Case Study on Fiscal Policy and Energy Efficiency
Baseline Study and Economic Study

Prepared by
M.K. Jaccard & Associates

Please note that this version of the case study is slightly modified from the version previously available. The modification relates to a paragraph in Section 3.5 of Appendix B dealing with aluminium electrolysis technologies.

June 4, 2004

Baseline Study
Table of Contents

1 Introduction
1.1 Definitions and Concepts
Industry Scope
Decarbonization
Distinction between Policy and Action
Direct, Indirect and Total GHG Emissions
1.2 Outline of this Report

2 Background
2.1 Defining Energy Efficiency
Measuring Energy Efficiency
Energy Efficiency and Decarbonization
2.2 Industry Sector Characteristics
Energy Use in Canadian Industry
2.3 Current Policy Context
Energy and GHG Policy Related to the Industry Sector
Tax Policy – Energy Efficiency Investments
EFR Related to Industrial Energy Efficiency

3 Baseline Methodology
3.1 Overview of Methodology
3.2 The CIMS Model
3.3 Development of the Baseline Scenario
3.4 Results and Discussion – Baseline Scenario

Appendix A: CIMS Model Details

1 Introduction

2 Key Inputs

3 Industry Flow Models in CIMS

4 Technology Competition Algorithm

5 Uncertainty Issues

Economic Study
Table of Contents

1 Introduction
1.1 Definitions and Concepts
Industry Scope
Decarbonization
Distinction between Policy and Action
Direct, Indirect and Total GHG Emissions
1.2 Outline of this Report

2 Energy Efficiency Potential
2.1 Energy Efficiency Opportunities
2.2 Challenges to Adopting Energy-Efficient Opportunities
2.3 Challenges in Linking Energy Efficiency to Long-term Energy Consumption and
Decarbonization

3 Alternative Forecasts
3.1 The Use of Models to Estimate Energy Efficiency Potential
3.2 Development of Alternative Scenarios
Methodology
3.3 Results / Discussion – Alternative Scenarios

4 Economic and Policy Analysis
4.1 Economic Analysis Methodology
Detailed Costing Methodology
4.2 Results / Discussion – Economic Analysis
4.3 Co-benefits
4.4 EFR Policy Tools
Environmental Taxes and Tax Shifting
Tradable Permits (Market-Oriented Regulation)
Subsidies
4.5 Policy Design
Effectiveness at Reaching Environmental Targets / Objective
Technological Innovation

5 Conclusions and Recommendations

Appendix B: Energy Efficiency Opportunities

1 Introduction

2 Generic / Auxiliary Services
2.1 Steam Generation
2.2 Electric Auxiliary Systems

3 Process-Specific Services
3.1 Petroleum Refining
3.2 Pulp and Paper
3.3 Mining
3.4 Iron and Steel
3.5 Non-Ferrous Metal Smelting and Refining
3.6 Industrial Minerals
3.7 Chemicals