The B.C. government will examine the pricing model for Pacific Carbon Trust (PCT) and, if needed, make whatever changes are necessary to ensure B.C.'s public sector organizations, including schools and hospitals, continue to receive the best value, Environment Minister Terry Lake announced today.
"Critical to ensuring value for money is the full disclosure of what Pacific Carbon Trust pays for offsets," said Lake. "To date, PCT hasn't released that information because it was important to protect this commercial information as it helps the Crown negotiate better prices, and it assists offset developers secure better prices when they sell on international markets. As we're in our third year of buying offsets, and the offset market has matured, we now believe it's more in line with open government to release this information."
Government will evaluate the $25 per tonne paid for carbon offsets to Pacific Carbon Trust by public sector organizations. Government will also evaluate what PCT retains as a surplus from the buying and selling of offsets and what that money is used for, as well as what the right level of overhead should be for PCT.
The price Pacific Carbon Trust pays for offsets is lower than the $25 per tonne paid by public sector organizations. The price was set at $25 per tonne when PCT was created back in 2007 for a few reasons:
- B.C. was creating a new market and could only estimate what the future cost of offsets would be.
- It was thought that international carbon markets would be further developed by now.
- Government wanted to give public sector organizations a firm number they could plan with and create an incentive for reductions.
The options the B.C. government will consider are:
- Reinvest the money into other programs specific to public sector organizations;
- Lower the cost charged to public sector organizations; or,
- Hold the retained surplus in the government's accounts as part of balancing the budget.
Pacific Carbon Trust plays an important role in helping the B.C. public sector reduce its carbon footprint and achieve carbon neutrality. In fact, B.C. was the first jurisdiction in North America to become carbon neutral across its provincial public sector - achieving that goal in 2011.
Pacific Carbon Trust will release a pricing framework for each of the three project types in its portfolio. This will help guide potential offset project developers as they build financing for their projects. In addition, PCT will make all carbon offset payment and pricing information from 2009 through 2011 available on its website. Going forward, PCT will continue to release this information on an annual basis every June in conjunction with the release of its annual carbon-neutral government portfolio.
"I want to make it clear that our government remains committed to the policy of carbon neutrality," said Lake. "Carbon neutrality is about leadership - putting government's house in order as it asks businesses, communities and individuals to do the same. This government's leadership on carbon neutrality drives down greenhouse gas emissions, reduces energy costs and produces savings public sector organizations can reinvest in energy saving projects. Those projects, in turn, create jobs in B.C.'s clean-energy sector."
The B.C. government has provided direct financial support to public sector organizations such as school districts and health authorities to help them achieve carbon neutrality:
- B.C. has provided $60.7 million through the Public Sector Energy Conservation Agreement (PSECA) as additional funding for public sector energy projects.
- $25 million has been provided through PSECA and through other funds to school boards.
- Through the Carbon Neutral Capital Program, announced in April 2012, $5 million per year is available to all school districts in B.C. for energy-efficiency projects. This is roughly equivalent to the amount school districts pay in carbon offsets annually.
- Projects across the public sector are estimated to achieve annual energy cost savings of more than $12.6 million, while reducing greenhouse gas emissions by over 35,600 tonnes.
- Government has committed more than $25 million to health authorities to improve energy efficiency in existing facilities.
- When these projects are complete, health authorities estimate that operating costs could decrease by as much as $5 to $6 million annually.
- SMARTTool administration costs associated with the measurement of GHG emissions will no longer be charged to public sector organizations, resulting in $850,000 in cost savings that will be absorbed by Pacific Carbon Trust.
To view the price per tonne at which Pacific Carbon Trust has purchased carbon offsets for resale, visit: www.pacificcarbontrust.com
Ministry of Environment