Toronto - Toronto Atmospheric Fund

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Challenges

While Toronto has achieved a 25% reduction in GHGs against 1990 levels, achieving City Council's adopted goal of an 80% reduction by 2050 is a challenge. Two of Toronto’s largest direct GHG reduction opportunities – investment in energy efficiency in buildings and expansion of public transit – face a major barrier due to competing interest for capital. With cities juggling multiple priorities, there is a challenge in accessing the investment needed to achieve significant carbon reduction. Often this is because the business case for climate investment is poorly understood, or that conventional financing approaches are unsuitable. Other times, it is because community interests are not aligned in a way that supports high impact climate solutions.

Actions

  • Responding to building owner concerns about debt and performance of energy retrofits, TAF invented a new energy efficiency financing tool called the Energy Savings Performance Agreement (ESPA). The ESPA funds all capital expenses, shares savings with the building owner, and is backed by an energy savings insurance policy should the project not perform as specified.
  • Facing a $6B productivity loss in the Toronto region due to traffic congestion as well as growing carbon and air pollution emissions from cars, TAF brought together a group of diverse civic groups from the health, business, labour and environmental sectors and supported alignment of their calls for increased provincial investment in regional public transit.

Description

Over its 25 years, funds from TAF have helped seed the development, at the time, of innovative initiatives, such as the creation of the world's largest lake fed deep water cooling system, the creation of Autoshare, conversion of all traffic signal lights to LED and installation of the first wind turbine in an urban centre in Canada. More recently, over the past four years, TAF has created, tested and scaled a new approach to financing energy retrofits in large buildings, launching it via a new private company, Efficiency Capital Corp., which is poised to scale to a $100M enterprise within five years. TAF has also funded a collective impact initiative called Move the Greater Toronto and Hamilton Region consisting of twelve diverse civic groups who create aligned strategies to leverage provincial support for local transit.

 

Projected Outcomes

 

  • The ESPA approach was designed to attract private sector interest in order to accelerate carbon reduction by increasing investment in energy retrofits in large buildings in Toronto.  In 2015, a company called Efficiency Capital Corp. was licensed by TAF to expand use of the ESPA in Toronto and beyond, raising private capital investment of up to $100M, and showcasing the business case for investment in energy efficiency.
  • With broad public support advanced by diverse civic groups including those working collaboratively in Move the GTHA, the Province of Ontario announced, in 2014, new dedicated annual funding to regional transit totaling $16B over ten years, providing regional residents with better alternatives to single occupancy vehicle use.