top of the agenda, and we're putting steps in motion to get there, but I haven't really seen concrete steps to get to integrated urban energy systems.

[Robert Joshi, Consultant, M.K. Jaccard and Associates Inc.]

I'd like to add, if I may, that we would like to see more attention given to this. As Chris pointed out earlier, urban energy use in general is about 60% of our emissions. It's a large chunk. To get at that, and not in an individual sense of how efficient a building is or how efficient a furnace is, but in this integrated aspect, the amount of effort and attention we give to it should be commensurate with the size of the solution it offers.

[Geoff Regan, Liberal, Halifax West, NS]

So the potential gain here, in terms of lowering emissions and becoming more energy efficient, is enormous.

[Robert Joshi]

And there are the broader socio-economic opportunities that were discussed, but just looking at air quality emissions and energy, the gains are enormous.

[Geoff Regan, Liberal, Halifax West, NS]

Ontario recently introduced a green energy act, as you may be aware, and it's intended to promote wind, solar, and biomass electrical generation. We also see the Obama administration investing heavily in renewables. What's your analysis or your assessment of the federal performance in this area, this government's performance? It seems to be investing far less.

[Dr. Atif Kubursi]

There's no question that we need to get all alternative non-conventional energy sources examined and analyzed and the consequences evaluated.

Governments seek multiple objectives. We really need to see every particular program in terms of the criteria we put in. For example, if you want to reduce emissions but increase employment at the same time, then I would like to really see what a particular program and a particular expenditure would do in terms of employment and in terms of reduction. It's only within this general picture that you could lay out where the commonality is and where the trade-offs are so that you can come to a complete assessment of what's going on.

But if you take each one on its own and say, all right, we want to have unconventional energy, this could really bring about major, massive unemployment or a reduction in employment possibilities. It could raise the cost of energy to industry, which might compromise further manufacturing. We really need to see how these multiple criteria would fare in terms of any particular expenditures. We would really like to see all these expenditures lined up against these criteria, whether that's jobs, a clean environment, emissions, or integrated energy reduction in urban cores.

These are issues that you cannot deal with separately or independently in a truncated way. You really need to bunch them up and see to what extent they satisfy these multiple criteria and where are the trade-offs.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Regan.

We'll go now to the Bloc Québécois, with Madame Brunelle, for up to seven minutes.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

Good afternoon to you, gentlemen, and thank you for being here.

I have a question that could be of interest to several of you.

Mr. Lee-Gosselin, you mention the federal government's role and say that it should create the conditions that allow structural innovations to emerge.

I would like to share with you something I read about the Hydrogen Research Institute, a prestigious research centre in the riding of Trois-Rivières. The head researcher was voicing his concerns. He said that the significant decline in the price of gas and the economic crisis would lead to reduced investment in research. Hydrogen development was at a critical point. The researcher's analogy was that Europe would continue to have a strategic advantage over us because they do research there and they would do for hydrogen what they did for wind power. As a result, they will have the technology that we will have to buy.

You see what I am getting at. Do we need a major course correction in order to turn things around? Yes, we do. It took considerable effort to attract a university, let alone a hydrogen research institute, to the small city of Trois-Rivières, with its 130,000 citizens. However, things cannot grind to a halt just as the efforts are beginning to bear fruit.