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Experts Look to Ottawa for Energy Poverty Strategy

Lower-income Canadians shouldn’t have to choose between heating, eating, and other daily essentials, say two policy experts who are pushing for a national strategy to combat the energy poverty that currently affects 20% of Canadian households.

As energy costs spike and the climate unravels, provincial programs lack both the dollars and the mandate to adequately protect residents, write Efficiency Canada Research Associate Abhi Kantamneni and Policy Director Brendan Haley, in a recent blog post. By contrast, with access to both financial leverage and policy reach, the federal government is ideally positioned to assume a leadership role in helping to end energy poverty,

That work begins by targeting the least energy-efficient and lowest-income households using two important metrics from the United Kingdom. The first is the 2015 Low Income High Cost (LIHC) indicator, which “identifies households that are pushed into poverty as a result of high fuel costs and low incomes,” which in turn helps policy-makers “prioritize and target energy efficiency upgrades towards households that require the most significant reductions in fuel bills to move out of energy poverty.” This indicator can bring together some of society’s most vulnerable people—those living in inefficient homes, young people, people with disabilities, and the older adults.

The second metric, introduced just last year, is the Low Income Low Energy Efficiency (LILEE) indicator, “which identifies energy poor households living in the most inefficient homes in the country.”

The next insight, courtesy of the European Union’s recent launch of its Social Climate Fund, is that dedicated low-income funding and design can be used to mobilize more action at the provincial level.

Set up to support vulnerable Europeans as the EU moves to cut greenhouse gas emissions 55% by 2030, the Social Climate Fund “dedicates a minimum of 25% of revenues (roughly C$103 billion between 2025 and 2032) from carbon emissions trading into supporting a ‘socially fair transition’,” Kantamneni and Haley write. It also requires EU member states to “match the funding allocation and implement measures and investments to principally benefit vulnerable households, micro-enterprises, or transport users.”

So far, the approach has mobilized the equivalent of C$206 billion for a socially fair transition, the two authors say.

Finally, Ottawa will want to “leverage existing delivery capabilities and complement them to achieve greater savings.” The can start by examining the U.S. Department of Energy’s Weatherization Assistance Program (WAP), which in the 45 years since its founding “has delivered no-cost energy-savings upgrades to approximately seven million homes, cutting more than two million tonnes of CO2 every year and supporting more than 8,500 jobs in communities across the U.S.”

Under the program, the U.S. Department of Energy “provides core program funding directly to the states and territories based on an allocation formula that accounts for severity of local climate, number of low-income households, and residential energy cost burdens experienced by such households,” Kantamneni and Haley say. Then those jurisdictions engage the efficient power of community action.

“A large network of over 700 local organizations, community action agencies, and service agents” currently delivers weatherization services “at no-cost to eligible low-income households in every county in the United States of America.”