February 23, 2000

Pollution Probe’s Response to EBR Registry Postings
Numbers RA00E0003 - RA00E000 5

It is our pleasure to respond to the Environmental Registry postings listed above detailing Ministry of Environment (MOE) announcements of January 24, 2000 about Ontario’s “new strategic attack on air pollution.”

In November, 1997 the government of Ontario outlined its plan to deregulate the electricity sector in a white paper entitled “Direction for Change”. In this document, the government of Ontario promises to “ensure that the province’s environmental protection record is maintained and improved” in a deregulated market. While offering some opportunities for improved environmental performance over the long term, the MOE announcement of January 24 does not ensure that emissions from the electricity sector will decrease. No guarantees have been offered of environmental benefits directly resulting from an open electricity market, and specifically in the area of NO_x, there is a significant threat that emissions will increase.

Pollution Probe believes the Government of Ontario has an unparalleled opportunity to guide the electricity generation sector towards providing environmentally cleaner and cost-effective power to the people of Ontario. Moreover, Ontario should become a leader in North America in cleaner power generation, thus influencing other jurisdictions to follow suit.

The electricity sector emits large quantities of SO₂, NO_x, CO₂ and toxic substances (such as Hg).  Recent problems with nuclear power plants in Ontario have resulted in significant increases in these pollutants. Collectively, these pollutants contribute to unacceptable levels of acid rain, adverse health effects due to ground-level ozone, fine particles and acid aerosols, extensive fish consumption advisories and the threat of global climate change.

There are cost-effective, cleaner alternatives to coal-fired electricity generation that are ready for implementation now. There are also immediately available demand management options with positive social benefit-cost ratios (as demonstrated in U.S. jurisdictions, such as New York state.)   And there are promising renewable energy technologies that can be developed into even cleaner power sources in the future.  The shift to cleaner energy sources and aggressive demand management are in Ontario’s best environmental and economic interests. 

Ontario has a ten-year window of opportunity to shift to cleaner electricity generation, develop and market cleaner technologies, and simultaneously give the people of Ontario much cleaner air to breathe.  The time to make the decision to obtain these benefits is now. If these decisions are not made, Ontario will likely have a less competitive electricity market by 2010, as well as dirtier, less healthy air.

The Government of Ontario has proposed targets for reducing emissions of SO₂ and NO_x, but has not included CO₂ or toxic substances (notably Hg) in its emissions reduction plan.  The lack of clear policy direction for these pollutants, combined with the obvious need to address these emissions in the future, leaves electricity generators with significant uncertainties that are not good for business.  A complete air policy framework is essential in order to guide industry to the cleaner power generation options that are implementable now.  Pollution Probe proposes the following targets and policy measures to ensure that industry has a clear framework to work within: 

The Government of Ontario has also stated that it will implement an emissions trading system for SO₂ and NO_x that will allow for emission credit trades between electricity sector generators, with other sectors in Ontario, and with U.S. based pollution sources.  Emission trading is intended to give companies flexibility in their approach to emissions reduction and the timing of their investments in pollution prevention and pollution control. Emissions trading in Ontario has the potential to facilitate emission reductions, but this is not guaranteed by the details that have been provided to date on the proposed emissions trading program. The fact that proposed emission trades could be conducted between capped entities and pollution sources that have no such emission limits, is of great concern. Unless there is some form of binding emission reduction process, there is no way to ensure an overall decrease in pollutants being released. Pollution Probe is willing to participate in the design of an appropriate trading system, but we believe that the emission trading system cannot in any way allow for non-attainment of the pollution reduction targets that have been set for Ontario.

Mercury emitted from coal-fired utilities is a particular concern, since it will not be (and should not be) part of the emissions trading system.  A standard for Hg emissions from coal-fired plants is currently under development as part of the Canada-Wide Standards (CWS) process; however, the standard is not expected to be in place for another 2-3 years.  The use of emissions trading for SO₂, NO_x (and eventually CO₂ ) can result in increased emissions of mercury from the electricity sector.  To deal with the 3 year period in which the Hg standard is expected to take to implement, Pollution Probe proposes the development in Ontario of an exemplary mercury reduction and elimination program for non-essential uses ( across all sources and sectors).  The coal-fired electricity generation sector (currently only Ontario Power Generation Inc. in Ontario) should contribute financially to this initiative and should be a leader in phasing out non-essential mercury uses in its own operations.  Mandatory reporting of mercury uses and emissions by all sectors should be implemented immediately, and the Ontario and federal Governments should take lead roles in bringing mercury uses into a structured and publicly transparent voluntary initiative to reduce and eliminate mercury uses.

The Government of Ontario is to be complimented for proposing mandatory reporting for key air pollutants from electricity generation and, in particular, from all other industry sectors by January 2001.  This is a much needed leadership role that will lay the foundation for future progress.  Pollution Probe fully supports these measures as proposed.

On the posting of new emission performance standards for electricity sold in Ontario, the concept is appropriate, but the present standards themselves are too weak. Although we believe that emission performance standards are beneficial to the process of limiting dirty power imports, the proposal that Ontario will match U.S. EPA legislation on these standards is overly cautious. There are many state jurisdictions down-wind of Ontario that have already committed to stricter emission performance standards. To ensure environmental protection, and at the same time remain competitive with New York and the New England states, Ontario need not wait for federal legislation in the U.S. to better the emission rate limits that have been proposed.

In conclusion, Pollution Probe believes that there is compelling evidence of environmental and human health damage due to the pollution coming from the electricity generation sector in both Ontario and the U.S..  There is equally compelling evidence of cleaner, cost-effective technologies that can, over time, replace coal-fired power plants (as well as significantly improve their environmental performance in the near-term).  There is a ten-year window of opportunity for Ontario to attain both environmental and economic benefits of shifting to cleaner energy production.  And the consequences of not shifting will result in lost economic opportunities for Ontario.

Finally, leadership now could significantly influence the U.S. to follow suit and thus enhance the environmental and economic benefits to Ontario.  The benefits of action clearly outweigh the threats of inaction.

For clarification or other questions about this submission please contact John Wellner at Pollution Probe, 416-926-1907 ext. 236.